EXHIBIT 4.41
CREDIT FACILITY AGREEMENT
THIS AGREEMENT dated as of the 26th day of November, 2004
BETWEEN:
PINE VALLEY MINING CORPORATION, a company incorporated under the laws
of British Columbia having its registered office at Suite 3000 - 0000
Xxxx Xxxxxxx Xxxxxx Xxxxxxxxx, XX X0X 0X0 ("PINE VALLEY")
AND:
FALLS MOUNTAIN COAL INC., a company incorporated under the laws of
British Columbia having its registered office at Suite 3000 - 0000
Xxxx Xxxxxxx Xxxxxx Xxxxxxxxx, XX X0X 0X0 ("FALLS MOUNTAIN")
AND:
PINE VALLEY COAL LTD., an Alberta corporation having its principal
business office at Suite 000 - 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX X0X
0X0 ("PVC")
AND:
THE ROCKSIDE FOUNDATION, an Ohio non-profit corporation having an
office at 000 Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxx, XX 00000-0000
("ROCKSIDE")
WHEREAS:
A. Pine Valley is a public mining company with its Common shares listed for
trading on the TSX Venture Exchange and the NASD OTC Bulletin Board;
B. Falls Mountain is a wholly-owned subsidiary of Pine Valley and holds Pine
Valley's coal mining interests;
C. PVC is a wholly-owned subsidiary of Falls Mountain and holds and operates its
principal asset, the Willow Creek Project (as defined below);
D. Pine Valley requires additional financing to further develop the Willow Creek
Project and for working capital purposes; and
E. Rockside is prepared to make available to Pine Valley and its affiliates a
credit facility on the basis set out in this Agreement.
NOW THEREFORE, IN CONSIDERATION of the covenants and agreements in this
Agreement, the Parties agree as follows:
1. INTERPRETATION
1.1 DEFINED TERMS
In this Agreement:
(a) "AGREEMENT" means this agreement including any recitals and Schedules
to this agreement, as amended, supplemented or restated from time to
time;
(b) "BUSINESS DAY" means a day other than a Saturday or Sunday on which
banks are open for general banking business in Vancouver, B.C.;
(c) "CLOSING" and "CLOSING DATE" will have the meanings set out in Section
10.1;
(d) "CLOSING DATE BONUS SHARES" has the meaning given to it in Section 6;
(e) "CREDIT FACILITY" means the credit facility made available by Rockside
to Falls Mountain pursuant to Section 2.1;
(f) "FALLS MOUNTAIN SECURITY AGREEMENT" means the Security Agreement dated
November 26, 2004 among Falls Mountain and PVC as debtors and Rockside
as secured party;
(g) "GOVERNMENTAL AUTHORITY" means any domestic or foreign government,
including any federal, provincial, state, territorial or municipal
government, and any government agency, tribunal, commission or other
authority exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, government;
(h) "INTEREST" has the meaning given to it in Section 2.2;
(i) "LIENS" means any mortgage, lien, charge, hypothec or encumbrance,
whether fixed or floating, on, or any security interest in, any
property, whether real, personal or mixed, tangible or intangible, any
pledge or hypothecation of any property, any deposit arrangement
priority, conditional sale agreement, other title retention agreement
or equipment trust, capital lease or other security arrangements of
any kind;
(j) "MARKET VALUE" means the weighted average share price over the ten
trading days on the TSX Venture Exchange (or the TSX, if applicable)
immediately preceding the date of the advance of Tranche Xx. 0,
Xxxxxxx Xx. 0 or Tranche No. 3, as applicable;
(k) "MARUBENI" means Marubeni Corporation, a corporation incorporated
under the laws of Japan and having a business at 0-0, 0 Xxxxx,
Xxxxxxx-Xx, Xxxxx, Xxxxx;
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(l) "MITSUI" means Mitsui Matsushima Co., Ltd., a company incorporated
under the laws of Japan and having its principal office at 1-12,
Otemon 1-chome, Chuo-ku, Fukuoka-shi, Fukuoka Prefecture, Japan;
(m) "MITSUI CANADA" means Mitsui Matsushima Canada Ltd., a company
incorporated under the laws of British Columbia having its registered
office at Suite 1600 - 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, XX X0X 0X0, and
a subsidiary of Mitsui;
(n) "PARTIES" means the parties to this Agreement and "PARTY" means any
one of them;
(o) "PERMITTED LIENS" means: (i) the security interests granted to Mitsui
Canada by any of the Pine Valley Group; (ii) the security interests
granted to Marubeni by any of the Pine Valley Group; (iii) Liens in
favour of the British Columbia Ministry of Energy and Mines over
reclamation security deposits required in connection with the permits
for the Willow Creek Project; and (iv) any other Liens permitted under
the Falls Mountain Security Agreement;
(p) "PERSON" means any natural person, sole proprietorship, partnership,
corporation, trust, joint venture, any Governmental Authority or any
incorporated or unincorporated entity or association of any nature;
(q) "PINE VALLEY GROUP" means Pine Valley, Falls Mountain and PVC;
(r) "PROJECT INFORMATION" means all information and data relating to the
Willow Creek Project and this Agreement;
(s) "SECURITIES ACT" has the meaning given to it in Section 8.2;
(t) "STATE ACTS" has the meaning given to it in Section 8.2;
(u) "TRANCHE NO. 1" means the first advance in the principal amount of
$3,750,000 referred to in Section 2.1;
(v) "TRANCHE NO. 2" means the second advance in the principal amount of
$1,250,000 referred to in Section 2.1;
(w) "TRANCHE NO. 3" means the third advance in the principal amount of
$2,000,000 referred to in Section 2.1; and
(x) "WILLOW CREEK PROJECT" means the exploration, development and
commercial exploitation of coal properties held by the Pine Valley
Group in north-eastern British Columbia.
1.2 GOVERNING LAW
This Agreement and each of the documents contemplated by or delivered under or
in connection with this Agreement are governed exclusively by, and are to be
enforced, construed and
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interpreted exclusively in accordance with, the laws of British Columbia and the
laws of Canada applicable in British Columbia which will be deemed to be the
proper law of this Agreement.
