Exhibit 4
LIQUIDITY AGREEMENT
THIS AGREEMENT is made the 12th day of January, 2003,
BETWEEN:
ONTARIO TEACHERS' PENSION PLAN BOARD, a non-share capital corporation
established under the laws of the Province of Ontario
(the "Purchaser")
AND:
CONSOL ENERGY CANADA LTD., a corporation incorporated under the laws
of the Province of New Brunswick
("CEC")
AND:
CONSOL OF CANADA INC., a corporation incorporated under the laws of
the State of Delaware
("COC")
(together, COC and CEC are the "Vendors")
WHEREAS:
A. CONSOL Energy Inc., being the parent of the Vendors, is proposing to,
concurrently with the execution of this Agreement, enter into a Term Sheet
with Fording Inc. ("Fording") and Luscar Ltd., a copy of which is attached
hereto as Schedule A (the "Joint Venturers' Term Sheet"), whereunder the
Vendors are to sell to Fording, on the closing date contemplated therein
(the "PA Closing Date"), subject to the terms and conditions set forth in
the Joint Venturers' Term Sheet, the Purchased Assets (as described in the
Joint Venturers' Term Sheet) and, as partial payment for the Purchased
Assets, Fording is to issue to the Vendors on the PA Closing Date, 3.2
million units of equal undivided beneficial interest ("Consideration
Units") of the Fording Canadian Coal Trust (the "Trust"); and
B. The Purchaser has, as consideration for the Vendors entering into the Joint
Venturers' Term Sheet, agreed to enter into this Agreement,
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the premises,
the sum of $1.00 now paid by each of the Vendors to the Purchaser and other good
and valuable consideration (the receipt and sufficiency of which is hereby
acknowledged) and of the covenants and agreements hereinafter set forth, the
parties hereto agree as follows:
1. INTERPRETATION
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1.1. Headings. The division of this Agreement into sections and the
insertion of headings are for convenience of reference only and shall
not affect the construction or interpretation of this Agreement.
1.2. Currency and Payment Obligations. Unless this Agreement otherwise
expressly provides, all dollar amounts set out herein are stated in
Canadian dollars.
1.3. Interest on Payments from the Purchaser. If the Purchaser fails to pay
to the Vendors any amount when due that the Purchaser has covenanted
to pay pursuant to this Agreement, without limiting the Vendors' other
rights as contained in this Agreement or otherwise at law or in
equity, the Purchaser shall be required to pay to the Vendors,
compound interest, calculated and accrued monthly, with respect to
such unpaid amount from the day such payment is due until the day it
is paid, at the rate of 2 1/2% above the Prevailing RBC Prime Rate.
1.4. Prevailing RBC Prime Rate. In this Agreement, "Prevailing RBC Prime
Rate" means the prime rate of interest in effect from time to time
that is the per annum rate of interest which is announced from time to
time by the Main Branch of the Royal Bank of Canada in Vancouver,
British Columbia as being its prime rate of interest and used by the
Main Branch of the Royal Bank of Canada in Vancouver, British Columbia
generally for determining what rate of interest is to be charged to
its domestic commercial customers on Canadian dollar floating interest
rate loans and any rate so announced and used shall, for the purposes
of this Agreement, become effective on the date of such change.
2. PUT OPTION
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2.1. Grant of Put Option. The Purchaser hereby irrevocably grants to the
Vendors the sole and exclusive right and option (the "Put Option"),
exercisable in the manner described in Section 4.2, to sell, transfer,
and assign all (but not less than all) of the Consideration Units that
are to be issued to them under and pursuant to the Joint Venturers'
Term Sheet or a definitive agreement to be entered into by Fording and
the Vendors incorporating the terms of the Joint Venturers' Term Sheet
("Purchase Agreement"), to the Purchaser, and the Purchaser covenants
and agrees to accept, purchase and pay for the Consideration Units,
all on the terms and subject to the conditions set forth herein.
2.2. Put Option Fee. In consideration of the grant of the Put Option, each
of the Vendors has, concurrent with the execution of this Agreement,
paid $1.00 to the Purchaser (as contemplated in the Recitals).
2.3. Termination of Put Option. If not exercised in the time and manner set
forth herein, the Put Option and the right of the Vendors to cause the
Purchaser to purchase the Consideration Units, shall terminate on
11:59 pm (Vancouver time) on the PA Closing Date.
3. PURCHASE PRICE
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3.1. Purchase Price. The purchase price payable by the Purchaser for the
Consideration Units shall be $85,000,000 (the "Purchase Price").
