DRAFT II

Management Cooperation Agreement

PT SASANGGA BANUA BANJAR
On this day, Monday the eighteenth of October two thousand and ten has been agreed the
Management Cooperation Agreement PT Sasangga Banua Banjar (hereinafter referred to
as the Agreement), between:
1.

Name
Occupation
Address

: H. Naina bin H. Muhammad Sultan

: President Director of PT Agate Coal Indonesia
: 12-13-2, Hartamas Regency, Persiaran Dutamas, Sri Hartamas,
50480 Kuala Lumpur, Malaysia, and in Indonesia addressed at
PT Agate Coal Indonesia, The Beleza, Gapuraprima Towe 23 th
floor, Jl. Letjen Soepeno No. 34, Kelurahan Grogol Utara,
Kecamatan Kebayoran Lama, Kotamadya Jakarta Selatan.

Acting for its concern and on behalf of itself and PT Agate Coal Indonesia, as the
owner of 51% (fifty one percent) of shares PT Agate Coal Indonesia, and as the
President Director of PT Agate Coal Indonesia, therefore he is legitimate to act for
its concern and on behalf of PT Agate Coal Indonesia, hereinafter referred to as
FIRST PARTY.
2.

Name
Occupation
Address

: Francis Sekar Raja

: Commissioner of PT Agate Coal Indonesia
: 10/8 Prasad Enclave, Azeez nagar 1st Street, Kodambakkam,
Chennai 600024, India, and in Indonesia addressed at PT Agate
Coal Indonesia, The Beleza, Gapuraprima Towe 23th floor, Jl.
Letjen Soepeno No. 34, Kelurahan North Grogol, Kecamatan
Kebayoran Lama, Kotamadya South of Jakarta.

Acting for its concern and on behalf itself and PT Agate Coal Indonesia, as the
owner of 49% (forty nine percent) of shares PT Agate Coal Indonesia, and as the
Commissioner of PT Agate Coal Indonesia, therefore he is legitimate to act for its
concern and on behalf of PT Agate Coal Indonesia, hereinafter referred to as
FIRST PARTY.
3.

Name
Occupation
Address

: Dokter Haji Prihandono bin Haji Sulaiman

: Private
: Jalan Kampung Baru No. 48, RT-004 RW-003, Kebon Jeruk,
Jakarta Barat.

Acting for its concern and on behalf itself, which cooperate with PT Agate Coal
Indonesia in managing the Limited Liability Company (PT) Sasangga Banua
Banjar, hereinafter referred to as SECOND PARTY.

FIRST PARTY and SECOND PARTY are jointly referred to as the PARTIES.
The PARTIES hereby explain the following:
1. Whereas the PARTIES are partner in the business which engaged in coal mining
and etc, the FIRST PARTY shall going to buy all the shares of PT. Sasangga
Banua Banjar (hereinafter referred to as "Company") and the SECOND PARTY
support the implementation of the transaction, in that matter FIRST PARTY is the
investor all funding requirements, meanwhile SECOND PARTY as the executor.
2. Whereas the PARTIES related to the abovementioned has agreed and signed the
agreements:__________________ (copy attached), all of which clearly proves
that FIRST PARTY is the investor who is the real owner of all shares PT
Sasangga Banua Banjar (hereinafter referred to as Company) meanwhile
SECOND PARTY is the stakeholder of the FIRST PARTY;
3. Whereas as the stakeholder of the FIRST PARTY, SECOND PARTY has agreed
and already sign Deed Number 93 dated 28 (twenty eight) May 2009 (two
thousand and nine) concerning in the Purchase and Transfer of Shares Agreement,
which appear in front of Gianto, Bachelor of Law, Notary in Banjarmasin with all
its Appendix dated on February, 1st 2010 (copy attached), the SECOND PARTY
act on behalf of FIRST PARTY subject to company shares and purchase
transaction and SECOND PARTY is not the owner of company shares, the
statement also proves that SECOND PARTY is the stakeholder of FIRST PARTY
subject to process of purchase company shares.
4. Whereas FIRST PARTY respect for all of action and consideration that helpfully
taken by SECOND PARTY as the stakeholder of FIRST PARTY subject to
process of purchase company shares, and shall not leave the SECOND PARTY
until the process of all purchase of shares accomplished, and the PARTIES shall
drafting title transfer agreement for all company shares which exclude form this
Agreement;
5. Whereas, furthermore FIRST PARTY shall respectful and SECOND PARTY
engage in the management of the Company;
6. Whereas the SECOND PARTY is willing to accept the trust and receive an
invitation FIRST PARTY;
7. Whereas for that the PARTIES agree to cooperate in the management of the
Company and poured into this Agreement with the following terms and
conditions;

