CONTRACT FOR PURCHASE OPTION OF TITLES AND APPLICATIONS FOR MINING CONCESSION CONTRACTS
CONTRACT
FOR PURCHASE OPTION OF TITLES AND APPLICATIONS FOR MINING CONCESSION
CONTRACTS
Between
the undersigned, CIA. SERVICIOS LOGÍSTICOS DE COLOMBIA LTDA., Colombian business
partnership constituted by public deed 1451 of the 6th
Notary
of Medellin of September 19, 2003, duly represented by Xxxxxxx Major, citizen
of
the United States, of legal age, resident in Medellin, identified with foreign
I.D. 206.811, who from now on will be referred to as SERVICIOS LOGISTICOS on
one
part and on the other, INVESTCOL Ltd., a business partnership organized and
existing in accordance with the laws of Belize, located in Xx.0 Xxxx Xxxxxx,
Xxxx xx Xxxxxx, Xxxxxx, duly represented by Xxx Xxxxx, male, Canadian citizen,
of legal age, resident in Toronto, Canada, identified with passport number
BC
251532 from Canada, who from now on will be referred to as INVESTCOL, have
agreed to celebrate this contract for purchase option of mining rights, subject
to the following clauses and considerations:
| 1) |
SERVICIOS
LOGÍSTICOS and INVESTCOL celebrated a contract for option of assignment
of
mining rights on June 25, 2005, by means of which INVESTCOL received
the
option to acquire, by means of purchase, the mining assignment contracts
identified with numbers 6602 and 6329 granted upon SERVICIOS LOGISTICOS
by
the Department of Antioquia and registered in the National Mining
Records
with codes HFQL-05 and HFQL-04 respectively. This negotiation also
included the application recorded under number 1343 to the name of
Xxxxxxxx Xxxxxx Xxxxx, whose records are currently missing and must
be
reconstructed by the mining authorities.
|
| 2) |
According
to the aforementioned contract, INVESTCOL was obliged to invest in
mining
exploitations in the areas of assignment contracts number 6602 and
6329
with Mining Registrations HFQL-05 and HFQL-04 and in the area of
application 1343, the amount of USD 2’990.000 in a period of three years,
like this: USD 300.000 the first year; USD 700.000 the second year,
and
USD 1’990.000 the third year. After these investments were made, if
INVESTCOL decides to exercise the option, they must pay an additional
amount of USD 10.000 and with this they will acquire the right to
have
completely assigned to their name, the rights of the two
|
| aforementioned mining titles and the rights resulting from application 1343 once it is granted. |
FIRST:
OBJECT.
By means
of this agreement, SERVICIOS LOGÍSTICOS and INVESTCOL agree to include in the
negotiation of the mining titles and the application mentioned in consideration
1) of this document, the mining titles and applications that will be specified
in this clause, in which SERVICIOS LOGISTICOS is obliged to process or acquire
from their corresponding holders, in order to assign them to INVESTCOL. The
addition of these new titles does not imply a raise in the amount of USD
2’990.000 that INVESTCOL was obliged to pay for mining exploitation in
assignment contracts 6602 and 6329 and in the area of application 1343 already
negotiated. The application of mining assignment contracts that are included
in
this negotiation are the ones corresponding to Registrations 6821, 6770, 6993,
and 7039 of the Direction of Titles and Inspection of the Department of
Antioquia, whose juridical status is included in the document annexed to this
contract on the understanding that the final decision on the granting of the
mining title corresponds exclusively to the mining authority or its delegate.
In
case that any of these applications are denied, SERVICIOS LOGISTICOS will carry
out all the necessary juridical actions with the object of achieving the
assignment of the areas covered by these applications.
SERVICIOS
LOGISTICOS is also obliged to make sure that Xxxxxxxx Xxxxxx carries out the
assignment of the application of exploration license number 1343, once it is
granted. In case the reconstruction of file 1343 is not possible or that such
reconstruction is not convenient, SERVICIOS LOGISTICOS is obliged to carry
out
the necessary processes to apply for such area to their name and then include
it
in this negotiation.