1.3 SEVERABILITY
Each provision of this Agreement is intended to be severable and accordingly:
(a) the unenforceability or invalidity of any particular provision under
any applicable law or in any jurisdiction, as determined by a court
having jurisdiction, an arbitrator or arbitrators appointed under this
Agreement, or other authority having jurisdiction, will not affect the
validity or enforceability of any other provision, except that if the
other provision is expressly stated to be, or if, on a proper
construction of this Agreement as a whole, it is reasonable to
conclude that the Parties intended the other provision to be,
dependent on the validity and enforceability of the particular
provision, the other provision will also be invalid or unenforceable;
and
(b) if any provision of this Agreement is determined to be invalid or
unenforceable as aforesaid or is invalid or unenforceable pursuant to
subparagraph (a), the balance of this Agreement will be construed and
enforced as if all invalid or unenforceable provisions were not
contained herein.
If, as a result of a determination that any part of this Agreement is
unenforceable or invalid as aforesaid, and as a result of or despite the
operation of this section, the expectations of the Parties, as determined on a
proper construction of this Agreement as a whole, are substantially frustrated,
the Parties will negotiate in good faith such amendments and additions to this
Agreement as are reasonable and necessary to realize the original expectations
to the greatest extent possible under the circumstances.
1.4 NUMBER AND GENDER
Unless otherwise specified, words importing the singular include the plural and
vice versa and words importing gender include all genders.
1.5 TIME OF DAY
Unless otherwise specified, references to time of day or date mean the local
time or date in Vancouver, British Columbia.
1.6 TIME OF ESSENCE
Time is of the essence of this Agreement.
1.7 CURRENCY
Except as otherwise expressly provided, all references to amounts of money mean
lawful currency of the United States of America.
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1.8 SCHEDULES
The schedules attached to this Agreement, will, for all purposes, form an
integral part of the Agreement.
2. CREDIT FACILITY
2.1 CREDIT FACILITY
Subject to the terms and conditions of this Agreement, Rockside hereby
establishes for Falls Mountain the following credit facility:
(a) Tranche No. 1 in the principal amount of $3,750,000, to be advanced on
the Closing Date;
(b) Tranche No. 2 in the principal amount of $1,250,000, to be advanced
between December 27, 2004 and February 19, 2005; and
(c) Tranche No. 3 in the principal amount of $2,000,000, to be advanced
between June 1, 2005 and July 31, 2005,
provided that Rockside will only advance Xxxxxxx Xx. 0 xxx Xxxxxxx Xx. 0 at the
sole option of, and if requested to so by, Falls Mountain, and nothing herein
will obligate any of the Pine Valley Group to draw down any of the Credit
Facility except for Tranche No. 1. If it elects to do so, Falls Mountain will
request the advance of Tranche No. 2 and Tranche No. 3 by delivering not less
than 7 days' written notice to Rockside. All advances will be made by Rockside
by wire transfer to such account as Falls Mountain may designate.
2.2 INTEREST
Subject to adjustment in accordance with Section 2.4, the outstanding principal
amount of the Credit Facility will bear simple interest (the "INTEREST") at an
annual interest rate of 10% and the amount of interest accrued on the
outstanding principal amount of the Credit Facility each month will be paid by
Falls Mountain to Rockside in arrears on the last Business Day of each month.
2.3 DUE DATE
Subject to the early repayment provisions in Sections 2.5 and 2.7, Falls
Mountain hereby agrees to pay to Rockside the entire outstanding amount of the
Credit Facility and any and all accrued and unpaid Interest on or before
November 29, 2005.
2.4 WITHHOLDING TAXES
(a) All payments in respect of interest, structuring fees and other
amounts owing under this Agreement will be made free and clear without
deduction for any taxes, duties, fees or other charges unless those
deductions are required by law.
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(b) If Falls Mountain determines that it is compelled by law to make any
such deduction, then Falls Mountain and Rockside will bear the cost of
such deduction equally, and Falls Mountain will pay, by way of an
adjustment to the interest payable pursuant to Section 2.2, such
additional amounts as will result in receipt by Rockside of the full
amount which would have been paid had one-half of such deduction not
been made.
(c) Falls Mountain will use reasonable commercial efforts to provide, as
soon as possible after a deduction or withholding is made, official
receipts or other official documentation to Rockside evidencing
payment of the taxes, duties, fees or other charges.
(d) If, following the imposition of taxes, duties, fees or other charges
referred to above upon any such payment, Rockside is granted a credit
or refund in respect of those taxes for any tax payable, Rockside
(subject to Falls Mountain having paid an additional amount in
accordance with this paragraph), to the extent that it is satisfied
that it can do so without prejudice to the retention of the amount of
the credit or refund, will reimburse Falls Mountain for that amount
which Rockside certifies to be the proportion of the credit or refund
as will leave Rockside (after the reimbursement) in no worse or better
position than it would have been in if there had been no taxes imposed
upon the payment by Falls Mountain referred to above, and that
reimbursement will be made immediately upon the credit or refund being
granted to Rockside. Rockside will use reasonable commercial efforts
to realize any such refunds or credits.
2.5 PREPAYMENT
Falls Mountain will have the right, at its option, to pay the outstanding amount
of the Credit Facility plus any Interest owing thereon, in whole or in part, at
any time and from time to time, without notice, bonus or penalty.
2.6 LEGAL FEES AND EXPENSES
Falls Mountain will compensate Rockside for all its reasonable legal fees and
other out of pocket expenses incurred in connection with the negotiation and
preparation of the Credit Facility documentation at the Closing, provided that
Falls Mountain has then received from Rockside or its advisors a statement of
account itemizing such fees and expenses.
2.7 SALE OF THE PROJECT OR FINANCING
If the Pine Valley Group sells, assigns or transfers to a third party an
interest of greater than 50% of the Willow Creek Project or obtains debt
financing in an amount sufficient to permit it to do so, then the Pine Valley
Group will make it a condition of any such transaction that the outstanding
principal amount of the Credit Facility and accrued Interest will be repaid in
full out of the transaction proceeds.
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3. USE OF PROCEEDS
3.1 USE OF PROCEEDS
The Credit Facility proceeds will be used by the Pine Valley Group to further
develop the Willow Creek Project and for working capital purposes.
3.2 INSPECTION AND AUDIT
The Pine Valley Group will maintain complete and accurate records relating to
the use of the Credit Facility proceeds. For so long as any of the Credit
Facility remains outstanding, Rockside or its representatives may, upon
reasonable notice to the Pine Valley Group and during normal business hours,
inspect and take copies of such records. In addition, Rockside will have the
right, for so long as any of the Credit Facility remains outstanding, to have
such records audited by a firm of internationally recognized chartered
accountants. Such audit will be carried out during reasonable business hours and
on reasonable notice to the Pine Valley Group.
