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Sleep,
I predicted BK. It happened. You predicted it would never happen. You also predicted China money. Where is it? As far as your implied threat, bring it. Seriously. Lets roll. CPRKQ MGMT are the only ones that have anything to worry about. What exactly do you think I have done wrong that would make it requisite for me to keep a low profile? Please do share.
I am still betting this will go 7. If it upsets you, it is because you know it is a very real possibility.
From an outsiders perspective it seems that primary watcher should be cut a break here by the steering com. From what I can tell in reading his posts, this guy has been nothing but a loyal supporter of cprksa since day one. To treat him with such disrespect is shameful at best. Amazing how easily you folks turn on your own.
I agree Richard. a year and a half minimum till trial, and maybe longer. This is a diversion from current events plain and simple.
RDG,
I guess we will just have to agree to disagree then. From what I read in the initial filing the concern was that the intecreditor agreement was not signed because of PNs actions. For there to be damages they will have to prove that the agreement would have gone through if PN had not interfered. If they can't prove that there are no damages. It doesn't matter who they swayed or did not. Again, to be damages they are going to have to prove that the agreement would have gone through if PN were never in the picture. The damages are about the agreement not who PN swayed or didn't, they are about why the agreement was not signed and moNey not lent. They have a very tough case here.
RDG,
Do you know which "Independent 3rd pary company" has been contracted to perform the ENG report?
RDG,
In a civil case they have to prove damages. That is, they must be able to prove that had PN not interfered, that the deal with Empire would have moved forward. That will be difficult to do at best. Just proving that one person was turned by PNs actions will not cut the mustard. You and others keep going back to this. They have to do more then prove just one person changed their minds based on PNs actions. Again, they must prove damages. If the argument can be made that the deal was already dead before PNs so called interference, then no damages will be proven because the deal would not have happened anyway. with 27 lender participants, this will be near impossible. Again there will be a suit, counter suit, discovery, depositions, hearings, more hearings, legal posturing, jury selection (if its not a bench trial) and finally a trial. A year and a half, and 250 K later in attorneys fees before anything is hammered out anyway. I know, I have been through it before. Now if you are talking criminal, that is a different story, but the current suit is civil. I don't see criminal charges coming down the pipe for anyone but CPRK MNGMT Anyway. Have a great weekend RDG.
ThunderBell,
There were two participants on the 1st trust deed alone that would not sign the intercreditor agreement. I know of several on the second that were also against it. The feeling I got was that it was closer to a 50/50 split, and it took a unanimous vote to push this thing through. I don't know who your sources are, but it does not sound like we are getting our information from the same people. My source was the horses mouth. Have a great weekend Thunder.
Intel,
Have you seen this. Thought you might be interested. This is one version of the intercreditor agreement that was floating around. As you can see, it needed 27 different secured parties to participate, or subordinate depending on their positions. This is the agreement mentioned in the law suit. Thought you might be interested.
INTERCREDITOR AGREEMENT
among
EMPIRE ADVISORS, LLC
an Ohio Limited Liability Company
ALTUS METALS, LLC
an Ohio Limited Liability Company
(“Empire”)
and
WILL HAMILL, an individual, MILES LAWRENCE MCCRACKEN, an individual, RODNEY EVAN SCHMELZER, an individual, BRENT THOMAS BINGHAM, an individual, DEVIN DURRANT, an individual, ADVANCED STRATEGIC PLANNING, LLC, a Utah limited liability company, VALERIE EVAN DUARTE, an individual, MILFORD INVESTORS, L.L.C., a Utah limited liability company, MARVIN G. NEFF, an individual, DENNIS V. BACK, an individual, BRIDGE LOAN CAPITAL FUND LIMITED PARTNERSHIP, a Utah limited partnership, REYNOLDS BROTHERS CORPORATION, a Utah corporation, [DPI COLLEGE, LC, a Utah limited liability company,] DDB UTAH LC, a Utah limited liability company, MILFORD COPPER INVESTORS II, L.L.C., a Utah limited liability company, [TOP-NOTCH [INVESTMENTS][HOLDINGS], LLC, a Utah limited liability company,] [BACKCOUNTRY INVESTMENTS, LLC, a Utah limited liability company];
(“Senior Creditors”)
and
BRIDGE LOAN CAPITAL FUND LIMITED PARTNERSHIP, a Utah limited partnership, M.E. DANCY CONSULTING SERVICES, INC., a Utah corporation, JONATHAN B. WELLS, an individual, WENDELL GILE TRUST, a ______________ trust, JOSH ROMNEY, an individual;
DEVIN DURRANT, an individual (“Durrant”);
(“Junior Creditors”)
and
COPPER KING MINING CORPORATION
a Nevada corporation
WESTERN UTAH COPPER COMPANY
a Utah corporation
MARK DOTSON, an individual
(“Copper King”)
Dated as of January ___, 2010
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT (this “Agreement”), dated as of January ___, 2010, is entered into by and among:
EMPIRE ADVISORS, LLC, an Ohio limited liability company, ALTUS METALS, LLC, an Ohio limited liability company (collectively, “Empire”); and
WILL HAMILL, an individual, MILES LAWRENCE MCCRACKEN, an individual, RODNEY EVAN SCHMELZER, an individual, BRENT THOMAS BINGHAM, an individual, DEVIN DURRANT, an individual, ADVANCED STRATEGIC PLANNING, LLC, a Utah limited liability company, VALERIE EVAN DUARTE, an individual, MILFORD INVESTORS, L.L.C., a Utah limited liability company, MARVIN G. NEFF, an individual, DENNIS V. BACK, an individual, BRIDGE LOAN CAPITAL FUND LIMITED PARTNERSHIP, a Utah limited partnership, REYNOLDS BROTHERS CORPORATION, a Utah corporation, and [DPI COLLEGE, LC, a Utah limited liability company,] DDB UTAH LC, a Utah limited liability company, MILFORD COPPER INVESTORS II, L.L.C., a Utah limited liability company, [TOP-NOTCH [INVESTMENTS][HOLDINGS], LLC, a Utah limited liability company,] [BACKCOUNTRY INVESTMENTS, LLC, a Utah limited liability company] (collectively “Senior Creditors”), whose addresses are set forth on Exhibit A hereto; and
BRIDGE LOAN CAPITAL FUND LIMITED PARTNERSHIP, a Utah limited partnership, M.E. DANCY CONSULTING SERVICES, INC., a Utah corporation, JONATHAN B. WELLS, an individual, WENDELL GILE TRUST, a ______________ trust, and JOSH ROMNEY, an individual, and DEVIN DURRANT, an individual (“Durrant”), (collectively, “Junior Creditors”, whose addresses are set forth on Exhibit B hereto, and collectively with Senior Creditors, “Prior Creditors”); and
COPPER KING MINING CORPORATION, a Nevada corporation, WESTERN UTAH COPPER COMPANY, a Utah corporation, and MARK DOTSON, an individual (collectively, “Copper King”).
RECITALS
A. Senior Creditors and Junior Creditors have loaned funds and/or extended certain financial accommodations to Copper King prior to the date hereof and, in order to secure the repayment of such loans, obtained liens, mortgages, deeds of trust and security interests (all such types of interests are hereinafter generically referred to as “Liens”) in the CK Property (as defined below) and filed certain filings, mortgages, deeds of trust, fixture filings and Uniform Commercial Code financing statements (all such types of filings are hereinafter generically referred to as “Filings”) in the relevant offices in order to perfect their Liens and establish the priority of such Liens.
B. Senior Creditors are the holder of that certain Deed of Trust, Assignment of Rents, Security Agreement, and Fixture Filing, dated January 4, 2005 and filed in the Official Records of the Beaver County, Utah County Recorder’s Office as Entry No. 229850 in Book 400, Page 356 on January 5, 2007 at 11:48 A.M., and filed in the records of the Utah Secretary of State as evidenced by UCC-1 Financing Statement(s) (the “SC Security Document”; for convenience of reference, the SC Security Document together with any and all Liens or Filings executed or made in connection with Senior Creditors’ loans and/or financings of Copper King may hereinafter sometimes be collectively referred to as the “SC Security Documents”), which SC Security Documents grant Senior Creditors Lien(s) in Copper King’s right, title and interest in and to certain real property, mineral rights, patented mining claims, unpatented mining claims and various leases and other rights and claims, along with all right, title and interest of Copper King in any and all buildings and other improvements, fixtures and attachments located thereon, as set forth in the Prior Security Documents (defined below) (“CK Real Property”), which CK Real Property is further described on Exhibit C attached hereto. Senior Creditors are also perfected secured creditors, as of the date hereof, in certain personal property, inventory, assets and other property owned by Copper King as of the date hereof, including all proceeds and after-acquired property as set forth in the SC Security Documents (all such property in which Senior Creditor is a perfected secured creditor, collectively with the CK Real Property, is hereinafter referred to as the “CK Property”).
