Contract
EXHIBIT
10.12
NEITHER
THIS CONVERTIBLE NOTE NOR THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION (TOGETHER, THE “SECURITIES
LAWS”) AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR
ENCUMBERED IN THE ABSENCE OF COMPLIANCE WITH SUCH SECURITIES LAWS AND UNTIL
THE
ISSUER THEREOF SHALL HAVE RECEIVED AN OPINION FROM COUNSEL ACCEPTABLE TO IT
THAT
THE PROPOSED DISPOSITION WILL NOT VIOLATE ANY APPLICABLE SECURITIES LAWS.
TRANSFER OF THIS CONVERTIBLE NOTE IS ALSO RESTRICTED BY THE CONVERTIBLE NOTES
PURCHASE AGREEMENT REFERRED TO HEREIN.
THE
PAYMENT AND PERFORMANCE OF THIS CONVERTIBLE NOTE IS SUBJECT TO THE TERMS AND
CONDITIONS OF THAT CERTAIN CONVERTIBLE NOTES PURCHASE AGREEMENT ENTERED INTO
AS
OF APRIL 10, 2007, AS AMENDED BY THAT CERTAIN AMENDMENT TO CONVERTIBLE NOTES
PURCHASE AGREEMENT DATED JUNE 19, 2007 AND THAT CERTAIN AMENDMENT NO. 2 DATED
NOVEMBER 10, 2008, BY THE HOLDER AND ISSUER.
CERTIFICATE
NO: 1
AMENDED
AND RESTATED PROMISSORY NOTE
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$9,800,000.00
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November
10, 2008
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FOR
VALUE RECEIVED,
Wits
Basin Precious Minerals Inc., a corporation organized and existing under the
laws of the State of Minnesota (“Issuer”),
hereby unconditionally promises to pay to the order of China Gold LLC, a Kansas
limited liability company, or its successors and assigns (the “Holder”)
on
demand at any time on or after December 31, 2008, subject to modification as
set
forth below (the “Maturity
Date”),
the
principal sum of up to Nine Million Eight Hundred Thousand Dollars and 00/100
Cents ($9,800,000.00) (the “Principal”),
together with accrued and unpaid interest thereon, as provided herein and from
the Prior Notes below until fully paid (the “Indebtedness”),
all
without relief from valuation or appraisement laws.
This
Amended and Restated Promissory Note (the “Note”)
is
issued pursuant to that certain Convertible Notes Purchase Agreement dated
as of
April 10, 2007, as previously amended by that certain Amendment to Convertible
Notes Purchase Agreement dated June 19, 2007, and as further amended on the
date
hereof (as amended, modified, or replace from time to time, the “Notes
Purchase Agreement”).
The
Issuer and Holder hereby amend and consolidate into this Amended and Restated
Promissory Note the following notes issued pursuant to the Notes Purchase
Agreement: (i) Convertible Promissory Note issued on April 10, 2007 in the
principal amount of $3,000,000; (ii) Convertible Promissory Note issued on
May
7, 2007 in the principal amount of $2,000,000; (iii) Convertible Promissory
Note
issued on June 19, 2007 in the principal amount of $4,000,000; and (iv)
Convertible Promissory Note issued on July 9, 2007 in the principal amount
of
$800,000 (collectively, the “Prior
Notes”).
Holder has delivered the Prior Notes to Issuer and they have been cancelled
in
their entirety.
1. Payment
of Principal and Interest.
Subject
to acceleration or earlier payment as provided for elsewhere in this Note,
the
Notes Purchase Agreement or any of the other agreements, documents, and
instruments relating to any of the Indebtedness or any security therefor that
are required by the Notes Purchase Agreement to be executed and delivered to
or
for the benefit of Holder (collectively, together with this Note and the Notes
Purchase Agreement, the “Investment
Documents”),
the
principal balance of this Note, and any accrued and unpaid interest thereon,
shall be due and payable at the earlier of (i) Holder’s demand on or after the
Maturity Date or (ii) to the extent funds are available, upon the closing of
Issuer’s joint venture with London Mining plc relating to China Global Mining
Resources Limited, a British Virgin Islands corporation (“CGMR”),
or an
affiliate thereof, and the related acquisition by CGMR, or an affiliate thereof,
of one or more iron ore mining properties in the People’s Republic of China.
