Document:

exh10l.htm

    Memorandum of
Understanding

    

    This
memorandum of understanding is made on 14.05..1427H (10.06.2006) in presence
of:

    1-Engineer, Hatem El-Khalidi, Chief
Executive Office of Arabian Shield Development Company, owner of the mining
lease granted by virtue of Royal Decree No. 137 dated 05.11.143H (hereinafter
referred to as “First Party”) 

           and

    2-Engineer, Mohamed Man’i Abal”ala,
representative of Thamart Najran Company, CR No. 5950010275 dated 06.01.1426H
(hereinafter referred to as “Second Party”)

    

    Recitals

    

    Whereas,
the First Party proposes a project for establishing a joint capital
company for the production of base and precious metals in the mining lease owned
to Arabian Shield Development Company by virtue of Royal Decree No. 137 dated
05.11.1413H;

    

    Whereas,
having been acquainted with the strategic brief provided by the First
Party in respect of a project for establishing a Saudi-American joint company or
the production of base and precious metals in factories area in AL Masane area
in Najran, the Second Party desires to join the said project as a
partner;

    

    Whereas,
the two parties have discussed the possibility of working jointly for
exploiting the mining lease granted to Arabian Shield Development Company by
virtue of Royal Decree No. 137 dated 05.11.1413H;

    

    Whereas,
the First Party has provided the Second Party with all information and
data related to the project, including the economic feasibility study prepared
by well known international consulting firms, the study of project’s cost and
operation cost for mining ores to produce condensed copper and zinc and gold and
silver alloys;

    

    Whereas,
the Second Party has been acquainted with all works and plans prepared by
the project developer, Engineer Hatem El-Khalidi, Chief Executive Office of
Arabian Shield Development Company, and has received all feasibility and
financial studies and project’s cash flow for the next ten years;

    

    Whereas,
the offer has been welcomed and appreciated by the Second Party,
represented by Engineer, Mohamed Abal’ala, who confirmed the sincere desire to
form partnership with Arabian Shield Development Company for exploiting the
mining lease granted by virtue of Royal Decree No. 137 dated 05.11.1413H,
through establishing a joint capital company of an estimated capital (according
to the above-cited studies) of US$ 140,000,000 (One Hundred Forty Million US
Dollars) equally shared by the two parties, i.e. 50% each.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Now therefore,
the two parties:

    
      	
              1-  

            	
               Arabian
      Shield Development Company, a company organized under the General
      Companies Act of the State of Delaware, Having its main office at 10830
      North Central Express Way-Dallas-75231, USA, represented herein by its
      president r Hatem El-Khalidi, hereinafter referred to as (First
      Party)

            

    

    

    
      	
              2-  

            	
              Thamarat
      Najran Company, a company organized under the laws of the Kingdom
      of Saudi Arabia, CR No. 5950010275, having its main office in Najran,
      represented herein by Mohamed Abal’ala, hereinafter referred to as (Second
      Party –Developer),

            

    

    

    hereby
agree as follows:

    

    First: the
above recitals constitute an integral and complementary part of this
Memorandum.

    Second:
The Second Party (Developer) shall affirm the existence of at least four
partners, hereinafter referred to as (“Saudi Partners”) who have the desire and
capability to establish a joint stock company wherein the first party, Arabian
Shield Development Company shall own 50% of the capital and the remainder shall
be distributed as agreed among the Saudi Partners. The Saudi Partners shall have
all powers of executive administration of the joint company.

    Third: The
First Party and the Saudi Company shall establish a joint capital company with
the name (AL Masane AL
Kobra Mining Company), referred to hereinafter as (“The
Company”). The Saudi Company shall have all administrative and executive
powers in the said joint company.

    Fourth:
The Company’s authorized capital shall be US$140,000,000 (One Hundred
Forty Million US Dollars), and the paid capital US$105,000,000 (One Hundred and
Five Million US Dollars) to be paid by the Saudi Partners. As a shareholder in
the joint company, the First Party shall, within the first six months of
company’s incorporation, arrange the amount of US$35,000,000 (Thirty Five
Million Dollars) by any suitable means, including loans from local banks with
the support and assistance of the company to be incorporated.

    Fifth: The
two parties agree that the share shall be distributed and the Board of Directors
be formed as follows:

    
      	
              a-  

            	
              The
      capital shares shall be equally distributed between the two partners, 50%
      each.

