THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "****" AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION."
EXHIBIT 4.24
WILLOW CREEK MARKETING AGENCY AGREEMENT
Made on 2004
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BETWEEN FALLS MOUNTAIN COAL INC. of Suite 501-535 Thurlow St Vancouver, B.C.
Canada
('FMC')
AND
PINE VALLEY MINING CORPORATION of Suite 501-535 Thurlow St
Vancouver, B.C. Canada
('PINE VALLEY')
AND
MARUBENI CORPORATION of 4-2, Ohtemachi 1-Chome, Chiyoda-Ku, Tokyo,
Japan
('MC')
BACKGROUND
A. Pursuant to rights it holds under coal licenses and leases issued pursuant
to the Coal Act (British Columbia) and a permit issued pursuant to the
Mines Act (British Columbia), FMC has the right to mine Coal (as defined
below) in a mine located near Chetwynd, B.C. Canada ('WILLOW CREEK MINE'),
and intends to commence commercial production at the Willow Creek Mine in
June 2004.
B. FMC has agreed to appoint MC as its exclusive agent for sales of Coal in
Japan, Korea and Taiwan on the terms and conditions contained in this
Agreement.
C. FMC is a wholly-owned subsidiary of Pine Valley.
OPERATIVE PROVISIONS
1. DEFINITIONS
In this Agreement, except to the extent the context otherwise requires:
'AGREEMENT' means this Willow Creek Marketing Agency Agreement;
'BUSINESS DAY' means a day other than a Saturday, Sunday or a public
holiday on which banks are open for business in B.C., Canada and Japan;
'COAL' means Willow Creek PCI and Coking coal produced from the Willow
Creek Mine;
'CONTRACT OF SALE' means a contract for sale of Coal to end-users;
'PARTY' means a party to this Agreement and 'PARTIES' has a corresponding
meaning;
'RELATED CORPORATION' means an affiliated body corporate as defined in the
Canada Business Corporations Act;
'TERM' means the term of this Agreement, which will start on the date of
this Agreement and end on the date specified in section 2.3, unless
otherwise agreed in writing by the Parties; and
'YEAR' means a period of 12 consecutive months starting from 1 April.
2. APPOINTMENT OF MC AS AGENT FOR FMC
2.1 Subject to section 2.3, FMC appoints MC as its exclusive agent to be
responsible for the promotion, marketing and sale from time to time of
Coal during the Term to the end-users in Japan, Korea and Taiwan. All
actions to be taken by MC on account of FMC pursuant to this Agreement
will be taken and, will be disclosed by MC to FMC as agent for FMC. It is
both Parties' intention that FMC will not directly communicate with the
end-users without the attendance of MC, but if such communications occur
,regardless of the intention of FMC, then FMC will disclose the content of
such communications to MC. If end-users in the Japan, Korea or Taiwan
request that FMC participate in direct communications concerning the sale
of Coal without the participation of MC, then FMC will inform such
end-users of the existence of the agency relationship arising under this
Agreement and will direct the end-user to an authorized representative of
MC. MC will have the right to appoint sub-agents to assist in the
performance of its obligations under this Agreement, provided that:
(a) prior to their appointment, any and all such sub-agents must be
accepted as sub-agents by FMC, such acceptance not to be
unreasonably withheld;
(b) MC will be fully responsible for and liable to FMC for the conduct
of such sub-agents; and
(c) MC will be liable for any and all compensation and reimbursement of
expenses payable to such sub-agents, and FMC will not be liable for
any such obligations to the sub-agents.
2.2 MC may introduce the Coal to potential end-users from countries outside of
Japan, Korea or Taiwan and FMC will consider granting agency rights to MC
in connection with sales of Coal to those end-users on case by case basis
at FMC's sole discretion.
