STRAITS MINING PTY LIMITED
BANK OF WESTERN AUSTRALIA LTD
NORD AUSTRALEX NOMINEES PTY LIMITED
AND NORD PACIFIC LIMITED
DEED OF PRIORITY
CORRS CHAMBERS WESTGARTH
Lawyers
Level 32, Governor Phillip Tower
1 Farrer Place
SYDNEY NSW 2000
AUSTRALIA
Tel: (02) 9210 6500
Fax: (02) 9210 6611
DX: 133 SYDNEY
Ref: JAD
STRA3333-2700278
S/1042299/2
<PAGE> 165
CONTENTS
1 INTERPRETATION 167
1.1 DEFINITIONS 167
1.2 CONSTRUCTION 169
1.3 HEADINGS 170
2 ORDER OF PRIORITY 170
2.1 PRIORITY 170
2.2 PRIORITY NOT AFFECTED BY OTHER MATTERS 170
2.3 FURTHER SECURITIES 171
3 WAIVER AND CONSENT 171
3.1 WAIVER AND CONSENT 171
3.2 NO OBLIGATION TO GIVE NOTICE OF ADVANCES 171
3.3 INFORMATION 171
3.4 COMPANY MUST CO-OPERATE 171
3.5 COMPANY'S OBLIGATIONS NOT AFFECTED 172
4 EXERCISE OF DEFAULT RIGHTS 172
4.1 RIGHT TO ENFORCE SECURITIES 172
4.2 NOTIFICATION OF ACTION TAKEN 172
4.3 CROSS-DEFAULT 172
5 ASSIGNMENT 172
5.1 ASSIGNMENT 172
5.2 DISCLOSURE OF INFORMATION 173
6 FURTHER ASSURANCES 173
7 COSTS AND EXPENSES 173
7.1 NATURE 173
7.2 GENERAL 173
8 MISCELLANEOUS 173
8.1 TIME OF THE ESSENCE 173
8.2 AMENDMENT 174
8.3 WAIVER AND EXERCISE OF RIGHTS 174
8.4 COUNTERPARTS 174
8.5 GOVERNING LAW AND JURISDICTION 174
8.6 JOINT AND SEVERAL LIABILITY 174
9 NOTICES 174
9.1 GENERAL 174
<PAGE> 166
9.2 METHOD OF SERVICE 174
9.3 ADDRESS FOR SERVICE 175
9.4 SERVICE 175
9.5 SERVICE AFTER HOURS 175
9.6 PROCESS SERVICE 176
<PAGE> 167
THIS DEED IS MADE ON THE 1ST DAY OF JUNE 2000
BETWEEN STRAITS MINING PTY LIMITED ACN 055 020 614 a
company incorporated in New South Wales, of Level
3, Goldfields House, 1 Alfred Street, Sydney NSW
2000 ("First Financier")
AND BANK OF WESTERN AUSTRALIA LTD ACN 050 494 454
a company incorporated in Western Australia, of
108 St Georges Terrace, Perth, WA 6000 ("Second
Financier")
AND NORD AUSTRALEX NOMINEES PTY LIMITED ACN 001
657 272 a company incorporated in New South Wales,
of Level 15, 3 Spring Street, Sydney NSW 2000 AND
NORD PACIFIC LIMITED ARBN 062 482 900 a company
incorporated in Canada, of 40 Wellington Row,
Suite 2100, Scotia Plaza, Saint John, New
Brunswick, Canada (together the "Company")
IT IS AGREED
1 INTERPRETATION
1.1 Definitions
In this document:
"Authorised Representative" means:
(a) in relation to a Financier:
(i) an employee of that Financier whose title contains the
word "manager" or a cognate term;
(ii) a person performing the functions of any of them; and
(iii) a lawyer for the Financier; and
(b) in relation to any party to this document:
(i) if that party is a corporation, a director or secretary
of that party; and
(ii) a person appointed by that party with the right to act
as the agent of that party for the purpose of this document
whose appointment and rights are notified in writing by the
appointor to the other party.