Issuer
shall make all payments payable in cash under this Note in lawful money of
the
United States. All payments paid by Issuer to Holder under this Note and under
the other Investment Documents shall be applied in the following order of
priority: (a) to amounts, other than principal and interest, due to Holder
pursuant to this Note for all costs of collection of any kind, including
reasonable attorneys’ fees and expenses; (b) to accrued but unpaid interest on
this Note; and (c) to the unpaid principal balance of this Note. If Issuer
makes
any payment of principal, interest or other amounts upon the Indebtedness by
check, draft, or other remittance, Holder shall not be deemed to have received
such payment until Holder actually receives the payment instrument.
2. Calculation
of Interest.
Interest shall accrue on the outstanding principal balance at the end of each
day on which any amount is outstanding under this Note at the rate of 12.25%
(the “Interest
Rate”)
per
annum. Interest shall be calculated on a basis of the actual number of days
elapsed over a year of 365 days, commencing as of the date hereof.
3. Prepayment.
This
Note may be prepaid in cash or other immediately available funds, in whole
or in
part, by Issuer at any time and from time to time, without premium or penalty
(a
“Prepayment”).
4. Waiver.
Payment
of principal and interest due under this Note shall be made without presentment
or demand. The Issuer and all others at any time liable directly or indirectly
(including, without limitation, the Issuer, any co-makers, endorsers, sureties
and guarantors, all of which are referred to herein as “Parties”),
severally waive presentment, demand and protest, notice of protest, demand,
and
dishonor, and nonpayment of this Note, and all diligence in collection and
agree
to pay all costs of collection when incurred, including reasonable attorneys’
fees, and to perform and comply with each of the covenants, conditions,
provisions, and agreements of the Issuer contained in every instrument now
evidencing the Indebtedness. No release by Holder of any security for payment
of
the Indebtedness or any modification or restructuring in respect of any lien
or
security interest held or at any time obtained or acquired by Holder for payment
of such Indebtedness shall operate to release, discharge, impair or alter the
liability of any Party liable at any time directly or indirectly for payment
of
such Indebtedness.
5. Renewal
and Modification.
Issuer
further agrees that the Indebtedness may be from time to time, extended,
renewed, modified, rearranged, or evidenced by one or more other notes or
obligations in substitution for this Note and upon and for such term or terms
agreed to by Issuer and Holder in writing, and with or without notice to other
Parties. Issuer agrees that upon and after such extension, renewal,
modification, rearrangement, substitution, or other change in form of the
Indebtedness, each of the other Parties shall remain liable in respect of the
Indebtedness so renewed, extended, modified, rearranged, or otherwise evidenced
in the same capacity and to the same extent as prior thereto. No release or
discharge (in whole or in part) of any Party hereto by Holder shall in any
manner impair, release, discharge, or alter the liability of any other
Party.
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6. Events
of Default.
Any one
or more of the following events shall constitute an event of default (each,
an
“Event
of Default”)
under
this Note: (a) Issuer fails to timely pay as and when due any monetary
obligation under this Note in accordance with the terms hereof; (b) Issuer’s
assignment for the benefit of creditors, or filing of a petition in bankruptcy
or for reorganization or to effect a plan or arrangement with creditors; (c)
Issuer’s application for, or voluntary permission of, the appointment of a
receiver of trustee for any or all Company property; (d) any action or
proceeding described in the foregoing paragraphs (b) or (c) is commenced against
Issuer and such action or proceeding is not vacated within sixty (60) days
of
its commencement; (e) Issuer’s dissolution or liquidation; and (f) an event of
default under any other Investment Document shall have occurred.
7. Rights
and Remedies.
Upon
the occurrence, and during the continuation, of an Event of Default (a) all
Indebtedness and all other amounts due and owing under this Note shall (at
the
option of Holder) immediately become due and payable without demand and without
notice to Issuer, (b) Holder shall have all rights, powers and remedies set
forth in the Investment Documents, as well as any and all rights and remedies
available to it under any applicable law or as otherwise provided at law or
in
equity; and (c) Issuer shall pay to Holder, in addition to the sums stated
above, the costs of collection, regardless of whether litigation is commenced,
including reasonable attorneys’ fees.
Holder
may employ an attorney to enforce its rights and remedies hereunder and Issuer
hereby agrees to pay Holder’s reasonable attorneys’ fees and other reasonable
expenses, including reasonable expenses relating to any assistance provided
by
Holder to Issuer in resolving such defaults and amounts incurred by Holder
in
exercising any of Holder’s rights and remedies upon an Event of Default.