2.3 The appointment of MC as FMC's agent will terminate upon the first to
occur of:
(a) the aggregate production of export saleable Coal reaching to
15,000,000 tonnes;
(b) the voluntary resignation of MC as FMC's agent, which resignation
will be effected by MC giving FMC not less than 30 days' prior
written notice of MC's intent to resign; and
(c) MC becoming insolvent or making a general assignment for the benefit
of its creditors, or an order being made or effective resolutions
being passed for the winding-up of MC or MC being declared bankrupt
or a custodian or receiver being appointed for MC under any
bankruptcy legislation, or a compromise or arrangement being
proposed by MC to its creditors or any class of its creditors, or a
receiver or other officer with like powers being appointed for MC.
2.4 Notwithstanding section 2.3 hereof, if, in FMC's opinion, MC's performance
under this Agreement has been satisfactory, then FMC will consider
extending the term of MC's agency.
2.5 MC acknowledges and agrees that FMC has entered or may enter into
marketing agency and coal sales agreements with other companies for the
sale of Coal to customers other than end-users in Japan, Korea and Taiwan.
2.6 FMC acknowledges and agrees that, subject to the limitations expressed
below, MC may market Coal to any potential end-users, including but not
limited to end-users in Japan Korea and Taiwan. In the case of end-users
outside of Japan, Korea or Taiwan, MC will first provide written notice to
FMC of the specific end-user MC would like to contact and will not
undertake any marketing to that potential end-user until FMC, in its sole
discretion, has granted permission for MC to initiate such marketing. In
addition, and notwithstanding the foregoing, if FMC notifies MC that FMC
has entered into an exclusive agency relationship with a third-party to
represent FMC in marketing the Coal to end-users in a specific market area
outside of Japan, Korea and Taiwan, then, except to the extent
then-previously authorized in writing by FMC, MC will then immediately
cease any actions in connection with marketing the Coal to any and all
end-users in such specific market area.
3. MARKETING ACTIVITIES
3.1 FMC will make reasonable commercial efforts to assist MC as MC may
reasonably require in the performance of the MC's marketing activities,
including providing MC with such information
concerning the Coal and the mining operations of FMC that MC may
reasonably require in order for MC to effectively market the Coal in
accordance with the terms of this Agreement.
3.2 MC will manage and conduct all marketing activities, including the
identification of potential end-users of the Coal, the introduction of the
Coal to end-users, the development of market intelligence, assistance on
contractual negotiations and maintenance of contract relationships, in
accordance with the instructions of FMC, and will keep FMC fully informed
of all such activities.
3.3 MC's activities under this Agreement will be conducted with the skill,
diligence and care normally exercised by qualified persons in the
performance of comparable work in accordance with accepted industry
standards and practices.
3.4 MC will supply to FMC at least yearly, and more frequently if requested by
FMC, documented programs developed by MC for the marketing activities
regarding the Coal.
3.5 MC will supply to FMC at least quarterly, and more frequently if requested
by FMC:
(a) progress reports summarizing MC's marketing activities; and
(b) details of the marketing activities planned by MC for the next
quarter period.
3.6 MC will keep and maintain accurate, correct and up-to-date records in a
manner that fully and fairly explains all of its marketing activities and
transactions carried on or effected in respect of or pursuant to this
Agreement.
3.7 It is the intent of both MC and FMC to sell the majority of Coal into
Japan, Korea and Taiwan, and MC will make reasonable commercial efforts to
maximize sales of the Coal in Japan, Korea and Taiwan.
3.8 Notwithstanding the other provisions of this Agreement, FMC will retain
absolute discretion as to whether it sells any coal into Japan, Korea and
Taiwan and on what terms.
4. COMMISSION ARRANGEMENTS
4.1 FMC will pay to MC the following commission based on the FOBT sales price
per tonne (exclusive of GST) during the Term.
