AMENDMENT NO. 1 TO ROYALTY AGREEMENT
EXHIBIT
10.1
AMENDMENT
NO. 1
TO
This
AMENDMENT
NO. 1 TO ROYALTY AGREEMENT
(the
“Amendment”)
is
made and entered into as of October 1, 2008, between Concord International
Inc.,
a privately held company incorporated in the Bahamas (“Concord,”),
Xxxxxxxx Mining Pte. Ltd., a company incorporated in Singapore (“Xxxxxxxx”),
and
KAL Energy, Inc., a Delaware corporation (“KAL”).
KAL,
Xxxxxxxx and Concord are hereinafter referred to collectively as the
“Parties”
and
individually as a “Party”.
RECITALS:
1. KAL,
Xxxxxxxx and Concord are parties to a Royalty Agreement, dated as of December
29, 2006 (the “Agreement”),
pursuant to which KAL agreed to make certain royalty payments to Concord in
connection with the production of thermal coal by KAL pursuant to the Mining
Concessions. Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Agreement.
2. KAL,
Xxxxxxxx and Concord desire to amend Sections 2.1 and 2.2 of the Agreement
in
order to modify the royalty payment provisions set forth therein.
C. Section
4.6 of the Agreement provides that no terms or provisions of the Agreement
may
be varied or modified and no subsequent alteration, amendment, change or
addition to the Agreement shall be binding upon the Parties unless reduced
to
writing and signed by an authorized officer of each Party.
AGREEMENT:
NOW,
THEREFORE, in consideration of the foregoing recitals and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. Section
2.1 of the Agreement is hereby amended and restated to read in its entirety
as
follows:
“Royalties
on Production by KAL, Xxxxxxxx or their Affiliates.
The
Xxxxxxxx Shareholders hereby designate Concord as the exclusive recipient of
royalty payments from KAL under this Agreement. KAL shall make royalty payments
to Concord as follows:
(a) KAL
shall
make a one-time payment to Concord of U.S.$15,000 (the “Initial
Payment”)
within
seven (7) days of the first shipment of the Product from the Mining Concessions
(the “First
Shipment”)
by
KAL, Xxxxxxxx or their Affiliates. In exchange for the Initial Payment, Concord
shall waive any royalty payments due to Concord under this Agreement for a
period of thirty-six (36) months following the First Shipment (the “Royalty
Waiver Period”).
(b) KAL
shall
make royalty payments to Concord in the amount of U.S.$0.20 per metric ton
of
the Product that is produced by KAL, Xxxxxxxx or their Affiliates pursuant
to
the Mining Concessions during each calendar quarter during the term of this
Agreement subsequent to the expiration of the Royalty Waiver Period; provided,
however, any time that the sale price per metric ton of the Product equals
or
exceeds U.S.$40.00 at any time during the term of this Agreement, the amount
of
the royalty payments due to Concord for such sale under this Agreement shall
be
correspondingly increased to the higher of U.S.$0.40 per metric ton or 0.65%
of
the price per metric ton (the “Royalty”).
The
entire amount of the Royalty shall be payable directly and exclusively to
Concord, unless otherwise agreed by the Parties.”
2. Section
2.2 of the Agreement is hereby amended and restated to read in its entirety
as
follows:
“Reports
and Payment.
Within
forty-five (45) days following the end of each calendar quarter subsequent
to
the expiration of the Royalty Waiver Period, KAL shall furnish to Concord a
report setting forth the gross production of the Product in metric tons for
such
period and a calculation of the Royalty and other amounts due, if any. Such
report shall be accompanied by reasonably satisfactory evidence of payment
of
such amounts for such period to Concord. Payment of the Royalty shall be made
to
Concord no later than thirty (30) days following the end of each calendar
quarter subsequent to the expiration of the Royalty Waiver Period.”
3. Counterparts.
This
Amendment may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which shall constitute one
Amendment.
4. Terms
and Conditions of the Agreement.
Except
as specifically amended by this Amendment, all terms and conditions of the
Agreement shall remain in full force and effect.
[Remainder
of Page Intentionally Left Blank; Signature Pages Follow]
IN
WITNESS WHEREOF, this Amendment is executed by the undersigned as of the date
first written above.
|
KAL
Energy, Inc.
|
|
/s/
Xxxxx Xxxxxxxxxx
|
|
By:
Xxxxx Xxxxxxxxxx
|
|
Its:
Chief Financial Officer
|
|
CONCORD:
|
|
Concord
International, Inc.
|
|
/s/
Xxxxxx Xxxxxxxxx
|
|
By:
Xxxxxx Xxxxxxxxx
|
|
Its:
Director
|
|
XXXXXXXX:
|
|
Xxxxxxxx
Mining Pte. Ltd.
|
|
/s/
Xxxxx Xxxxxxxxxx
|
|
Its:
Director
|
