PT KUBAR RESOURCES World Trade Center 14th Floor Jl. Jenderal Sudirman Kav. 29-31 Jakarta 12920, Indonesia KAL ENERGY, INC. World Trade Center 14th Floor Jl. Jenderal Sudirman Kav. 29-31 Jakarta 12920, Indonesia Dear Sirs, US$400,000 TERM LOAN FACILITY
Exhibit
99.1
APRIL
14, 2009
World
Trade Center 14th Floor
Xx.
Xxxxxxxx Xxxxxxxx Xxx. 00-00
Xxxxxxx
00000, Xxxxxxxxx
KAL
ENERGY, INC.
World
Trade Center 14th Floor
Xx.
Xxxxxxxx Xxxxxxxx Xxx. 00-00
Xxxxxxx
00000, Xxxxxxxxx
Dear
Sirs,
US$400,000
TERM LOAN FACILITY
This
letter ("Agreement")
sets out the terms upon which HADIPUTRANTO, HADINOTO &
PARTNERS, an Indonesian partnership established under the laws of the
Republic of Indonesia, and having its principal place of business at 21st Xxxxx,
Xxxxx 0, Xxxxxxxxx Stock Exchange Building, Xx Xxxx. Xxxxxxxx Xxx 00-00, Xxxxxxx
00000 Xxxxxxxxx (the "Lender") is willing to make
available to PT Kubar Resources, a company established under the laws of the
Republic of Indonesia and having its domicile at World Trade Center 14th Floor,
Xx. Xxxxxxxx Xxxxxxxx Xxx. 00-00, Xxxxxxx 00000, Xxxxxxxxx (the
"Borrower") a loan (the
"Loan") in the principal
amount equal to the sum of:
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(a)
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US$400,000;
and
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(b)
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the
amounts advanced by the Lender to the Borrower pursuant to Clause 1.1(b)
below,
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with the
Borrower's obligations to repay such Loan being guaranteed by KAL Energy, Inc, a
company incorporated under the laws of Delaware and having its registered office
at The Company Corporation, 0000 Xxxxxxxxxxx Xxxx Xxxxx 000, Xxxxxxxxxx XX 00000
("Guarantor").
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Drawdown
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Within
two business days (in Jakarta) of the date of execution of this Agreement, and
subject to the due and proper execution of the Settlement Agreement between the
Guarantor, the Borrower, PT Kubar Resources and the Lender, the Lender shall
advance to the Borrower an amount of US$400,000, to be deposited directly into
the following account of the Borrower:
Account
Number:
SWIFT
address:
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Bank
Details:
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HSBC
Bank
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World
Trade Centre Building
Jl.
Jend. Xxxxxxxx Xxx 00-00
Xxxxxxx Xxxxxxxxx
00000
Tel:
x00 00 000 0000
Fax:
x00 00 000 0000
Contact:
Xxxx Xxxxxxxx
On each
Interest Payment Date (as defined below), the Lender shall advance to the
Borrower an amount equal to the total interest payment due on such Interest
Payment Date. Subject to Clause 1.1(c), the Parties acknowledge and
agree that, from any advance made pursuant to this Clause 1.1(b) on an Interest
Payment Date, the Lender shall be entitled to set-off the amount due to the
Lender from the Borrower pursuant to Clause 1.3(c), and such set-off shall be
effected by the Lender without the obligation to remit any proceeds to the
Borrower.
To the
extent that the Borrower is obliged, pursuant to Indonesian tax laws, to
withhold any amount from the payment of any interest due pursuant to Clause 1.3,
then:
that
portion of the advance made pursuant to Clause 1.1(b) in an amount equal to such
withholding tax liability of the Borrower shall not be set-off in the manner
provided for in Clause 1.1(b) but shall instead be paid by the Lender to the
Borrower's account as specified in Clause 1.1(a) on the applicable Interest
Payment Date to which the advance relates;
the
Borrower shall immediately remit the amount advanced by the Lender as referred
to in Clause 1.1(c)(i) to the Indonesian tax authorities, and within fourteen
days after the relevant Interest Payment Date, provide to the Lender the
relevant withholding tax receipt issued by the Indonesian tax authorities in
respect of the amount referred to in Clause 1.1(c)(i).