            

    

    
      	
              b-  

            	
              The
      Board of Directors of the joint company shall be of six members: three
      representing the First Party and three representing the Saudi Partners.
      The powers of directors shall be specified in separate contracts or in the
      articles of association of the joint company. The Chairman shall be from
      among the directors representing the Saudi
  Partners.

            

    

    Sixth: The
Second Party agrees and consents that First Party’s efforts, expertise, assets
and franchise right be values for US$35,000,000. The Second Party shall pay that
amount to be added to Company’s capital on behalf of the First Party; and the
same shall represent the Saudi Partner’s fair value for obtaining 50% of mining
franchise so as to start purchasing equipment and for preparing the present
factories’ site for the production of base metals and concomitant metals,
against tangible and intangible assets, including mining right, and all mining
works performed by the First Party since 1967.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Seventh:
The two parties agree that the planned company’s activity shall be the
mining of known base metals’ ore (copper and zinc), concomitant metals (gold and
silver), in addition to producing condensed copper and zinc and gold and silver
alloys, according to the franchise right granted to Arabian Shield Development
Company by virtue of Royal Decree No. 137 dated 05.11.1423H.

    Eighth:
The two parties agree that Arabian Shield Development Company has
performed the exploration works in the great factories area that it will assign
to AL
Masane AL Kobra Mining Company, after the latter’s incorporation, for
obtaining the exploration license and franchise later.

    Ninth: The
Mining lease granted to the First Party shall be transferred to the joint
company after its incorporation.

    Tenth: The
exploration license application filed by the First Party shall be transferred to
the joint company after its incorporation.

    Eleventh:
This Memorandum shall be binding upon its parties, who shall act
accordingly, immediately after its final draft shall have been signed by the
parties and approved by the boards of directors of both companies. The parties
shall also act jointly with full cooperation for achieving the company’s
objective. They shall further undertake to implement the provisions of the
Memorandum and start procedures for establishing AL Masane AL
Kobra Mining Company as a Saudi-Memorandum. Furthermore, the parties
undertake to act within the work plan stipulated in the mining franchise granted
by virtue of Royal Decree No. 137 dated 05.11.1413H.

    Twelfth:
This Memorandum supersedes all previous memoranda of understanding
between the two parties, and shall be made in three original copies of which
each party shall receive a copy to act accordingly. The third copy shall remain
with Kadasa Law Firm.

    

    

    

    First
Party                                                                                           Second
Party

    

    Arabian
Shield Development
Company                                                                                     Thamarat
Najran Company

    

    Name:
Hatem
EL-Khalidi                                                                                      Name: Mohamed
Abal’ala

    Capacity: 
President                                                                                      Capacity:
Representative

    Signature:
/s/ Hatem
El-Khalidi                                                                                   Signature: /s/ Mohamed
Abal’alaexh10m.htm

    

    Exhibit
10(m)

    ARTICLES
OF ASSOCIATION

    of

    Almasani
Al Kobra Mining Company

    A
Closed Joint Stock Company

    

    

    THIS
AGREEMENT is made this day, 14/06/1427 H, corresponding to 10/07/2006 G, between
and by :

    

    
      	
              1.  

            	
              Arabian American Development
      Company, formerly: Arabian Shield Development Company , a company
      duly organized and existing under the laws of the State of Delaware, with
      its place of business at 10830 North Central Express Way, Dallas 75231,
      United States of America;

            

                                              “1st
Party”

     
 

    
      	
              2.  

            	
              Dorrat Al Masane'e Trading
      Establishment, an establishment having Commerical Registration
      No. 1010220094
      dated 10/15/14277 H., and having its place of business at
      Riyadh, Propr.  Mr. Mohammed Mane'a
      Sultan Aba Al-Ola, Civil
      Registration No. 1056784334 dated
      22/08/1397 H., a civil servant by profession, born in
    1379H.;

            

                                             “2nd
Party”

    

    
      	
              3.  

            	
              Al-Sha’er Trading,
      Manufacturing and Contracting Company, a company registered in the
      commercial register under No. 4030017174 dated 30/02/1399 H. and whose
      Articles of Association are notarized by the 1st
      Notarization Department of Jeddah under No. 79, Sheet 91 of Volume
      3/TA for the year 1409H.;

            

    

                      “3rd
Party”

     

    
      	
              4.  

