EXHIBIT 4.68
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")
NAME OF THIRD PARTY: XXXXXX TERMINALS INC. ("XXXXXX")
RE: TERMINAL SERVICES AGREEMENT BETWEEN XXXXXX AND FMC
WHEREAS:
Xxxxxx operates a terminal facility for the handling of bulk commodities on
Xxxxxx Island, Prince Rupert, British Columbia ("TERMINAL").
Xxxxxx has entered into a Terminal Services Agreement with FMC dated for
reference November 15, 2005 ("SERVICES AGREEMENT"); pursuant to which Xxxxxx 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 Xxxxxx shall store the Commodity.
The Lender has entered into certain financing transactions with FMC ("BORROWER")
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 the Borrower.
In consideration of the Lender extending credit to FMC and other good and
valuable consideration, the receipt and sufficiency of which Xxxxxx hereby
acknowledges, the PARTIES AGREE AS FOLLOWS:
1. Xxxxxx acknowledges that:
(a) the Services Agreement is valid and in full force and effect and has
not been assigned to any person whatsoever; and
(b) it is not aware of any default under the Services Agreement as at the
date hereof.
2. Xxxxxx agrees that at any time Xxxxxx gives notice of default to FMC under
the Services Agreement 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 the Services Agreement within a period of 30 days
from the date of receipt by the Lender of a notice (a "XXXXXX NOTICE")
pursuant to Subsection 2. Any payment made, or act
done, by the Lender to cure any default under the Services Agreement shall
not constitute an assumption by the Lender of that agreement or any
obligations of FMC thereunder.
4. For so long as FMC is not in default under the Services Agreement, and for
the 30 day period referred to in Section 3 above, Xxxxxx 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 reasonably
directed by the Lender, at the Lender's cost, provided, that the Lender
indemnifies Xxxxxx in full for all liabilities and expenses incurred by
Xxxxxx for following the Lender's direction, and provided the Lender pays
all amounts owing to Xxxxxx by FMC. For greater certainty, if the Lender
directs Xxxxxx to deliver the Inventory to a location other than on board a
vessel the Lender shall pay to Xxxxxx the full amount of the throughput
rate payable under the Services Agreement in respect of such Inventory as
if such Inventory had been loaded onto a vessel, together with the costs
incurred by Xxxxxx in effecting delivery of the Inventory to the location
requested by the Lender.
5. The Lender, including its authorized agents or representatives, shall upon
reasonable advance notice and subject to compliance with Xxxxxx'x security,
safety and other requirements, have access to the Terminal at any time and
from time to time during Xxxxxx'x normal business hours to inspect the
Inventory.
6. Xxxxxx shall have no liability to FMC if it complies with any written
direction from the Lender or any provision of this Acknowledgement and
Agreement and FMC agrees that it will continue to pay to Xxxxxx all amounts
owing to Xxxxxx under the Services Agreement.
7. The Lender or its authorized agents or representatives may, at any and all
times:
(a) request that Xxxxxx provide the Lender, at the Lender's cost, to view
at Xxxxxx'x office upon reasonable advance notice and subject to
compliance with Xxxxxx'x security, safety and other requirements, any
and all of FMC's books and records and other information or data of
FMC, if any, held by Xxxxxx, 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 Xxxxxx must provide
such access to books, records, information and data within a
reasonable time period so long as it retains possession of such books,
records, information and data, regardless of whether or not FMC is in
default of any of its obligations to Xxxxxx or the Services Agreement
has been terminated; and
(b) during normal business hours of Xxxxxx, provided the Lender has
settled in full all obligations of FMC to Xxxxxx, the Lender may upon
reasonable advance notice and subject to compliance with Xxxxxx'x
security, safety and other requirements, 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
2
Terminal any or all of the Inventory free and clear of any right of
restraint or mechanic's or other lien of Xxxxxx.
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 Xxxxxx.
IN WITNESS WHEREOF, the parties to this Acknowledgement and Agreement
have executed and delivered this Acknowledgement and Agreement with effect as of
the 23rd day of December, 2005.
XXXXXX TERMINALS INC.
Per: /s/ Xxxx Xxxxxxxx
--------------------------------------------
Authorized Signatory I have authority to
Bind the corporation
FALLS MOUNTAIN COAL INC.
Per: /s/ Xxxxxx Rip
--------------------------------------------
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
--------------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Portfolio Manager
By: /s/ Tro DerBedrossian
--------------------------------------------
Name: Tro DerBedrossian
Title: Manager, Underwriting
3