Repayment
The
Borrower shall repay the Loan in one lump sum on the date which no later than
five business days (in Jakarta) after the first of the following events occurs
(such due date of repayment being the "Final Repayment
Date"):
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(a)
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the
date on which the total funding raised by the Guarantor (whether through
any form of equity, loan capital or debt raising) since the date of this
Agreement exceeds in aggregate an amount of US$4,000,000;
or
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(b)
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the
date on which the Guarantor, the Borrower or PT Kubar Resources sells,
transfers or assigns all or part of its interest (directly or indirectly
and whether by way of share sale, sale of an economic interest or any
other means) in any Indonesian mining projects in which the Guarantor,
Xxxxxxxx and/or KR has, directly or indirectly, any
interest.
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Interest
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Interest
shall be payable by the Borrower on the Loan in relation to each Interest Period
at the rate of 5% per annum (subject to adjustment in accordance with Clause
1.3(d)), payable annually in arrears on each Interest Payment
Date. For the purposes of this Agreement:
"Interest Period" means each
period beginning on the date on which the first drawdown under Clause 1.1(a) is
made or (if already made) on an Interest Payment Date and ending on and
including the day immediately preceding the next Interest Payment
Date:
in the
case of the first Interest Period, the interest period shall end on the day
immediately preceding the next Interest Payment Date;
in the
case of the last Interest Period, the interest period shall end on the Final
Repayment Date.
"Interest Payment Date" means
each of the following dates:
each
anniversary of the date of the first drawdown made under Clause 1.1(a);
and
the Final
Repayment Date.
Interest
shall accrue from day to day and shall be calculated on the basis of the actual
number of days elapsed and a 360 day year, including the first day of the period
during which it accrues but excluding the last. Interest shall be
paid on the Loan on the last day of each Interest Period.
The
Parties acknowledge and agree that the repayment of any interest due by the
Borrower to the Lender pursuant to this Clause 1.3 on any Interest Payment Date
shall be deemed satisfied pursuant to the set off arrangements referred to in
Clause 1.1(b).
The
Lender and the Borrower acknowledge and agree that upon the total aggregate
amount of interest paid by the Borrower pursuant to Clause 1.3(a) reaching
US$134,325, the interest rate that shall be applicable to the outstanding
balance of the Loan from that time onwards shall be such interest rate as may be
agreed between the Lender and the Borrower, and pending or failing such
agreement, such interest rate shall be deemed to be zero.
Payments
All
payments by the Borrower hereunder shall be made in United States dollars in
same day funds by 11:00 a.m. (New York time) on the due date to the Lender's
account with:
Account
Name:
Account
No:
Account
Bank:
Bank
Address:
Bank SWIFT:
or to
such other bank account as the Lender may from time to time
specify.
No
Deduction
Subject
to Clause 1.5(b), all payments by the Borrower under this Agreement shall be
made in full without set-off or counterclaim or any deduction or withholding for
or on account of any present or future taxes, duties, charges or fees of any
kind. Subject to Clause 1.5(b), if the Borrower is compelled by law
to make any such deduction or withholding, the Borrower will promptly pay to the
Lender such additional amounts as will result in the net amount received by the
Lender being equal to the full amount which it would have received if there had
been no such deduction or withholding.
Despite
clause 1.5(a), where Indonesian tax laws and regulations require the Borrower to
deduct withholding tax from any interest payments due to the Lender pursuant to
this Agreement, the Borrower shall be entitled to so withhold the relevant
amount and remit the same to the Indonesian taxation authorities. The
Borrower shall obtain a receipt from the Indonesian taxation authorities in
respect of the amount so remitted, and provide the original of such receipt to
the Lender.
Representations
and Warranties
The
Borrower represents and warrants to the Lender that:
the
Borrower is a company duly incorporated with limited liability and validly
existing under the laws of Singapore, and has full power, authority and legal
right and has taken all necessary corporate action and obtained all necessary
consents in order to borrow the Loan on the terms of this Agreement and to
perform its obligations under this Agreement, and this Agreement constitutes
legal, valid and binding obligations of the Borrower in accordance with its
terms; and
neither
the borrowing of the Loan nor the performance by the Borrower of its obligations
under this Agreement will conflict with any obligation applicable to the
Borrower or result in or oblige the Borrower to create any encumbrance on any of
its assets.
