Exhibit 2.1
INTER-CREDITOR AGREEMENT
THIS AGREEMENT dated the _____ day of ___________________, 2004.
AMONG:
MITSUI MATSUSHIMA CANADA LTD., a company incorporated pursuant
to the laws of British Columbia and with an address for
notices at 1600 - 777 Dunsmuir Street, Box ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(hereinafter called "Mitsui")
AND:
MARUBENI CORPORATION, a company incorporated pursuant to the
laws of Japan, and with an address for notices c/o Marubeni
Canada Ltd., Suite ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 2, ▇▇▇ - ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(hereinafter called "Marubeni")
AND:
FALLS MOUNTAIN COAL INC., a company incorporated under the
laws of the Province of British Columbia and having its head
office at Suite 501 - ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
and
PINE VALLEY COAL LTD., a corporation incorporated under the
laws of Alberta and having its head office in British Columbia
at Suite 501 - 535 ▇▇▇▇▇▇▇ Street, Vancouver, British
Columbia, V6E 3L2
(Falls Mountain Coal Inc. and Pine Valley Coal Ltd.,
collectively, the "Companies")
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WHEREAS:
A. The Companies are indebted to Mitsui pursuant to the agreement entitled
"Amended and Restated Agreement for the Sale & Purchase of Joint Venture
Interest" dated March 10, 2004, among, inter alia, the Companies and Mitsui, as
the same may be amended, extended, renewed, replaced, restated and in effect
from time to time (the "Mitsui Agreement") and have granted certain security to
Mitsui to secure their respective debts, liabilities and obligations under or
pursuant to the Mitsui Agreement;
B. Marubeni has agreed to make available to the Companies a loan facility
pursuant to the agreement entitled "Coal Purchase and Financing Agreement" dated
________________, 2004, among, inter alia, the Companies and Marubeni, as the
same may be amended, extended, renewed, replaced, restated and in effect from
time to time (the "Marubeni Agreement") and the Companies have agreed to grant
certain security to Marubeni to secure their respective debts, liabilities and
obligations under or pursuant to the Marubeni Agreement;
C. Mitsui and Marubeni (collectively, the "Lenders") and the Companies have
agreed to enter into this Agreement.
NOW THEREFORE WITNESSETH that for valuable consideration (the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto), the
parties hereto hereby agree as follows:
1. DEFINITIONS
In this Agreement:
(a) "Assets" means all of the presently owned or held and after
acquired or held property of each of the Companies, real and
personal, of whatsoever nature and kind and wheresoever situate,
secured by the Lenders' Security (as defined below) including
without limitation all presently owned and after-acquired coal
licenses and coal leases and all proceeds and renewals thereof
and therefrom, accretions thereto and substitutions therefor;
(b) "Mitsui Security" means, collectively, the Mitsui Agreement and
any and all security granted by the Companies, or either of them
to Mitsui, including without limitation the general security
agreement granted by the Companies in favour of Mitsui which
creates or purports to create a mortgage, charge or security
interest upon or in all or any part of the Assets, and which is
the subject of or derives its priority from any registration as
described in Part I of Schedule A hereto, together with any
modifications, extensions, renewals or substitutions thereof or
therefor in effect from time to time;
(c) "Marubeni Security" means, collectively, the Marubeni Agreement
and any and all security granted by the Companies, or either of
them to Marubeni, including without limitation the general
security agreement granted by the Companies in favour of
Marubeni which creates or purports to create a mortgage, charge
or security interest upon or in all or any part of the Assets,
and which is the subject of or derives its priority from any
registration as described in Part II of Schedule A hereto,
together with any modifications, extensions, renewals or
substitutions thereof or therefor in effect from time to time;
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(d) "Lenders' Security" means, collectively, the Mitsui Security and
the Marubeni Security; and
(e) except where the context may otherwise require, all references
to the Assets, the Mitsui Security, the Marubeni Security and
the Lenders' Security include where applicable each or any of
them or any part or parts thereof separately.
2. PARI PASSU SECURITY AND PRO RATA PAYMENTS
The Lenders hereby agree as follows:
(a) the interest of each of the Lenders in the Assets under their
respective Lenders' Security shall rank pari passu, each with
the other, on the basis of the amounts outstanding at any time
and from time to time to each Lender under or secured by the
respective Lenders' Security, as if the same and any security
collateral or ancillary thereto had been executed and registered
at the same instant in time and the full amounts secured by the
Lenders' Security had been advanced contemporaneously by the
Lenders;
(b) any default under either of the Lenders' Security shall
constitute default under the other Lenders' Security. Either of
the Lenders may, in its absolute discretion, upon delivery of
prior written notice to the other Lender, make demand upon the
Companies, or either of them, for repayment of the indebtedness
secured by that Lenders' Security and such Lender may proceed to
realize upon its respective security as it sees fit;
(c) all monies and consideration received or acquired by a Lender as
a result of enforcement of, against or with respect to, or other
disposition pursuant to any or all of the Lenders' Security held
by that Lender which has commenced the proceedings, or the
Assets included therein or charged thereby, shall be received
and held by the recipient thereof in trust for both of the
Lenders and after payment of all reasonable costs of enforcement
or disposition, shall be shared between the Lenders pro rata in
proportion to the amount of the indebtedness and liabilities
then outstanding by both of the Companies to each Lender
respectively, or in such other proportions as may be determined
by or as otherwise agreed between the Lenders;
(d) subject to subsection 2(h) below, prior to delivery of a notice
of commencement of enforcement proceedings under paragraph 2(b),
above, by either of the Lenders, all monies paid to or otherwise
received by a Lender in respect of the indebtedness owing by the
Companies, or either of them, to that Lender, may be applied by
that Lender against the indebtedness and liabilities of the
Companies owed to such Lender in such manner as that Lender may
see fit;
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(e) each of the Lenders agree to provide 24 hour advance notice to
the other of any decision to commence enforcement proceedings or
otherwise realize upon any of its Lenders' Security, and the
Companies and all parties hereto hereby consent to the giving of
such notice;
(f) this Agreement will be effective in spite of a failure of the
Lenders to perfect or maintain the perfection or registration of
the mortgages, charges and security interests under the Lenders'
Security;
(g) if both Lenders have commenced enforcement proceedings or are
otherwise realizing upon any of the Lenders' Security, then the
Lenders will co-operate with each other on such enforcement and
realization with a view to minimizing enforcement costs. Such
co-operation may include the appointment by each of the Lenders
of an accounting firm acceptable to the Lenders as the receiver,
receiver-manager or agent; and
(h) any proceeds of collateral received by the Lenders, including
insurance proceeds in respect of Assets subject to the Lenders'
Security will be dealt with as proceeds of enforcement under
this Agreement.
