EXHIBIT 2.5
Carbones de Guaduas. Ltda
CONVENIO DE CUENTAS EN PARTICIPACION
This Agreement of "Association" is executed by and between:
VII. ON THE ONE HAND, XX. XXXXXX XXXXXXX XXXXXXX, A CITIZEN OF
COLOMBIA WITH CITIZENSHIP CARD NDEG 17.079, 078, WHO ACTS HEREIN IN
HIS OWN NAME AND BEHALF, AND FOR THE PURPOSES OF THIS AGREEMENT HAS
THE CAPACITY AS "ACTIVE PARTNER; AND
VIII. On the other hand,. CARBONES DE GUADUAS, LTDA., a limited
liability company incorporated and existing under the Laws of
Colombia. Hereinafter referred to as the Investing Partners, acting
herein through its legal representative and authorized officer, Xx.
Xxxxx Xxxxxxxx;
WHEREAS:
1. On April 23, 1998 an Agreement for a Coal Mining and Power
Generation Project in Guaduas", was executed between the "Active
Partner" on the one hand, and, on the other by Msres XXXX XXXX,
XXXXX XXXXX, XXXXXX XXXXXXXX, XXXXX XXXXXXXX, XXXX XXXXXXXX and
XXXXXX XXXXX, each of them acted in common ("en comun y proindiviso
por partes iguales"), by equal shares; such Agreement was extended
by a document executed May 26, 1998.
2. The above mentioned Agreement refers to the intention of the Parties
to develop a Coal Mining Project in the municipality of Guaduas,
"Departamento" of Cundinamarca, and any surrounding area, with the
purpose of possibly further developing a project for power
generation or any other project that may be financially and legally
feasible under the laws and regulations of Colombia.
3. Msres XXXX XXXX, XXXXX XXXXX, XXXXXX XXXXXXXX, XXXXX XXXXXXXX, XXXX
XXXXXXXX and XXXXXX XXXXX, have assigned to Xxxxxxxxx Energia LLC a
Limited Liability Company incorporated under the Laws of the State
of Texas, and to Grupo Energia LLC a Limited Liability Company
incorporated under the Laws of the State of Texas, all their rights
and obligations under the aforementioned Agreements, and thus have
created CARBONES DE GUADUAS, LTDA.
4. The Active Partner acknowledges that he acts in his own name but on
behalf of the Investing Partner.
5. The Investing Partner maintains an interest in developing the
coal-mining project for the further development of a power
generation project and other possible purposes and ventures; and the
Active Partner expects a compensation to be established in this
instrument.
6. In performance of the above mentioned agreement, on July 10, 1998,
the Active Partner executed with ECOCARBON a "Contract for the
Exploration and Exploitation of Coal - "Contrato de pequena
exploracion y explotacion carbonifera"-, covering an area described
in Clause 1.2 thereof within the municipality Guaduas.
7. Also, in performance of the above mentioned agreement, the Active
Partner submitted in his name but for the account of the Investing
Partner, three (3) applications for the exploration and exploitation
of areas - "solicitudes de exploracion y explotacion"-, for areas
adjacent to the area covered by the Contract dated July 10, 1998.
The applications are included within the following coordinates:
a) parting from "Punto Arcifinio" 248 IC
X: 106596000 Y: 946380 Area: 495 Has. Vereda Tabaquera
X: 106596000 Y: 946380 Area: 450 Has. Vereda: Carbonera
San Xxxx
b) parting from- Punto Arcifinio 204-3A:
X: 105304000 Y: 945990 Are26a: 420 Has. Vereda: Chipauta -
Carbonera
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Active Partner has agreed to submit two additional applications in
the neighboring areas, which have already been compensated for and
the coordinates of which will be provided as soon as possible to
Investing Partner.
8. The Parties acknowledge the need to enter into this agreement of
"association" while the feasibility studies for any of the above
intended projects are concluded. Materialization of such projects is
not an obligation; instead it will be the consequence of the
conclusions of such feasibility studies.
9. For the actions conducted to date by the Active Partner, he has been
compensated by the individuals who have formed the Investing
Partner, with the following amounts:
- Twenty million Pesos (Col $20.000.000), paid on
May 19, 1998, as a compensation for consulting services
provided through April 23, 1998.
- Four million Pesos ($4.257.443) paid on October 6, 1998, as
a compensation for the submittal of the second and third
"applications".
- The equivalent in Colombian Pesos to USD 4,500 paid as an
advance against the first installment of 50% of the Col Ps
110.000.000 as provided for in 2.1 of this agreement.
BASED ON THE ABOVE CONSIDERATIONS, THE PARTIES AGREE AS FOLLOWS:
1. OBLIGATIONS OF THE ACTIVE PARTNER:
0.1 In relation to the existing Contract of July 10, 1998, the
Active Partner shall comply all the obligations therein
stated and shall ensure that it remains valid and
enforceable in all respects.
