EXHIBIT 10.7
JOINT VENTURE AGREEMENT
BETWEEN THE UNDERSIGNED PARTIES:
- Xx. Xxxxxx Xxxxxxxxx Xxxxxx HARINORO, born September 16, 1957, residing at
Xxx XXX 0X, Xxxxxxxxxxxxx, Xxxxxxxxxxxxxx, Antananarivo, of Madagascan
nationality, holder of National Identity Card No. 108-992-038-748, issued
on September 23, 1976 at Antsirabe, daughter of Xxxxxx RALAIBOZAKA and
RAVAONORO;
Referred to hereinafter as "The Permit Holder";
OF THE FIRST PART;
AND
- SAOWANI DEVELOPMENT LTD., a business corporation with assets of 1,000,000
Fmg, with head offices located at: Lot MA II 1 a), Maibahoaka, Ivato, and
registered with the Commercial Register of Antananarivo under No. 16.157,
represented in these presents by Ms. SAOWANI CHUAIPHAN,
Referred to hereinafter as "The Partner";
OF THE SECOND PART.
THE FOLLOWING HAS BEEN AGREED TO BY THE PARTIES:
Section 1. - This Joint Venture Agreement was prepared in accordance with
the provisions of Law No. 95-016 of August 09, 1995 concerning
the Mining Code and Ministerial Order No. 3216/94 of July 25,
1994 establishing the conditions of validity for joint venture
agreements.
Section 2. - This agreement has been prepared in order to set forth the
rules governing joint ventures between the two parties and to
regulate the joint exploration to be carried out under the
mining permit which belongs to the Permit Holder.
Section 3. - This agreement shall be valid for the term of the mining
permit, which is the subject of this agreement. It shall be
renewed by way of tacit renewal beyond this date for the same
term as the renewal of the said mining permit.
Section 4. - Within the context of the Joint Venture Agreement, the Permit
Holder shall exercise all of its exclusive rights flowing from
the mining permit which it holds and which has the following
characteristics:
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PERMIT XV YV FIVOND-RONANA MAP SUBSTANCE
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Q 53-76/1 541 250 538750 Mananjary Q 53 Beryllium
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Q 53-76/1 546 250 538750 Mananjary Q 53 Beryllium
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Q 53-76/1 548 250 538750 Mananjary Q 53 Beryllium
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Section 5. - The parties to this agreement hereby agree that following a
period of one and one half years of operations, the mining
permit, which is the subject of this agreement, shall be
transformed into a Type III Permit. To this effect, a business
corporation shall be constituted under Madagascan law in which
SAOWANI DEVELOPMENT, or any other person or firm acting on its
behalf, shall invest the amount of eighty per cent ( 80%) of
the capital, and Xx. Xxxxxx Xxxxxxxxx Xxxxxx HARINORO shall
invest twenty per cent (20%). This business corporation shall
then be the holder of the said Type III mining permit.
Section 6. - The Permit Holder shall ensure the search for and hiring of
local personnel, investment by persons in securities and the
establishment of perennial operations, as well as all
relationships with administrative authorities, both on a
national and local level.
It shall be the Permit Holder's responsibility to obtain all
the necessary documents for the distribution and marketing of
the product.
Section 7. - The Partner shall take responsibility for the financing of all
investments required for the operations of which it is
proprietor, as well as the financing of cash flow, including
taxes and duties attached to the import of materials and
equipment. Furthermore, the Partner hereby accepts the
principle of financing investments of a social nature in a
manner proportionate to the scope of the company's business
activity.
Section 8. - The Partner hereby agrees to protect the environment and shall
be solely liable for the management of the mining operations
and the management of personnel subject to Section 8,
hereinbelow.
Section 9.- The Permit Holder shall be entitled to have access to any
audit follow-up for the operations and production and shall
have the right to be represented by the person of its choice,
who is to be provided with a special proxy to this effect.
With respect to business activities, this person shall be
entitled to intervene in the management of the mining
operations and may decide to stop all activity where he
believes that the operations do not comply with current
regulations.
The Partner hereby agrees to facilitate the audit follow-up
undertaken by the Permit Holder.
Section 10. - Financial management shall be the sole responsibility of the
Partner.
Section 11. - The distribution of profits between the parties shall be
carried out in the following proportions:
- eighty per cent (80%) of profits for the Partner;
- twenty per cent (20%) of profits for the Permit Holder.
Section 12. - Both parties must have at least one permanent representative
at the operations perimeter. Any product extracted must be
reported by the representatives of both parties and kept
locked in a safe with a double locking system. Any removal of
the product must also be carried out in presence of both
representatives.
Section 13. - The Partner hereby reserves the right to substitute in its
place, a portion of its rights in accordance with this
agreement, to any person or firm of its choice. It shall
remain jointly and severally liable with such persons for the
proper performance of the undertakings in this agreement.
Section 14. - Any stoppage of operations which is deemed to be unjustified
for a period of one year shall be considered to be a clear
waiver of the Partner's rights as provided for in these
presents, without the possibility for filing a claim for
damages by either of the two parties. Any such waiver of
rights shall result in the full termination of this agreement.
Section 15. - Given the xxxxx and truthful cooperation between the parties,
any dispute which might arise between them concerning the
performance or the interpretation of the conditions of this
agreement shall be settled in a friendly manner, before any
recourse is taken to the competent Court in Fianarantsoa.
Prepared at Antananarivo, on June 28, 1999
The Permit Holder The Partner
/s/ Xxxxxx Xxxxxxxxx Xxxxxx Harinoro /s/ Saowani Chuaiphan
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SAOWANI CHUAIPHAN
Xxxxxx Xxxxxxxxx Xxxxxx HARINORO for SAOWANI DEVELOPMENT
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