UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported):
September 29,
2009
KAL
ENERGY, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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333-97201
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98-0360062
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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World
Trade Center 14th Floor
Jl.
Jenderal Sudirman Kav. 29-31
Jakarta,
Indonesia
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12920
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (62) 21 5211110
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425).
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act 17 CFR
240.13e-4(c))
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ITEM 1.01
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
As
previously disclosed by KAL Energy, Inc. (“
KAL
”), KAL faces
various uncertainties in its continued efforts to realize its goal of
commercializing its rights to the concession entitled PT Graha Panca Karsa
(“
GPK
”). Such
uncertainties include, third party claims to the rights to GPK, possible
criminal activities by certain individuals associated with the titleholders to
GPK, delays in the mining license extension application for GPK, the unknown
potential negative impacts of the Bill on Mineral and Coal Mining as passed by
the Indonesian Parliament in January 2009 and a general lack of capital
liquidity. Despite these uncertainties, KAL has continued to
express confidence in its rights to the economic benefits of the GPK
project.
Notwithstanding
KAL’s stance with respect to its interests in GPK, due to the increasing
uncertainties as enumerated above, in particular KAL’s lack of funding, and the
significant legal expenses associated with defending its bundle of rights in
GPK, KAL has decided to cease this course of disadvantageous legal effort and
expense, but rather realize guaranteed financial value from its bundle of rights
in GPK by relinquishing all of its claims to GPK for the consideration of
US$5,000,000, as described in more detail below.
On
September 29, 2009, KAL, its subsidiary Thatcher Mining PTE, Ltd. (“
Thatcher
”), Romo
Nitiyudo Wachjo, Kangaroo Resources Ltd. (“
KRL
”) and GPK entered
into a Deed of Termination and Release (the “
Agreement
”) pursuant
to which Thatcher and GPK agree to, among other things, terminate the
Cooperation and Investment Agreement dated on or around January 7, 2007 by and
among GPK, Thatcher, Fitri S Astuty Goodwin and Sri Purwani (the “
Cooperation
Agreement
”), which is the agreement whereby Thatcher and KAL obtained the
economic rights to GPK. The termination of the Cooperation Agreement
serves to relinquish all claims of KAL and its affiliates to GPK.
Payment Obligations of KRL
Under the Agreement
Pursuant
to the terms of the Agreement, KRL is obligated make the following payments to
Thatcher: (i) US$100,000 on the date which is three (3) days from the date of
the Agreement (the “
First Payment
”); (ii)
US$2,400,000 on the date which is thirty (30) days from the date of the
Agreement (the “
Second
Payment
”); and (iii) US$2,500,000 on the date which is sixty (60) days
from the date of the Agreement (the “
Third
Payment
”). KRL may elect to make any of the above payments
prior to the relevant payment dates, provided that the minimum payments made are
at least US$250,000. Further, KRL may elect to extend the Second
Payment for forty-five (45) days by providing notice and submitting a penalty
payment of US$50,000 to Thatcher. If KRL makes such an election, the
Third Payment will automatically be extended for forty-five (45)
days. KRL may extend the Third Payment for an additional forty-five
(45) days by providing notice and submitting an additional penalty payment of
US$50,000 to Thatcher.
Obligations of Thatcher
Regarding Outstanding Agreements and Information Transfer
Within
seven (7) business days of the date of the Agreement, Thatcher shall provide to
KRL a list of the Original Agreements (defined below), such list which shall
disclose: (i) the title of each of the Original Agreements; (ii) the date of
each of the Original Agreements; and (iii) the parties to each of the Original
Agreements.
On the
date of the Second Payment, but prior to its being made, Thatcher shall make
available for inspection by KRL the terminations of the Original Agreements
signed by all counterparties with the exception of Thatcher.
Within
two (2) business days of receipt of the Second Payment by Thatcher, it shall
establish a data room that contains copies of the Original Agreements for review
by KRL. KRL will not be able to make copies of any of the Original
Agreements at that time.
On the
Release Date (defined below), Thatcher must: (i) provide copies of each Original
Agreement to KRL; (ii) procure the termination of each of the Original
Agreements; (iii) provide the originals of each document evidencing the
termination of the Original Agreements; and (iv) generally provide reasonable
help and assistance in respect of unwinding any transaction contemplated by the
Original Agreements.
Within
seven (7) business days of the date of the Agreement, Thatcher shall provide to
KRL a complete list of the Mining Information (defined below), such list which
shall disclose: (i) the title of the relevant Mining Information; (ii) the date
of the relevant Mining Information; and (iii) the author of the relevant Mining
Information.
Within
two (2) business days of receipt of the Second Payment by Thatcher, Thatcher
shall establish a data room that contains copies of the Mining Information for
review by KRL. KRL will not be able to make copies of any of the
Mining Information at that time.
On the
Release Date, Thatcher, KAL and GPK will each transfer to KRL its respective
right, title and interest in and to the Mining Information. Further,
on the Release Date, the original Mining Information must be delivered to
KRL.
“
Original Agreements
”
means the Cooperation Agreement and any and all other agreements which relate in
any way to GPK, the shares in GPK or any of the assets of GPK and entered into
by KAL and Thatcher or their nominees.
“
Release Date
” means
the earlier of: (i) the date on which KRL makes all of its payments as described
herein; and (ii) the date which falls ten (10) days after the date which either
KAL or Thatcher receives notice asserting material breach of the Agreement by
KRL, in the event that a material breach has taken place and remains uncured at
that date, provided that the First Payment and Second Payment have been made by
KRL and subject to dispute procedures available under the Agreement
“
Mining Information
”
is defined as all original and technical information associated with GPK which
is owned by GPK, KAL and Thatcher.
Additional Material
Provisions
Except
for claims arising under the Agreement, on and from the Release Date, the
parties to the Agreement released each other from all claims in respect of: (i)
the Original Agreements; (ii) the negotiation, entry into and performance of the
Original Agreements; (iii) any relationship between the parties created by or
arising out of or in connection with the Original Agreements; and (iv) any claim
which was or could reasonably have been known to any of the parties as at the
date of the Agreement arising out of or in any way connected with or incidental
to the Original Agreements.
KAL
guarantees the performance of Thatcher under the Agreement.
Each
party to the Agreement represents and warrants to each other party that: (i) it
has the power, capacity and authority to enter into the Agreement; (ii) the
Agreement is valid and binding on it; and (iii) it has not sold, assigned,
granted or transferred to any other person or entity any claim covered by the
terms of the Agreement or any Mining Information.
KAL intends to use the proceeds from
the Agreement to satisfy some of its outstanding debt obligations and to
generally pursue opportunities in connection with its mining and other
assets.
The
description of the Agreement above is qualified in its entirety by reference to
the full text of such Agreement, a copy of which is filed as Exhibit 10.1 to
this report and is incorporated by reference into this Item 1.01.
ITEM
2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
The description of the Agreement and
the transactions thereunder are incorporated by reference into this Item
2.01.
ITEM
9.01
FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
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Exhibit
Number
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Description
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10.1
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Deed
of Termination and Release by and among Thatcher, Romo Nitiyudo Wachjo,
Kangaroo and GPK dated September 29, 2009.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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KAL
ENERGY, INC.
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October
1, 2009
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By:
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/s/ William
Bloking
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William
Bloking
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Executive
Chairman and President
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EXHIBIT
INDEX
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Exhibit
Number
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Description
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10.1
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Deed
of Termination and Release by and among Thatcher, Romo Nitiyudo Wachjo,
Kangaroo and GPK dated September 29, 2009.
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