4. SECURITY
4.1 GENERAL SECURITY AGREEMENT
Falls Mountain's obligation to repay the Credit Facility and the Interest will
be secured by the Falls Mountain Security Agreement, and the security interests
arising thereunder will rank subsequent in priority and be subordinate in all
respects to: (a) the security interests presently held by Mitsui Canada and
arising under a General Security Agreement made January 6, 2004 between Falls
Mountain and PVC as debtors and Mitsui Canada; and (b) the security interests
presently held by Marubeni and arising under a General Security Agreement made
May 13, 2004 between Falls Mountain and PVC as debtors and Marubeni.
4.2 RELEASE OF SECURITY
Upon the repayment in full of the Credit Facility and accrued Interest thereon,
the Falls Mountain Security Agreement will terminate, and Rockside will
irrevocably release and discharge the Falls Mountain Security Agreement and the
guarantee of Pine Valley expressed in Section 5.1.
4.3 PROJECT MANAGEMENT
Notwithstanding the Falls Mountain Security Agreement, the Willow Creek Project
will be developed and operated by and under the control of the Pine Valley Group
and the contractors and agents engaged by the Pine Valley Group.
5. GUARANTEES AND INDEMNITIES
5.1 GUARANTEE OF PINE VALLEY
Rockside is willing to proceed with this Agreement and the transactions
contemplated hereby only with the participation of Pine Valley as set forth in
this Section 5. In consideration of the
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payment of $20 and other good and valuable consideration paid and given by
Rockside to Pine Valley (the receipt and sufficiency of which are hereby
acknowledged), Pine Valley hereby guarantees the performance by Falls Mountain
of the respective covenants, agreements and obligations of Falls Mountain under
this Agreement and guarantees payment by Falls Mountain to Rockside of any and
all loss, damage, expense, liability, claim or demand suffered or incurred by
Rockside arising out of any breach of any covenant, agreement, representation or
warranty of this Agreement by Falls Mountain or any misrepresentation on the
part of Falls Mountain.
5.2 ABILITY TO DEAL
Pine Valley acknowledges and agrees that none of the following will release Pine
Valley of any of its obligations under this Section 5:
(a) any modification, amendment or change to the rights or obligations of
Falls Mountain under this Agreement in any manner whatsoever,
regardless of the magnitude or materiality of such change and
regardless of whether Pine Valley has consented to or approved such
change;
(b) the granting of any time, renewals, extensions or indulgences to Falls
Mountain with respect to its obligations under this Agreement;
(c) the taking of any securities (which word as herein used includes other
guarantees) for the performance by Falls Mountain of its obligations
under this Agreement; abstaining from taking or perfecting such
securities; accepting compositions from, exchanging, enforcing,
waiving or releasing any such securities; or otherwise dealing with
such securities as Rockside may see fit, and, Rockside may apply all
monies at any time received from such securities or Falls Mountain or
others to such part of the liabilities of Falls Mountain as Rockside
deems best and change such application in whole or in part from time
to time as Rockside sees fit;
and Pine Valley further waives presentment, demand, protest and all notices and
any right to require Rockside to proceed against Falls Mountain or to proceed
against or exhaust any security or pursue any other remedy available to Rockside
as a condition to enforcement of Pine Valley's obligations under this Agreement.
5.3 INDEMNIFICATION FROM PINE VALLEY
Pine Valley will indemnify and save harmless Rockside from and against all
suits, claims, demands, liabilities, losses and expenses which Rockside may
suffer, incur or sustain resulting or arising from any non-fulfilment of any
covenant or agreement or any breach of or incorrectness in any representation or
warranty by or of Pine Valley or any other member of the Pine Valley Group
contained in this Agreement or the Falls Mountain Security Agreement.
Every indemnity and exemption from liability, limitation and condition contained
in this Agreement for the benefit of Rockside and every defence and immunity of
whatsoever nature applicable to Rockside or to which Rockside is entitled under
this Agreement will also be
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available and extend to protect every director, officer, employee, agent or
independent contractor from time to time of Rockside.
5.4 INDEMNIFICATION FROM PVC
PVC will indemnify and save harmless Rockside from and against all suits,
claims, demands, liabilities, losses and expenses which Rockside may suffer,
incur or sustain resulting or arising from any non-fulfilment of any covenant or
agreement or any breach of or incorrectness in any representation or warranty by
or of PVC or any other member of the Pine Valley Group contained in this
Agreement or the Falls Mountain Security Agreement.
Every indemnity and exemption from liability, limitation and condition contained
in this Agreement for the benefit of Rockside and every defence and immunity of
whatsoever nature applicable to Rockside or to which Rockside is entitled under
this Agreement will also be available and extend to protect every director,
officer, employee, agent or independent contractor from time to time of
Rockside.
5.5 INDEMNIFICATION FROM ROCKSIDE
Rockside will indemnify and save harmless each and every member of the Pine
Valley Group from and against all suits, claims, demands, liabilities, losses
and expenses which any member of the Pine Valley Group may suffer, incur or
sustain resulting or arising from any failure or refusal by Rockside to advance
any part of the Credit Facility in breach of its obligations under this
Agreement.
Every indemnity and exemption from liability, limitation and condition contained
in this Agreement for the benefit of the Pine Valley Group and every defence and
immunity of whatsoever nature applicable to any member of the Pine Valley Group
or to any member of the Pine Valley Group is entitled under this Agreement will
also be available and extend to protect every director, officer, employee, agent
or independent contractor from time to time of any member of the Pine Valley
Group.
6. BONUS SHARES
Pine Valley will issue to Rockside as additional consideration for the Credit
Facility, a bonus payment equal to that number of common shares in the capital
of Pine Valley having a Market Value equivalent to 10% of the principal amount
of: (a) Tranche No. 1, to be issued as soon as is reasonably practicable after
the advance of Tranche No. 1 (the "CLOSING DATE BONUS SHARES"); (b) Tranche No.
2, to be issued as soon as is reasonably possible after the advance, if any, of
Tranche No. 2; and (c) Tranche No. 3, to be issued as soon as is reasonably
possible after the advance, if any, of Tranche No. 3; each of which advances
will be converted into Canadian Dollars at the exchange rate published by the
Bank of Canada at the close of business on the day immediately preceding the
date of such advance.