The
Guarantor represents and warrants to the Lender that:
the
Guarantor is a company duly incorporated with limited liability and validly
existing under the laws of Delaware, and has full power, authority and legal
right and has taken all necessary corporate action and obtained all necessary
consents in order to perform its obligations under this Agreement, and this
Agreement constitutes legal, valid and binding obligations of the Guarantor in
accordance with its terms; and
the
performance by the Guarantor of its obligations under this Agreement will not
conflict with any obligation applicable to the Guarantor nor result in or oblige
the Guarantor to create any encumbrance on any of its assets.
The above
representations and warranties shall be repeated daily with reference to the
facts and circumstances at the time of repetition until the Loan and all other
monies due under this Agreement have been paid in full.
Undertakings
The
Borrower and the Guarantor undertake that so long as any sum remains owing under
this Agreement, they will:
forthwith
notify the Lender of any material litigation, arbitration or administrative
proceedings which are brought or (to its knowledge) threatened against the
Borrower or the Guarantor;
ensure
that the obligations of the Borrower under this Agreement at all times rank at
least pari passu with all liabilities of the Borrower, except for any statutory
preference applicable in the winding-up of the Borrower.
Events of
Default
The
Lender may by written notice to the Borrower declare the amount of the Loan
outstanding and all other sums payable under this Agreement to be, whereupon the
same shall become, immediately due and payable if any of the following events of
default occurs:
the
Borrower fails to pay any sum payable under this Agreement when
due;
the
Borrower fails to perform any of its other obligations under this
Agreement;
any
representation or warranty made by the Borrower or the Guarantor in this
Agreement or in any notice or other document delivered pursuant to this
Agreement is or proves to have been untrue or inaccurate in any material
respect;
a
petition is presented or any proceedings are commenced or an order is made or a
resolution is passed or a notice is issued convening a meeting for the purpose
of passing any resolution, or any other step is taken:
for the
winding-up, insolvency, administration, bankruptcy or reorganisation of the
Borrower or the Guarantor; or
for the
appointment of a liquidator, administrator, administrative receiver, receiver or
trustee of the Borrower or the Guarantor or any of their respective
assets;
a
creditor takes possession of all or any part of the business or assets of the
Borrower or Guarantor, or any execution or other legal process is enforced
against all or any part of the business or assets of the Borrower or the
Guarantor and is not discharged or stayed within 14 days.
Default
Interest
If the
Borrower fails to pay any sum payable under this Agreement when due, it shall
pay interest on such sum from and including the due date up to and including the
date of actual payment (both before and after judgment) at the rate per annum of
10%. So long as the default continues such interest shall be
compounded monthly. Interest at the rate determined as aforesaid
shall be calculated on the basis of the actual number of days elapsed and a 360
day year, shall accrue from day to day and shall be payable from time to time on
demand.
Guarantee
The
Guarantor unconditionally and irrevocably guarantees, as a continuing
obligation, the due and punctual payment of any amounts due by the Borrower to
the Lender in accordance with this Agreement, notwithstanding any dispute
between the Borrower and the Lender, and if the Borrower fails to pay any such
amount owed to the Lender when due, the Guarantor shall pay such amount to the
Lender forthwith upon receiving the Lender's first written
demand. Unless waived, released or reduced by a writing of the
Lender, the liability of the Guarantor under this Agreement shall be
irrevocable, absolute and unconditional and shall not be affected or discharged
by, and the Guarantor hereby irrevocably waives any defenses it may now have or
hereafter acquire in any way relating to, any or all of the
following:
any lack
of validity or enforceability of this Agreement or any agreement or instrument
relating thereto;
any
change in the time, manner or place of performance or payment of, or in any
other term of, all or any of the obligations of the Borrower under or in respect
of this Agreement, or any other amendment or waiver of or any consent to or
departure from any provision hereof, or the granting of any time or indulgence
to the Borrower or any act or omission of the Lender or any other person which,
but for this provision in this paragraph 1.10, would or might discharge the
Guarantor;
any
change, restructuring or termination of the corporate structure or existence of
the Borrower, or the bankruptcy, administration, insolvency or liquidation, or
any change in the constitution, ownership or status of, the Guarantor or the
Borrower;
any act,
omission, event, circumstance which would or may but for this provision operate
to prejudice, affect or discharge the guarantee given by the Guarantor or the
liability of the Guarantor hereunder, not being an act of the
Lender.