Also,
SERVICIOS LOGISTICOS will acquire from the title holders, the following
assignment contracts with mining registrations number 072-98 (HETJ-26), 074-98
(HETJ-27), 135-98 (HETJ-31,136-98 (HETJ-32) and 143-98 (HETG-01), and will
include these in this negotiation in order to then assign them to INVESTCOL
or
to whoever these appoint. For the purchase of the mining titles mentioned in
this part, SERVICIOS LOGISTICOS will receive from INVESTCOL the amount of USD
150.000 at the latest on June 23, 2006.
The
mining titles and applications mentioned in this clause are located in the
municipality of Caramanta, Department of Antioquia, as it can be observed in
the
map added as annex 1 of this contract.
SECOND:
OPTION TERM.
INVESTCOL will be able to use the option in order to receive the assignment
of
the mining rights of assignment contracts: 6602 (HFQL-05), 6329 (HFQL-04),
072-98 (HETJ-26), 074-98 (HETJ-27), 135-98 (HETJ-31), 136-98 (HETJ-32), and
143-98 (HETG-01) and the ones resulting from applications 1343, 6821, 6770,
6993, and 7039, within a term of three (3) years counted from November 10,
2005.
When
the applications replacing the last ones are registered, the three (3) year
term
will be counted as of the date of registration of the mining title.
THIRD:
PURCHASE - SALE PRICE. The
price
to be paid for the assignment of all the mining titles mentioned in the first
clause and the titles resulting from the applications annexed to the same
clause, in case the option is exercised, is the amount of TEN THOUSAND DOLLARS
(USD 10,000.00).
FOURTH:
RIGHTS OF INVESTCOL DURING THE OPTION TERM.
| A. |
To
carry out directly or by means of third parties, all the mining
exploitation works that are considered convenient in order to assess
the
economic potential of the areas that are the object of this option,
taking
the necessary material samples for chemical and geological
analysis.
|
| B. |
To
desist from the option with the simple written statement of such
determination.
|
| C. |
To
assign this contract without the need of authorization from SERVICIOS
LOGÍSTICOS.
|
| D. |
To
begin executive processes against SERVICIOS LOGÍSTICOS in case this
company does not sign the documents for the assignment of the mining
titles or does not fulfill the obligations mentioned in this
contract.
|
FIFTH:
OBLIGATIONS OF INVESTCOL DURING THE OPTION TERM.
During
the effect of this contract INVESTCOL will have the obligation to invest the
amount of TWO MILLION NINE HUNDRED NINTY THOUSAND AMERICAN DOLLARS (USD
2’990,000.00)
in
exploitation works in the areas that are object of this contract in the
following way:
| A. |
The
amount of THREE HUNDRED THOUSAND AMERICAN DOLLARS (USD
300,000.00)
during the first year of effect of this contract;
|
| B. |
The
amount of SEVEN HUNDRED THOUSAND AMERICAN DOLLARS (USD
700,000.00)
during the second year of effect of this
contract;
|
| C. |
The
amount of ONE MILLION NINE HUNDRED NINTY THOUSAND AMERICAN DOLLARS
(USD
1’990,000.00)
during the third year of effect of this
contract.
|
SIXTH:
OBLIGATIONS OF SERVICIOS LOGÍSTICOS DURING THE OPTION
TERM:
| A. |
To
comply with all the obligations that the law imposes to the holders
of
mining rights or the applicants for assignment contracts, whether
it is to
keep their right to explore and exploit the minerals that are object
of
the assignment contract or to receive such titles.
|
| B. |
To
exercise all the actions that lead to the conservation of the possession
and rights that are object of the assignment contracts that are negotiated
through the initial contract and this one;
|
| C. |
To
insure the legal conditions so that INVESTCOL can carry out the
exploration in the areas object of this
contract.