Holder’s rights and remedies under this Note and the other Investment Documents
shall be cumulative. Holder shall have all other rights and remedies not
inconsistent herewith as provided under the Uniform Commercial Code as in effect
in the State of Kansas, or otherwise by law, or in equity. No exercise by Holder
of one right or remedy shall be deemed an election, and no waiver by Holder
of
any Event of Default shall be deemed a continuing waiver. No delay by Holder
shall constitute a waiver, election, or acquiescence by it.
8. Revival
and Reinstatement of Note.
To the
extent that any payment to Holder or any payment or proceeds of any collateral
received by Holder in reduction of the Indebtedness is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid
to
a trustee, to Issuer (or Issuer’s successor) as a debtor-in-possession, or to a
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then the portion of the Indebtedness intended
to
have been satisfied by such payment or proceeds shall remain due and payable
hereunder, be evidenced by this Note, and shall continue in full force and
effect as if such payment or proceeds had never been received by Holder whether
or not this Note has been marked “paid” or otherwise canceled or satisfied or
has been delivered to Issuer, and in such event Issuer shall be immediately
obligated to return the original Note to Holder and any marking of “paid” or
other similar marking shall be of no force and effect.
9. Authority.
Issuer
warrants and represents that the persons or officers who are executing this
Note
and the other Investment Documents on behalf of Issuer have full right, power
and authority to do so, and that this Note and the other Investment Documents
constitute valid and binding documents, enforceable against Issuer in accordance
with their terms, and that no other person, entity, or party is required to
sign, approve, or consent to, this Note.
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10. Governing
Law; Consent to Forum.
This
Note shall be governed by the laws of the State of Kansas without giving effect
to any choice of law rules thereof; provided,
however,
that if
any of the collateral securing the Indebtedness shall be located in any
jurisdiction other than Kansas, the laws of such jurisdiction shall govern
the
method, manner and procedure for foreclosure of Holder’s security interest, lien
or mortgage upon such collateral and the enforcement of Holder’s other remedies
in respect of such collateral to the extent that the laws of such jurisdiction
are different from or inconsistent with the laws of Kansas. AS PART OF THE
CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED, ISSUER HEREBY CONSENTS TO THE
JURISDICTION OF ANY STATE COURT LOCATED WITHIN XXXXXXX COUNTY, KANSAS OR FEDERAL
COURT IN THE DISTRICT OF KANSAS, AND WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
CERTIFIED OR REGISTERED MAIL AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
UPON ACTUAL RECEIPT THEREOF. ISSUER WAIVES ANY OBJECTION TO JURISDICTION AND
VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES NOT
TO
ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE. ISSUER FURTHER AGREES
NOT TO ASSERT AGAINST HOLDER (EXCEPT BY WAY OF A DEFENSE OR COUNTERCLAIM IN
A
PROCEEDING INITIATED BY HOLDER) ANY CLAIM OR OTHER ASSERTION OF LIABILITY WITH
RESPECT TO THIS NOTE, THE OTHER INVESTMENT DOCUMENTS, HOLDER’S CONDUCT OR
OTHERWISE IN ANY JURISDICTION OTHER THAN THE FOREGOING
JURISDICTIONS.
11. WAIVER
OF JURY TRIAL AND COUNTERCLAIMS.
TO THE
FULLEST EXTENT PERMITTED BY LAW, AND AS SEPARATELY BARGAINED-FOR CONSIDERATION
TO HOLDER, ISSUER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY (WHICH HOLDER ALSO
WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR IN ANY COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR OTHERWISE RELATING TO THIS NOTE, THE INDEBTEDNESS, THE
COLLATERAL SECURING THE INDEBTEDNESS, OR THE HOLDER’S CONDUCT IN RESPECT OF ANY
OF THE FOREGOING.
12. Transfer
of Note.
Issuer
shall not transfer any obligations hereunder without Holder’s prior written
consent, which may be withheld in Holder’s sole and absolute discretion. With
the prior written consent of Issuer, which shall not be unreasonably withheld,
conditioned, or delayed, Holder may participate, sell, assign, transfer or
otherwise dispose of all or any portion of its interest in this Note (including
Holder’s rights, title, interests, remedies, powers and duties hereunder) to a
purchaser, participant, any syndicate, or any other Person (each, a
“Note
Purchaser”).
