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Exhibit 10.xli
MEMORANDUM OF AGREEMENT
This Memorandum of Agreement ("MOA") is made effective as of October 9th 1998,
by and among:
CYPRUS AMAX COAL COMPANY ("Cyprus"), a company established under the laws of
Delaware, United States, with offices at 0000 X. Xxxxxxx Xxxxxx, X.X. Xxx 0000,
Xxxxxxxxx, Xxxxxxxx 00000-0000, Fax number (0 000) 000-0000;
NEVADA MANHATTAN MINING INC. ("Nevada"), a company established under the laws of
Nevada, with offices at 0000 Xxxxx Xxxxxxx Xxxxxxxxx, Xxxxxxxxx, XX 00000; and
The individuals listed on the attached Exhibit A, all of whom are Indonesian
citizens, residing in Indonesia, whom for notices purposes shall be held to all
reside at Xx. Xxxxxxx Xxxxxxxxx XX Xx 00 Xxxxx Xxxxxx Xxxxx - Xxxxxxx 00000
Indonesia, Fax number __________________, and shall collectively be referred to
as "Shareholders."
(Together the "Parties" and separately a "Party")
RECITALS
A. PT Mecfa Energy International, a limited liability company formed in
the status of a PMDN company by Notarial Deed Number 52 dated October
12, 1993, Decree of Minister of Justice Number C2-981.HT.01.01Th98
dated February 18, 1998 ("Contractor") which was formed to act as a
contractor under a Coal Contract of Work executed with the Republic of
Indonesia on February 19, 1998 ("CCOW").
B. Under the CCOW Contractor is granted the exclusive right to explore
for, develop and mine coal resources on certain lands located under
Kode Wilayah 97PB0330, in East Kalimantan, the area of which is more
particularly described on the attached Exhibit A.
C. The Shareholders collectively hold 100% of the shares of Contractor.
D. Cyprus has experience and expertise in coal exploration and mining and
wishes to acquire an interest in the CCOW and cooperate with Nevada and
the Shareholders in the exploration and development of the CCOW.
E. Nevada has assisted in locating Cyprus to assist with the development
of the CCOW and the Parties wish for Nevada to hold an interest in the
CCOW.
F. The Parties wish to set forth the terms of their agreement for Cyprus
to acquire an 85% interest in the CCOW and provide for the exploration
and development of the CCOW.
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AGREEMENT
NOW THEREFORE, in consideration for the mutual promises and covenants contained
herein, the sufficiency of which is hereby acknowledged by the Parties, the
Parties agree as follows:
1. Structure of the CCOW. The Parties agree that they will use all reasonable
endeavours in conformity with applicable laws to cause the Contractor's
status to be changed to a PMA company and receive all necessary approvals
such that Cyprus is allowed to acquire 85% of the shares of the Contractor.
2. Interests in the CCOW. Following the conversion of the Contractor into a
PMA company and receipt of all necessary government approvals, Cyprus, or
its designee, shall be entitled to acquire 85% of the shares of the
Contractor (the "Shares"), and Nevada and the Shareholders shall
collectively hold the remaining 15% of the shares of the Contractor. Until
such time as the Contractor can be converted into a PMA company and Cyprus
can acquire title to the Shares, the Parties acknowledge that the
Shareholders shall hold the Shares for the benefit of Cyprus and shall take
such actions, including without limitation, the voting of such Shares in
such manner as Cyprus may direct.
3. General Survey and Exploration Obligations: Subject to the provisions of
Section 4, Cyprus agrees that it will be responsible for the initial
payment of 100% of the costs and expenses of each Phase of exploration and
development, in a total amount of not less than US$450,000 (the "Costs").
Each of the programs for each Phase of exploration and development shall be
sufficient in scope and expenditure and shall be conducted within the time
frames established in the CCOW; provided however, that upon expenditure of
the Costs and if Cyprus elects not to proceed with additional exploration
and development it shall have no further obligation to the Shareholders or
Nevada, the Contractor or the Government of the Republic of Indonesia to
proceed under the terms of the CCOW.