C. Junior Creditors and/or Durrant are the holders of those certain Deeds of Trust dated as of May 25, 2007, April 26, 2007, May 16, 2007 and September 6, 2007 and filed in the Official Records of the Beaver County, Utah County Recorder’s Office as (i) Entry No. 232286 in Book 407, Page 429 on June 7, 2007 at 2:24 P.M., (ii) Entry No. 231589 in Book 405, Page 345 on April 26, 2007 at 11:34 A.M., (iii) Entry No. 232052 in Book 406, Page 548 on May 16, 2007 at 10:10 A.M., and (iv) Entry No. 233680 in Book 412, Page 239 on September 13, 2007 at 3:57 P.M. (collectively, the “JC Security Document”; for convenience of reference, the JC Security Document together with any and all other Liens and Filings executed or made in connection with Junior Creditors’ loans and/or financings of Copper King may hereinafter sometimes be collectively referred to as the “JC Security Documents”; the SC Security Documents and JC Security Documents may be collectively referred to as the “Prior Security Documents”), which JC Security Documents grant Junior Creditors and/or Durrant Lien(s) in certain CK Real Property. Junior Creditors are also perfected secured creditors in certain CK Property.
D. Empire is agreeing to provide up to Six Million Dollars ($6,000,000) in funds to Copper King (“Financing”). In connection with the Financing and those certain Deed(s) of Trust and Security Document(s) and related documents by and between Empire and Copper King (“Empire Security Documents”) entered into in connection with the Financing, Copper King shall grant and assign to Empire certain Liens in the CK Property for all amounts owed to Empire under the Financing (“Empire Obligations”; the relative amounts owed by Copper King to each other party to this agreement shall generically be referred to as an “Obligations”, and the obligation to any particular party may be indicated by stating such party followed by Obligations) as collateral security in order to secure repayment of such Empire Obligations. The parties have agreed that Empire shall hold a senior, first priority, superior and perfected (“First Priority”) Lien on the CK Property on a pari passu basis along with Senior Creditors as further specified below to secure repayment of the Empire Obligations.
E. The parties have agreed that, notwithstanding any Liens or Filings granted, to be granted, of record, or to be placed of record, by any of the Prior Creditors or Empire, (i) Senior Creditors hereby consent to the filing of Liens by Empire, and contractually agree to relinquish the rights of First Priority in the CK Property only to the extent necessary that Empire and Senior Creditors shall hold a co-First Priority pari passu lien (as further specified below) and deed of trust in the CK Property that is senior, prior and superior to any Liens and Filings of Junior Creditors, (ii) Junior Creditors shall accordingly subordinate all Liens and Filings that they currently hold in the CK Property to those granted to Empire in connection with the Financing, and (iii) a Collateral Agent Committee (as defined below) shall be formed to manage any actions or dispositions of the CK Property in accordance with the terms set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the parties hereto hereby agree, as follows:
1. Recitals. The foregoing recitals are true and correct and incorporated into this Agreement by reference.
2. Junior Creditors’ Subordination and Consent.
2.1. Subordination. Junior Creditors hereby fully subordinate any and all Liens and Filings currently held by or benefitting Junior Creditors, and any and all of Junior Creditors’ debts of or rights to payment from Copper King, and any interests of Junior Creditors in the CK Property, to the Empire Obligations, Empire Security Documents, Pari Passu Lien (as defined below) and any Empire Liens and interests in the CK Property, notwithstanding (i) any Liens and Filings granted, to be granted, of record, or to be placed of record, or (ii) any Prior Security Documents.
2.2. Consent to Priority and Financing. Junior Creditors hereby acknowledge and consent to the Financing, the arrangements between the Senior Creditors and Empire and Pari Passu Lien (as defined below) set forth herein, and Junior Creditors’ status and priority as creditors in a junior position to Empire and Senior Creditors with respect to the CK Property, all of which shall supersede the Prior Security Documents. To the extent any specific consents or waivers of Junior Creditors are necessary under any Prior Security Documents in order to execute and perform this Agreement and accomplish the Financing as contemplated by this Agreement, such specific consent is hereby given and such specific waivers are hereby made, including, without limitation, consents and waivers regarding and/or pursuant to Sections 1.12, 1.17, and 4 of the JC Security Document. Junior Creditors will not contest or challenge the priority of the secured creditors of Copper King set forth in this Agreement.
2.3. Notice, Default and Acceleration. Empire or Senior Creditors, as applicable, shall provide Junior Creditors with copies of any notices of default delivered to Copper King under their financing documents with Copper King that are permitted pursuant to the terms hereof. Junior Creditors shall provide Empire and Senior Creditors with thirty (30) days written notice prior to, as permitted pursuant to the terms hereof, (i) delivering any notice of default to Copper King, (ii) accelerating payments due under any instruments or agreements between a Junior Creditors and Copper King, or (iii) or taking any action pursuant to any instruments or agreements between a Junior Creditors and Copper King; provided, however, that Junior Creditors may not take any such actions, enforce any Liens or proceed against the CK Property prior to September 18, 2010 without Empire’s and Senior Creditors’ written approval. Empire or Senior Creditors may choose to cure any default of Copper King on Copper King’s behalf following any such notice. As soon as any of Junior Creditors become aware of the occurrence of any event of default or condition which gives it a right to foreclose under its respective loan or security documents and the terms hereof or of any event or condition which but for the lapse of time or the giving or notice or both would constitute such an event of default, Junior Creditors shall give notice of such circumstance to Empire and Senior Creditors. Any actions to be taken with respect to the CK Property or Copper King by Junior Creditors, or to enforce the Liens and Filings of Junior Creditors, shall be governed by the provisions of Section 6 and subject to Section 5 and the other provisions of this Agreement. Junior Creditors shall not file or cause to be filed a petition for bankruptcy with respect to Copper King.
2.4. Payments. Notwithstanding anything to the contrary in any other agreements to which Junior Creditors are a party, Copper King may not make any cash payments or transfer any assets to Junior Creditors, including without limitation pursuant to the financing, credit or related documents between Junior Creditors and Copper King, without the prior written consent of Empire and Senior Creditors’ Representative, which all parties agree have sole and absolute discretion to withhold or grant. Copper King’s compliance with this Section shall not constitute or cause, or be deemed to constitute or cause, a default under the JC Security Documents or other documents or agreements between Junior Creditors and Copper King, notwithstanding any language in any such documents or agreements to the contrary, and any provisions of any such documents or agreements to the contrary are hereby amended and modified to reflect the foregoing.
3. Senior Creditors’ Qualified Subordination, Consent, and Pari Passu Lien.
3.1. Qualified Subordination. Only to the extent legally necessary to achieve the Pari Passu Lien (defined below) set forth in Section 3.3, Senior Creditors hereby subordinate any and all Liens and Filings currently held by or benefitting Senior Creditors, any interests of Senior Creditors in the CK Property and any and all of Senior Creditors’ debts of or rights to payment from Copper King, to the Empire Obligations, Empire Security Documents Pari Passu Lien and any other Liens and Filings or interests in the CK Property granted to, or recorded for the benefit of, Empire in connection with the Financing, notwithstanding (i) any Liens and Filings or interests granted, to be granted, of record, or to be placed of record or (ii) any Prior Security Documents.
3.2. Consent. Senior Creditors hereby acknowledge and consent to the Financing and their status and priority as creditors in the Pari Passu Lien (defined below) position with Empire with respect to the CK Property. To the extent any specific consents or waivers of Senior Creditors are necessary under any Prior Security Documents in order to execute and perform this Agreement and the Financing as contemplated by this Agreement, such specific consent is hereby given and such specific waivers are hereby made, including, without limitation, consents and waivers regarding and/or pursuant to Sections 1.12, 1.17, and 4 of the SC Security Document. Senior Creditors will not contest or challenge the priority of the secured creditors of Copper King set forth in this Agreement.