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7. REPRESENTATIONS AND WARRANTIES OF THE PINE VALLEY GROUP
7.1 REPRESENTATIONS AND WARRANTIES OF FALLS MOUNTAIN
Falls Mountain represents and warrants as follows and acknowledges and confirms
that Rockside is relying upon such representations and warranties in entering
into this Agreement:
(a) Falls Mountain is a valid and subsisting company duly incorporated
under the laws of the Province of British Columbia and has all
necessary corporate power and authority to enter into this Agreement
and perform its obligations hereunder;
(b) this Agreement has been duly authorized, executed and delivered by
Falls Mountain and is a legal, valid and binding obligation of Falls
Mountain, enforceable against Falls Mountain in accordance with its
terms except as enforcement may be limited by bankruptcy, insolvency
and other laws affecting creditors' rights generally and subject to
the qualification that specific performance and injunction, as
equitable remedies, may only be granted in the discretion of a court
of competent jurisdiction;
(c) the making of this Agreement and the completion of the transactions
contemplated hereby and the performance of and compliance with the
terms hereof does not conflict with or result in the breach of, or the
acceleration of, any terms, provisions or conditions of or constitute
a default under: (i) the constating documents of Falls Mountain; (ii)
any indenture, mortgage, deed of trust, agreement, lease, franchise,
certificate or other instrument to which Falls Mountain is a party or
is bound, except as set out in the agreements with Marubeni and Mitsui
or Mitsui Canada; or (iii) any term or provision of any licenses,
registrations or qualifications of Falls Mountain or any order of any
governmental authority or any applicable law;
(d) no litigation or administrative proceedings before any court or
governmental authority are presently pending, or have been threatened
in writing against Falls Mountain or any of its assets which could
have a material adverse effect on its business or assets;
(e) Falls Mountain has conducted and is conducting, in all material
respects, its business in compliance with all applicable laws,
by-laws, rules and regulations of each jurisdiction in which the
Willow Creek Project is carried on and it holds all licences,
registrations, permits, consents or qualifications (whether
governmental, regulatory or otherwise) required in order to enable the
Willow Creek Project to be carried on as now conducted, and all such
licences, registrations, permits, consents and qualifications are
valid and subsisting and in good standing, in all material respects,
and Falls Mountain has not received any notice of proceedings relating
to the revocation or modification of any such licence, registration,
permit, consent or qualification which, if subject to an unfavourable
decision, ruling or finding, would materially adversely affect the
business or assets of Falls Mountain;
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(f) Falls Mountain is the legal and beneficial owner of all of the issued
and outstanding shares in the capital of PVC, free and clear of any
Liens other than Permitted Liens; and
(g) except for those Willow Creek Project assets registered in the name of
PVC, Falls Mountain owns all of the Willow Creek Project assets,
licences, and permits required to carry on the Willow Creek Project in
its current state of development free and clear of any Liens other
than Permitted Liens.
The representations set out in this Section are continuous in nature and will
continue in effect as representations and warranties of Falls Mountain repeated
on a daily basis during the currency of this Agreement.
7.2 REPRESENTATIONS AND WARRANTIES OF PINE VALLEY
Pine Valley represents and warrants as follows and acknowledges and confirms
that Rockside is relying upon such representations and warranties in entering
into this Agreement:
(a) Pine Valley is a valid and subsisting company duly incorporated under
the laws of the Province of British Columbia and has all necessary
corporate power and authority to enter into this Agreement and perform
its obligations hereunder;
(b) this Agreement has been duly authorized, executed and delivered by
Pine Valley and is a legal, valid and binding obligation of Pine
Valley, enforceable against Pine Valley in accordance with its terms
except as enforcement may be limited by bankruptcy, insolvency and
other laws affecting creditors' rights generally and subject to the
qualification that specific performance and injunction, as equitable
remedies, may only be granted in the discretion of a court of
competent jurisdiction;
(c) the making of this Agreement and the completion of the transactions
contemplated hereby and the performance of and compliance with the
terms hereof does not conflict with or result in the breach of, or the
acceleration of, any terms, provisions or conditions of or constitute
a default under: (i) the constating documents of Pine Valley; (ii) any
indenture, mortgage, deed of trust, agreement, lease, franchise,
certificate or other instrument to which Pine Valley is a party or is
bound, except as set out in the agreements with Marubeni and Mitsui or
Mitsui Canada; or (iii) any term or provision of any licenses,
registrations or qualifications of Pine Valley or any order of any
governmental authority or any applicable law;
(d) no litigation or administrative proceedings before any court or
governmental authority are presently pending, or have been threatened
in writing against Pine Valley or any of its assets which could have a
material adverse effect on its business or assets;
(e) Pine Valley has conducted and is conducting, in all material respects,
its business in compliance with all applicable laws, by-laws, rules
and regulations of
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each jurisdiction in which its business is carried on and it holds all
licences, registrations, permits, consents or qualifications (whether
governmental, regulatory or otherwise) required in order to enable its
business to be carried on as now conducted, and all such licences,
registrations, permits, consents and qualifications are valid and
subsisting and in good standing, in all material respects, and Pine
Valley has not received any notice of proceedings relating to the
revocation or modification of any such licence, registration, permit,
consent or qualification which, if subject to an unfavourable
decision, ruling or finding, would materially adversely affect the
business or assets of Pine Valley; and
(f) Pine Valley is the legal and beneficial owner of all of the issued and
outstanding shares in the capital of Falls Mountain, free and clear of
any Liens other than Permitted Liens.
The representations set out in this Section are continuous in nature and will
continue in effect as representations and warranties of Pine Valley repeated on
a daily basis during the currency of this Agreement.