4. EXERCISE OF OPTION AND CLOSING
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4.1. Notice of PA Closing Date. The Purchaser shall provide written notice
to be received by the Vendors not less than five Business Days in
advance of the PA Closing Date, specifying the date on which the
transactions contemplated by the Joint Venturers' Term Sheet or a
Purchase Agreement, as the case may be, are to close and the time and
place of the closing.
4.2. Notice of Exercise. The Vendors may only exercise the Put Option by
jointly providing to the Purchaser, on or before 11:59 pm (Vancouver
time) on the PA Closing Date, a written notice (the "Put Notice")
signed by each of the Vendors stating their intention to exercise the
Put Option.
4.3. Closing. The purchase and sale of the Consideration Units shall be
consummated at a closing (the "Closing") on the second Business Day
next following the PA Closing Date, if the Vendors have exercised the
Put Option by delivering the Put Notice to the Purchaser as
contemplated by Section 4.2 (the "Closing Date"), at 10:00 am local
time at the place of closing of the transactions contemplated by the
Joint Venturers' Term Sheet or a Purchase Agreement, as the case may
be, or at such other date, time and place as may be mutually agreed in
writing between the parties.
5. REPRESENTATIONS AND WARRANTIES OF THE VENDORS
---------------------------------------------
5.1. Representations and Warranties of COC. COC hereby represents and
warrants to the Purchaser, with the intent that the Purchaser will
rely thereon in entering into this Agreement and in completing the
transactions contemplated hereby, that subject to Section 5.3:
(a) COC is a corporation duly incorporated and organized and validly
subsisting in all respects under the laws of its jurisdiction of
incorporation and has all necessary corporate power, authority
and capacity to enter into this Agreement and to perform its
obligations hereunder;
(b) all necessary corporate or other action has been taken by COC to
authorize the execution and delivery of this Agreement, all other
documents and instruments contemplated by this Agreement and the
performance of all its obligations under this Agreement; and
(c) this Agreement has been duly executed and delivered by COC and
constitutes a legal, valid and binding obligation of COC
enforceable in accordance with its terms, provided that
enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization, reconstruction and other laws
generally affecting creditors' rights and the equitable remedies
such as specific performance and injunction that are in the
discretion of the court from which they are sought.
5.2. Representations and Warranties of CEC. CEC hereby represents and
warrants to the Purchaser, with the intent that the Purchaser will
rely thereon in entering into this Agreement and in completing the
transactions contemplated hereby, that subject to Section 5.3:
(a) CEC is a corporation duly incorporated and organized and validly
subsisting in all respects under the laws of its jurisdiction of
incorporation and has all necessary corporate power, authority
and capacity to enter into this Agreement and to perform its
obligations hereunder;
(b) all necessary corporate or other action has been taken by CEC to
authorize the execution and delivery of this Agreement, all other
documents and instruments contemplated by this Agreement and the
performance of all its obligations under this Agreement; and
(c) this Agreement has been duly executed and delivered by CEC and
constitutes a legal, valid and binding obligation of CEC
enforceable in accordance with its terms, provided that
enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization, reconstruction and other laws
generally affecting creditors' rights and the equitable remedies
such as specific performance and injunction that are in the
discretion of the court from which they are sought.
5.3. No Further Representations and Warranties. It is expressly understood
and agreed to by the Purchaser that if the Vendors exercise the Put
Option in the time and manner specified in this Agreement, the Vendors
will deliver the certificates representing the Consideration Units
with the form of transfer thereon duly completed and signed by the
Vendors, without recourse and without representation or warranty,
express or implied, except the representations and warranties set
forth in Sections 5.1 and 5.2 and the following representations and
warranties that are to be given by the Vendors to the Purchaser on the
Closing Date that, subject to Sections 5.3(c) through 5.3(n):
(a) the Vendors are the legal and beneficial owners of the Consideration
Units with good and marketable title thereto; and
(b) the Consideration Units are free and clear of any lien or other
adverse claim and that the Vendors have full legal right, power and
authority to sell, transfer and assign the Consideration Units to the
Purchaser.