3.3. Pari Passu Lien. The Liens and Filings held by Senior Creditors with respect to the CK Property shall rank pari passu with the Empire Security Documents and Liens and Filings held by Empire with respect to the CK Property, and Senior Creditors and Empire shall thus hold co-senior or co-First Priority Liens and Filings with respect to the CK Property as further detailed in this Section, notwithstanding (i) any Liens and Filings granted, to be granted, of record, or to be placed of record or (ii) any Prior Security Documents (“Pari Passu Lien”). If the CK Property is foreclosed upon, liquidated, refinanced or otherwise sold or transferred, pursuant to the Pari Passu Lien or otherwise in order to satisfy the Obligations held by Senior Creditors and/or Empire, Senior Creditors and Empire shall receive the proceeds as follows:
(a) First, equally, dollar for dollar, until Empire has received the full principal amount invested pursuant to the Financing plus one (1) year of return or interest on such principal amount as set forth in Empire’s Financing documents and agreements plus Empire’s costs and fees incurred in connection with the relevant foreclosure, liquidation, refinancing, sale or transfer; then
(b) Second, Senior Creditors shall receive all proceeds until Senior Creditors have received their original principal investment amount of Seven Million Five Hundred Eighty Five Thousand Two Hundred Thirty Two and 15/100 Dollars ($7,585,232.15) plus a twenty four percent (24%) return on such principal investment amount for a total amount of Nine Million Four Hundred Five Thousand Six Hundred Eighty Seven and 87/100 Dollars ($9,405,687.87) inclusive of amounts received pursuant to subsection (a) above (such that, for example, if the amount received by each of Empire and Senior Creditors pursuant to subsection (a) was Four Million and No/100 Dollars ($4,000,000.00), Senior Creditors would receive an additional Five Million Four Hundred Five Thousand Six Hundred Eighty Seven and 87/100 Dollars ($5,405,687.87) pursuant to this subsection (b)); then
(c) Third, equally, dollar for dollar, until Empire has received all amounts owed to Empire by Company and is paid off in full; then
(d) Fourth, Senior Creditors shall receive all proceeds until Senior Creditors have received all amounts owed to Senior Creditors by Company and Senior Creditors are paid off in full; then
(e) Fifth, Junior Creditors shall receive the remainder of the proceeds according to their respective priorities.
3.4. Empire Security Documents. Empire shall record Empire’s Deed of Trust in connection with the Financing, and they shall be deemed to have been filed prior to any of Junior Creditors’ Liens and Filings and filed simultaneously with any of Senior Creditors’ Liens and Filings, in order to achieve the priority in the CK Property contemplated by this Agreement and the Pari Passu Lien.
3.5. Payments. Notwithstanding anything to the contrary in any other agreements to which Senior Creditors are a party, any payments made to Senior Creditors prior to September 18, 2010 shall be governed by Section 5.2 set forth below. Copper King’s compliance with this Section and any Payments made pursuant to Section 5.2 shall not constitute or cause, or be deemed to constitute or cause, a default under the Prior Security Documents or other documents or agreements between Prior Creditors and Copper King, notwithstanding any language in any such documents or agreements to the contrary, and any provisions of any such documents or agreements to the contrary are hereby amended and modified to reflect the foregoing.
3.6. Notice, Default and Acceleration. If, while any Empire Obligations remain outstanding or prior to September 18, 2010, Senior Creditors or Empire would like to deliver a notice of default, declare an acceleration or take any other action against Copper King or proceed against the CK Property as permitted hereunder, Senior Creditors’ or Empire, as applicable, shall notify the other party prior to taking any such actions. Prior to or concurrently with delivering any notice of default to Copper King, Senior Creditors and Empire shall provide the other party with a copy of such notice of default. Any actions to be taken with respect to the CK Property by Senior Creditors or Empire, or to enforce the Liens and Filings of Senior Creditor or the Empire Security Documents as permitted hereunder, shall be governed by the provisions of Section 6 and subject to Section 5 and the other provisions of this Agreement. As soon as Senior Creditor or Empire becomes aware of the occurrence of any event of default or condition which gives it a right to foreclose under its respective loan or security documents and the terms hereof or of any event or condition which but for the lapse of time or the giving or notice or both would constitute such an event of default, such party shall give notice of such circumstance to the other party. Senior Creditors shall not file or cause to be filed a petition for bankruptcy with respect to Copper King without the consent of Empire, and Empire shall not file or cause to be filed a petition for bankruptcy with respect to Copper King without the consent of Senior Creditors’ Representative.
4. Empire’s Financing, Obligations and Pari Passu Lien.
4.1. Empire Financing Amounts, Logistics and Coverage. Empire’s Financing is anticipated to be completed as follows: a Two Million and No/100 Dollar ($2,000,000.00) First Tranche (“First Tranche”); a Two Million and No/100 Dollar ($2,000,000.00) Second Tranche (“Second Tranche”); and a Two Million and No/100 ($2,000,000.00) Third Tranche (“Third Tranche”). Empire shall only be obligated to complete the First Tranche, inclusive of any amounts advanced to Copper King prior to the date hereof. Empire shall have the exclusive right, but not the obligation, in Empire’s sole discretion, without approval or consent of any Prior Creditors, to advance the Second Tranche to Company within one hundred twenty (120) days after the closing of the full First Tranche; provided, however, that Senior Creditors’ Representative may elect to block or prevent the Second Tranche funding only if (a) Copper King’s Accounts Payable over thirty (30) days old has been reduced to less than Five Hundred Thousand Dollars ($500,000) (with no “close down” judgments), (b) Copper King is able to pay its debts as they become due, (c) Copper King has achieved Collected Net Sales (as defined below) of at least One Million Dollars ($1,000,000) for two (2) consecutive months and nothing has occurred that would prevent Copper King from continuing to achieve comparably high levels of Collected Net Sales in the future, and (d) Copper King has at least Two Million Dollars ($2,000,000) in a deposit bank account from any other sources. If the Second Tranche funding is blocked or prevented by Senior Creditors’ Representative pursuant to the foregoing sentence, then Empire shall be entitled to receive a penalty of one half (1/2) half of the return (including cash and warrants) it would have received if it were permitted to make the Second Tranche funding (“Penalty”), which Penalty shall be added to the Empire Obligations and secured by the Pari Passu Lien. Empire shall have the right, upon receipt of consent from Senior Creditors’ Representative (as specified below in Section 17), to advance the Third Tranche (including the right to advance all or part of the Third Tranche as part of the Second Tranche), should the Company elect to receive such Third Tranche financing. All Empire Obligations, including those related to the First Tranche, Second Tranche, and Third Tranche financings and the Penalty, shall be secured by the Pari Passu Lien in the CK Property created herein.
4.2. Use of Empire Financing Funds and Monitoring. The First Tranche financing shall be used by Copper King as specified in the Use of Proceeds exhibit attached hereto as Exhibit D. Empire shall monitor that the First Tranche Financing funds are used in accordance with the Use of Proceeds and that additional tranche funds are used in accordance with the Copper King business plan, and provide the results of such monitoring to Senior Creditors’ Representative upon his request, provided Empire shall not incur any liability in the performance of such duties. Empire and Senior Creditors’ Representative will agree upon the methodology of monitoring and assuring Copper King’s compliance with the Use of Proceeds and business plan. A finance person for Copper King and/or a third party appointed by Empire and Senior Creditors’ Representative will sign off on all major expenditures. Empire and Senior Creditors’ Representative must approve any material deviation from the Use of Proceeds.
5. Extension; Waiver; Revised Payment Schedule.
5.1. Extension and Waiver. In any event and notwithstanding anything to the contrary contained herein or any agreements between any of Prior Creditors and Copper King, (i) subject to Section 5.2 below, Prior Creditors shall not be entitled to any payments from Copper King until September 18, 2010, (ii) subject to Section 5.2 below, Prior Creditors shall correspondingly extend any due dates for any payments under any Prior Creditor agreements with Copper King to September 18, 2010, (iii) Prior Creditors waive and release Copper King from any past defaults and any defaults that may occur between the date hereof and September 18, 2010 (to the extent such defaults between the date hereof and September 18, 2010 are caused by compliance with or consistent with this Section or Agreement) under any of the agreements between Prior Creditors and Copper King or Prior Security Documents, and (iv) Prior Creditors agree that Prior Creditors shall in no event deliver a notice of default, accelerate any debt or Obligations owed by Copper King, or foreclose upon or proceed against the CK Property prior to September 18, 2010 in connection with a default caused by compliance with this Section or this Agreement. Prior Creditors hereby voluntarily and explicitly waive, and forgive Copper King with respect to, all prior claims of any kind that Prior Creditors may have had against Copper King prior to the date of this Agreement, and agree to release and abandon and judgments or proceedings obtained against Copper King prior to the date hereof.