3. AGREEMENTS OF THE COMPANIES
3.1 ACKNOWLEDGEMENTS AND CONSENTS
The Companies hereby agree as follows:
(a) the Companies acknowledge the provisions of this Agreement and
agree to be bound hereby, and not to make any payments, take any
action or omit to take any action which would result in
non-compliance by a Lender of its obligations hereunder, or
sharing of proceeds;
(b) nothing in this Agreement is intended to or shall impair, as
between the Companies and each of the Lenders, the obligations
of the Companies, which are unconditional and absolute, to pay
to the Lenders the full amount of the obligations under or
secured by the Lenders' Security to the Lenders as and when such
obligations become due and payable; and
(c) the Companies consent to the Lenders entering into this
Agreement and dealing with security and sharing of proceeds and
the Companies consent to the Lenders entering into any agreement
among themselves which has the effect of amending rights and
obligations of the Lenders under this Agreement provided that
the substantive rights of the Companies are not materially
affected thereby.
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4. GENERAL PROVISIONS
4.1 DEALINGS WITH COMPANIES
The Lenders may grant time, renewals, extensions, releases and discharges to,
accept compositions from and otherwise deal with the Companies, or either of
them, as each Lender may see fit, the whole without notice to the other Lender
and without prejudice to or in any way limiting or affecting the agreements on
the part of the Lenders set forth in this agreement. Nothing in this Agreement
will constitute either Lender an agent of the other, or the Lenders as partners
of each other.
4.2 HEADINGS
The headings to the provisions of this agreement are inserted for convenience of
reference only and shall not form part of nor affect the interpretation of this
agreement.
4.3 FINANCING CHANGE STATEMENTS, ETC.
The Lenders authorize Bull, Housser & ▇▇▇▇▇▇ to complete and file as agents for
each of the Lenders such financing change statements or other registration
documents as may be necessary to record notice of this agreement in the British
Columbia Personal Property Registry, Alberta Personal Property Registry and the
Coal Administrators Office or elsewhere.
4.4 ENUREMENT
This agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.
4.5 NOTICES
Any notice required or permitted to be given pursuant to this Agreement shall be
in writing and shall be addressed and delivered to the parties at the addresses
first stated above, unless a party gives written notice to the parties of a
different address. Notices may be sent by fax or served personally, and in each
case shall be deemed to be received on the day it is transmitted if the
receiving party receives it before 4:00 P.M. (receiving party's local time) on a
day that is a business day, and otherwise on the next business day following
transmission or delivery.
4.6 TERMINATION
This Agreement shall be effective from the date written above and shall continue
in full force and effect until the date on which it is terminated by the written
agreement of the Lenders.
4.7 EXECUTION IN COUNTERPART
This Agreement may be signed by the parties in as many counterparts as may be
necessary and delivered by facsimile each of which so signed will be deemed to
be an original, and such counterparts together will constitute one and the same
agreement.
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5. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the Province of
British Columbia.
IN WITNESS WHEREOF this agreement has been executed as of the day and year first
above written.
FALLS MOUNTAIN COAL INC., by its PINE VALLEY COAL LTD., by its
authorized signatory: authorized signatory:
------------------------------------- --------------------------------
Name: Name:
MITSUI MATSUSHIMA CANADA LTD., by its MARUBENI CORPORATION, by its
authorized signatory: authorized signatory:
------------------------------------- --------------------------------
Name: Name:
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SCHEDULE A
PART I - MITSUI SECURITY
The security which is the subject of or derives its priority:
(a) from the financing statements registered:
(i) in the British Columbia Personal Property Registry under
base registration number 467826B; and
(ii) in the Alberta Personal Property Registry under
registration number 04050501370; and
(b) with the Coal Administrator's Office on January 8, 2004 under
event number 3204338.
PART II - MARUBENI SECURITY
The security which is the subject of or derives its priority:
(a) from the financing statements registered:
(i) in the British Columbia Personal Property Registry under
base registration number __________; and
(ii) in the Alberta Personal Property Registry under
registration number ___________; and
(b) with the Coal Administrator's Office on _______________ under
number ___________