7.3 REPRESENTATIONS AND WARRANTIES OF PVC
PVC represents and warrants as follows and acknowledges and confirms that
Rockside is relying upon such representations and warranties in entering into
this Agreement:
(a) PVC is a valid and subsisting corporation duly incorporated under the
laws of the Province of Alberta and has all necessary corporate power
and authority to enter into this Agreement and perform its obligations
hereunder;
(b) this Agreement has been duly authorized, executed and delivered by PVC
and is a legal, valid and binding obligation of PVC, enforceable
against PVC in accordance with its terms except as enforcement may be
limited by bankruptcy, insolvency and other laws affecting creditors'
rights generally and subject to the qualification that specific
performance and injunction, as equitable remedies, may only be granted
in the discretion of a court of competent jurisdiction;
(c) the making of this Agreement and the completion of the transactions
contemplated hereby and the performance of and compliance with the
terms hereof does not conflict with or result in the breach of, or the
acceleration of, any terms, provisions or conditions of or constitute
a default under: (i) the constating documents of PVC; (ii) any
indenture, mortgage, deed of trust, agreement, lease, franchise,
certificate or other instrument to which PVC is a party or is bound,
except as set out in the agreements with Marubeni and Mitsui or Mitsui
Canada; or (iii) any term or provision of any licenses, registrations
or qualifications of PVC or any order of any governmental authority or
any applicable law;
(d) no litigation or administrative proceedings before any court or
governmental authority are presently pending, or have been threatened
in writing against PVC or any of its assets which could have a
material adverse effect on its business or assets;
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(e) PVC has conducted and is conducting, in all material respects, its
business in compliance with all applicable laws, by-laws, rules and
regulations of each jurisdiction in which its business is carried on
and it holds all licences, registrations, permits, consents or
qualifications (whether governmental, regulatory or otherwise)
required in order to enable its business to be carried on as now
conducted, and all such licences, registrations, permits, consents and
qualifications are valid and subsisting and in good standing, in all
material respects, and PVC has not received any notice of proceedings
relating to the revocation or modification of any such licence,
registration, permit, consent or qualification which, if subject to an
unfavourable decision, ruling or finding, would materially adversely
affect the business or assets of PVC; and
(f) except for those Willow Creek Project assets owned by Falls Mountain,
PVC owns all of the Willow Creek Project assets, licences, and permits
required to carry on the Willow Creek Project in its current state of
development free and clear of any Liens other than Permitted Liens.
The representations set out in this Section are continuous in nature and will
continue in effect as representations and warranties of PVC repeated on a daily
basis during the currency of this Agreement.
8. REPRESENTATIONS AND WARRANTIES OF ROCKSIDE
8.1 GENERAL REPRESENTATIONS AND WARRANTIES
Rockside hereby represents and warrants as follows and acknowledges and confirms
that the Pine Valley Group is relying upon such representations and warranties
in entering into this Agreement:
(a) Rockside is a valid and subsisting corporation duly incorporated under
the laws of its jurisdiction of incorporation and has all necessary
corporate power and authority to enter into this Agreement and perform
its obligations hereunder;
(b) this Agreement has been duly executed and delivered by Rockside and is
a legal, valid and binding obligation of Rockside, enforceable against
Rockside in accordance with its terms except as enforcement may be
limited by bankruptcy, insolvency and other laws affecting creditors'
rights generally and subject to the qualification that specific
performance and injunction, as equitable remedies, may only be granted
in the discretion of a court of competent jurisdiction;
(c) the making of this Agreement and the completion of the transactions
contemplated hereby and the performance of and compliance with the
terms hereof does not conflict with or result in the breach of, or the
acceleration of, any terms, provisions or conditions of or constitute
a default under: (i) the constating documents of Rockside; (ii) any
indenture, mortgage, deed of trust, agreement, lease, franchise,
certificate or other instrument to which Rockside is a party or is
bound; or (iii) any term or provision of any licenses, registrations
or qualifications of Rockside or any order of any governmental
authority or any applicable law;
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(d) there is not now pending or threatened against Rockside, nor has
Rockside received notice in respect of any material claim, nor is
Rockside aware of any facts that could give rise to any claim, which
could lead to, any litigation, action, suit or other proceeding by or
before any court, tribunal or other competent governmental agency or
authority or regulatory body which if determined adversely to Rockside
would materially affect the application of this Agreement or the
Parties; and
(e) Rockside is a non-resident of Canada within the meaning of Section 116
of the Income Tax Act (Canada).
The representations and warranties set out in this Section are continuous in
nature and will continue in effect as representations and warranties of Rockside
repeated on a daily basis during the currency of this Agreement.
8.2 SECURITIES LAW REPRESENTATIONS AND WARRANTIES
Rockside hereby further represents and warrants as follows and acknowledges and
confirms that the Pine Valley Group is relying upon such representations and
warranties in entering into this Agreement:
(a) Rockside acknowledges that it has had the opportunity to review all
reports, information and other documents filed by Pine Valley with
U.S. and Canadian securities authorities and to obtain additional
information from, and to ask questions of, Pine Valley or its
representatives concerning Pine Valley and its present and proposed
business, results of operations and financial condition, and has had
all such questions answered to its satisfaction and has been supplied
with all additional information requested;
(b) Rockside has such knowledge and experience in business and financial
matters that it is capable of evaluating the merits and risks of
investing in Pine Valley. Rockside has sufficient liquid assets or
other sources of income to provide for its current needs and
contingencies with no need for liquidity of the investment in Pine
Valley and has the ability to suffer a complete loss of the
investment. Rockside is familiar with the type of investment which the
securities being issued by Pine Valley constitutes and has reviewed
the investment in Pine Valley with its own tax and legal advisors and
investment representatives to the extent deemed advisable;
(c) Rockside understands that (i) the securities have not been registered
under the U.S. Securities Act of 1933, as amended (the "SECURITIES
ACT"), or any state securities or "blue sky" laws (the "STATE ACTS")
and are being issued and sold in reliance upon certain exemptions
contained in the Securities Act and the State Acts, and the
representations and warranties contained herein are essential to the
claim of exemption by Pine Valley under the Securities Act and the
State Acts, (ii) the securities are "restricted securities" as that
term is defined in Rule 144 promulgated under the Securities Act,
(iii) the securities cannot be sold or
14
transferred without registration under the Securities Act and any
applicable State Acts, unless the holder establishes to the
satisfaction of Pine Valley that such registration is not necessary,
(iv) any certificates which may be issued to evidence the securities
shall bear the following legend, in addition to any other legend
required by law or otherwise:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT
WITH RESPECT TO SUCH SECURITIES HAS BECOME EFFECTIVE OR UNLESS THE
HOLDER ESTABLISHES TO THE SATISFACTION OF THE CORPORATION THAT AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
(v) only Pine Valley can register the securities under the Securities
Act and any of the State Acts, (vi) Pine Valley has not made any
representations to Rockside that Pine Valley will register the
securities under the Securities Act or any of the State Acts, or with
respect to compliance with any exemption therefrom, (vii) there are
stringent conditions for obtaining an exemption for the resale of the
securities under the Securities Act and any State Acts, and (viii)
Pine Valley may from time to time make stop transfer notations in its
transfer records to ensure compliance with the Securities Act and any
State Acts;
(d) Rockside represents and warrants that (i) it is acquiring the
securities for its own account and not on behalf of any other person,
(ii) it is acquiring the securities for investment and not with a view
to or for sale in connection with any distribution of the securities
or with the intent to divide its participation with others or resell
or otherwise participate in a distribution of the securities, directly
or indirectly, and (iii) neither it nor anyone acting omits behalf has
paid or will pay any commission or other remuneration to any person in
connection with the acquisition of the securities; and
(e) Rockside is an "accredited investor" within the meaning of Rule 501(a)
of Regulation D promulgated under the Securities Act because it is an
organization described in Section 501(c)(3) of the Internal Revenue
Code, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000.