5.2. Revised Contingent Payment Schedule. Prior to September 18, 2010, Copper King shall have the obligation to distribute cash to Empire and Senior Creditors on an equal pari passu, dollar-for-dollar basis, which cash distributions shall be applied against the outstanding Obligations owed to Empire and Senior Creditors, respectively, when Copper King reaches the following milestones:
(a) In any month in which Collected Net Sales (as defined below) of copper concentrate product equals or exceeds One Million Dollars ($1,000,000) per month, but is less than One Million Five Hundred Thousand Dollars ($1,500,000) per month, an aggregate total of Fifty Thousand ($50,000) per month shall be distributed to Empire and Senior Creditors by the later to occur of (i) the 15th day of the following month or (ii) the date that such funds are actually received by Copper King. As used herein, “Collected Net Sales” are the amounts actually received by Copper King from the sale of its copper concentrate product after the subtraction of (x) costs and fees charged by the relevant parties involved in the shipment, (y) costs and fees associated with refining of the concentrate product and (z) payments of royalties to applicable third parties.
(b) In any month in which Collected Net Sales of copper concentrate product equals or exceeds One Million Five Hundred Thousand Dollars ($1,500,000) per month, but is less than Two Million Dollars ($2,000,000) per month, an aggregate total of One Hundred Thousand Dollars ($100,000) per month shall be distributed to Empire and Senior Creditors by the later to occur of (i) the 15th day of the following month or (ii) the date that such funds are actually received by Copper King.
(c) In any month in which Collected Net Sales of copper concentrate product equals or exceeds Two Million Dollars ($2,000,000) per month, an aggregate total of One Hundred Fifty Thousand Dollars ($150,000) per month shall be distributed to Empire and Senior Creditors by the later of (i) the 15th day of the following month or (ii) the date that such funds are actually received by Copper King.
Either Empire or Senior Creditors (by and through Senior Creditors’ Representative) may elect not to receive the cash distributions owed to it pursuant to this Section at its own sole discretion, in which case the relevant party’s one half (1/2) share of the “aggregate total” payments or distributions pursuant to this Section shall remain with Copper King and shall not be distributed to the other party.
5.3. Expiration of Extension. If, as of September 18, 2010, Copper King or a third party has not repaid the Obligations owed to Senior Creditors, Junior Creditors, and/or Empire and Copper King is unable to pay off such parties in full or resume the normal payment schedule under the respective financing documents with such parties or refinance its debt, then Empire, Senior Creditors’ Representative and Junior Creditors’ Representative shall use their reasonable best efforts to negotiate an appropriate extension or revision of their payment schedules, or determine at such time that it is appropriate to wind down or transfer Copper King or the CK Property.
6. Foreclosure Upon CK Property.
6.1. Decision to Foreclose. Subject to Sections 2.3, 3.6, 4, 5, and other provisions of this Section and Agreement, Senior Creditor, Junior Creditor or Empire may each independently choose to foreclose upon, proceed against, or take action with respect to their Liens and Filings that affect the CK Property in accordance with the terms of their agreements with Copper King and the terms of this Agreement, but any party choosing to do so must provide the notices required above and proceed in accordance with this Section 6 and may only do so based upon defaults inconsistent with this Agreement that occur after the date hereof in accordance with Section 5.1 above.
6.2. Control of CK Property and Administration of Disposition. Senior Creditors, Junior Creditors and Empire agree that a committee of three (3) individuals, comprised of one representative from Empire, Senior Creditors’ representative, and Gary Post, an independent neutral party selected jointly by Empire and Senior Creditors (collectively, “Collateral Agent Committee”), shall serve as a “collateral agent” for the CK Property, pursuant to which Collateral Agent Committee shall direct and control the disposition or sale of the CK Property in connection with the enforcement of any Liens or Filings thereon in satisfaction of the Obligations owed to Senior Creditors, Junior Creditors and Empire. The parties hereby agree that all reasonable and necessary costs and expenses incurred by the Collateral Agent Committee in serving as collateral agent and conducting any disposition or sale shall be deducted from the proceeds of any disposition or sale prior to any proceeds being applied against any Obligations owed to Empire or Prior Creditors.
(a) Good Faith Efforts. Collateral Agent Committee shall, in serving as collateral agent, use its good faith efforts to conduct a reasonable sale of the CK Property in an effort to achieve the highest possible sale price, so that the greatest amount of Obligations are satisfied by such sale proceeds.
(b) No Liability; Waiver. The parties agree that Collateral Agent Committee shall have no liability of any kind whatsoever in connection with the foreclosure upon or sale of the CK Property pursuant to this Section 6, and each of the parties hereto hereby forever waives and releases any claims of any kind based upon the foregoing, including, without limitation, any claim based upon the sale method utilized or price obtained by Collateral Agent Committee.
(c) Appointment of Third Parties to Conduct Sale. Collateral Agent Committee may, at its reasonable discretion, appoint a third party to administer or assist with the foreclosure upon or sale of the CK Property, provided that such third party agrees to abide with Section 6.2(a) hereof.
6.3. Trustee. In connection with this Agreement and this Section 6, Empire and Prior Creditors shall use Marlon L. Bates, Esq., a Utah attorney (“Bates”) as Trustee under all deeds of trust regarding the CK Real Property and Prior Security Documents, if Bates is not already trustee under such deeds of trust or Prior Security Documents, and the parties shall cause appropriate documentation or substitutions of trustee(s) to be recorded in the real estate records of Beaver County and any other relevant counties to effect the foregoing.
6.4. Waiver of Conflicting Provisions. Prior Creditors hereby release, waive and amend any provisions of any Prior Security Documents that are inconsistent with this Section 6 or this Agreement, including any provisions that give Prior Creditors the right to control the disposition of or take action against the CK Property.
7. Prior Creditors Representations and Warranties. Prior Creditors hereby represent and warrant the following:
7.1. Due Formation and Authority. Each entity that composes Prior Creditors (i) is an entity duly formed or organized and validly existing under the laws of its state of incorporation or formation, (ii) is duly qualified, authorized to do business and in good standing in every jurisdiction necessary to perform its obligations under the this Agreement and all related agreements, and (iii) has all requisite power and authority to enter into and to perform its obligations under this Agreement, and to carry out the terms hereof. All natural persons that compose Prior Creditors satisfy item (iii) above.
7.2. Due Execution. The execution, delivery and performance by Prior Creditors of this Agreement has been duly authorized by all necessary corporate or other action on the part of Prior Creditors and does not require any approvals, filings with, or consents of any entity or person which have not previously been obtained or made. Those parties signing this Agreement on behalf of Prior Creditors have the authority to bind all Prior Creditors in accordance with Section 27. The statements set forth in Section 27 are accurate regarding the percentages of economic interests required to bind Senior Creditors and Junior Creditors, respectively, and the agreements attached as Exhibit E are the current and effective agreements with respect thereto. The names and designations of all parties that compose Prior Creditors’ set forth on the cover page and first page of this Agreement are correctly stated and are all parties that are part of Prior Creditors’ creditor groups that have advanced funds to or invested in Copper King or have been assigned or have acquired any interest in the same.
7.3. Full Force and Effect. This Agreement is in full force and effect, has been duly executed and delivered on behalf of Prior Creditors by the appropriate officers and/or individuals representing Prior Creditors, and constitutes the legal, valid and binding obligation of Prior Creditors, enforceable against Prior Creditors in accordance with its terms.
7.4. No Litigation. There is no litigation, action, suit, proceeding or investigation pending or threatened against Prior Creditors before or by any court, administrative agency, arbitrator or governmental authority, body or agency which, if adversely determined, individually or in the aggregate, (i) could adversely affect the performance by Prior Creditors of its obligations hereunder, or which could modify or otherwise adversely affect any required approvals, filings or consents which have previously been obtained or made, (ii) could have a material adverse effect on the condition (financial or otherwise), business or operations of Prior Creditors or (iii) questions the validity, binding effect or enforceability of any action taken or to be taken pursuant hereto or any of the transactions contemplated hereby. There is no current litigation, action, suit, proceeding or investigation of any kind pending or threatened against Copper King by Prior Creditors.
