FIFTH AMENDMENT TO ASSET PURCHASE AGREEMENT
EXHIBIT
10.1
FIFTH
AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS
FIFTH AMENDMENT
to Asset
Purchase Agreement is dated this 9th
day of
June, 2008, by and among Xxxxxx Xxxxx Mining Corporation (“Xxxxxx
Xxxxx”),
a
Minnesota corporation and wholly-owned subsidiary of Wits Basin Precious
Minerals Inc. (“Wits
Basin”),
a
Minnesota corporation (as successor-in-interest to Wits Basin) (the
“Purchaser”),
Central City Consolidated, Corp. d/b/a Central City Consolidated Mining Co.,
a
Colorado corporation, Hunter Gold Mining Inc., a Colorado corporation and Xxxxxx
Xxxxx, a Colorado resident (collectively, the “Sellers”
and
each
individually, a“Seller”),
and
Hunter Gold Mining Corp., a British Columbia corporation (the “Covenantor”)
(the
Purchaser, Sellers and Covenantors are individually or collectively, as the
case
may be, a “Party”
or
“Parties”).
RECITALS: The
Parties entered into an Asset Purchase Agreement dated on or about September
20,
2006, for the sale and purchase of assets, real estate and real estate mining
claims described in such asset purchase agreement, which was amended by that
certain First Amendment to Asset Purchase Agreement dated October 31, 2006,
that
Second Amendment to Asset Purchase Agreement dated as of March 1, 2007, that
Third Amendment to Asset Purchase Agreement dated May 31, 2007 and that Fourth
Amendment to Asset Purchase Agreement dated January 14, 2008 (collectively,
“Purchase
Agreement”);
and
the wish to amend the Purchase Agreement on the terms and conditions hereafter
set forth. Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Purchase Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements set forth below, the Parties agree that the Purchase Agreement shall
be revised as follows:
1. Section
3.2 is hereby deleted and replaced in its entirety with the following language:
Purchase
Price.
In the
event that Purchaser elects to proceed to closing, as and for the purchase
price
of the Purchased Assets, Purchaser agrees to pay and Sellers agree to accept
the
sum of Six Million Seven Hundred Fifty Thousand Canadian Dollars ($6,750,000.00
CDN) plus Three Million Six Hundred Twenty Thousand (3,620,000) unregistered
and
restricted shares of the .01 par value common capital stock of Wits Basin
Precious Minerals Inc., a Minnesota corporation (“Wits
Basin”),
payable as set out in Section 3.3 hereof (the “Purchase
Price”).
2. Section
3.3(b)(ii) subsection (iv) is hereby deleted and replaced in its entirety with
the following language:
(iv)
Three Million Six Hundred Twenty Thousand (3,620,000) shares of the unregistered
and restricted .01 par value common capital stock of Wits Basin.
3. Section
3.3(b)(iv) is hereby deleted and replaced in its entirety with the following
language:
Seller
shall deliver to Purchaser a fully-executed Undertaking Agreement in the form
of
Exhibit
I
attached
hereto and a fully-executed Shareholder Voting Agreement in the form of
Exhibit
J
attached
hereto.
4. Sellers
and Covenantor agree that the operations of the limited personal liability
provisions under the Promissory Note attached hereto as Exhibit “C” shall be
suspended until such time as the Sellers have delivered the certificate of
an
Officer of Hunter Gold Mining Corp. confirming that the covenants set forth
in
the Undertaking Agreement have be performed by the parties thereto.
5. All
references to Exhibits E and F are hereby deleted in their entirety.
6. An
execution copy of Exhibits C, D, I and J to the Purchase Agreement are hereby
attached to this Fifth Amendment and shall replace any previous versions of
such
Exhibits.
7. All
references to “Central City Consolidated Mining Corp.” or “Central City
Consolidated Mining Co.” or “Central City Mining Corp.” are hereby deleted in
their entirety and replaced with “Central City Consolidated, Corp.”
8. The
first
paragraph of the Purchase Agreement is hereby deleted and replaced in its
entirety with the following language:
THIS
ASSET PURCHASE AGREEMENT (this “Agreement”)
is
made and entered into as of this 20th day of September, 2006, by and among
Wits
Basin Precious Minerals Inc., a corporation organized under the laws of the
State of Minnesota (the “Purchaser”),
Central City Consolidated Corp. d/b/a Central City Consolidated Mining Co.,
a
corporation organized under the laws of the State of Colorado, Hunter Gold
Mining Inc., a corporation organized under the laws of the state of Colorado
and
Xxxxxx Xxxxx, a resident of Colorado, (collectively, the “Sellers”
and
each individually as a “Seller”),
and
Hunter Gold Mining Corp., a corporation organized under the laws of the Province
of British Columbia, (the “Covenantor”).