"Business Day" means a day which is not a Saturday,
Sunday or public or bank holiday, in Sydney or Perth.
"Financiers" means the First Financier and the Second
Financier and "Financier" means each of them.
"First Priority Amount" means:
(a) $9,000,000.00;
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(b) all accrued but unpaid interest (including capitalised
interest) and fees payable to the First Financier the payment
of which is secured by the First Security;
(c) all accrued but unpaid costs and expenses payable to the
First Financier the payment of which is secured by the First
Security (including without limitation, all Recovery Costs
incurred by the First Financier or any Receiver appointed by
the First Financier and all losses and damages suffered by the
First Financier which the Company is obliged to indemnify
against); and
(d) all Taxes and registration and other fees (including
fines and penalties relating to the Taxes and fees) which are
payable in relation to the First Security or any transaction
contemplated by the First Security.
"First Security" means:
(c) fixed and floating charge between the Company (each a
Chargor) and the First Financier as Chargee of even date;
(d) mortgage of mining property between the Company (each a
Mortgagor) and the First Financier as Mortgagee of even date;
and
(e) real property mortgage between the Company (each a
Mortgagor) and the First Financier as Mortgagee of even date.
"Receiver" means a receiver, receiver and manager or
attorney.
"Relevant Jurisdiction" means New South Wales.
"Remedy Proceeds" means, in relation to a Security, an
amount equal to:
(a) all moneys received by the Financier which holds that
Security (or by any Receiver appointed by that Financier) from
exercising or otherwise enforcing any rights against the
property subject to that Security; less
(b) all Recovery Costs paid or incurred by that Financier or
Receiver in exercising or enforcing those rights.
"Recovery Costs" means all costs and expenses incurred
by a Financier (or by a Receiver appointed by that
Financier) in exercising or otherwise enforcing any
rights in relation to a Security including, without
limitation:
(a) all outgoings in relation to the Security which the
Financier or Receiver thinks fit to pay;
(b) all payments towards the satisfaction of any monetary
obligation which has mandatory priority under any statute; and
(c) the remuneration of, and any costs and expenses claimed
by, a Receiver appointed by the Financier.
"Second Security" means fixed and floating charges
between Nord Australex Nominees Pty Limited as Chargor
and the Second Financier as Chargee.
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"Secured Property" means the Charged Property as defined
in the charge described in paragraph (a) of the
definition of "First Security", the Secured Property as
defined in the mortgage described in paragraph (b) of
the definition of "First Security" and the Secured
Property as defined in the mortgage described in
paragraph (c) of the definition of "First Security".
"Securities" means the First Security and the Second
Security and "Security" means any one or more of them.
"Security Interest" means any interest in or right over
property which secures the payment of a debt or other
monetary obligation or the compliance with any other
obligation.
"Tax" means a tax, rate, levy, impost and duty (other
than a tax on the net overall income of a Financier) and
any interest, penalty, fine or expense relating to any
of them.
1.2 Construction
Unless expressed to the contrary:
(a) words importing:
(i) the singular include the plural and vice versa; and
(ii) any gender includes the other genders;
(b) if a word or phrase is defined cognate words and phrases
have corresponding definitions;
(c) a reference to:
(i) a person includes a firm, unincorporated association,
corporation and a government or statutory body or authority;
(ii) a person includes its legal personal representatives,
successors, assigns and substitutes, including, without
limitation, persons substituted by novation;
(iii) a statute, ordinance, code or other law includes
regulations and other statutory instruments under it and
consolidations, amendments, re-enactments or replacements of
any of them;
(iv) a right includes a benefit, remedy, discretion and
power;
(v) an obligation includes any warranty or representation
and a reference to a failure to comply with an obligation
includes a breach of warranty or representation;
(vi) this or any other document includes the document as
varied or replaced and notwithstanding any change in the
identity of the parties;
(vii) provisions or terms of this document or another
document, agreement, understanding or arrangement includes a
reference to both express and implied provisions and terms;
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(viii) time is to local time in Sydney;
(ix) "$" or "dollars" is a reference to the lawful currency
of Australia;
(x) writing includes any mode of representing or reproducing
words in tangible and permanently visible form, and includes
facsimile transmissions; and
(xi) any thing (including, without limitation, any amount) is
a reference to the whole or any part of it and a reference to
a group of things or persons is a reference to any one or more
of them; and
(d) a reference to this document includes all schedules,
annexures and appendices referred to in it.