Article 1
Cooperation Scheme
The PARTIES declare that cooperation applied with the scheme of FIRST PARTY will
provide incentives and royalties as well as facilities to SECOND PARTY for the
fulfillment of all duty and obligation by SECOND PARTY and involve in management of
the Company.

Article 2
Duties and Obligations of the Parties
1.

SECOND PARTY will undertake FIRST PARTY to perform the duties and
obligations and be responsible for:
A. Ensure the Company shall perform mining activities well streamline, and the
Company will coordinate with the local citizen, national and local
government, mining contractors, team of the FIRST PARTY, the owners of the
jetty and road and transportation facilities, and any other related party who
determine the mining production that ready to export.
B. Lead the team that will provide estimate budget activity and mining
operational monthly, quarterly, and annually.
C. Ensuring mining production not disrupted due to permits matters and/or other
similar things related with government regulations.
D. Coordinate with the Board of Directors and the ranks of mining operations in
the implementation of the mining plan, addressing government policy as well
as every growth situation of the community and other stakeholders.
E. Enforce every Company decree in the daily operational of the Company
Headquarters
F. Advising and looking for new opportunities for the Company to raise
profitability.
G. Ensuring the growth of the Company achieves 25% (twenty five percent)
annually.
H. Obtaining written approval from the Board of Directors or an authorized
officer of the Company before make any commitments, contracts, agreements
and guarantees on behalf of the Company.
I.
Always provide the Directors with any kind information, including but not
limited to any arising issues and financial concern, which related with mining
and the Company.
J.
Always obey the Code of Conduct of the Company prevails and binding to all
party in the Company.

2.

FIRST PARTY has the duty and obligation and responsibility for the fulfillment of
all the requirements of the SECOND PARTY in performing their duties and
obligations as mentioned above.
Article 3
Incentive, Royalty & Facility for the SECOND PARTY

1.

2.

3.

For the first time the SECOND PARTY net salary incentives amounting to USD
20,000,000 (twenty million Rupiah) per month, with taxes borne by the FIRST
PARTY, the amount of which will be evaluated each year to decide whether meet
the requirements to be rising above it, which incentives are given during the
SECOND PARTY still active cooperation and started to be paid since November 1,
2010.
For the first time the SECOND PARTY obtain royalties of U.S. $ 0.25/metric ton of
mine production (with a target of mine production by 1 million metric ton per year,
means the amount of annual royalty is U.S. $ 250,000 or U.S. $ 20,833 per month)
for the level of benefits obtained through reached U.S. $ 20/metrik ton mine
production, the amount of royalties will be changed to U.S. $ 0.50 / metric ton at
the mine (mine with a production target of 1 million metric tons per year, means the
amount of annual royalty is U.S. $ 500,000 or U.S. $ 41,666 per month) for the
level of profit earned over U.S. $ 20/metric ton of mine production, royalties will be
paid each month along with the payment of salaries, taxes paid by the FIRST
PARTY, Royalties will be evaluated each year to decide whether the amount eligible
to be increased, Royalties were paid for mine production and for the Parties are still
binding by this Agreement regardless of whether still exist or death of the SECOND
PARTY without any conditions as well and regardless of profit or loss of the
Company.
SECOND PARTY obtained of all the cost and operational needs, the provision of
tax allowances, included in the program JAMSOSTEK with dues fully paid by
FIRST PARTY, included in the health insurance program that covers Outpatient &
Inpatient fully with the annual premiums into the cost of the FIRST PARTY , where
the facilities are only given for the SECOND PARTY is still actively working and
the Parties are still bound by this Agreement

Article 4
Level & Position of The Second Party
SECOND PARTY position is under the Company Directors therefore they receive reports
from Responsible Officers for Mining Operations and directly responsible to the
Directors of the Company, and located at Corporate Headquarters in Jakarta.

8.

