EXHIBIT 4.67
ACKNOWLEDGEMENT AND AGREEMENT
BETWEEN:
LENDER: ROYAL BANK ASSET BASED FINANCE, A DIVISION OF ROYAL BANK OF CANADA,
("LENDER")
NAME OF BORROWERS: FALLS MOUNTAIN COAL INC. ("FMC")
PINE VALLEY MINING CORPORATION ("PVM")
PINE VALLEY COAL INC. ("PVC")
NAME OF THIRD PARTY: NEPTUNE BULK TERMINALS (CANADA) LTD. ("NEPTUNE")
RE: SPOT CONTRACT AND AGENCY AGREEMENT BETWEEN NEPTUNE AND FMC
WHEREAS:
Neptune operates a terminal facility for the handling of bulk commodities in
North Vancouver, British Columbia ("TERMINAL").
Neptune has entered into a Spot Contract with FMC dated with effect July 1, 2004
("SPOT CONTRACT"), pursuant to which Neptune has agreed to handle FMC's low
volatile or semi-anthracite coal ("COMMODITY") which is produced by FMC at its
Willow Creek mine in Pine Valley, British Columbia ("MINE"), including the
provision that Neptune shall store the Commodity and maintain records associated
with it at the Terminal.
Neptune has entered into an Agency Agreement with FMC made effective January 1,
2005, pursuant to which Neptune acts as FMC's agent in conducting FMC's business
at the Port of Vancouver, which agreement was to terminate on December 31, 2005;
Neptune has entered into a revised Agency Agreement with FMC made effective
January 1, 2006 pursuant to which Neptune will act as FMC's agent in conducting
FMC's business at the Port of Vancouver, and at the Xxxxxx Terminal located at
Xxxxxx Island, Prince Rupert, (which agreement, and any further renewals of it
are referred to as the "AGENCY AGREEMENT");
The Lender has entered into certain financing transactions with FMC, PVM and PVC
("BORROWERS") and the Lender has been or will be granted a security interest in,
inter alia, all of the inventory of the Commodity produced from the Mine
("INVENTORY") and accounts receivable ("ACCOUNTS") of each of the Borrowers.
In consideration of the Lender extending credit to FMC and other good and
valuable consideration, the receipt and sufficiency of which Neptune hereby
acknowledges, the PARTIES AGREE AS FOLLOWS:
1. Neptune acknowledges that:
(a) the Spot Contract and the Agency Agreement are valid and in full force
and effect and have not been assigned to any person whatsoever; and
(b) it is not aware of any default under either the Spot Contract or the
Agency Agreement as at the date hereof.
2. Neptune agrees that at any time Neptune gives notice to FMC it will provide
a copy of such notice to the Lender at 000 Xxxxx Xx Xxxx, 00xx xxxxx,
Xxxxxxx, Xxxxxxx, X0X 0X0. Attention: Asset Based Finance, by registered
mail or facsimile ((000) 000-0000)).
3. The Lender shall have the right, but not the obligation, to cure any
default, if any, under either the Spot Contract or the Agency Agreement
within a period of 30 days from the date of receipt by the Lender of a
notice (a "NEPTUNE NOTICE") pursuant to subsection 2. Any payment made, or
act done, by the Lender to cure any default under either the Spot Contract
or the Agency Agreement shall not constitute an assumption by the Lender of
either of those agreements or any obligations of FMC thereunder.
4. For so long as FMC is not in default under the Spot Contract and the Agency
Agreement, and for the 30 day period referred to in Section 3 above,
Neptune on written direction from the Lender, agrees not to deliver the
Inventory as directed by FMC and, instead, agrees to hold the Inventory
subject to the Lender's further direction, and to deliver the Inventory as
may be directed by the Lender, at the Lender's cost, provided that the
Lender indemnifies Neptune in full for all liabilities or expenses incurred
by Neptune for following the Lender's direction, and provided the Lender
pays all amounts owing to Neptune by FMC.
5. The Lender, including its authorized agents or representatives, shall have
access to the Terminal at any time and from time to time during normal
business hours to inspect the Inventory.
6. Neptune shall have no liability to FMC if it complies with any written
direction from the Lender and FMC agrees that it will continue to pay to
Neptune all amounts owing to Neptune under the Spot Contract and the Agency
Agreement.
7. The Lender or its authorized agents or representatives may, at any and all
times:
(a) request that Neptune provide the Lender, at the Lender's cost, to view
at Neptune's office with any and all of FMC's books and records and
other information or data of FMC held by Neptune, including, without
limitation, information and data from any of FMC's computer equipment
or systems and any and all of FMC's information, data and records
stored electronically, and any other information in relation to
collecting or otherwise dealing with any of the Accounts, and Neptune
must provide such access to books, records, information and data
within a reasonable time period regardless of whether or not FMC is in
default of any of its obligations to Neptune or the Spot Contract or
Agency Agreement have been terminated; and
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(b) during normal business hours, provided the Lender has settled in full
all obligations of FMC to Neptune, the Lender may enter upon and use
the Terminal for the purpose of taking possession of the Inventory
being stored at the Terminal, including without limitation that the
Lender or its authorized agents or representatives can inspect or
remove from the Terminal any or all of the Inventory free and clear of
any right of restraint or mechanic's or other lien of Neptune.
8. This Acknowledgement and Agreement (i) may be executed in any number of
counterparts by facsimile transmission, each of which counterparts shall be
deemed to be originals and all of which when taken together shall form one
and the same agreement, (ii) shall be governed by and in accordance with
the laws of the Province of British Columbia and the federal laws of Canada
applicable therein and (iii) shall enure to the benefit of the Lender and
its successors and assigns, and shall be binding upon the successors and
assigns of Neptune.
IN WITNESS WHEREOF, the parties to this Acknowledgement and Agreement
have executed and delivered this Acknowledgement and Agreement with effect as of
the 2lst day of December, 2005.
NEPTUNE BULK TERMINALS
(CANADA) LTD.
Per: /s/ Xxxxxxx Xxxxxxx
--------------------------------------------
Authorized Signatory I have authority to
Bind the corporation
FALLS MOUNTAIN COAL INC.
Per: /s/ Xxxxxx Rip
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Authorized Signatory
I have authority to bind the corporation
ROYAL BANK ASSET BASED FINANCE, a
Division of Royal Bank of Canada
By: /s/ Xxxxxxxx Xxxxxxxxx
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Name: Xxxxxxxx Xxxxxxxxx
Title: Portfolio Manager
By: /s/ Tro DerBedrossian
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Name: Tro DerBedrossian
Title: Manger, Underwriter
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