1.3 Headings
Headings do not affect the interpretation of this
document.
2 ORDER OF PRIORITY
2.1 Priority
The parties agree that the Securities, to the extent
that they affect the Secured Property, rank at law and
in equity in the following order of priority:
(a) first, the First Security to the extent of the First
Priority Amount;
(b) second, the Second Security to the extent of all moneys
the payment of which is secured by the Second Security; and
(c) third, the First Security to the extent of all moneys
the payment of which is secured by the First Security in
excess of the First Priority Amount,
and all Remedy Proceeds received by a Financier (or any
Receiver appointed by that Financier) on enforcement of
its Securities against the Secured Property shall be
applied in that order of priority and each Financier
shall account to each other in respect of such Remedy
Proceeds to the extent necessary to give effect to this
clause 2.1.
2.2 Priority not affected by other matters
The priority conferred by clause 2.1 shall apply
notwithstanding anything which but for this clause 2.2
would affect that order of priorities, including,
without limitation, any of the following:
(a) the order of creation or registration of the Securities;
(b) that a Financier has notice of any Security or the date
of receipt of such notice;
(c) anything contained in the Securities;
(d) the respective dates on which anything is done or not
done under or in relation to any Security or the respective
dates on which moneys became secured (actually or
contingently) by any Security;
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(e) the nature of the moneys the payment of which is secured
by any Security or any fluctuation in the amount secured by
the Securities from time to time;
(f) any notice received by a Financier under a Security;
(g) any transactions between the Company and a Financier; or
(h) any rule of law or equity.
2.3 Further Securities
This document, including in particular the order of
priorities set out in clause 2.1, shall apply to any
other Security Interest now or in the future held by a
Financier to the extent that that Security Interest
affects the Secured Property which is subject to a
Security held by the other Financier.
3 WAIVER AND CONSENT
3.1 Waiver and consent
Each Financier:
(a) to the extent that the creation or existence of the
other Financier's Securities requires its consent, consents to
each such Security; and
(b) waives any breach of its Securities constituted by the
Company granting the other Financier's Securities to the other
Financier.
3.2 No obligation to give notice of advances
Each Financier agrees that nothing in this document
obliges a Financier to give any notice to any other
Financier of any financial accommodation which may in
future be made to the Company or any other person or of
the occurrence of any liability or obligation which is
secured or intended to be secured by its Securities.
3.3 Information
(a) Each Financier shall, upon request by a Financier
reasonably made from time to time, inform the requesting
Financier as to the amount of the principal, interest and
other moneys owing by the Company to the first-mentioned
Financier and which are secured by its Securities.
(b) The Company, after receipt from a Financier of any
notice of default or demand to pay any moneys under a
Security, shall immediately give a copy of that notice to each
other Financier.
3.4 Company must co-operate
The Company shall co-operate in the implementation of
the transactions contemplated by this document.
<PAGE> 172
3.5 Company's obligations not affected
(a) The liabilities and obligations of the Company and the
respective rights of the Financiers against the Company under
or in relation to their respective Securities are not affected
in any way by:
(i) this document, other than as expressly provided herein;
or
(ii) the failure of a Financier to comply with the terms of
this document.
(b) The Company acknowledges that this document is intended
only to benefit the Financiers.