4. Nevada and Shareholders. Nevada and the Shareholders shall collectively
hold a 15% carried interest in the Contractor, which means that Cyprus will
provide them with an interest bearing loan on commercial terms in an amount
equal to their 15% share of funds for all of the costs and expenses,
including without limitation, the Costs, associated with the exploration
and development of a mine on the CCOW (collectively, the "Total Costs");
provided however, that Cyprus shall be entitled to recover 100% of Nevada's
and the Shareholders' share of the Total Costs plus interest at the agreed
upon rate from 95% of the dividends due to Nevada and the Shareholders
derived from the sale of coal from the CCOW.
5. Exclusive Rights. Cyprus shall have the exclusive right to conduct
exploration and development of the CCOW and to acquire an 85% shareholding
in the Contractor. Cyprus shall be the manager, operator, and sales agent
of the project and shall have the exclusive and sole right to determine the
manner of proceeding with exploration and development, subject to the terms
of the CCOW.
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6. Joint Venture Agreements. The Parties each agree to use reasonable
endeavours to cause a more definitive Joint Venture Agreement to be
finalized and executed, as is necessary to further reflect the terms of
their agreements. The terms and conditions of such Joint Venture Agreement
shall be in conformity with the terms and conditions of this Agreement and
set out in greater detail the terms and conditions governing the
relationships between the parties thereto, their respective rights and
obligations, and such other terms as are customarily found in such
agreements. Execution of the Joint Venture Agreement by Cyprus shall be
dependent upon final approval by its Board of Directors.
7. Representations and Warranties. The Shareholders and Nevada represent and
warrant that:
7.1 all requirements of the CCOW have currently been met and the CCOW
is in good standing.
7.2 as to Nevada, Nevada represents that it is duly established and
has all necessary authority to enter into this Agreement.
7.3 as to each individual Shareholder, he or she has full authority
to enter into this agreement and has obtained to the extent
necessary, any spousal waiver or other legal consent necessary to
enter into this Agreement.
8. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the Republic of Indonesia.
9. Disputes. Any dispute ("Dispute") arising between the Parties in connection
with this Agreement and the performance of obligations or exercise of
rights hereunder shall if possible be settled first by amicable discussion
to be initiated by any Party(ies) delivering to the other Parties a written
notice ("Notice") setting forth the nature of the Dispute in reasonable
detail. If the Dispute is not amicably settled within thirty (30) days of
the date of delivery of a notice, then any Party may initiate arbitration
by written notice thereof to the other Parties. The Dispute shall then be
finally settled by a single arbitrator under the Rules of the Singapore
International Arbitration Centre ("SIAC"), applying the law of the Republic
of Indonesia. If within thirty (30) days of the date of delivery of the
Notice, the Parties have not agreed upon an arbitrator, such arbitrator
will at the request of any Party be appointed by and in the sole discretion
of the SIAC. Arbitration shall be in English and in Singapore. The Parties
agree that an arbitration award hereunder shall be final and binding and no
person or legal entity may appeal any award to any court or otherwise
initiate court proceedings with respect to a Dispute or any arbitration
thereof except for purposes of enforcement of an arbitration awards. An
arbitration award may be entered for enforcement in any court having
jurisdiction therefore. The Parties waive any provisions of otherwise
applicable law which could operate to terminate the appointment of an
arbitrator or require an arbitration to be completed within a fixed period
of time or provide for a right of appeal of any arbitration award.
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10. Assignment of Rights/Assumption of Obligations. None of the Parties may
assign its rights or cause a third party to assume its obligations
hereunder without the prior written consent of the other Parties except
that Cyprus may assign its rights to and cause a wholly owned subsidiary
("WOS") to assume its obligations hereunder without such consent.
11. Force Majeure. None of the Parties shall be liable to the other Parties for
failure or delay in performance of its obligations hereunder except an
obligation to pay money for periods of time and to the extent such failure
or delays is caused by events of force majeure beyond the reasonable
control of the affected Party.
12. Termination.
12.1 For Default. In the event a Party defaults and fails to perform its
obligations hereunder ("Default"), the other Party(ies) may deliver a
written notice describing such failure in reasonable detail and
requesting remedial action. If remedial action has not occurred and
the Default remedied within sixty (60) days of the date of receipt of
such notice, the non-defaulting Parties may terminate this Agreement
by written notice thereof.
