Amendment
This amendment (the "Amendment") among Consolidated Energy, Inc., a Wyoming
corporation ("CEI"), CEI Holdings, Inc., a Nevada corporation ("HOLDINGS"), a
wholly-owned subsidiary of CEI, and Saudi American Minerals, Inc., a Nevada
corporation ("SAMI"), (individually, a "Party"; collectively, the "Parties"), is
being executed for the purpose of amending the Agreement dated May 30th 2003
Agreement and Plan of Acquisition and Merger among CEI, HOLDINGS, and SAMI and
all subsequent amendments.
Premises
Whereas, it is necessary for Consolidated Energy to obtain additional
funding to remain as a going concern;
Whereas, the cancellation of the May 30th, 2003 merger agreement (Attached
as Schedule A) and all subsequent amendments is necessary for Consolidated
Energy Inc. to obtain additional funding and to enter into a new Agreement;
Whereas, SAMI desires the right to terminate and declare all agreements,
including this agreement between CEI, Holdings and SAMI null and void at SAMI's
sole discretion prior to receiving from CEI, the stock and/or cash described in
this Agreement.
Whereas, the parties have agreed to the following terms.
Agreement
1. The May 30th 2003 Merger Agreement and any and all subsequent
amendments, is hereby terminated by mutual consent of the Parties, and
all obligations thereunder are declared null and void. Executed board
consents, documenting the termination from each Party, are attached
hereto as Appendix 1 and incorporated herein by this reference.
2. Both parties agree that this Agreement can be terminated and declared
null and void at the sole discretion of SAMI prior to SAMI's receipt
of CEI stock or cash.
3. CEI shall pay to SAMI Seven Hundred Fifty Thousand Dollars ($750,000)
(the "Cash Payment") and issue Three Million (3,000,000) shares of
CEI's rule 144 common stock (the "CEI Stock") to SAMI in exchange for
the assignment by SAMI of a twenty-five percent (25%) interest in
SAMI's patented clean coal technology, patent # 6,447,559 herein
referred to as the "SAMI Technology", including any subsequent
improvements thereto, to HOLDINGS.
4. The aforementioned 3,000,000 shares of stock shall be subject to
restrictions barring all sales or transfers for two full years from
the date of this Agreement, and further restrictions limiting sales or
transfers following the expiration of the two year period to a maximum
of 50,000 shares per month.
5. The stock transfer, will not occur before but must be made by CEI
within 20 calendar days following (i) The execution of this Agreement;
and (ii) CEI receives authorization from its shareholders to increase
the number of authorized shares from 50,000,0000 shares to 100,000,000
shares.
6. CEI's cash payment of $750,000.00 is due and payable within 20
calendar days of completing all of the following: (i) The execution of
this Agreement; (ii) CEI achieves aggregate EBITDA from coal
production of $12 million after the date of this Agreement and; (iii)
CEI achieves at least $3 million in EBITDA in the most recent calendar
quarter; and (iv) CEI receives authorization from its shareholders to
increase the number of authorized shares from 50,000,0000 shares to
100,000,000 shares. However, the cash payment of $750,000.00 must be
paid no later than July 31, 2007 without regard to the above four (4)
items.
7. CEI agrees to pay SAMI, 3% annual interest (the interest) on the Cash
Payment from the date of this Agreement until the date CEI transfers
to SAMI the Cash Payment; such Interest payment to be made at the time
such transfer is made.
8. The transfer of the SAMI Technology shall entitle CEI (through its
subsidiary HOLDINGS) to receive 25% of the net income received by SAMI
from licensing or other income related to the patent or any expansion
or improvement of the SAMI Technology ("Net Proceeds"). Other than the
payment of the Cash Payment, the Interest and the CEI Stock referenced
in paragraphs 3, 4, 5, 6 & 7 above, neither CEI nor HOLDINGS shall
have any obligation to contribute additional money or resources to
receive these Net Proceeds. The Net Proceeds shall, using GAAP, be
calculated after deducting SAMI's reasonable and customary expenses,
overhead costs, related to the future development of the SAMI
Technology and administrative and salary costs. Administrative and
salary costs, which for the calculation of CEI's 25% distribution will
not exceed two hundred and fifty thousand dollars [$250,000] per year
until such time as gross revenues exceed one million two hundred and
fifty thousand dollars [$1,250,000]. When gross revenues exceed one
million two hundred and fifty thousand dollars [$1,250,000] the
administrative and salary costs, which for the calculation of CEI's
25% distribution will not exceed 20% of gross revenue unless approved
by CEI and SAMI. CEI shall have the right to inspect SAMI's books and
records at least once annually to confirm the calculation of Net
Proceeds.
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9. SAMI shall take all reasonable steps to complete the assignment of the
SAMI Technology as contemplated in Paragraph 3 above as soon as
reasonably possible following execution of this Agreement. The
assignment shall be in substantially the form attached hereto as
Exhibit 1.
10. Each Party hereby represents and warrants that it has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly authorized
by all necessary corporate action on the part of each Party. This
Agreement constitutes the legal, valid and binding obligation of the
Parties, enforceable against each other in accordance with its terms.
The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will not, conflict
with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of
a benefit under, or result in the creation of any lien upon any of the
assets to be transferred by any party under, (i) the articles of
incorporation or by-laws, (ii) any loan or credit amendment, note,
bond, mortgage, indenture, lease or other amendment, instrument,
permit, concession, license or similar authorization applicable to any
of the parties or their subsidiaries or their respective properties or
assets, or (iii) subject to the governmental filings and other matters
referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to any of the
Parties or any of their subsidiaries or their respective properties or
assets.
11. Each Party further represents and warrants that no consent, approval,
order or authorization of, action by or in respect of, or
registration, declaration or filing with, any federal, state, local or
foreign government, any court, administrative, regulatory or other
governmental agency, commission or authority or any non-governmental
self-regulatory agency, commission or authority (a "Governmental
Entity") is required by or with respect to any of the Parties or any
of their subsidiaries in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated by
this Agreement, except for the filing of appropriate documents with
the relevant Governmental Entities to satisfy the applicable
requirements of state or federal securities or "blue sky" laws, or the
transfer or assignment of patents, service marks, trade names,
copyrights or similar rights.
a. Regarding the issuance of the CEI Stock, CEI shall be responsible
for any necessary filings with Governmental Entities. SAMI agrees
to cooperate and assist with such filings as may be required.
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b. Regarding the transfer and assignment of the SAMI Technology to
HOLDINGS, SAMI shall be responsible for any necessary filings
with Governmental Entities. CEI agrees to cooperate and assist
with such filings as may be required.
IN WITNESS WHEREOF, CEI, HOLDINGS AND SAMI have caused this Amendment to be
signed by their respective officers thereunto duly authorized, all as of
December 30, 2005.
Consolidated Energy, Inc.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title : President
CEI Holdings, Inc.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title : President
Saudi American Minerals, Inc.
By: /s/ X. X. Xxxxxxx
----------------------
Name: X.X. Xxxxxxx
Title : President
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