Dated 17 March 2009
EXHIBIT
10.3
Dated 17
March 2009
(1) LONDON
MINING PLC
WITS
BASIN LOAN AGREEMENT
THIS AGREEMENT IS MADE
ON 17 March
2009
BETWEEN:-
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(1)
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LONDON MINING PLC a
company incorporated in England and Wales with registered number 5424040
whose registered office is at 00 Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX (the
"Lender");
and
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(2)
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WITS BASIN PRECIOUS MINERALS
INC. a company incorporated in the State of Minnesota, United
States with registered number 00-0000000 whose registered office is at 00
Xxxxx 0xx
Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000 ("Wits
Basin") (the "Borrower").
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WHEREAS:-
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(A)
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Under
the Subscription Agreement the Lender agrees to advance to the Borrower
the sum of US$5,750,000 by way of loan to fund the repayment of the China
Gold Debt and the payment of the WB
Expenses.
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(B)
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This
Agreement sets out the terms on which the Loan is
made.
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NOW IT IS
AGREED AS FOLLOWS:
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1.
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DEFINITIONS
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In
this Agreement, the following words and phrases have the following
meanings:
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Business
Day
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means
any day other than a Saturday or Sunday, on which clearing banks are open
for business in the City of London, the United States, the British Virgin
Islands and the People's Republic of China.
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CGMR
BVI
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means
China Global Mining Resources (BVI) Limited with company number 1513743
duly incorporated under the laws of the British Virgin Islands whose
registered office is 56, Administration Drive, P.O. Box 3190, Road Town,
British Virgin Islands.
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China
Gold
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means
China Gold, LLC, a limited liability company organised under the laws of
the State of Kansas in the United States.
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China
Gold Debt
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means
US$5,600,000, being part of the principal and accrued but unpaid interest
outstanding under the Wits Basin Promissory
Note.
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Completion
Date
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means
the date on which the Lender subscribes for shares in CGMR BVI pursuant to
the Subscription Agreement.
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Event
of Default
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has
the meaning ascribed to that expression in clause 7.1.
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Group
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means,
in relation to a company, the company and any parent undertaking of that
company from time to time and all subsidiary undertakings of that company
or any such parent undertaking from time to time (other than, in the case
of CGMR BVI: the Borrower, the Lender and any of their parent undertakings
from time to time, and in the case of the Borrower: other than CGMR BVI
and any of its subsidiaries from time to time, and in the case of the
Lender, other than CGMR BVI and any of its subsidiaries from time to
time).
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Loan
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means
the amount outstanding from time to time under the loan facility of
US$5,750,000 made available by the Lender to the Borrower on the
Completion Date under the terms of this Agreement.
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Long
Stop Date
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31
January 2014.
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Shares
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means
any shares in CGMR BVI held by the Borrower or any other member of the
Borrower's Group at the time of repayment of the Loan in accordance with
this Agreement.
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Subscription
Agreement
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means
the subscription agreement between the Lender and the Borrower dated 12
January 2009 whereby the Lender conditionally agrees to subscribe for
shares in CGMR BVI, as amended, novated or substituted from time to
time.
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Target
Entities
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means
each of Nanjing Sudan Mining Co. Ltd and Maanshan Xiaonanshan Mining Co.
Ltd, and if subsequently acquired by a member of CGMR BVI's Group,
Maanshan Zhao Yuan Mining Co. Ltd.
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WB
Expenses
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means
the outstanding payment obligation of the Borrower of US$150,000 owing to
Xxxxxx Xxxxxxx Xxxxxx & Brand,
LLP.
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Wits
Basin Promissory Note
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means
the Second Amended and Restated Promissory Note in the aggregate principal
amount of US$10,421,000 issued by Wits Basin to China Gold on 22 December
2008 pursuant to the Convertible Notes Purchase Agreement dated 10 April
2007 between China Gold and Wits Basin as amended by the Amendment to
Convertible Notes Purchase Agreement dated 19 June 2007, by the Amendment
No. 2 to Convertible Notes Purchase Agreement dated 10 November 2008, by
the Amendment No. 3 to Convertible Notes Purchase Agreement dated 22
December 2008 and as amended from time to
time.
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2.
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USE
OF LOAN
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2.1
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The
Lender shall advance the Loan to the Borrower on the date of this
Agreement and the Borrower agrees to use those funds to repay the WB
Expenses and to repay to China Gold the China Gold
Debt.