CONFIDENTIAL TREATMENT REQUESTED
(a) a commission of ******% will be payable in respect of any Coal sold
to purchasers of Coal in Japan, Taiwan or Korea, and to other
purchasers of Coal approved by FMC, and also in respect of Coal
purchased by MC and shipped to or to the order of the purchaser up
to an aggregate amount of ******** tonnes in each Year;
(b) a commission of ***** % will be payable in respect of any Coal sold
to purchasers of Coal in Japan, Taiwan or Korea, and to other
purchasers of Coal approved by FMC, and also in respect of Coal
purchased by MC and shipped to or to the order of the purchaser from
******* tonnes up to an aggregate of ******* tonnes in each Year;
and,
(c) a commission of *****% will be payable in respect of any Coal sold
to purchasers of Coal in Japan, Taiwan or Korea, and to other
purchasers of Coal approved by FMC, and also in respect of Coal
purchased by MC and shipped to or to the order of the purchaser in
excess of ******** tonnes in each Year.
4.2 MC will invoice FMC for the commissions described in Section 4.1 within 7
Business Days of the shipping documents being released and the commission
will be payable within 14 Business Days following receipt of such an
invoice.
4.3 MC will also be reimbursed from time to time for certain reasonable
out-of-pocket costs incurred by MC in connection with negotiating,
visiting and coordinating activities, including entertainment, with
respect to the marketing of the Coal to end-users, provided that, in each
case, the nature and amount of such costs have been approved in advance
and in writing by FMC. Except as otherwise provided for in this section,
MC will bear all of its costs arising in connection with its activities in
connection with or pursuant to this Agreement. For greater certainty and
without limiting the foregoing, the Parties acknowledge that MC will be
generally responsible for those of its out-of-pocket costs that are of the
kind customarily associated with the marketing activities required to
fulfil its duties under this Agreement, including routine travel,
accommodation, meal and entertainment expenses.
5. CONFIDENTIALITY
5.1 Each Party will use reasonable commercial efforts to preserve and protect
any confidential information concerning the business or affairs of the
other party (the "Disclosing Party") which may be disclosed to the
receiving party (the "Receiving Party") by the directors, officers,
employees, agents or other representatives of the Disclosing Party either
prior to or during the term of this Agreement ("Confidential
Information"). Without restricting the generality of the foregoing, the
Receiving Party will not:
(a) disclose any Confidential Information to third parties without prior
written consent of the Disclosing Party, except that such consent
will not be required where the information is disclosed:
(i) to the employees, officers, accountants, legal advisers,
Related Corporations, or agents of the Receiving Party or such
other persons as the directors of the
Receiving Party may designate provided that, the Disclosing
Party first takes reasonable steps to ensure that, in the case
of disclosure to employees, officers, Related Corporations, or
agents of the Receiving Party, the Receiving Party first
ensures that such persons are made subject to binding
confidentiality agreements requiring them to comply with the
restrictions in this Agreement concerning the use and
disclosure of Confidential Information; or
(ii) pursuant to any law, statute, regulation, ordinance or
administrative, regulatory, judicial order, or stock exchange
policy, provided that, prior to such disclosure the Receiving
Party gives notice of the proposed disclosure, the entity to
which the information will be disclosed, and the circumstances
relating to the same to the Disclosing Party; or
(b) use any Confidential Information for its own purpose or benefit or
to the detriment or intended or probable detriment of the Disclosing
Party.
The foregoing covenants will not apply to any information which:
(c) through no act or omission of the Receiving Party is or becomes
generally known or part of the public domain; or
(d) is lawfully furnished to the Receiving Party by a third party
without breach of any existing or future restriction on disclosure
owed to the Disclosing Party.
5.2 The Parties acknowledge that, without prejudice to any and all rights of
either Party, an injunction may be the only effective remedy to protect a
breach of the provisions of section 5.1 above.
5.3 The Parties will make reasonable commercial efforts to limit the amount of
Confidential Information that is disclosed to other persons under section
5.1(a) to the extent reasonably required to accomplish the desired
purpose.
5.4 The Parties will make reasonable commercial efforts to agree on the
wording of all public announcements and statements including statements to
their shareholders, whether contained in an annual report or made at a
general meeting or otherwise, relative to the subject matter of this
Agreement including details of Coal sales agreements.