0.2 In relation to the three (3) applications for exploration
and exploitation submitted, as well as any other application
as indicated above, also the Active Partner shall diligently
conduct all actions and processes necessary to make these
applications convertible into Contracts for Exploration and
Exploitation.
0.3 To search for and obtain, for the benefit of the project all
technical, commercial and any other kind of information as
may be necessary or convenient for the successful
exploration and exploitation of coal reservoirs that may be
found in the areas and in other zones of the Colombian
territory.
0.4 To advise the Investing Partner of any act or fact that may
affect the rights to explore and develop the coal mines in
the areas mentioned above.
0.5 To refrain from conducting any assignment, alienation,
limitation to the property, mortgages or any other
encumbrance upon the rights derived from the contract and
the applications referred to above.
0.6 To keep any and all technical, commercial or financial
information related to the rights under the contracts and
under this agreement strictly confidential
0.7 To assign all and free of any and all encumbrance the rights
that he may have by virtue of this agreement, under the
Contract with ECOCARBON and under the applications above
mentioned, to the Investing Partner within the month
following receipt of the advise provided payments under
clause 2.1 and 2.2 are made and without prejudice to the
compensation agreed to in the form of a percentage of
profits described in clause 2.3 of this agreement.
0.8 To grant the Investing Partner the right to participate,
under similar terms and conditions as obtained by the Active
Partner, in any Projects, whether commercial, industrial or
otherwise, on any lands, or interest in any lands, obtained
by the Active Partner, located within a 25 mile radius from
the perimeter of the area described in clause 1.2 of the
Contract entered into between the Active Partner and
ECOCARBON for the exploration and exploitation of coal,
dated July 10, 1998.
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2. OBLIGATIONS OF THE INVESTING PARTNER:
2.1 To pay the Active Partner the amount of One hundred ten
million Colombian Pesos (Col$110.000.000), in two
installments as follows:
a) Fifty percent (50%) on the tenth (10th) working day
following execution of this agreement;
b) Fifty percent (50%) on the twentieth (20th) working
day following execution of this agreement.
2.1 To pay the Active Partner the total amount of Twenty five
thousand US Dollars (USD 25,000) divided into twelve (12)
equal monthly installments the first one becoming payable on
the same day as the amount described in 2.1(b) herein
above. Each one of these payments shall be made in Colombian
Pesos by converting the amount in dollars to pesos at the
Representative Market Exchange Rate as certified by the
Banking Superintendency for the day of payment.
2.2 Once the corporate structure for the Mining and/or Power
Generation is established, where the Investing Partner has
an interest, then it will ensure that such company or
companies, resulting of this decision shall each agree with
the Active Partner on a share of profits in the amount of
two percent (2%) of the net distributable profits - after
taxes and reserves - as determined in the Balance Sheet and
other financial documents of each company.
2.3 Payments contemplated in this clause as payable to Active
Partner, shall be made by Investing Partner according to
payment instructions received from Active Partner, provided
Beneficiary is clearly identified.
3. APPLICABLE LAW AND ARBITRATION.
The laws of the Republic of Colombia shall govern this agreement.
Any dispute between the parties that may not be amicably resolved
within the sixty (60) calendar days following the claim from one of
the Parties, shall be submitted to the decision of an Arbitration
tribunal that shall meet and decide according to the rules of the
Center of Conciliation and Arbitration of Santafe de Bogota, D.C.,
The tribunal shall be formed by 3 arbitrators appointed by the joint
agreement of the Parties. In the absence of such agreement, the
Parties delegate this decision upon the Center of Conciliation and
Arbitration of Bogota. The Tribunal shall meet in Bogota and its
ruling shall be in law.
4. ADDRESSES OF THE PARTIES:
For the purposes of information and advises between the Parties
under this agreement, each one of them appoints the following agents
and their address as follows:
The Active Partner: The Investing Partner.
XXXXXX XXXXXXX XXXXXXX XXXXX LORIQUER
Diag.128C NDEG58-04 Cra.11 NDEG115-08
Tel. 000 0000 Tel. 000 00 00
Fax. 000 0000 Fax. 000 00 00
Santafe de Bogota D.C. Santafe de Bogota D.C.
5. LANGUAGE:
This agreement is executed simultaneously in both the English and
the Spanish languages.
6. EXPENSES AND TAXES.
The Investing Partner shall pay the expenses for the authentication
of signatures and recognition of this agreement as well as the stamp
tax.
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IN WITNESS OF THE ABOVE THE PARTIES HAVE CAUSED THIS AGREEMENT TO BE EXECUTED IN
THE CITY OF SANTAFE DE BOGOTA D.C., THIS 6TH DAY OF APRIL 1999, BY:
The Active Partner The Investing Partner:
/s/XXXXXX XXXXXXX /s/XXXXX XXXXXXXX
LEGAL REPRESENTATIVE
CONRBONES DE GUADUAS, LTDA, Y
POTOMAC ENERGY (BVI), LTD.
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