            	
              Qasser Al Ma'aden Trading
      Establishment, an establishment having  Commerical
      Registration No. 1010220095 dated 10/05/1427 H., and having its place of
      business at Riyadh, Prop.  His Royal
      Highness Prince Nawaf bin Mishel bin Saud Al Saud, Civil
      Registration No. 1057765933 dated 19/091406H., a trader by profession,
      born in 1377 H.;

            

    

    

                      “4th
Party”

    
      	
              5.  

            	
              Mr. Ibraheem Ali Hussain
      Moslem, a citizen of Saudi Arabia by virtue of Civil Registration
      No. 100188279 issued at Jeddah on 25/11/1427 H,, a civil servant by
      profession, and born in 1368 H.;

            

    

    

    
                                                 “5th
Party”

    

    

    
      	
              6.  

            	
              Mr. Majed Ali Hussain
      Moslem, a citizen of Saudi Arabia by virtue of Civil Registration
      No. 1001882859 issued at Jeddah on 16/5/1418 H,. a student by profession,
      and born in 1398 H.;

            

    

    

                     “6th
Party”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              7.  

            	
              Thamarat Najran Co. Ltd.,
      a company registered in the Commercial Registry of the city of
      Najran under Number 5950010275 dated 06/01/1426 H., and whose Articles of
      Association are notarized by the Najran Notary Public, Volume No. 497/2,
      Sheet 100-102 on 16/12/1425 H.;

            

    

                     “7th
Party”

    

    
      	
              8.  

            	
              Saudi Establishment for Trading
      & Construction, an establishment having Commercial Registration
      No. 2050000782 dated 22/09/1378 H., and having its place of business at
      Dammam Civil Registration No. 1054514045 dated 21/10/1395H., Prop. Omar bin Ali bin Omar
      Babtain,  a trader by profession, born in 1379;
    

            

    

                     “8th
Party”

    

    

    The
parties hereto, all possessing legal capacity, agree to form a Saudi Joint Stock
company in accordance with the Saudi Arabian Companies Act issued under Royal
Decree No. M/6 dated 22.03.1385 H. and the Amendments thereto and in conformity
with the attached Bylaws and pursuant to SAGIA Decision No.
993/2  dated 16/7/1428 H.,  and in accordance with the
following terms:

    

    1.
Name of Company:

    

    Almasani Al Kobra Mining Company,
a closed joint stock company

    

    2.
Objects of Company:

    

    Production
of Silver alloys, Gold alloys, Copper concentrates, and Zinc concentrates
pursuant to SAGIA Licence No. 993/2  dated
16/7/1428 H

    

    3.

    The
Company may have an interest in or participate in any manner whatsoever with
corporations or companies engaged in activities which are similar to its
activities or which may help the Company achieve its objects. Further, the
Company may own shares in and merge with or purchase such
companies.

    Further
still, the Company may have an interest in or participate in any manner
whatsoever with other companies provided that such interest or participation
shall not exceed 20 % of its free reserves nor 10 % of the capital of companies
in which the Company is participating; and provided further that the total of
such participation shall not exceed the value of such reserves and that the same
be brought before the 1st
Ordinary General Meeting.

    

    4.
Principal Office:

    

    The
Company’s principal office shall be situated in the city of Jeddah. The Board of
Directors may, with the sanction of the competent authorities, establish
branches, offices, or agencies for the Company within or without Saudi
Arabia.

    

    5.
Term of Company:

    

    The Term
of the Company shall be Ninety Nine (99) years effective from the date
of  the Decision of H. E. the Minister of Commerce authorizing the
incorporation of the Company. The term of the Company may be extended under a
resolution by the Extraordinary General Meeting issued one year before the
elapse of its Term.

    

    

    6.
Capital of Company:

    

    The
declared Capital of the Company shall be Four Hundred Fifty Million Saudi
Riyals   (SR450,000,000.00) divided into 45,000,000.00 shares of
equal value of SR 10 each.

    

    7.
Contributions to Capital:

    

    The
founder shareholders have subscribed for the entire shares of the Company and
paid up the amount of Two Hundred Twenty Five Million Saudi Riyals
(SR225,000,000.00) representing 50% of the value of the entire shares,
distributed among the Shareholders as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              Founder
      Shareholders

            	 	
              Total
      Shares

            	 	 	
              Unit
      Value

            	 	 	
              Total
      Capital

            	 	 	
              Capital
      paid up

            	 	 	
              %

            	 
	
              Arabian
      American Development Company

            	 	 	22500000	 	 	 	10	 	 	 	22500000	 	 	 	112500000	 	 	 	50	 
	
              Mr. Mohammed Mane’a Sultan Aba
      Al-Ola, owner of Dorrat Al Masane’e Trading
      Establishment