6. ASSIGNMENT
6.1 Except in the case of an assignment to a Related Corporation of MC, MC
will not assign or transfer all or any of its rights or obligations under
this Agreement without the prior written approval of FMC, which consent
will not be unreasonably withheld.
6.2 FMC will not assign or transfer all or any of its rights or obligations
under this Agreement without the prior written approval of MC, which
consent will not be unreasonably withheld.. If FMC sells over 50% of its
right, title and interest to the Willow Creek Mine, or if a third party
purchases all outstanding shares of FMC, then FMC will ensure that it is a
condition of such sale that this Agreement will remain good standing and
in full force with respect to sales of the Coal, regardless of the
then-current legal and beneficial owners of the Willow Creek Mine.
7. COSTS OF AGREEMENT
The Parties will each bear their own legal costs in relation to the
negotiation, preparation, execution and completion of this Agreement, but
any and all stamp duty assessed by and payable to Canadian tax authorities
in relation to this Agreement will be paid by FMC.
8. NO WAIVER
8.1 The failure of a Party at any time to require full or partial performance
of any provision of this Agreement does not affect in any way the full
right of that Party to require that performance subsequently.
8.2 The waiver by any Party of a breach of a provision of this Agreement is
not deemed a waiver of all or part of that provision or of any other
provision or of the right of that Party to avail itself of its rights
subsequently.
8.3 Any waiver of a breach of this Agreement will be in writing signed by the
Party granting the waiver, and is effective only to the extent
specifically set out in that waiver.
8.4 All remedies afforded to the parties under this Agreement are cumulative.
9. ENTIRE AGREEMENT
9.1 This Agreement constitutes the entire agreement of the parties as to its
subject matter and supersedes and cancels all prior arrangements,
understandings and negotiations in connection with the same.
10. FURTHER ASSURANCES
Each Party will do all things and execute all further documents necessary
to give full effect to this Agreement and refrain from doing anything that
might hinder the performance of this Agreement.
11. NOTICE
A notice required or authorized to be given or served upon a Party
pursuant to this Agreement will be in writing in the English language and
may be given or served by facsimile, prepaid post or hand to that Party at
its address or facsimile number appearing in Schedule 1 or such other
address or facsimile number as the Party may have notified in writing to
the other Party or Parties, from time to time.
11.1 In the absence of proof to the contrary a notice will be deemed to have
been given or served on the Party to whom it was sent:
(a) in the case of hand delivery, upon delivery during Business Hours of
the recipient;
(b) in the case of pre-paid post, 2 Business Days after the date of
dispatch; and
(c) in the case of facsimile transmission:
(i) at the time of dispatch if that dispatch is during Business
Hours; or
(ii) at 9.00 a.m. at the location of intended recipient on the next
Business Day following the day of dispatch, if the dispatch is
outside Business Hours.
11.2 A notice given or served under this Agreement is sufficient if:
(a) in the case of a corporation, it is signed by a director or
secretary of that corporation; and
(b) in the case of an individual, it is signed by that individual.
11.3 The provisions of this section are in addition to any other mode of
service permitted by law.
11.4 In this section 'NOTICE' includes a demand, request, consent, approval,
offer and any other instrument or communication made, required or
authorized to be given under or pursuant to a provision of this Agreement.
11.5 In this section 'BUSINESS HOURS' means from 9.00 a.m. to 5.00 p.m. on a
Business Day in the geographic location of the intended recipient.
12. GOVERNING LAW AND JURISDICTION
12.1 This Agreement is governed by the laws of British Columbia, Canada.
12.2 Each party irrevocably submits to the non-exclusive jurisdiction of the
courts of British Columbia, Canada.
12.3 All disputes between the parties arising out of 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 arbitrator.
13. AMENDMENTS IN WRITING
No amendment to this Agreement has any force unless it is in writing and
signed by the all of the Parties to this Agreement.