7.5. No Violation of Agreements. The execution, delivery and performance by Prior Creditors of this Agreement, and the consummation of the transactions contemplated hereby, will not result in any violation of, breach of or default under any term of its formation or governance documents, or of any contract or agreement to which it is a party or by which it or its property is bound, or of any license, permit, franchise, judgment, injunction, order, law, rule or regulation applicable to it.
7.6. No Default. Neither Copper King nor, to the best of Prior Creditors’ knowledge, any other party to this Agreement, shall be in default under this Agreement or any financing agreements with Copper King following the execution hereof.
Each of the representations and warranties set forth in this Section 7 are made as of the date hereof and shall not be affected by subsequent events. These representations and warranties shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.
8. Empire’s Representations and Warranties. Empire hereby represents and warrants the following:
8.1. Due Formation and Authority. Empire (i) is an entity duly formed or organized and validly existing under the laws of its state of incorporation or formation, and (ii) has all requisite power and authority to enter into and to perform its obligations under this Agreement, and to carry out the terms hereof.
8.2. Due Execution. The execution, delivery and performance by Empire of this Agreement has been duly authorized by all necessary corporate or other action on the part of Empire and does not require any approvals, filings with, or consents of any entity or person which have not previously been obtained or made.
8.3. Full Force and Effect. This Agreement is in full force and effect, has been duly executed and delivered on behalf of Empire by the appropriate officers and/or individuals representing Empire, and constitutes the legal, valid and binding obligation of Empire, enforceable against Empire in accordance with its terms.
Each of the representations and warranties set forth in this Section 8 are made as of the date hereof and shall not be affected by subsequent events. These representations and warranties shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.
9. Representations and Warranties of Copper King. Copper King hereby represents and warrants the following:
9.1. Only Liens on CK Property. Empire, Senior Creditors and Junior Creditors are the only entities or parties that hold any Lien, Filing or interest of any kind that affects the CK Property, and the Liens and Filings addressed herein are the only Liens or Filings of any type or kind that affect the CK Property. Copper King has timely paid all taxes owing with respect to the CK Property.
9.2. Due Formation and Authority. Each entity that composes Copper King (i) is an entity duly formed or organized and validly existing under the laws of its state of incorporation or formation, (ii) is duly qualified, authorized to do business and in good standing in every jurisdiction necessary to perform its obligations under the this Agreement and all related agreements, and (iii) has all requisite power and authority to enter into and to perform its obligations under this Agreement, and to carry out the terms hereof.
9.3. Due Execution. The execution, delivery and performance by Copper King of this Agreement has been duly authorized by all necessary corporate or other action on the part of Copper King and does not require any approvals, filings with, or consents of any entity or person which have not previously been obtained or made.
9.4. Full Force and Effect. This Agreement is in full force and effect, has been duly executed and delivered on behalf of Copper King by the appropriate officers and/or individuals representing Copper King, and constitutes the legal, valid and binding obligation of Copper King, enforceable against Copper King in accordance with its terms.
9.5. No Violation of Agreements. The execution, delivery and performance by Copper King of this Agreement, and the consummation of the transactions contemplated hereby, will not result in any violation of, breach of or default under any term of (i) its formation or governance documents, or, (ii) as of the execution hereof, of any contract or agreement to which it is a party or by which it or its property is bound, or of any license, permit, franchise, judgment, injunction, order, law, rule or regulation applicable to it.
Each of the representations and warranties set forth in this Section 9 are made as of the date hereof and shall not be affected by subsequent events. These representations and warranties shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.
10. Rescission of Past Notices of Default; Material Defaults. Prior Creditors hereby waive and rescind all notices of default, notices of sale, acceleration and/or actions towards foreclosure that occurred prior to the date hereof, regardless of form and whether or not such notice of default was recorded (“Past Notices”). Following the execution hereof, such Past Notices and the defaults that such Past Notices were based upon shall be deemed to not have occurred and not been delivered. Prior Creditors and Empire agree that they may only take action with respect to the CK Property as permitted hereunder and in compliance with the terms hereof and only upon the occurrence of a material default inconsistent with the terms hereof.
11. Covenants of Copper King. Copper King shall not willfully place, or permit to be placed, any additional Liens or Filings that affect the CK Property prior to the repayment of all Obligations owed to Empire and Prior Creditors, without the express written consent of those parties holding Obligations at the relevant time. Copper King shall keep Empire and Prior Creditors appraised of all developments with respect to the CK Property and any events that impact the CK Property. Copper King shall (i) pay all taxes and lease payments owed with respect to the CK Property when they become due, (ii) notify Prior Creditors and Empire if Copper King does not, or believes that it will be unable to, timely make any such tax or lease payments, (ii) notify Prior Creditors and Empire of any communications received by Copper King regarding the untimely payment of such taxes or lease payments. Copper King has, prior to the date hereof, addressed all situations between the Company and all other creditors that are not a party to this Agreement to the satisfaction of Empire and Prior Creditors, including but not limited to Republic Bank, Strategic Capital Partners, John and Erma Dalton, Comstock Financial, Massey Energy and CM Holdings (“Non-Party Creditors”), which situations are summarized on Exhibit F hereto. Copper King shall immediately provide Empire and Prior Creditors with notice of (i) any communication received from any Non-Party Creditor and (ii) any material change in Copper King’s relationship or situation with any Non-Party Creditor from the relationship or situation that existed as of the date hereof. Copper King has, prior to the date hereof, established a relationship with _______________ for the shipment of the concentrate it produces domestically in the United States by truck. Copper King shall immediately provide Empire and Prior Creditors with notice if its relationship with _____________ materially changes or if Copper King becomes unable to make concentrate shipments domestically for any period of time greater than seven (7) days for any reason (after Copper King has resumed consistent production of concentrate at a level that permits such shipments). Copper King shall provide Empire and Prior Creditors’ Representatives with monthly production and financial reports. Empire shall provide one of its financial employees to coordinate and monitor the monthly reporting process, provided that neither Empire nor its employees shall incur liability in connection with the performance of such activities.
12. Reliance by Empire. Copper King, Senior Creditors and Junior Creditors acknowledge and agree that the terms of this Agreement are a substantial, significant and material reason for Empire completing the Financing and entering into the Financing agreements and documents, and Empire is thus relying on the terms hereof in its decision to enter into the Financing agreements and documents.
13. Continuing Agreement. This Agreement constitutes a continuing agreement until each of Empire and Prior Creditors is paid in full by Copper King and release their respective Liens on the CK Property. The priority given to the Liens held by each of Empire, Senior Creditors and Junior Creditors in this Agreement is enforceable regardless of the time or order of attachment or perfection of the Liens, or the order of any Filings of such parties.
14. Limited Release and Waiver. Except for the specific waivers and releases set forth in Sections 2, 3, 5, 6 and 10 and other provisions of this Agreement that modify the Prior Security Documents, the provisions of this Agreement or the failure of Empire, Senior Creditors or Junior Creditors to abide by their respective obligations under this Agreement shall not diminish or alter, in any manner, the obligations of Copper King that are owed to each of Empire, Senior Creditors or Junior Creditors under their respective loan and security documents and, except with respect to the specific waivers and releases set forth in Sections 2, 3, 5, 6, and 10 and other provisions of this Agreement that modify the Prior Security Documents, shall not be used as defense by Copper King to the enforcement of such obligations against Copper King.
15. General Waiver Law. With respect to all waivers and releases made by Prior Creditors hereunder, Prior Creditors hereby (i) waive the application of any laws and all rights or creditor protections that could affect the effectiveness of such waivers or releases, and acknowledge that it has read and understood the applicable provisions of any such laws or protections, and (ii) agree that all waivers and releases herein shall apply regardless of any knowledge creditor does or does not have at the time of making such releases and waivers.