In the event that any representations and warranties of the Vendors
are not true as at the time of Closing on the Closing Date, the
Purchaser's sole and exclusive remedy shall be the termination of this
Agreement, provided that any such termination shall not release the
Purchaser from its obligations under Section 12.1. Without limiting
the generality of the foregoing, the Vendors make no representation or
warranty whatsoever as to:
(c) the establishment, organization or existence of the Trust or the
appointment or authorization of the trustees of the Trust;
(d) whether there are any requirements for the Trust to make any
filing with, give any notice to or obtain any licence, permit,
certificate, registration, authorization, consent or approval of,
any government or regulatory authority as a condition to the
lawful consummation of the transactions contemplated by this
Agreement;
(e) the qualification of the Trust as a mutual fund trust for the
purposes of the Income Tax Act (Canada);
(f) whether the Trust has complied with all applicable securities
laws in all provinces of Canada (the "Qualifying Jurisdictions")
in relation to the creation, offering, issuance and sale of the
trust units of the Trust (the "Units");
(g) whether the Units are listed on the TSX or any other stock exchange;
(h) whether the Units including the Consideration Units shall be
freely tradeable in all Qualifying Jurisdictions; and as to
whether any filing, proceeding, approval, consent or
authorization is required to be made, taken or obtained by
Fording or the Trust to permit the issuance of the Consideration
Units by the Trust to the Vendors pursuant to the terms of the
Joint Venturers' Term Sheet or a Purchase Agreement, as the case
may be, or from the Vendors to the Purchaser pursuant to the
terms hereof;
(i) whether the Consideration Units to be transferred to the
Purchaser by the Vendors at the Closing shall have been duly and
validly issued and shall be fully paid and non-assessable;
(j) whether the Units, including each Consideration Unit, shall be
transferable and shall represent an equal undivided beneficial
interest in any distributions from the Trust (whether of income,
net realized capital gains or other amounts) and in the net
assets of the Trust in the event of termination or winding up of
the Trust;
(k) the voting rights attached to each Unit, including each
Consideration Unit;
(l) whether there are any actions, suits or proceedings (whether or
not purportedly on behalf of the Trust) pending, or threatened
against or affecting the Trust at law or in equity or before or
by any federal, provincial, municipal or other governmental
department, court, commission, board bureau, agency or
instrumentality, domestic or foreign, or before or by an
arbitrator or arbitration board;
(m) whether any order having the effect of ceasing or suspending the
distribution of the Units by the Trust will have been issued by
any of the Qualifying Jurisdictions and any proceedings for that
purpose will have been instituted or will be pending or
contemplated; and
(n) whether the certificates representing the Consideration Units
have been duly approved and adopted by the Trust and comply with
applicable laws.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
6.1. Representations and Warranties of Purchaser. The Purchaser hereby
represents and warrants to each of the Vendors, with the intent that
the Vendors will rely thereon in entering into this Agreement and in
completing the transactions contemplated hereby, that:
(a) the Purchaser has been continued and exists as a corporation
without share capital under the Teachers Pension Act R.S.O. 1990
c.T.1, as amended and has all necessary power, authority and
capacity to enter into this Agreement and to perform its
obligations hereunder;
(b) all necessary action has been taken by the Purchaser to authorize
the execution and delivery of this Agreement, all other documents
and instruments contemplated by this Agreement and the
performance of all its obligations under this Agreement;
(c) this Agreement has been duly executed and delivered by the
Purchaser and constitutes a legal, valid and binding obligation
of the Purchaser, enforceable in accordance with its terms,
provided that enforcement may be limited by bankruptcy,
insolvency, liquidation, reorganization, reconstruction and other
laws generally affecting creditors' rights and the equitable
remedies such as specific performance and injunction that are in
the discretion of the court from which they are sought; and
(d) the Purchaser is not a "non-Canadian" for the purposes of and
within the meaning of the Investment Canada Act (Canada).
7. PURCHASER'S LEGAL OPINION
-------------------------
7.1. Purchaser's Legal Opinion. The Purchaser shall deliver to the
Vendors, concurrent with the execution of this Agreement, an
opinion of its solicitors dated as of the date hereof, opining on
the matters contemplated by Sections 6.1(a) through 6.1(c), in
form and content to the satisfaction of the Vendors acting
reasonably.
8. WITHHOLDING
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8.1. Withholding. The parties hereby acknowledge and agree that if the
Vendors are unable to provide to the Purchaser on or before the
Closing Date, evidence to the satisfaction of the Purchaser acting
reasonably, that the Purchaser is under no obligation to comply with
the withholding provisions in section 116 of the Income Tax Act
(Canada) in respect of the portion of the Purchase Price attributable
to the applicable Vendor, the Purchaser shall be obliged to withhold
from the Purchase Price as required by section 116 of the Income Tax
Act (Canada).
9. NATURE AND SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1. Nature and Survival Of Representations, Warranties And Covenants. All
representations, warranties, covenants and agreements of the parties
contained in this Agreement shall survive the Closing and the
completion of the transactions contemplated hereby and shall continue
in full force and effect.