4 EXERCISE OF DEFAULT RIGHTS
4.1 Right to enforce Securities
(a) Nothing in this document requires the First Financier to
exercise or prevents the First Financier from exercising any
of its rights and the First Financier may exercise its rights
under its Securities to recover payment of the moneys secured
thereby at any time and in any manner that the First Financier
thinks fit. Upon its Securities becoming enforceable, the
First Financier may determine in its absolute discretion the
extent (if any) to which it will have recourse to such
Securities and the extent (if any) to which it will have
recourse to any source other than its Securities which may be
available to it.
(b) Any enforcement action by the First Financier
(including, without limitation, any enforcement action taken
by any Receiver appointed by the First Financier) shall take
precedence over any enforcement action by the Second
Financier.
4.2 Notification of action taken
(a) The Second Financier agrees that if it intends to take
any action to enforce any of its Securities it shall give not
less than 7 days notice to the First Financier.
4.3 Cross-default
Notwithstanding anything contained in the Securities:
(a) if the moneys secured by a Security become immediately
due and payable, the moneys secured by each other Security
shall, at the option of the Financier thereunder, become
immediately due and payable; and
(b) if a Security, having operated as a floating charge in
respect any asset, crystallizes and operates as a fixed charge
in respect of that asset, the other Securities, if they
operate as a floating charge over that asset, shall
automatically and immediately crystallize and operate as a
fixed charge in respect of that asset.
5 ASSIGNMENT
5.1 Assignment
(a) Subject to clause 5.1(b), a Financier shall not
transfer, assign or otherwise deal with its interest under its
Securities unless the transferee, assignee or other person
acquiring the interest first enters into a deed with the other
parties to this document (in such form as the other parties
may reasonably require) by which it undertakes to be bound by
the terms of this document to the same extent as the Financier
from which it acquired the interest.
<PAGE> 173
(b) Clause 5.1(a) does not apply where the transfer,
assignment or dealing is for the purposes of or results from
the enforcement of a Security.
5.2 Disclosure of information
Each Financier may disclose to any transferee, assignee
or other person acquiring an interest in that
Financier's Securities all information about the Company
and this document which the Financier thinks
appropriate.
6 FURTHER ASSURANCES
Each party shall promptly execute all documents and do
all things that a Financier reasonably requires from
time to time:
(a) for the purpose of more effectively carrying out the
intention of this document; and
(b) to stamp and register this document in any relevant
jurisdiction.
7 COSTS AND EXPENSES
7.1 Nature
The Company shall pay and if paid by a Financier
reimburse to that Financier:
(a) the Financier's reasonable costs and expenses relating
to:
(i) the negotiation, preparation, execution, stamping and
registration of this document; and
(ii) any consent, request for consent, communication, waiver
of any right, or the variation, replacement or discharge of
this document;
(b) the Financier's costs and expenses in relation to the
exercise or attempted exercise or the preservation of any
rights of the Financier under this document; and
(c) any Taxes and registration or other fees (including
fines and penalties relating to the Taxes and fees) which are
payable in relation to this document.
7.2 General
A reference to costs and expenses in this document
includes, without limitation, legal costs and expenses
on a full indemnity basis.
8 MISCELLANEOUS
8.1 Time of the essence
Time is of the essence of any obligation of any party
under this document to pay money.
<PAGE> 174
8.2 Amendment
This document may only be varied or replaced by a
written document duly executed by each Financier and the
Company.
8.3 Waiver and exercise of rights
(a) A right in favour of a Financier under this document or
the breach of an obligation of the Company under this document
can only be waived by a written instrument signed by that
Financier. No other act, omission or delay of the Financier
will constitute a waiver.
(b) A single or partial exercise or waiver by a Financier of
a right relating to this document will not prevent any other
exercise of that right or the exercise of any other right.
8.4 Counterparts
This document may consist of a number of counterparts
and if so the counterparts taken together constitute one
and the same instrument.
8.5 Governing law and jurisdiction
(a) This document is governed by and shall be construed in
accordance with the laws of the Relevant Jurisdiction.