16. Notices. Unless otherwise specifically provided herein, any approval, disapproval, demand, document or other notice or communication required or permitted to be given hereunder shall be in writing and may be served (a) personally, or (b) by commercial delivery or private courier service, or (c) by Federal Express or other national overnight delivery service, or (d) by registered or certified mail (return receipt requested, postage prepaid), or (e) by telecopy or facsimile transmission, to the respective addresses and numbers specified below, which notice shall be effective (i) upon personal delivery, (ii) the next business day after delivery to Federal Express or other national overnight delivery service for next day delivery to the appropriate address, (iii) when received as indicated by the date on the return invoice or receipt showing delivery, or (iv) when sent by telecopy or facsimile, with written proof of either (a) transmittal to and receipt by the other party or (b) the failure of such transmission to the number designated by such party in this Section being established mechanically by the sender at the time of transmittal or attempted transmittal, along with proof of attempted email to the relevant party. Any delivery by facsimile in which all attempted facsimile transmissions failed shall be followed on the next business day by one of the other methods of notice set forth in this Section. Notice of change of any address or fax numbers shall be given by written notice in the manner detailed in this Section or by email at the addresses set forth in this Section. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to constitute receipt of the notice. All notices to empire shall be copied via email to empire at the address specified below. The parties’ addresses for notices are as follows:
IF TO EMPIRE: Empire Advisors, LLC
Altus Metals, LLC
500 South Front Street, Suite 1200
Columbus, Ohio 43215
Facsimile: 310-861-5095
Email: drichards@empireadvisorsllc.com and
dvrichards@empireadvisorsllc.com
and a copy to:
Robert J. Behal, Esq.
The Law Offices of Robert J. Behal
501 South Front Street
Columbus, Ohio 43215
Facsimile: 614-224-8708
Email: rbehal@behallaw.com
IF TO SENIOR CREDITORS: Rob Reynolds
____________________
____________________
____________________
Facsimile: ____________________
Email: ____________________
and a copy to:
____________________
____________________
____________________
____________________
Facsimile: ____________________
Email: ____________________
IF TO JUNIOR CREDITORS: ____________________
____________________
____________________
____________________
Facsimile: ____________________
Email: ____________________
and a copy to:
____________________
____________________
____________________
____________________
Facsimile: ____________________
Email: ____________________
IF TO DURRANT: Devin Durrant
1716 W. 1825 North
Provo, Utah 84604
Facsimile: ____________________
Email: ____________________
IF TO COPPER KING: Copper King Mining Corporation
Western Utah Copper Company
1208 South 200 West, Box 492
Milford, Utah 84751
Attn: David McMullin
Facsimile: _______________
Email: macvp@scinternet.net
and a copy to:
George Young, Esq.
__________________
__________________
Facsimile: _______________
Email: macvp@scinternet.net
17. Prior Creditor Representatives. For the purposes of binding Senior Creditors and Junior Creditors with respect to (i) any additional documents related to the Financing and Empire Security Documents, (ii) action(s) to be taken upon the default of Copper King, (iii) the Use of Proceeds and (iv) any amendments, extensions of or modifications to this Agreement and the Prior Security Documents and all related agreements or other agreements between Senior Creditors or Junior Creditors, respectively, and Copper King, the following parties shall serve as the agents and representatives of Senior Creditors and Junior Creditors, respectively, and are hereby appointed by Senior Creditors and Junior Creditors in such capacity with the authority to bind Senior Creditors and Junior Creditors with respect to the matters set forth in this Section:
Senior Creditors’ Representative: Rob Reynolds
Junior Creditors’ Representative: [Bridge Loan Capital Fund][Devin Durrant]
In connection with such appointments, Prior Creditors shall execute powers of attorney in the forms set forth in Exhibit G attached hereto and incorporated herein by this reference, at the time of execution of this Agreement. Any limitations on the representatives’ ability to legally bind Senior Creditors and Junior Creditors, respectively, are set forth in the powers of attorney and incorporated herein by this reference.
18. Memorandum of Agreement. Promptly following the execution of this Agreement by the parties, the parties shall record a memorandum of this agreement or intercreditor or subordination letter in the Beaver County recorder’s office in the form attached hereto as Exhibit H.
19. Further Assurances. The parties shall deliver such other instruments, agreements, certificates, or documents (including any Filings) as Empire or Senior Creditors may request to effectuate the intent of this Agreement and achieve the priority of Liens contemplated hereby. The parties shall fully cooperate with each other and perform all additional acts reasonably requested by other parties to effect the purposes of the foregoing.
20. Assignment, Termination, Amendment and Governing Law. This Agreement shall be binding upon and benefit the successors and assigns of the parties hereto and their respective successors, transferees and assigns. This Agreement may only be assigned by Empire or Prior Creditors with the written consent of the other parties (except for Copper King, whose written consent shall not be requred). No termination, amendment, variation or waiver of any provisions of this Agreement shall be effective unless in writing and signed by the parties hereto. This Agreement shall be governed by the laws of the State of Utah, without giving effect to principles relating to conflicts of law. There are no third party beneficiaries to this Agreement. Notwithstanding the foregoing, nothing in this Agreement shall be construed as creating any direct or implied application of Utah law to any other document or Agreement to which Empire is a party, including without limitation the Financing documents, all of which the parties hereto acknowledge and agree are subject to the laws of the State of Ohio.
21. Counterparts. This Agreement may be executed in one or more duplicate counterparts, and when executed and delivered by all the parties listed below, shall constitute a single binding agreement. The counterpart signature pages for this Agreement may be delivered, and shall be effective upon delivery, by facsimile or email.
22. Severability. In the case that any provision of this Agreement, or the obligations of any of the parties hereto, shall be determined to be invalid, illegal or unenforceable by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions, or the obligations of the other parties hereto, shall not in any way be affected or impaired thereby, and the parties hereto shall negotiate in good faith to replace such invalid, illegal or unenforceable provisions.
23. No Partnership or Joint Venture. No agency, partnership, joint venture or other relationship is intended hereby, and no party shall be deemed the agent, servant, employee, partner or joint venturer of another party. Empire, Senior Creditors and Junior Creditors shall not, in any way or for any reason be deemed to have become a partner or joint venture of or with the other in the conduct of its business or otherwise. In addition, by virtue of this Agreement, there shall not be deemed to have occurred any joint enterprise between Empire, Senior Creditors and Junior Creditors.
24. Joint and Several Liability. If any party consists of more than one person or entity, the liability and responsibilities of each such person or entity with respect to this Agreement shall be joint and several.
25. Interpretation. All provisions herein shall be construed in all cases as a whole according to its fair meaning, neither strictly for nor against any party and without regard for the identity of the party initially preparing the same. Titles and captions are inserted for convenience only and shall not define, limit or construe in any way the scope or intent of this Agreement. A term defined in the singular may be used in the plural, and vice versa, all in accordance with ordinary principles of English grammar (unless the singular and plural of a defined term have different defined meanings). All language of this Agreement and the related agreements shall be construed in all cases as a whole according to its fair meaning in accordance with ordinary principles of English grammar. The words “include” and “including” shall be construed to be followed by the words: “without limitation.” Each of these terms shall be interpreted as if followed by the words “(and each of the entities that compose it)” except where the context clearly requires otherwise: Senior Creditors, Junior Creditors, Copper King; and any other similar collective noun. Every reference to any document, including this Agreement, refers to such document as modified from time to time (except any modification that violates this Agreement or related agreements), and includes all exhibits, schedules, and riders to such document. The word “or” includes the word “and”. References to Sections are to Sections as numbered in this Agreement unless expressly stated otherwise. As used in this Agreement and the related agreements, the masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. All exhibits and schedules attached to this Agreement are incorporated herein by reference.
26. Conflicting Provisions. To the extent that there are any conflicting or inconsistent provisions in the Prior Security Documents or any agreements between Prior Creditors and any of the entities that compose Copper King or any agreements among Prior Creditors, this Agreement shall control and supersede such agreements to such extent.
27. Effectiveness. This Agreement shall become effective when signed by Copper King and Durrant and individuals and/or entities accounting for [75%] of the economic interests of the Senior Creditors and [50%] of the economic interests of the Junior Creditors (excluding Durrant), in accordance with those certain agreements among Senior Creditors and Junior Creditors, respectively, attached hereto as Exhibit E, which allow such respective percentages of Senior Creditors and Junior Creditors to bind all of Senior Creditors and Junior Creditors, respectively; provided, however, that if, in order to properly create the Pari Passu Lien, this Agreement must be deemed effective as of a later date at the time of the Empire funding tranche(s), this Agreement shall be deemed effective as of such later date(s); provided, further, that the preceding sentence shall not permit any parties hereto to terminate, cancel, retract or in any way voluntarily change the effectiveness this Agreement after such parties have executed this Agreement, except as set forth in the other provisions of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first set forth above.