The representations and warranties set out in this Section are continuous in
nature and will continue in effect as representations and warranties of Rockside
repeated on a daily basis during the currency of this Agreement.
9. COVENANT ON RESALES OF SECURITIES
Rockside hereby covenants with Pine Valley not to make any sale of the
securities: (i) without registration under the Securities Act and the applicable
State Acts, unless it is established to the
15
satisfaction of Pine Valley that such registration is not necessary; or (ii)
without compliance with any restrictions imposed by the Securities Act or any
applicable State Acts.
10. CLOSING
10.1 CLOSING DATE
The closing of the advance of Tranche No. 1 (the "CLOSING") will take place at
the offices of the Pine Valley Group's Vancouver legal counsel at 11:00 a.m.
(Vancouver time) on November 26, 2004, or such other date as may be agreed to by
the Parties (the "CLOSING DATE").
10.2 PINE VALLEY GROUP CLOSING AND POST-CLOSING DOCUMENTS
At the Closing, the Pine Valley Group will table and, in accordance with the
other provisions of Section 10, will deliver to Rockside:
(a) this Agreement duly executed by each member of the Pine Valley Group;
(b) a certificate of a senior officer of each member of the Pine Valley
Group directed to the truth and accuracy of the representations and
warranties of that member of the Pine Valley Group made in this
Agreement and the performance by that member of the Pine Valley Group
of the covenants to be performed by it at or before the Closing and
providing particulars of any inaccuracy or non-performance;
(c) certified copies of resolutions of the directors of each member of the
Pine Valley Group authorizing the execution and delivery by each such
member of this Agreement and the performance of each such member's
obligations hereunder;
(d) the Falls Mountain Security Agreement duly executed by Falls Mountain
and PVC;
(e) a certified cheque, bank draft or wire transfer made payable to
Rockside in connection with Falls Mountain's obligation to pay the
amount owing, if any, pursuant to Section 2.6;
(f) a certified copy of resolution of the directors of Pine Valley
authorizing the allotment and issuance of the Closing Date Bonus
Shares; and
(g) all other documents as Rockside or its solicitors may reasonably
request pursuant to the terms and conditions of this Agreement.
As soon as is reasonably possible after the Closing Date, Pine Valley will
deliver to Rockside a share certificate duly and validly registered in the name
of Rockside representing the Closing Date Bonus Shares.
16
10.3 ROCKSIDE'S CLOSING DOCUMENTS
At the Closing Rockside will table and, in accordance with the other provisions
in Section 10, will deliver to the Pine Valley Group:
(a) this Agreement duly executed by Rockside;
(b) a certificate signed by a senior officer of Rockside:
(1) directed to the truth and accuracy of the representations and
warranties of Rockside in this Agreement and the performance by
Rockside of the covenants to be performed at or before the
Closing and providing particulars of any inaccuracy or
non-performance; and
(2) confirming that the execution and delivery of this Agreement by
Rockside and the performance by Rockside of its obligations
hereunder have been authorized by all necessary procedures;
(c) a wire transfer in the amount of $3,750,000 representing the advance
of Tranche No. 1;
(d) a statement of account evidencing the amount owing, if any, pursuant
to Section 2.6; and
(e) all other documents as the Pine Valley Group may reasonably request
pursuant to the terms and conditions of this Agreement.
10.4 CONDITIONS PRECEDENT
The obligation of Rockside to complete the Closing is subject to the conditions
that Rockside will have received confirmation of the registration of the Falls
Mountain Security Agreement in the personal property security registries of
British Columbia and Alberta, and the recording of the Falls Mountain Security
Agreement on the title records of the Willow Creek Project coal licenses and
coal leases maintained at the office of the British Columbia Coal Administrator.
The foregoing condition is for the exclusive benefit of Rockside and may be
waived by Rockside. Each of Rockside and Falls Mountain will use reasonable
commercial efforts to fulfill the foregoing condition promptly following the
execution and delivery of this Agreement.
11. DEFAULT
11.1 EVENT OF DEFAULT
An "EVENT OF DEFAULT" means the occurrence of any of the following events:
(a) Falls Mountain defaults in any payment when the same is due under this
Agreement;
(b) any member of the Pine Valley Group becomes insolvent or makes a
general assignment for the benefit of its creditors, or if an order is
made or effective
17
resolutions are passed for the winding-up, of a member of the Pine
Valley Group or if any member of the Pine Valley Group is declared
bankrupt or if a custodian or receiver is appointed for a member of
the Pine Valley Group under any bankruptcy legislation, or if a
compromise or arrangement is proposed by any member of the Pine Valley
Group to its creditors or any class of its creditors, or if a receiver
or other officer with like powers is appointed for a member of the
Pine Valley Group;
(c) the Pine Valley Group uses the Credit Facility proceeds for purposes
other than those permitted by Section 3.1 of this Agreement;
(d) Pine Valley pays any dividends or makes any other cash distributions
to shareholders, or makes any payment towards an amount of $600,000
which Pine Valley has disclosed in the notes to its annual financial
statements as owing to the estate of Pine Valley's former Chairman;
(e) Falls Mountain pays any cash dividends or makes any other cash
distributions to its shareholder, other than by paying expenses of its
shareholder that it is otherwise permitted to pay under this
Agreement, which payments may be accounted for as dividends by Falls
Mountain;
(f) the Pine Valley Group forfeits or abandons any of the coal licenses or
coal leases listed in Schedule 11.1(f), or cause any conditions of its
mining permits to be changed or amended such that the Pine Valley
Group would have to cease mining operations on the Willow Creek
Project for a period of greater than thirty consecutive days;
(g) the Pine Valley Group sells or otherwise disposes of any assets
without the prior written consent of Rockside, excluding assets sold
or otherwise disposed of in the normal course of business such as coal
and equipment sales;
(h) a member of the Pine Valley Group is in material breach of any
agreements with a third party and such material breach is reasonably
likely to have a material impact on the ownership of the Willow Creek;
or
(i) a member of the Pine Valley Group is in material breach of any
provision of this Agreement.