SECOND PARTY obtained in the form of all the cost and operational needs, the
provision of tax allowances, included in the program JAMSOSTEK with dues fully
paid by FIRST PARTY, included in the health insurance program that covers
Outpatient & Inpatient fully with the annual premiums into the cost of the FIRST
PARTY , where the facilities are only given for the SECOND PARTY is still actively
working and the Parties are still bound by this Agreement.
Article 5
Day and Office Hours

Working days are basically on Monday through Friday from 8 (eight) until around 17
(seventeen) West Indonesia Time, except national holidays or holiday company, but if
needed, beyond the days and hours can be interpreted as working days without any
addition incentive besides underwriting the cost of operations.
Article 6
Leaves
SECOND PARTY entitled to leave for 10 (ten) working days after the Agreement
effective for 6 (six) months from November 2010, on which the petition must be filed by
the SECOND PARTY in written no later than within 5 (five) working days prior to the
Board of Directors.
Article 7
Second Party Growth
FIRST PARTY allows widely to the SECOND PARTY to grow in terms of getting the
project, find the location of new mines or to diversify the business for the benefit of the
Company, where it opens an opportunity for the SECOND PARTY to raise profit as well
as new royalty other than that it has been received with the provision which will be set
later through separate agreement.

Article 8
Evaluation and Termination Agreement
1.

2.
3.
4.
5.

6.
7.

Validity of this Agreement shall be evaluated annually by the PARTIES to the spirit
and purpose solely in the interest of the Company and ensure the fulfillment of
justice for the Parties, which if necessary can be done and changes or additions in
content.
This agreement expired by itself with the death of the SECOND PARTY or FIRST
PARTY or business lid on any reason whatsoever including but not limited to the
endless capacity of mine production company.
The agreement is terminated if the Parties are both no longer wishes to proceed, and
for that the Parties do not require a court determination altogether.
The agreement is terminated if the SECOND PARTY is no longer willing to
forward it, and to the SECOND PARTY does not require a court determination
altogether.
The agreement is terminated if the FIRST PARTY SECOND PARTY found a crime
that harm the Company and / or do something that resulted in big losses for the
Company, and to the FIRST PARTY does not require a court determination
altogether.
In terms of the agreement ending the SECOND PARTY Heirs and / or obtain any
right guaranteed by law and regulations and this Agreement.
Related from the terminated of the Agreement, provision will still be paid royalties
only to the SECOND PARTY if the agreement ended due to death of the SECOND
PARTY, which is means that if the agreement terminates due to reasons other than
that the provision of Royalty came to an end.
Article 9
Communication

1.
2.

Official communications between the Parties according to Indonesian law is to use

that is made in writing, so that any oral commitments should be stated in written
form no later than 48 (forty eight) hours.
In the case of a foreign language used in official communication, then for the sake
of law must always be given a written translation into Bahasa Indonesian, where the
Indonesian version that will apply the law as the official meaning of the contents of
the communication.
Article 10
Dispute Settlement

1. All disputes arising between the parties regarding this Agreement or any part thereof
will be resolved through deliberation and consensus.

2. If settlement discussions fail to reach consensus, then the Parties agree to select the
forum settlement in the Central Jakarta District Court, using the laws of the Republic
of Indonesia, where for that the Parties select a general and permanent residence in the
Office of the Central Jakarta District Court in Jakarta, Republic of Indonesia.
Article 11
Transition Rules
1. All agreements between the Parties before they signing of the Treaty, is still legally
valid as long as not binding on the Parties and / or have not governed by the
Agreement.
2.

If development occurred in the implementation of any agreement that has not

regulated by the Agreement, then the Parties not more than 7 (seven) working days
must make a deal about it and add it in the Agreement.

This Agreement has been made and signed knowingly and understand and be, on the day
and date at the beginning of the Agreemententered, this agreement has been made into 2
(two) original copies signed by First Party with duly stamped and both hold the same power
and signed by The Parties.

Jakarta, Monday 18th October 2010

FIRST PARTY
PT. AGATE COAL INDONESIA

FRANCIS SEKAR RAJA

Commissioner

H.NAINA bin H.MUHAMMAD SULTAN

President Director

SECOND PARTY

Dr.H.PRIHANDONO bin H.SULAIMAN

WITNESESS :
1. ___________________
2. ___________________