EMPIRE ADVISORS, LLC
ALTUS METALS, LLC
By:______________________________
Name: David J. Richards
Title: President
[SENIOR CREDITORS]
[JUNIOR CREDITORS]
DEVIN DURRANT
_________________________________
COPPER KING MINING CORPORATION
WESTERN UTAH COPPER COMPANY
By:______________________________
Name: Mark Dotson
Title: Chief Executive Officer
MARK DOTSON, individually
_________________________________
TABLE OF EXHIBITS
Exhibit Description
A Senior Creditors’ Addresses
B Junior Creditors’ Addresses
C CK Real Property Description
D Use of Proceeds
E Prior Creditors’ Agency Agreements
F Non-Party Creditors’ Situations
G Forms of Prior Creditors Powers of Attorney
H Form of Memorandum of Intercreditor Agreement or Intercreditor Letter
EXHIBIT A
SENIOR CREDITORS’ ADDRESSES
Will Hamill
3080 Crestline Dr.
Park City, UT 84060
Miles Lawrence McCracken
1315 E. 300
N. Alpine, UT 84004
Rodney Evan Schmelzer
5340 S. Cottonwood Ln.
Salt Lake City, UT 84117
Brent Thomas Bingham
1333 North. 430 East
Orem, UT 84097
Devin Durrant
DPI College, LC, A Utah limited liability company
1716 W. 1825 North
Provo, Utah 84604
Advanced Strategic Planning, LLC
5348 Cottonwood Lane
Salt Lake City, Utah 84117
Valerie Evan Duarte
Raymond W Schmelzer marital trust
4 Commerce Park, 23240 Chagarn Blvd
Cleveland, Ohio 44122
Milford Investors, L.L.C.
6839 Bufflehead DR PO Box 1059
Park City, Utah 84060
Marv Neff
Backcountry Investment LLC
1835 S Highway 89
Perry, UT 84302
Dennis V. Back
1045 E Millstream Way
Bountiful, UT 84010
Bridge Loan Capital Fund Limited Partnership
11576 S. State Street #202
Draper, Utah 84020
1240 E. 2100 S. Suite 100
Salt Lake City, UT 84106
Reynolds Brothers Corporation
Rob Reynolds
6891 S. 700 W. Suite 200
Midvale, UT 84047
Barlow Bridge WUCC, LLC
5348 Cottonwood Lane
Salt Lake City, UT 84111
DPI College, LC
1716 W. 1825 North
Provo, Utah 84604
DDB Utah LC
64 E 6400 S, Suite 100
Salt Lake City, UT 84107
Milford Copper Investors II, L.L.C.
7971 Winchester Circle
Goleta, CA 93117
Top-Notch [Investments][Holdings], LLC
3080 Crestline Dr.
Park City, UT 84060
Backcountry Investments, LLC
325 North 200 West
Willard, UT 84340
EXHIBIT B
JUNIOR CREDITORS’ ADDRESSES
Bridge Loan Capital Fund Limited Partnership
11576 S. State Street #202
Draper, Utah 84020
1240 E. 2100 S. Suite 100
Salt Lake City, UT 84106
M.E. Dancy Consulting Services, Inc.
455 E 500 S. #205
Salt Lake City, Utah 84111
Jonathan B. Wells
2598 Lower Landow Lane
Park City, Utah 84098
Wendell Gile Trust
P.O. Box 57070
Murray, Utah 84157
Josh Romney
1869 Yale Ave.
Salt Lake City, Utah 84108
Devin Durrant
1716 W. 1825 North
Provo, Utah 84604
EXHIBIT C
DESCRIPTION OF CK REAL PROPERTY
Attached.
EXHIBIT D
USE OF PROCEEDS
[To come]
EXHIBIT E
PRIOR CREDITORS’ AGENCY AGREEMENTS
Attached.
EXHIBIT F
NON-PARTY CREDITORS’ SITUATIONS
[To come]
EXHIBIT G
FORMS OF PRIOR CREDITORS POWERS OF ATTORNEY
[To come]
EXHIBIT H
FORM OF MEMORANDUM OF INTERCREDITOR AGREEMENT OR INTERCREDITOR LETTER
RDG,
Typically, the initial complaint will have attached exhibits that attempt to prove the claim made in the suit. I didn't see any supporting documentation attached. Am I missing something? Furthermore, it is not my opinion that 27 lender participant signatures were required to sign off on the inter-creditor agreement. That is a fact. Now, think about the basis of CPRK's argument. Even if they have undisclosed supporting documentation (not likely) that proves that PN swayed some of the creditors to back away from the inter-creditor agreement, do you think they will also be able to prove for a fact that PN manipulated all 27 creditors with a meeting that not all creditors attended. IF they can, can they also prove that all 27 creditors were on board and ready to sign the agreement had the meeting with PN not occurred?
In order to win this law suit they will have to prove that damages occurred that otherwise would not have if that meeting had not transpired.
Again, the meeting is the basis of the claim. At least so far as the initial complaint is concerned. At this point all we have to go on is the initial complaint. So, to restate, they have to prove that before the meeting in January with PN that all 27 lender participants were on board with the fore mentioned agreement, and after the meeting, and due to the meeting, that the deal fell apart.
If this is not the case, and they cannot provide evidence as such, they have no quantifiable damages. Again, I am working with what we have, which is only the initial complaint with no supporting documentation. Though I am not an attorney, I have been involved in several law suites over the last few years. I can tell you things are never cut and dry, and if you don't have a slam dunk of a case, it will go NO WHERE FAST. First comes the suit, then counter suit (3 months minimum), then discovery (another 6 months of back and forth with service of summons, scheduling depositions, hearings etc), and finally to trial (at the earliest a year later and 250 K in attorney bills). That is if there is any money left to go to trial with. BTW, whether the creditors were swayed by a third party or not, there was no wrong doing on there part. It was at their sole discretion to agree to the joke that was the inter-creditor agreement, or not. Doesn't matter how they made up there minds. Again, My guess is this will Go Chapter 7. Watch. I was right about the BK, and I will be right about this. Good Luck RDG. You are a good guy.
Intel2,
The suit was not brought against the lien holders. The suit was brought against PN. The claim is not that a lien holder, or group of lien holders blocked finanicng from Empire, it is that PN manipulated the lien holders into not agreeing to the increditor agreement as put forth by Empire/Altus.
Let me break it down for you. What Empire wanted was a shared position with the 1st trust deed. What that means is that all participants on the 1st trust deed would have needed to sign off on the financing and participate in a shared 1st position with Altus.
In addition, all other junior secured lien holders would have had to sign a subordination agreement. In all, they needed some 27 seperate secured lender participants to sign off on the intercreditor agreement in order for the financing from Empire to occur. IMO, this was a bad deal for all existing secured creditors because it put them in a worse position in the case of liquidation. Of course, we know they didnt sign it. They must have agreed with me.
Back to your point. The arguement that Waltey is making is that before the meeting that transpired on January 14, 2010 between some of the secured creditors and PN representatives that CPRK had a VERBAL agreement with ALL 27 secured senior and junior creditors to sign the intercreditor agreement to put all secured creditors in a worse position to be paid in the case of liquidation.
Think about that argument for a minute. CPRK claims to have had VERBAL agreements with 27 seperate parties to sign an agreement that put all parties subordinate to an additional 6 million dollars. They dont have anything in writting, they dont have any real proof of collusion, they have verbal agreements with 27 seperate witnesses. THIS IS A JOKE, AND WILL GO NO WHERE. CHAPTER 7 HERE WE COME.
I am honored that you think so much of my opinion that you would be interested in what I have to say on the matter. Shareholders have a voice. Great News. It will not change the inevitable, but it will make us all feel better about getting screwed. Chapter 7 here we come.
Sleep,
Fact is the mill did not work as anticipated. They tried to dial it in for 9 maybe 10 months, and were unable to do so. Do you really think they didn't try processing every variation of ore they had on site within that period of time. As the saying goes, if it quacks like a duck, then.... This Mill is quacking. I am sure if it were going to work then the contractors brought in to fix it would have fixed it, but they didn't. The mill was not economical, and I am not sure it ever can be. The senior creditors feel the same way. I cant see any judge allowing this thing to continue with the large possibility of increasing damages to more investors. I just don't see it. Chapter 7 here we come.