10. CONDITIONS PRECEDENT TO CLOSING
10.1. Conditions of Vendors. The obligation of the Vendors to complete the
sale of the Consideration Units to the Purchaser pursuant to this
Agreement is subject to the satisfaction at or prior to the Closing
Date of the following condition precedent, which is for the exclusive
benefit of the Vendors and which may be waived in whole or in part by
the Vendors at any time, without prejudice to any claims the Vendors
may have for breach of covenant, representation or warranty:
(a) certificates representing the Consideration Units shall have been
delivered to the Vendors on the PA Closing Date under and
pursuant to the Joint Venturers' Term Sheet or a Purchase
Agreement, as the case may be.
10.2. Conditions of the Purchaser. The obligation of the Purchaser to
complete the purchase of the Consideration Units from the Vendors
pursuant to this Agreement is subject to the fulfilment of each of the
following conditions precedent, which is for the exclusive benefit of
the Purchaser and each of which may be waived in whole or in part by
the Purchaser at any time, without prejudice to any claims the
Purchaser may have for breach of covenant, representation or warranty:
(a) all of the representations and warranties of the Vendors
contained herein shall be true and correct as at the time of
Closing and with the same force and effect as if such
representations and warranties were made as at the time of
Closing;
(b) there shall have been delivered to the Purchaser, a certificate
dated the Closing Date, executed by an authorized officer of COC,
certifying that at and as of the Closing Date, the
representations and warranties of COC contained Sections 5.1(a)
through 5.1(c) and the representations and warranties to be made
by the Vendors at the Closing as contemplated by Sections 5.3(a)
and 5.3(b), are true and correct as if made on the Closing Date;
and
(c) there shall have been delivered to the Purchaser a certificate
dated the Closing Date, executed by an authorized officer of CEC,
certifying that at and as of the Closing Date, the
representations and warranties of CEC contained Sections 5.2(a)
through 5.2(c) and the representations and warranties to be made
by the Vendors at the Closing as contemplated by Sections 5.3(a)
and 5.3(b), are true and correct as if made on the Closing Date.
11. CLOSING MATTERS
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11.1. Deliveries by Vendors. At Closing, the Vendors shall deliver, or cause
to be delivered, to the Purchaser certificates representing the
Consideration Units, with the form of transfer thereon duly completed
(with the identity of the transferee to be completed by the Vendors as
directed by the Purchaser in writing) and signed by the Vendors.
11.2. Deliveries by Purchaser. At the Closing, the Purchaser shall deliver,
or cause to be delivered, to the Vendors a bank draft or certified
cheque in the amount equal to the Purchase Price, made payable to the
Vendors or to their order.
11.3. No Set-Off. The Purchaser acknowledges and agrees that the Purchase
Price shall be paid by the Purchaser, in accordance with the
provisions of Section 11.2, without any setoff, counterclaim or
deduction of any kind, to the Vendors.
12. INDEMNIFICATION
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12.1. Indemnification of Vendors. The Purchaser covenants and agrees to
indemnify and hold harmless the Vendors from and against any and all
claims, losses, damages, costs and expenses (including legal fees and
disbursements on a solicitor/client full indemnity basis), fines and
penalties whatsoever suffered or incurred by the Vendors arising,
directly or indirectly, out of or in connection with any breach of any
of the representations, warranties, agreements or covenants of the
Purchaser set out herein.
12.2. Indemnification of Purchaser. The Vendors covenant and agree to
indemnify and hold harmless the Purchaser from and against any and all
claims, losses, damages, costs and expenses (including legal fees and
disbursements on a solicitor/client full indemnity basis), fines and
penalties whatsoever suffered or incurred by the Purchaser arising,
directly or indirectly, out of or in connection with any breach of any
of the representations, warranties, agreements or covenants of the
Vendors set out herein.
13. MISCELLANEOUS
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13.1. Remedies Cumulative. Except as expressly provided for under this
Agreement, the rights and remedies of the parties under this Agreement
are cumulative and in addition and not in substitution for any rights
or remedies provided by law.