|
| D. |
To
trespass to INVESTCOL or whoever they appoint, the titles of the
mining
assignments when this one has invested the amounts mentioned in the
fifth
clause. At that moment SERVICIOS LOGÍSTICOS must celebrate with INVESTCOL
or with whoever they appoint, the assignment contracts of all the
rights
conferred for the mining titles and applications mentioned in this
contract once they have been granted. Such trespass will be done
through
the documents demanded by the mining legislation.
|
SEVENTH:
RIGHTS OF SERVICIOS LOGÍSTICOS IN CASE OF DESISTANCE ON BEHALF OF INVESTCOL.
In
case
that INVESTCOL decides not to continue with the exploration investment,
SERVICIOS LOGÍSTICOS will have the right to:
| A. |
Become
the owner of the advanced payments received from the date of the
contract
to the date of desistance.
|
| B. |
Receive
a free copy of the results of the exploration carried out until the
moment
of desistance.
|
EIGHTH:
WAY TO TAKE THE OPTION OR TO DESIST FROM IT.
INVESTCOL must exercise its option by means of a letter addressed to SERVICIOS
LOGÍSTICOS, in which they must inform the address that will be included for the
effects of this contract. Such letter must be sent within the 60 days prior
to
the expiration date of this contract.
TENTH:
TERM
FOR THE PURCHASE - SALE CELEBRATION.
The
document for the assignment of the rights granted in the mining titles that
are
object of this contract must be celebrated within the thirty (30) calendar
days
following the date that INVESTCOL decides to exercise their option only if
they
are up to date in the investments that they are obliged to, in accordance with
the fifth clause.
ELEVENTH:
MODIFICATIONS.
Any
modification to this contract must be done in written for any
effect.
TWELFTH:
ARBITRATION.
Any
controversy or difference related to this contract and its execution or
liquidation, will be solved by an arbitration tribunal made up of three (3)
arbitrators chosen by the Medellin Chamber of Commerce, who must solve according
to the law. The costs of the arbitration shall be paid equally by both
parties.
THIRTEENTH:
COSTS.
Each one
of the parties of this contract will pay half of the legalization costs and
expenses, such as notary expenses, taxes, and in general, any distribution
required for the legalization and perfection of this contract.
FOURTEENTH:
DISENCUMBRANCE.
In case
that SERVICIOS LOGÍSTICOS is deprived from all or part of one or any of the
assignments or applications, the investments of INVESTCOL will be proportionally
reduced. These will also decrease if third parties difficult or make the
execution impossible due to the fault of SERVICIOS LOGISTICOS.
FIFTEENTH:
PRIOR CONTRACTS. All
the
prior contracts celebrated between SERVICIOS LOGÍSTICOS and INVESTCOL, specially
the one celebrated in June 25, 2005 are understood to be incorporated to this
one and therefore all the prior contracts do not have any effect.
SIXTEENTH:
ADDRESSES:
For
effects of notifications and correspondence related to this contracts the
addresses of the parties will be the following:
| SERVICIOS LOGÍSTICOS: | INVESTCOL: |
| Xxxxxxx X. Major | Xxx Xxxxx |
| COMPAÑÍA SERVICIOS LOGÍSTICOS | INVESTCOL Ltd. |
| DE COLOMBIA LTDA | #1 Xxxx Street, |
| Xxxxxxx 00 Xx. 0 X-00 | Xxxxxx Xxxx, Xxxxxx |
|
Xxxxxxxx,
Xxxxxxxx
|
Signed
in
two identical copies, one for each party, in Medellín on the 23rd day of
March 2006.
|
/s/
Xxxxxxx Major
XXXXXXX
MAJOR
Compañía
Servicios Logísticos de Colombia Ltda
Legal
Representative
|
/s/
Xxx Xxxxx
XXX
XXXXX
Investcol
Legal
Representative
|