No
Waiver
No
failure or delay by the Lender in exercising any right, power or remedy under
this Agreement shall operate as a waiver thereof. Rights, powers and
remedies available under this Agreement are cumulative and do not exclude those
provided by law.
Severability
If at any
time any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, the legality,
validity and enforceability of such provision under the law of any other
jurisdiction, and of the remaining provisions of this Agreement, shall not be
affected or impaired thereby.
Assignment
The
Borrower may not assign any of its rights or transfer any of its obligations
under this Agreement.
Notices
Any
notice or demand given or made in connection with this Agreement shall be sent
to the Lender at its address given above or to the Borrower or the Guarantor in
accordance with the details given in the Schedule or such other address as the
relevant party may from time to time notify to the other. Notices
shall be in writing and made by Agreement or facsimile.
Third
Party Rights
The
Contracts (Rights of Third Parties) Act 1999 shall not apply to this Agreement
and no person not party to this Agreement shall have or acquire any right to
enforce any term of it pursuant to that Act. This provision shall not
affect any right or remedy of any third party which exists or is available
otherwise than by reason of that Act and shall prevail over any other provision
of this Agreement which is inconsistent with it.
Governing
Law
This
Agreement and the rights and obligations of the parties under it shall be
governed by and construed in accordance with the laws of England.
Dispute
Resolution
Any
difference, dispute, conflict or controversy (a "Dispute"), arises out of or in
connection with this Agreement or its performance, including without limitation
any dispute regarding its existence, validity, termination of rights or
obligations of any Party, shall be referred to and finally resolved by
arbitration in accordance with the arbitration rules of the Singapore
International Arbitration Centre (SIAC) (the "SIAC Rules") for the time
being in force. The arbitration will be conducted in the English language in
Singapore. The Board of Arbitration will consist of one arbitrator
appointed in accordance with the SIAC Rules.
Counterparts
The
Parties agree that this Agreement may be executed in several counterparts;
however, the Parties further agree that each of said counterparts shall be
deemed an original and that said counterparts shall constitute but
one
and the
same instrument which may be sufficiently evidenced by one
counterpart.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
Please
confirm your acceptance of the foregoing terms and conditions by signing and
returning to us the duplicate of this Agreement.
Yours
faithfully,
For and
on behalf of
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HADIPUTRANTO,
HADINOTO & PARTNERS
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| //s// Timur Sukirno | ||
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Name:
Timur Sukirno
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Title:
Managing Partner
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We
confirm our acceptance of the terms and conditions set out above.
For and
on behalf of
| PT KUBAR RESOURCES | KAL ENERGY, INC | |
| //s// Xxxxxx Xxxxxxxxx | //s// Xxxxxx Xxxxxxxxx | |
| Name: Xxxxxx Xxxxxxxxx | Name: Xxxxxx Xxxxxxxxx | |
| Title: President Director | Title: Director and Chief Financial Officer | |
| Dated: 14 April 2009 | Dated: 14 April 2009 |
THE
SCHEDULE
Notice
Details of the Borrower
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Name:
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Address:
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World
Trade Center,
14th
Floor
Jl.
Jend. Xxxxxxxx Xxx 00 -00
Xxxxxxx
00000 Xxxxxxxxx
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Fax:
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x00-00
000 0000
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Attention:
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Xxxxxx
Xxxxxxxxx, President Director
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Notice
Details of the Guarantor
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Name:
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KAL
Energy, Inc
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Address:
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World
Trade Center,
14th
Floor
Jl.
Jend. Xxxxxxxx Xxx 00 -00
Xxxxxxx
00000 Xxxxxxxxx
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Fax:
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x00-00
000 0000
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Attention:
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Xxxxxx
Xxxxxxxxx, Chief Financial Officer
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