11.2 CONSEQUENCES OF DEFAULT
If any Event of a Default occurs and is continuing for a period of 30 days after
written notice has been given by Rockside to the Pine Valley Group, and acts or
omissions of Rockside have not materially contributed to such a default, then
Rockside may declare the outstanding amount of the Credit Facility plus accrued
and unpaid Interest to be immediately due and payable and may exercise all of
its rights and remedies available to it at law, including under the Falls
Mountain Security Agreement. Notwithstanding the foregoing, the provisions of
this Section 11.2 will not in any way relieve the obligation of Falls Mountain
to repay the entire outstanding amount of the
18
Credit Facility and any and all accrued and unpaid Interest in accordance with
the repayment deadline prescribed in Section 2.3.
11.3 NOTICE OF DEFAULT
Upon becoming aware of the occurrence of an Event of a Default or an event
which, with the passage of time, will become an Event of Default, Falls Mountain
will give written notice of such event to Rockside.
11.4 USE OF PROCEEDS ASSUMPTION
Unless Rockside is able to prove otherwise, the Pine Valley Group will be
assumed to have used the Credit Facility proceeds in accordance with Article 3
of this Agreement.
12. FORCE MAJEURE
If any Party is delayed in the performance of its obligations under this
Agreement or its operations are suspended by strikes, lockouts or other labour
unrest or disturbances, fire, flood, insurrection, riots, acts of the enemy,
acts of the government including governmental agencies or other bodies, acts of
God, or by any other similar causes reasonably beyond the control of the
affected Party (such an event being herein referred to as "FORCE MAJEURE"), then
the obligations of the Party, insofar as its obligations are affected by the
Force Majeure, will be suspended, while, but only for so long as, the Force
Majeure continues to prevent the performance of the said obligations. The Party
claiming suspension of its obligations as aforesaid will give the other Party
written notice of the Force Majeure within 10 days of its commencement including
reasonably full particulars in respect thereof, which particulars will include
the commencement date of the Force Majeure. The affected Party will promptly
take steps to remedy the cause and effect of the Force Majeure described in the
aforesaid notice insofar as it is reasonably able so to do; provided that the
terms of settlement of any strike, lockout, or other labour unrest or
disturbance will be wholly in the discretion of the Party so affected and that
Party will not be required to accede to the demands of its opponents in any
strike, lockout or other labour unrest or disturbance solely to remedy promptly
the Force Majeure thereby constituted.
Notwithstanding the foregoing, the provisions of this Section 12 will not in any
way relieve the obligation of Falls Mountain to repay the entire outstanding
amount of the Credit Facility and any and all accrued and unpaid Interest in
accordance with the repayment deadline prescribed in Section 2.3.
13. GENERAL
13.1 INDEPENDENT LEGAL ADVICE
Rockside acknowledges and agrees that the Pine Valley Group and their counsel,
Bull, Housser & Xxxxxx, have recommended that it obtain independent legal advice
with respect to the subject matter of this Agreement and Rockside hereby
represents and warrants to each of the Pine Valley Group and Bull, Housser &
Xxxxxx that Rockside has sought independent legal advice or waives such advice.
19
13.2 ARBITRATION
All disputes between the parties arising out of or in connection with this
Agreement which cannot be settled by them will be referred to a single
arbitrator under the Commercial Arbitration Act then in effect in British
Columbia whose decision thereon will be final, binding and conclusive. All
arbitration proceedings will be conducted, unless the Parties otherwise agree,
in Vancouver, British Columbia. Any matter, issue or dispute referred to
arbitration will be dealt with on an expeditious basis with the parties using
all commercially reasonable efforts to obtain and implement a timely decision of
the arbitration panel.
13.3 FURTHER ASSURANCES
Before, at, and after the Closing Date, each Party will promptly execute and
deliver all further documents and take all further action reasonably necessary
or appropriate to give effect to the provisions and intent of this Agreement and
to complete the transactions contemplated by this Agreement.
13.4 ENTIRE AGREEMENT
This Agreement, together with the agreements and other documents delivered
pursuant hereto, constitutes the entire agreement between the Parties pertaining
to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, express
or implied, statutory or otherwise between the Parties hereto and there are no
warranties, representations or other agreements between the Parties in
connection with the subject matter hereof except as specifically set forth
herein and therein.
13.5 NOTICE
Any notice or other communication required or permitted to be given under this
Agreement must be in writing and delivered personally or sent by facsimile,
addressed as follows:
IF TO ANY MEMBER OF THE PINE VALLEY GROUP:
#000 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Attention: President
Fax: (000) 000-0000
WITH A COPY TO:
Bull, Housser & Xxxxxx
3000 - 1055 W. Georgia St.
Vancouver, B.C.
V6E 3R3
Attention: Xxxxx Xxxxxx
Fax: (000) 000-0000
20
AND IF TO ROCKSIDE:
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxx, XX 00000-0000
Attention: President
Fax: 000-000-0000
or to such other address or facsimile number as a party may specify by notice in
writing given hereunder.
Each notice to a Party given pursuant to or in connection with this Agreement
must be given in writing and will be validly given if delivered on a Business
Day to an individual at the address for the Party designated in accordance with
this Section, or, if transmitted on a Business Day by fax to the fax number for
that the Party designated in accordance with this Section. Any notice:
(a) if validly delivered, will be deemed to have been given when
delivered;
(b) if validly transmitted by fax before 3:00 p.m. (local time at the
place of receipt) on a Business Day, will be deemed to have been given
on that Business Day; and
(c) if validly transmitted by fax after 3:00 p.m. (local time at the place
of receipt) on a Business day, will be deemed to have been given on
the first Business Day after the date of the transmission.
For greater certainty, for all purposes under this Agreement, any notice,
delivery, payment, approval, or direction to be made or given by Rockside to or
to the benefit of any member of the Pine Valley Group will be effected by a
notice, delivery, payment, approval, or direction by Rockside to Pine Valley as
the duly authorized representative for each and every member of the Pine Valley
Group.