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2.2
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The
Borrower irrevocably and unconditionally instructs the Lender to advance
on the Completion Date:
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2.2.1
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an
amount equal to WB Expenses direct to Xxxxxx Xxxxxxx Xxxxxx & Brand
LLP; and
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2.2.2
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an
amount equal to China Gold Debt direct to China
Gold,
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and the
parties agree that receipt of the amounts set out in paragraphs 2.2.1 and 2.2.2
above into the respective accounts of Xxxxxx Xxxxxxx Xxxxxx & Brand LLP and
China Gold shall be evidence that the Borrower and Lender have satisfied their
respective obligations under clause 2.1.
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3.
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INTEREST
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3.1
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The
Loan shall carry interest at the rate of two per cent per annum above the
Prime Rate, as reported by the Wall Street Journal from time to time, (the
"Interest Rate"),
subject to a maximum Interest Rate of eight per cent (8%), or at such
other commercial rate of interest as the Borrower and the Lender may agree
from time to time.
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3.2
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Interest
shall accrue from day to day and shall be calculated on the basis of a
year of 365 days and the actual number of days
elapsed.
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3.3
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Interest
shall only be payable in accordance with clause
4.
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3.4
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For
the avoidance of doubt, no interest accruing in respect of the Loan shall
compound on any date.
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4.
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REPAYMENT
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4.1
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The
Borrower shall repay the Loan and any accrued but unpaid interest on the
Loan to the Lender (less any tax which the Borrower is required by law to
deduct or withhold), in the event of a sale by the Borrower or any other
member of the Borrower's Group of any of their Shares, or the granting of
a charge over the Shares to a third party (other than the charge given in
favour of China Gold under the Amended and Restated Share Pledge given by
the Borrower in favour of China Gold dated 22 December 2008 or as
otherwise agreed by the Lender) or if earlier, any of the
following:
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4.1.1
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the
Long Stop Date;
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4.1.2
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the
termination of the Shareholders' Agreement pursuant to clause 18 of the
Shareholders' Agreement;
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4.1.3
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the
making of an order or the passing of an effective resolution for the
winding-up of the Borrower or any member of the Borrower's Group (other
than a solvent winding-up for the purposes of amalgamation or
reconstruction); or
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4.1.4
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as
otherwise agreed by the parties from time to
time.
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4.2
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In
the event of a sale by the Borrower or any other member of the
Borrower's Group of any of their Shares, the Borrower agrees to procure
that a condition to the completion of any such sale will be the repayment
to the Lender of an amount equal to no more than the gross proceeds of
such sale. For the avoidance of doubt, this Agreement will continue to
apply to the extent that any of the principal outstanding under the Loan
and any accrued but unpaid interest on the Loan has not been repaid to the
Lender under this clause 4.2.
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5.
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VOLUNTARY PREPAYMENT
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The
Borrower may at any time prepay without premium or penalty the whole or any part
of the Loan. Any such prepayment shall be accompanied by accrued but unpaid
interest (less any tax which the Borrower is required by law to deduct or
withhold) on the prepaid amount.
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6.
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ASSIGNMENT
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6.1
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This
Agreement shall be binding on and ensure for the benefit of the Lender and
its successors, assigns and
transferees.
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6.2
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The
Borrower shall not be entitled to assign or transfer all or any of its
rights under this Agreement without the prior written consent of the
Lender.
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6.3
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The
Lender shall not be entitled to assign or transfer all or any of its
rights under this Agreement without the prior written consent of the
Borrower, provided that if such assignment or transfer is to another
member of the Lender's Group, such consent shall not unreasonably be
withheld, delayed or conditioned by the
Borrower.
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7.
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DEFAULT
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7.1
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Each
of the events set out below is an Event of
Default:
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7.1.1
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the
Borrower or any relevant member of the Borrower's Group does not pay any
sum due from it under this Agreement at the time and in the manner
provided in this Agreement and such sum remains unpaid for at least 30
days from such time;
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7.1.2
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the
appointment of an administrator or a receiver or a similar official in
respect of the undertaking and all or substantially all of the assets of
the Borrower or any member of the Borrower's
Group;
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7.1.3
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distress
or execution (or other similar process) being levied upon, or enforced
against, all or substantially all of the assets of the Borrower or any
member of the Borrower's Group and not being either disputed or fully paid
out or discharged within ninety days;
or
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7.1.4
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the
Borrower is unable to (or admits its inability to) pay its debts as they
fall due or is (or deemed to be) insolvent under any applicable
law.
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7.2
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If
any Event of Default shall occur, the Lender may, at any time after the
occurrence of such Event of Default, by notice to the Borrower declare the
Loan to be due and payable on such date as it may specify in such
notice.