14. GUARANTEE AND INDEMNITY OF PINE VALLEY
14.1 MC 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 14. In consideration of the payment of $20 and other
good and valuable consideration paid and given by MC to Pine Valley (the
receipt and sufficiency of which are hereby acknowledged), Pine Valley
hereby guarantees the performance by FMC of the respective covenants,
agreements and obligations of FMC under this Agreement and guarantees
payment by FMC to MC of any and all loss, damage, expense, liability,
claim or demand suffered or incurred by MC arising out of any breach of
any covenant, agreement, representation or warranty of this Agreement by
FMC or any misrepresentation on the part of FMC.
14.2 Pine Valley acknowledges and agrees that none of the following will
release Pine Valley of any of its obligations under this Section 14:
(a) any modification, amendment or change to the rights or obligations
of FMC 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
FMC 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 FMC 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 MC may see fit, and, MC may apply all monies at
any time received from such securities or FMC or others to such part
of the liabilities of FMC as MC deems best and change such
application in whole or in part from time to time as MC sees fit;
and Pine Valley further waives presentment, demand, protest and all
notices and any right to require MC to proceed against FMC or to
proceed against or exhaust any security or pursue any other remedy
available to MC as a condition to enforcement of Pine Valley's
obligations under this Agreement.
14.3 Pine Valley will indemnify and save harmless MC from and against all
suits, claims, demands, liabilities, losses and expenses which MC 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 FMC contained in this
Agreement.
15. INTERPRETATION
In this Agreement, except to the extent the context otherwise requires:
(a) the singular includes the plural and vice versa and a gender
includes other genders;
(b) a reference to a party to this Agreement or any other document or
Agreement includes its successors and permitted assigns;
(c) a reference to an item in a recital, section, schedule, annexure or
appendix is a reference to a recital , section of or schedule,
annexure or appendix to this Agreement and references to this
Agreement include its schedules and any annexures;
(d) where a word or phrase is given a particular meaning, other parts of
speech or grammatical forms of that word or phrase have
corresponding meanings;
(e) a reference to a document or Agreement including this Agreement
includes a reference to that document or Agreement as amended,
novated, supplemented, varied or replaced from time to time;
(f) in the interpretation of this Agreement, headings are to be
disregarded;
(g) where a party comprises 2 or more persons, an Agreement or
obligation to be performed or observed by that party binds those
persons jointly and severally and a reference to that party includes
a reference to any one or more of those persons; and
(h) references to '$C', 'dollar', '$' and to any amount not otherwise
designated is to be construed as a reference to Canadian currency.
SCHEDULE 1
Notice Particulars
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Pine Valley Mining Corporation Marubeni Corporation
Suite 501-535 Thurlow St, 4-2, Ohtemachi 1-Chome
Vancouver, B.C. Chiyoda-Ku
Canada V6E 3L2 Tokyo Japan
Fax: 1-604-682-4698 Fax: 81-3-3282-9539
Attention: Graham Mackenzie Attention: Hisao Azuma
Marubeni Canada Ltd. Calgary Office
Suite 3060, Bow Valley Square 2
205-5th Avenue, South West
Calgary, Alberta
Canada T2P 2V7
Fax: 1-403-263-8100
Attention: Junji Morinaga
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EXECUTED as an Agreement in British Columbia, Canada
SIGNED for and on behalf of
FALLS MOUNTAIN COAL INC.
in the presence of:
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Signature of witness Authorized Signing Officer
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Full name of witness Full name of Signing Officer
SIGNED for and on behalf of
PINE VALLEY MINING CORPORATION
in the presence of:
- --------------------------- ----------------------------
Signature of witness Authorized Signing Officer
- --------------------------- ----------------------------
Full name of witness Full name of Signing Officer
SIGNED for and on behalf of
MARUBENI CORPORATION
in the presence of:
- --------------------------- ----------------------------
Signature of witness Authorized Signing Officer
- --------------------------- ----------------------------
Full name of witness Full name of Signing Officer