13.6 ASSIGNMENT
Except as expressly provided for herein, which may occur without consent
provided that Rockside is not released from its obligations as a result of such
assignment, this Agreement may not be assigned by any Party without the prior
written consent of the other Parties. This Agreement will enure to the benefit
of and be binding upon the each of the Parties and their successors and
permitted assigns.
13.7 CONFIDENTIALITY
Rockside will hold all Project Information in confidence, taking reasonable
security precautions (at least as great as the precautions it takes to protect
its own confidential information) to keep confidential the Project Information,
except for Project Information which:
(a) is or becomes generally available to the public other than as a result
of a disclosure by Rockside, its representatives or anyone to whom
Rockside or its representatives have transmitted any Project
Information;
21
(b) is or becomes available or known to Rockside on a non-confidential
basis and not in contravention of applicable law from a source other
than the Pine Valley Group, provided that Rockside does not have
reason to believe that such source is bound by a confidentiality
agreement with the Pine Valley Group or is otherwise prohibited from
transmitting the Project Information to Rockside;
(c) was known to Rockside on a non-confidential basis prior to the date of
this Agreement, provided that such Project Information is not subject
to another confidentiality agreement with, or other obligation of
secrecy to, any member of the Pine Valley Group or another party; or
(d) is information which Rockside is or becomes legally obligated to
disclose pursuant to an order of a court or other governmental entity
having jurisdiction over such disclosure.
13.8 PUBLIC DISCLOSURE OBLIGATIONS
Rockside acknowledges that Pine Valley is a reporting issuer in British Columbia
and Alberta and has certain of its securities listed for trading on the TSX
Venture Exchange, and agrees that where Pine Valley, in its reasonable opinion,
is required to publicly disclose Project Information in order to comply with its
obligations to the TSX Venture Exchange, or any other exchange, quotation and
trade reporting system on which Pine Valley's securities are listed for trading,
or securities laws applicable to Pine Valley, then Pine Valley will be
permitted, in its sole discretion, to make such disclosure, provided that Pine
Valley provides Rockside with advance notice of any disclosure relating directly
or indirectly to Rockside.
13.9 COUNTERPARTS
This Agreement and all documents contemplated by or delivered under or in
connection with this Agreement may be executed and delivered in any number of
counterparts with the same effect as if all Parties had all signed and delivered
the same document and all counterparts will be construed together to be an
original and will constitute one and the same agreement.
13.10 DELIVERY BY FAX
Any Party may deliver an executed copy of this Agreement by fax but that Party
will immediately dispatch by delivery in person to the other Parties an
originally executed copy of this Agreement.
IN WITNESS WHEREOF the Parties hereto have executed this Agreement the day and
year first above written.
22
PINE VALLEY MINING CORPORATION
Per: /s/ Xxxx Xxxxxx
--------------------------------
Authorized Signatory
I have authority to bind
PINE VALLEY MINING CORPORATION
FALLS MOUNTAIN COAL INC.
Per: /s/ Xxxx Xxxxxx
--------------------------------
Authorized Signatory
I have authority to bind
FALLS MOUNTAIN COAL INC.
PINE VALLEY COAL LTD.
Per: /s/ Xxxx Xxxxxx
--------------------------------
Authorized Signatory
I have authority to bind
PINE VALLEY COAL LTD.
THE ROCKSIDE FOUNDATION
Per: /s/ Xxxxxxx X. Xxxx
--------------------------------
Authorized Signatory
I have the authority to bind
THE ROCKSIDE FOUNDATION
23
SCHEDULE 11.1(F)
COAL LICENSES AND LEASES
I. LICENSOR
British Columbia Provincial Crown
II. LICENSES AND LEASES
A. Pine Valley Coal Ltd.
COAL
LICENSE NO./ WORK STATUS
TENURE NUMBER TENURE NO. MAP NUMBER RECORDED TO (G.S. - GOOD STANDING) AREA (HA)
------------- ---------- ---------- ----------- ---------------------- ---------
1. 8574 327312 093O09W 2005.03.31 G.S. 2005.03.31 293
2. 8575 327313 093O09W 2005.03.31 G.S. 2005.03.31 293
3. 8576 327314 093O09E 2005.03.31 G.S. 2005.03.31 293
4. 8577 327316 093O09W 2005.03.31 G.S. 2005.03.31 293
5. 8578 327318 093O09W 2005.03.31 G.S. 2005.03.31 293
6. 8579 327320 093O09W 2005.03.31 G.S. 2005.03.31 293
7. 8580 327321 093O09W 2005.03.31 G.S. 2005.03.31 293
8. 347214 347214 093O09W 2005.03.31 G.S. 2005.03.31 292
9. 347215 347215 093O09E 2005.03.31 G.S. 2005.03.31 293
10. 347216 347216 093O09E 2005.03.31 G.S. 2005.03.31 293
11. 347217 347217 093O09E 2005.03.31 G.S. 2005.03.31 293
12. 347218 347218 093O09E 2005.03.31 G.S. 2005.03.31 293
13. 389294 389294 093O09E 2005.03.31 G.S. 2005.03.31 6151
B. Falls Mountain Coal Inc.
COAL
LICENSE NO./ WORK STATUS
TENURE NUMBER TENURE NO. MAP NUMBER RECORDED TO (G.S. - GOOD STANDING) AREA (HA)
------------- ---------- ---------- ----------- ---------------------- ---------
1. 409343 409343 093O09W 2005.04.07 G.S. 2005.04.07 293
2. 409344 409344 093O09W 2005.04.07 G.S. 2005.04.07 293
3. 409345 409345 093O09W 2005.04.07 G.S. 2005.04.07 293
4. 409346 409346 093O09W 2005.04.07 G.S. 2005.04.07 293
5. 409347 409347 093O09W 2005.04.07 G.S. 2005.04.07 293
6. 409348 409348 093O09W 2005.04.07 G.S. 2005.04.07 293
7. 409349 409349 093O09W 2005.04.07 G.S. 2005.04.07 293
8. 409350 409350 093O09W 2005.04.07 G.S. 2005.04.07 293
9. 409351 409351 093O09W 2005.04.07 G.S. 2005.04.07 293
10. 409352 409352 093O09W 2005.04.07 G.S. 2005.04.07 292
Together with any other coal licenses or coal leases acquired after the date
hereof by Pine Valley Coal Ltd. or Falls Mountain Coal Inc.
24