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7.3
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On
the issue of a notice under clause 7.2, the Loan shall become so due and
payable on the date specified in the notice, together with all accrued but
unpaid interest (less any tax which the Borrower is required by law to
deduct or withhold) then owed by the Borrower under this
Agreement.
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8.
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TAXES
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All
payments by the Borrower under this Agreement shall be made free and clear of
any deduction or withholding of any kind save for any withholding or deduction
of tax which the Borrower is required by law to withhold or deduct.
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9.
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PAYMENTS
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9.1
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All
sums payable by the Borrower under this Agreement shall be paid in US
Dollars without any counterclaim or
setoff.
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9.2
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Any
sum which falls due under this Agreement on a day which is not a Business
Day shall be payable on the next Business
Day.
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10.
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NOTICES
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Form
of Notice
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10.1
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Any
notice, consent, request, demand, approval or other communication to be
given or made under or in connection with this Agreement (each a "Notice"
for the purposes of this clause) shall be in writing and signed by or on
behalf of the person giving it.
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Method
of service
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10.2
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Service
of a Notice must be effected by one of the following
methods:
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10.2.1
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by
hand to the relevant address set out in clause 10.4 and shall be deemed
served upon delivery if delivered during a Business Day, or at the start
of the next Business Day if delivered at any other time;
or
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10.2.2
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by
prepaid first-class post to the relevant address set out in clause 10.4
and shall be deemed served at the start of the second Business Day after
the date of posting; or
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10.2.3
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by
prepaid international airmail to the relevant address set out in clause
10.4 and shall be deemed served at the start of the fourth Business Day
after the date of posting; or
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10.2.4
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by
facsimile transmission to the relevant facsimile number set out in clause
10.4 and shall be deemed served on despatch if despatched during a
Business Day, or at the start of the next Business Day if despatched at
any other time, provided that in each case a receipt indicating complete
transmission of the Notice is obtained by the sender and that a copy of
the Notice is also despatched to the recipient using a method described in
clause 10.2.1 to clause 10.2.3 (inclusive) no later than the end of the
next Business Day.
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10.3
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In
clause 10.2 "during a Business Day" means any time between 9.30 a.m. and
5.30 p.m. on a Business Day based on the local time where the recipient of
the Notice is located. References to "the start of [a] Business
Day" and "the end of [a] Business Day" shall be construed
accordingly.
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Address
for service
10.4 Notices
shall be addressed as follows:
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10.4.1
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Notices
for the Lender shall be marked for the attention
of:
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Name:
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Rohit
Bhoothalingam
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Address:
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00
Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX
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Fax
number:
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x00
(0) 000 000 0000
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10.4.2
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Notices
for the Borrower shall be marked for the attention
of:
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Name:
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Xxxxxxx
Xxxx
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Address:
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Xxxxxxxxxxx,
Xxxxxxxxx
00000-0000
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| 00 Xxxxx 0xx Xxxxxx, Xxxxx 000 |
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Fax
number:
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(US)
0 (000) 000-0000
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Change
of details
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10.5
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A
party may change its address for service provided that it gives the other
party not less than 28 days' prior notice in accordance with this clause
10. Until the end of such notice period, service on either address shall
remain effective.
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11.
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GENERAL
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Entire
Agreement
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11.1
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This
Agreement (together with any documents referred to in this Agreement or
required to be entered into pursuant to this Agreement) contains the
entire agreement and understanding of the parties and supersedes all prior
agreements, understandings or arrangements (both oral and written)
relating to the subject matter of this Agreement and any such
document.
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Counterparts
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11.2
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This
Agreement may be executed in two or more parts or copies and execution by
each of the parties of any one or more of such part or copies will
constitute due execution of this
Agreement.
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No
Partnership or Agency
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11.3
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This
Agreement shall not be construed as creating any partnership or agency
relationship between any of the
parties
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Variation
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11.4
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No
variation of this Agreement shall be effective unless made in writing and
signed by or on behalf of all the parties and expressed to be such a
variation.
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Governing
law
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11.5
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This
Agreement shall be governed by, and construed in accordance with, the laws
of England and Wales.
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11.6
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The
Parties irrevocably submit to the exclusive jurisdiction of the courts of
England and Wales in respect of any claim or matter arising under or in
connection with this Agreement.
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SIGNED
by
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)
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for
and on behalf of
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)
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LONDON
MINING PLC
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)
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/s/ Xxxxxx Xxxxxx
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SIGNED
by
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)
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for
and on behalf of
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)
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WITS
BASIN PRECIOUS
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)
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MINERALS
INC.
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)
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/s/ Xxxxxxx X. Xxxx
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