Total waste of time. This will end up in Chapter 7. The mill hasnt worked, and the case is being made that dumping more money will not change anything. senior secured creditors and IRS will get theirs, and that is all. Only issue to resolve is with PN, and senior guys are already talking settlement with them. Watch.
The mill has not proven it can process any type of ore efficiently. There is no track record that says otherwise. I say prove it. To date, it has all been talk. To make a statement that the mill can process silver, gold, and copper from a different type of ore consistently and efficiently is just plain nonsense. They have not done it yet. If they have we are all being scammed. Until they do, I am not convinced they ever will. IMO, this will go Chapter 7. Regardless of the IRS situation, the senior secured guys will get theirs. We will all be left holding the bag, and that is just the way it is. Sucks to lose money, but it is time to get a grip. GTLA to all of you dreamers out there. Reality will set in eventually. To me the fat lady has already exited stage right. I was not wrong before, I am not wrong now. Wait and see.
Chapter 7 coming soon. Watch.
Pretty funny you would say that Ken. You gave Mr. Dotson a pass for months and months when it was clear he was driving this company straight to BK. Maybe you should practice what you preach???
You won't be.
I have no idea what that even means. I have nothing to do with PN/NS. As usual you are way, way off base. Same story different day. My hell, cant you get anything right.
Sleep,
Will this good news be similar to the good news you so frequently talked about in the days leading up to BK? See below sleep. As far as I am concerned you have zero credibility. Everyone just read Sleeps past posts and you will know what he is about. pay special attention to the sticky note where Sleep claimed to receive an email from MS literally 3 days before the BK was filed. Also see below. "BK and failure are not words that are spoken by Charles; Marcus and Mark"---Do you really still believe this Sleep? As important, did you ever believe this? I doubt it.
Posted by: sleep Member Level Date: Sunday, May 16, 2010 8:06:42 PM
In reply to: RS500 who wrote msg# 64248 Post # of 66340 Send
RS...that statement that you just posted about CPRK not making it to the end of the month is False and Misleading and has No basis in truth. The only talk of the company failing takes place here on this board...in reality, many good and positive things are happening with the company...the future is not without hurdles and challenges but BK and failure are not words that are spoken by Charles; Marcus and Mark.
Candy,
This is a perfect example of what I was talking about:
Posted by: Panson Date: Friday, April 09, 2010 1:31:30 PM
In reply to: Candy B who wrote msg# 62307 Post # of 66364
Candy, Thanks you. That was the post I was waiting to hear from you. Your words "I am Long & Strong" is like music in my ears. I have been patient for a year now and if necessary for real success, I can be patient until Marcus says we are ready to rock. I admire the guy and what he is doing.
Looking forward to June
Candy,
Did you ever feel even a tinge of guilt when you would post on this board knowing full well that your lease payments were either late or not paid at all. Looking through your posts I could not find mention of it. All of these poor people on this board talking about getting shares at such a cheap price, and no mention of a missed lease payment. Frankly, you have too much insider info to be posting here anyway. Too much liability. I bet if you had consulted an attorney he would have told you the same thing. If I were you I would just fade away. Good luck with the big dreams Candy.
Candy B,
What exactly do you have faith in? JB, MS, MD, CAM, the minerals ---LMFAO. Faith in what!?!?!?! I have never seen you as a pumper, and frankly the issue is not with you. I am glad you have faith, but like you I am going no where. Unlike many on this board, I have nothing to hide from. The garbage that some have spewed on this board is despicable. Good folks bought in and lost money because of it. So, honestly, I also don't care what your feelings are in relation to my posts.
Farmboynate,
Looks like you were pretty far off. Do still feel like CPRK is "going to go to da moon".
Posted by: Farmboynate Member Level Date: Monday, February 08, 2010 5:28:24 PM
In reply to: Regulator78 who wrote msg# 54013 Post # of 66342 Send a link via email Share on Facebook Tweet this post
you have been harping on this bk thing for months and months and months and months it still hasn't happened cprk is still there !
Johnny,
Did you know the lights were off at CPRK, and gates locked for two weeks prior to BK. This was not sudden, it was planned.
Johnny,
In a deposition taken from Mark David Dotson, Mr. Dotson admitted that CPRK had consulted BK attorney's as far back as September of last year. You may conjecture how you like, but to me, consulting BK attorneys means CPRK was considering and even planning for BK. I am not much of a conspiracy theorist, but I have dealt with these same people for years. I know them, and have found them to be selfish at the very least, and at most, have terrible intentions. Maybe it falls somewhere in between, but either way, this is not as innocent as you would like to convince yourself to believe. Bottom line, shareholders have been burned here. I hope those responsible are held accountable. Johnny, please quit giving these guys the benefit of the doubt. That strategy has not worked to date. Being passive and non-confrontational will allow these jokers to lead you shareholders quietly to slaughter. I promise that is what they are trying to do.
That makes two of us. I would have sold mine had I been able to. I was never able to get them online. What a joke. Crazy thing is how many of you on this board were in MGMTs camp for so long depsite obvious red flags. This whole thing has been a joke like many of the posters on this board.
From MS to sleep---"I feel strengthened in my role here at Copper King. Your prayers do make a difference. I am trying to do my very best in representing the company and the best interests of the shareholders. We have some challenging and difficult times ahead but from my perspective, we will emerge strong and successful. Keep your head up, I do!"
Just days before BK---WOW.
Sleep I know you believe, "everyone can be a winner here", but in the real world things just do not work that way. CPRK managment is out to get the shareholders period. You can lay down, or try to protect what is yours. Fear of legal recourse will motivate people like Southworth to do the right thing. JMHO.
Sleep,
Now did you have 56,000,000 or 54,000,000 shares? I can't remember what you said. Are you the infamous Mr. Lee? One of your posts said you had 56 million. If you are Mr. Lee good for you. I am glad to see someone standing up for their position.
This will end up in Chapter 7 despite MGMTs best efforts. That is what the secured guys want, and I bet they get it.
Private money is not subject to usary in Utah. That is a fact. There have been some pretty creative defenses put together to dispute "higher then normal interst rate" private money loans, but no actual solid law to back it up. CPRK's favorite defense is/was coercion, as if anyone put a gun to there head and made them borrow money--LOL. In addition, after they claimed lenders took advantage of them they continued to borrow money at the same so called "higher then normal rate". So that makes a lot of sense. Bottom line, Dotson borrowerd money with no intent to abide by the terms under which the money was lent. That my friends is dishonest. BTW, did I mention that CPRK actually approached us with terms. Let me restate, they made an offer, and we accepted that offer and incorporated their terms into our note. Then they cried coercion as an excuse not to pay up. Look up the definition of that word. What a joke.
Take it easy Richard. Focus the anger on those that deserve it. The creditors were used and abused by CPRK for years. Dotson and gang are to blame here, not the creditors, but I think you already knew that. GLTY Richard. Not that luck will help.
Yeah, I figured so, but it is hard to tell on here sometimes. Hope you are well Richard.
Sleep,
If any of these shareholders have a case to make against Southworth and Dotson it is you. I hope you go after these guys. Southworth, Dotson and the gang were talking BK long before you purchased your shares with Southworth's assistance. I bet he did not disclose that to you. I hope CPRKSA is not the only remedy you are looking at here. If I were you, I would be suing these yahoos individually. I doubt I have to tell you that though.
Richard,
I think it will be hard to find an attorney that would take stock as payment, but CPRKSA could ask for everyone to pitch in and put up a small retainer for everyone that wanted to participate. Maybe set the bar at 3-5K. That could give you the juice you are looking for. I have seen it done before.
Sleep. What are you doing about it other then posting here?
Ken,
As perhaps one of MD's biggest defenders over the last year, you are more then welcome to share any thoughts you now have on the man. In fact, I would enjoy hearing them.
I am with you JIT. Off with their heads!!!!!--- far as I am concerned(legally speaking of course). I hope those that did wrong are held accountable to full extent possible.
Thunder, down south there are almost no public lands. Almost everything is private. I have never dealt with public properties, only private land owners and indian reservations. So I guess I don't know what you are getting at. IMO, it is all about how the lease was written. Plus, there is always a loop hole that those that have will exploit against those that don't. It is a shame, but I have seen it over and over again. I hope candy does not get taken advantage of.