(b) The parties irrevocably and unconditionally submit to
the nonexclusive jurisdiction of the courts of the Relevant
Jurisdiction and any courts which have jurisdiction to hear
appeals from any of those courts and the parties waive any
right to object to any proceedings being brought in those
courts.
8.6 Joint and several liability
Where 2 or more parties comprise the Company:
(a) a reference to the Company includes each and any 2 or
more of them; and
(b) the obligations on the part of the Company bind them
jointly and severally.
9 NOTICES
9.1 General
A notice, demand, certification, process or other
communication relating to this document shall be written
in English and may be given by an Authorised
Representative of the sender.
9.2 Method of service
In addition to any other lawful means, a communication
may be given by:
(a) being personally served on a party;
(b) being left at the party's current address for service;
<PAGE> 175
(c) being sent to the party's current address for service by
pre-paid ordinary mail or, if the address is outside
Australia, by pre-paid airmail; or
(d) facsimile to the party's current number for service.
9.3 Address for service
(a) The particulars for service are initially:
The First Financier:
Address: Level 3
Goldfields House
1 Alfred Street
SYDNEY NSW 2000
Facsimile: (02) 9241 2465
The Second Financier:
Address: Level 17, 108 St Georges Terrace
PERTH WA 6000
Facsimile: (08) 9449 6696
The Company:
Address: c/- Nord Australex Nominees Pty Limited
Level 15
3 Spring Street
SYDNEY NSW 2000
Facsimile: (02) 9241 5170
(b) Each party may from time to time change its particulars
for service by notice to each other party.
9.4 Service
If a communication is given by:
(a) post it will be deemed received if posted within
Australia to an Australian address 3 Business Days after
posting and in any other case 10 Business Days after posting
by airmail;
(b) facsimile and the sender's facsimile machine produces a
transmission report indicating that the facsimile was sent to
the addressee's facsimile, the report will be prima facie
evidence that the facsimile was received by the addressee at
the time indicated on that report.
<PAGE> 176
9.5 Service after hours
If a communication is received:
(a) after 5.00 p.m; or
(b) on a day which is not a Business Day;
it will be deemed to have been received on the next Business Day.
9.6 Process service
Any process or other document relating to litigation,
administrative or arbitral proceedings relating to this
document may be served by any method contemplated by
this clause 9 or in accordance with any applicable law.
EXECUTED as a deed.
EXECUTED by STRAITS MINING PTY )
LIMITED )
C H Lim B J Rear
Company Secretary Director
C H Lim B J Rear
Name of Company Secretary Name of Director (print)
(print)
EXECUTED by BANK OF WESTERN )
AUSTRALIA LTD ACN 050 494 454 ) Bank of Western Australia
by its duly constituted ) Ltd by its Attorney
Attorney under Power of )
Attorney No. 901657258 dated 4 )
November 1996 who at the date )
hereof had no notice of ) Greg Wynne
revocation of such Power of ) Staff No 80224
Attorney in the presence of: Senior Manager
Strategy & Operations
Librada Lu-Sapitan
An officer of the Bank
<PAGE> 177
EXECUTED by NORD AUSTRALEX )
NOMINEES PTY LIMITED by the )
party's attorney pursuant to )
power of attorney registered )
Book 4276 No 698 who states )
that no notice of revocation )
of the power of attorney has
been received in the presence
of:
T A Humphreys J Syriatowicz
Witness Attorney
T A Humphreys J C Syriatowicz
Name of Witness (print) Name of Attorney (print)
EXECUTED by NORD PACIFIC )
LIMITED by the party's )
attorney pursuant to power of )
attorney registered Book 4276 )
No 699 who states that no )
notice of revocation of the )
power of attorney has been
received in the presence of:
T A Humphreys J Syriatowicz
Witness Attorney
T A Humphreys J C Syriatowicz
Name of Witness (print) Name of Attorney (print)