               

            	 	 	7200000	 	 	 	10	 	 	 	7200000	 	 	 	36000000	 	 	 	16	 
	
              Al-Sha’er Trading,
      Manufacturing and Contracting Company,

            	 	 	4500000	 	 	 	10	 	 	 	4500000	 	 	 	22500000	 	 	 	10	 
	
              His Royal Highness Prince Nawaf
      bin Mishel bin Saud Al Saud, owner of Qasser Al Ma’aden Trading
      Establishment

            	 	 	3600000	 	 	 	10	 	 	 	3600000	 	 	 	18000000	 	 	 	8	 
	
              Mr. Ibraheem Ali Hussain
      Moslem

            	 	 	2250000	 	 	 	10	 	 	 	2250000	 	 	 	11250000	 	 	 	5	 
	
              Mr.
      Majed Ali Hussain Moslem

               

            	 	 	2250000	 	 	 	10	 	 	 	2250000	 	 	 	11250000	 	 	 	5	 
	
              Thamarat
      Najran Co. Ltd.

               

            	 	 	1800000	 	 	 	10	 	 	 	1800000	 	 	 	9000000	 	 	 	4	 
	
              Omar bin Ali bin Omar
      Babtain, owner of
      the Saudi Establishment for Trading & Construction

               

            	 	 	900000	 	 	 	10	 	 	 	900000	 	 	 	4500000	 	 	 	2	 
	
              Total

            	 	 	45000000	 	 	 	10	 	 	 	45000000	 	 	 	225000000	 	 	 	100	 

    

    

    The
amounts paid up by the founder shareholders have been deposited with the Albank
Alsaudi Alfransi in the name of the Company under incorporation.

    

    8.
Management of Company:

    

    The
Company’s management shall be undertaken by a board of directors to be comprised
of eight (8) directors appointed by the Ordinary General Meeting for a term not
exceeding three (3) years. However, the term of the First Board of Directors
shall be five years commencing from the date of the Ministerial Decision
announcing the incorporation of the Company. The appointment of the Board of
Directors shall be as follows:

    

    - Four
directors to be appointed by the 1st
Party

    - Four
directors to be appointed by the remaining Parties

    

    The
directors’ remuneration and powers shall be as stipulated in the Bylaws of the
Company.

    

    9.
Fiscal Year:

    

    The
Company’s fiscal year shall commence on the first of January and end on the
thirty first of December each year, save the first fiscal year which shall
commence form the date of the Ministerial Decision authorizing the incorporation
of the Company and end on the 31st of
December of the next year.

    
 

    10.
General Provisions:

    

    The
Company shall be subject to the provisions of the Companies Act  and
the provisions of the Bylaws of the Company respecting all matters not
stipulated herein.

    

    11. The founder shareholders
hereby authorize Nassir Ali
Mousa Kadasa, Abdul Aziz Sa’eed Ahmed Kadasa, Raad Ghandar Ibrahim Kadasa, and
Abdul Rehman Al-Oyouni to consummate the Company’s incorporation
procedures and to sign on their behalf in this respect.

    

    12.
Copies of Articles:

    

    These
Articles have been executed in a number of copies, of which each Party received
one copy and the remaining copies shall be retained for the consummation of the
incorporation procedures.

    

    
      	 
      	
              Founder
      Shareholders

            	
              Signatures

            
	
              1.

            	
              Arabian
      American Development Company

            	 
      /s/ Raad G. Kadasa (on behalf of all shareholders)
	
              2.

            	
              Mr. Mohammed Mane’a Sultan Aba
      Al-Ola, owner of Dorrat Al Masane’e Trading
      Establishment

               

            	 
      
	
              3.

            	
              Al-Sha’er Trading,
      Manufacturing and Contracting Company,

            	 
      
	
              4.

            	
              His Royal Highness Prince Nawaf
      bin Mishel bin Saud Al Saud, owner of Qasser Al Ma’aden Trading
      Establishment

               

            	 
      
	
              5.

            	
              Mr. Ibraheem Ali Hussain
      Moslem

               

            	 
      
	
              6.

            	
              Mr.
      Majed Ali Hussain Moslem

               

            	 
      
	
              7.

            	
              Thamarat
      Najran Co. Ltd.

               

            	 
      
	
              8.

            	
              Omar bin Ali bin Omar
      Babtain, owner of
      the Saudi Establishment for Trading & Construction

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