In
connection with any such disposition (and thereafter), Holder may, with adequate
safeguards of confidentiality in a manner satisfactory to Issuer, disclose
any
financial information Holder may have concerning Issuer to any such Note
Purchaser or potential Note Purchaser.
13. Further
Assurances.
Issuer
agrees to execute and deliver such further documents and to do such other acts
as Holder may request in order to effect or carry out the terms of this Note
and
the other Investment Documents and the due performance of Issuer’s obligations
hereunder and thereunder.
14. Relationship
to Security Agreement.
This
Note shall be entitled to the benefits of, shall be construed in accordance
with
any Security Agreement securing the Indebtedness.
15. Miscellaneous.
(a) Time
is
of the essence with respect to this Note.
(b) Issuer
hereby waives presentment, demand, protest, and notice of dishonor and protest.
No waiver of any right or remedy of the Holder under this Note shall be valid
unless in a writing executed by the Holder and any such waiver shall be
effective only in the specific instance and for the specific purpose given.
All
rights and remedies of the Holder of this Note shall be cumulative and may
be
exercised singly, concurrently, or successively.
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(c) Unless
otherwise provided herein, any notice required or permitted to be given
hereunder shall be given by Issuer to the Holder or the Holder to the Company
in
accordance with the Notes Purchase Agreement.
(d) Any
provision of this Note that is prohibited or unenforceable in any jurisdiction
shall be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof in that jurisdiction or
affecting the validity or enforceability of such provision in any other
jurisdiction.
(e) This
Note
and the other Investment Documents collectively: (i) constitute the final
expression of the agreement between Issuer and Holder concerning the
Indebtedness; (ii) contain the entire agreement between Issuer and Holder
respecting the matters set forth herein and in the other Investment Documents;
and (iii) may not be contradicted by evidence of any prior or contemporaneous
oral agreements or understandings between Issuer and Holder. Neither this Note
nor any of the terms hereof may be terminated, amended, supplemented, waived
or
modified orally, but only by an instrument in writing executed by the party
against which enforcement of the termination, amendment, supplement, waiver
or
modification is sought.
(f) If
there
is a conflict between or among the terms, covenants, conditions or provisions
of
this Note and the other Investment Documents, then any term, covenant, condition
and/or provision that Holder may elect to enforce from time to time so as to
enlarge the interest of Holder in its security for the Indebtedness, afford
Holder the maximum financial benefits or security for the Indebtedness, and/or
provide Holder the maximum assurance of payment of the Indebtedness and the
Indebtedness in full, shall control. ISSUER ACKNOWLEDGES AND AGREES THAT IT
HAS
BEEN PROVIDED WITH SUFFICIENT AND NECESSARY TIME AND OPPORTUNITY TO REVIEW
THE
TERMS OF THIS NOTE AND EACH OF THE INVESTMENT DOCUMENTS WITH ANY AND ALL COUNSEL
IT DEEMS APPROPRIATE, AND THAT NO INFERENCE IN FAVOR OF, OR AGAINST, HOLDER
OR
ISSUER SHALL BE DRAWN FROM THE FACT THAT EITHER SUCH PARTY HAS DRAFTED ANY
PORTION OF THIS NOTE OR ANY OF THE INVESTMENT DOCUMENTS.
(g) The
terms
“include”, “including” and similar terms shall be construed as if followed by
the phrase “without being limited to.” The term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” Words of
masculine, feminine or neuter gender shall mean and include the correlative
words of the other genders, and words importing the singular number shall mean
and include the plural number, and vice versa. All article, section, schedule,
and exhibit captions are used for convenient reference only and in no way
define, limit or describe the scope or intent of, or in any way affect, any
such
article, section, schedule, or exhibit. Unless the context of this Note clearly
requires otherwise, references to the plural include the singular, references
to
the singular include the plural. Any reference in this Note or in the Investment
Documents to this Note or to any of the Investment Documents shall include
all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, and supplements thereto and thereof, as applicable.
An Event of Default shall “continue” or be “continuing” until such Event of
Default has been waived in writing by Holder or completely cured in accordance
with the terms of the applicable Investment Documents.
[The
remainder of this page is intentionally blank. Signature page
follows.]
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IN
WITNESS WHEREOF,
Issuer
has executed and delivered this Note as of the date first stated
above.
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ISSUER:
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By:
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/s/
Xxxx X Xxxxx
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Name:
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Xxxx
X. Xxxxx
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Title:
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Chief
Financial Officer
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