13.2. Notices. Any notice or other communication required or permitted to be
given hereunder shall unless otherwise expressly provided herein, be
in writing and shall be delivered in person, transmitted by fax or
similar means of recorded electronic communication or sent by
registered mail, charges prepaid, addressed as follows:
if to the Purchaser:
Ontario Teachers' Pension Plan Board
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxx
Fax No.: (000) 000-0000
with a copy to:
Xxxxx XXX
Xxxxx 0000
00 Xxxxxxxxxx Xxxxxx West
Box 270, TD Centre
Toronto, Ontario
M5K 1N2
Attention: Xxxxx Xxxxxxxxx
Fax No.: (000) 000-0000
if to the Vendors:
CONSOL Energy Canada Ltd. / CONSOL of Canada Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX
00000
Attention: Xxxxxxx X. Xxxxx, Vice-President, International
Business
Fax No.: (000) 000-0000
with a copy to:
CONSOL Energy Canada Ltd. / CONSOL of Canada Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX
00000
Attention: X. X. Xxxxxx, Vice-President, General Counsel
Fax No.: (000) 000-0000
and with a copy to:
Xxxxxx Xxxxxxx
0000 Xxxxxxxxx Xxxxx
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xxxxx Xxxxxxx
Fax No.: (000) 000-0000
Any such notice or other communication shall be deemed to have been given
and received on the day on which it was delivered or transmitted (or, if
such day is not a Business Day, on the next following Business Day) or, if
mailed, on the fifth Business Day following the date of mailing; provided,
however, that if at the time of mailing or within five Business Days
thereafter there is or occurs a labour dispute or other event which might
reasonably be expected to disrupt the delivery of documents by mail, any
notice or other communication hereunder shall be delivered or transmitted
by means of recorded electronic communication as aforesaid. For the
purposes of this Agreement, Business Day means any day that is not a
Saturday or a Sunday or a statutory or banking holiday in Toronto,
Ontario, Vancouver, British Columbia or Pittsburgh, Pennsylvania.
Any party may at any time change its address for service from time to time
by giving notice to the other party in accordance with this Section.
13.3. Entire Agreement. This Agreement together with the Joint Venturers'
Term Sheet, represents the entire agreement between the Vendors and
the Purchaser and their respective affiliates and/or subsidiaries,
with respect to the matters referred to herein, and supersedes and
replaces all prior agreements, undertakings, negotiations and
discussions, whether oral or written, of the parties, and there are no
warranties, representations, covenants or agreements between the
Vendors and the Purchaser except as set forth herein.
13.4. Amendments/Waivers. No supplement, amendment, modification, waiver or
termination of this Agreement will be binding upon the parties unless
executed in writing by the party to be bound thereby. No waiver of any
of the provisions of this Agreement, in whole or in part, shall be
deemed or shall constitute a waiver of any other provision hereof, nor
shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
13.5. Enurement. This Agreement will enure to the benefit of and be binding
upon the Purchaser and the Vendors and their respective successors and
permitted assigns, if any.
13.6. Time. Time shall be of the essence of this Agreement.
13.7. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of British Columbia and the laws of Canada
applicable therein and each of the parties hereto hereby attorns to
the jurisdiction of the Courts of British Columbia.
13.8. Disclosure. Except as required by law or regulatory authority, no
announcements or disclosures concerning the transactions under this
Agreement may be made by any party to any Person unless previously
approved by all the parties hereto. Any party required to disclose
information shall provide the other parties with a draft of the
proposed disclosure in advance of the release thereof and such
opportunity as is reasonably possible to review and comment on any
disclosure concerning that party.
13.9. Further Assurances. The parties shall do and perform all such acts
and things and execute such deeds, documents and writings and give all
such assurances as may be necessary to give effect to this Agreement.
13.10.Relationship of Parties. Nothing herein contained shall be construed
as creating a partnership of any kind as between the Vendors
themselves, or between the Vendors and the Purchaser.
13.11.Assignment. No party may assign any of its rights or obligations
under this Agreement without the prior written consent of the other
parties hereto, provided that each Vendor may assign its rights under
this Agreement to an affiliate thereof without the consent of the
other parties hereto.
13.12 . Void or Invalid Provision. If a court of other tribunal of competent
jurisdiction determines that any one or more of the provisions of this
Agreement is invalid, illegal, or incapable of being enforced by
reason of any rule of law or public policy, then such covenant or
other provision will be severed from and will not affect any other
covenant or other provision of this Agreement, and this Agreement will
be construed as if such invalid, illegal, or unenforceable covenant or
provision had never been contained in this Agreement, unless, as a
result of such determination, this Agreement would fail in its
essential purpose.
13.13.Counterparts. This Agreement may be signed in counterpart and such
counterparts (including any counterpart transmitted by facsimile which
shall be deemed to be evidence of valid execution) shall constitute
one and the same instrument and, notwithstanding the date of execution
of any counterpart, this Agreement shall be deemed to be executed by
the parties on the date of execution set out herein.
IN WITNESS WHEREOF the parties hereto have duly executed this agreement as of
the date first written above.
CONSOL ENERGY CANADA LTD. ONTARIO TEACHERS' PENSION PLAN BOARD
Per: Per:
--------------------------- ---------------------------
Authorized Signatory Authorized Signatory
CONSOL OF CANADA INC.
Per:
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Authorized Signatory
SCHEDULE A
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JOINT VENTURERS' TERM SHEET
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(See Attached)
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