12.2 Liquidated Damages. The defaulting Party(ies) will convey to the other
Party(ies) their entire interest in the Contractor. For purposes of
this paragraph, entire interest includes equity AND any claims on the
assets of the Contractor.
12.3 At Will by Cyprus. If Cyprus at any time determines that further
exploration is not justified by results to date or development is not
feasible, it may terminate this Agreement on thirty (30) days written
notice to the Shareholders and Nevada provided all payments and
reports required under the CCOW have been made and the CCOW is in good
standing. On such termination, Cyprus shall return 80% of the shares
of the Contractor (and retain 5% of the shares of the Contractor) to
be returned to the Shareholders and Nevada, or their designees whether
by transfer of shares or assignment of rights or interests for $1.00.
However, Cyprus shall be entitled to retain 5% of the shares of the
Contractor (and return 80% of the shares of the Contractor) in the
CCOW or property and mining rights subject to the CCOW; provided,
however, that Cyprus shall have no further obligations in respect of
funding under the CCOW. In the event that the rights provided under
the CCOW or land subject to the CCOW are transferred subsequent to the
time Cyprus retains its 5% interest, then Cyprus shall be entitled to
not less than 5% of the proceeds, fees, bonuses, or other payments
made for the transfer of interests in the CCOW.
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12.4 Following termination of the Agreement, Cyprus agrees that it shall
deliver to the Shareholders and Nevada, all data, records, reports,
maps or information of whatsoever kind regarding the CCOW
(collectively, the "Data").
13. WAIVER OF ARTICLE 1266. For purposes of termination of this Agreement as
contemplated hereby, the Parties waive the application of Article 1266 of
the Indonesian Civil Code to the extent it would otherwise require a
judicial order or intervention to effect termination of this Agreement in
accordance with its terms and conditions.
14. NOTICE AND DELIVERY. The delivery by a Party of any notice contemplated
hereby may be effected by messenger or by fax (with receipt confirmed by
the transmitting fax machine) to the address of the Parties first above
written or as may otherwise be specified by a Party in a written notice to
the other Parties. The date of delivery shall be the date the notice is
delivered by messenger or one (1) day following the transmission of a
notice by fax as specified herein.
15. CONFIDENTIALITY AND NON-DISCLOSURE. During the term of this Agreement, the
Parties each agree to keep and cause the Contractor, to keep confidential
and not disclose to third parties information about the CCOW and its
potential for mineral exploitation, information which the Parties may
obtain as a result of the relationship of the Parties contemplated hereby
and information generated by exploration, development or mining activities
in the CCOW whether in the possession of the Parties, subcontractors,
employees, agents, officers and directors (collectively, "Information")
except:
15.1 if such disclosure is required by law or the applicable rules of any
stock exchange;
15.2 is in or enters the public domain through no action of the Party
contemplating disclosure to a third party;
15.3 is disclosed to a Party by a third party not bound by any obligation
of confidentiality or nondisclosure with respect thereto; or
15.4 if the written consent of the non-disclosing Parties to a specified
disclosure is first obtained.
16. COUNTERPARTS. This Agreement may be executed in three (3) counterparts.
Upon the execution by each Party of a separate counterpart, each such
counterpart when delivered to the other Parties shall be deemed to be an
original and both together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Parties have caused this Agreement or a counterpart
thereof to be executed by their duly authorized representatives as of the date
first above written.
CYPRUS AMAX COAL COMPANY
/s/ Xxxxxxx X. Xxxxx
By __________________________
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
NEVADA MANHATTAN MINING INCORPORATED
/s/ Xxxxxxx Xxxxxx
By ___________________________________
Name: Xxxxxxx Xxxxxx
Title: Chief Operating Officer
The Shareholders:
(attach necessary signature page)
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EXHIBIT A
Shareholders
Memorandum of Agreement
dated effective as of October 7, 1998
by and among
Cyprus Amax Coal Company
1. Yoeslin Nasution
2. Achmad Sony Septana
3. Xxxxxxx Xxxx
4. Xxxxx Xxxxxxxx
5. Xxxxxx Xxxxxxx Bona Simanjuntak
6. Xxxxxx Xxxxxxxx
7. Xxxxxxx Manuasal Simanjuntak