9. The
Parties acknowledge that Hunter Gold Mining Inc., a Colorado corporation, shall
hereby be included in the definition of “Sellers”
and
excluded from the definition of “Covenantors.”
All
references to the term “Covenantors” shall include only Hunter Gold Mining
Corp., a British Columbia corporation. All references to the plural term
“Covenantors” shall be deemed singular, mutatis
mutandis.
10. Section
4.1.1 is hereby deleted in its entirety and replaced with the following
language:
“Central
City Consolidated Corp. and Hunter Gold Mining Inc. are corporations duly
incorporated, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation. Central City Consolidated Corp.
and
Hunter Gold Mining Inc. have the requisite power to own, operate, use and/or
lease the Purchased Assets, as applicable, and to conduct the operations of
the
Purchased Assets as presently being conducted by them and/or by the Covenantor,
including any and all permits required by any public authority for such
operations such as permits, or regulatory authorizations.”
11. Section
5.7 is hereby deleted in its entirety and replaced with the following language:
“Shares
Duly and Validly Issued.
The
3,620,000 shares of .01 par value common capital stock of Wits Basin
constituting a portion of the Purchase Price shall have been duly and validly
issued as fully paid and non-assessable, and in accordance with all applicable
securities laws, as of the Closing Date.”
12. Any
notice or other documents given pursuant to the Purchase Agreement to Hunter
Gold Mining Inc., as Seller, shall be sent to: Hunter Gold Mining Corp., P.O.
Box 2460, Station “R”, Kelowna, British Columbia, Canada V1X 6A5, Attention:
Dell Balfour, Facsimile: (000) 000-0000, with a copy to: Xxxxxx Xxxxxxxx XXX,
0xx Xxxxx, 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0,
Attention: E. Xxxxx Xxxxxxx, Facsimile: (000) 000-0000.
13. Section
8.10 of the Purchase Agreement is deleted in its entirety and replaced with
the
following:
“Purchaser
reserves the right hereunder to assign its right(s) to one or more affiliated
parties prior to closing, it being understood that Purchaser may create one
or
more new entities which may consummate the Contemplated Transactions. In the
event that the Purchaser assigns it right(s) hereunder any such affiliated
party
or parties, then (i) Purchaser shall also make, or shall cause such assignee(s)
to make, in respect of such assignee(s), the representations and warranties
set
forth in sections 5.1 to 5.6 (inclusive) of the Purchase Agreement, (ii)
Purchaser shall cause such assignee(s) to agree to be bound by all of the
Purchaser’s covenants and obligations under the Purchase Agreement except for
those which, by their nature, are intended to be performed solely by the
Purchaser notwithstanding any assignment of the Purchaser’s rights under the
Purchase Agreement, (iii) both the Purchaser and each such assignee shall
deliver a certificate of an officer thereof for the purposes of section 9.1
of
the Purchase Agreement, and (iv) the opinions set forth in the Purchaser
Counsel’s Legal Opinion (as defined in section 9.4 hereof) shall extend, to the
extent applicable, to both the Purchaser and its assignee(s).”
14. To
each
of the Sellers and the Covenantor, Xxxxxx Xxxxx hereby makes the representations
and warranties set forth in sections 5.1 to 5.6 (inclusive) of the Purchase
Agreement as though the term “Purchaser” set forth therein refers to Xxxxxx
Xxxxx and with the exception that the representation set forth in section 5.5
of
the Purchase Agreement shall be deemed to include the words “Except for the
consent of “Wits Basin,” at the beginning of such section. Xxxxxx Xxxxx further
agrees to be bound by all of the covenants and obligations of the Purchaser
except for those covenants and obligations which, by their nature, are intended
to be performed by Wits Basin notwithstanding the assignment of Wits Basin’s
rights under the Purchase Agreement to Xxxxxx Xxxxx.
15. Wits
Basin hereby confirms that it has consented to the consummation by Xxxxxx Xxxxx
of the “Contemplated Transactions” (as defined in the Purchase Agreement) and to
its execution of any documents incidental thereto.
16. The
parties hereto agree that in the event the tax advisors to Hunter Gold Mining
Inc. and Hunter Gold Mining Corp. identify and recommend an alternate structure
for the delivery of the Purchase Price including, but not limited to, the
distribution and documentation of the Purchase Price in the name of one or
more
alternate parties, and/or recommend an alteration to the content of the
Allocation Schedule, then each of the parties hereto agrees to take all
reasonable steps to record and effect the necessary changes to the Purchase
Agreement and the documents ancillary thereto to implement such recommendation;
provided, however, that Sellers and Covenantor shall reimburse Purchaser for
all
reasonable expenses incurred in the course of effecting such change.
Notwithstanding the foregoing, Purchaser shall not be obligated to participate
in effecting the aforementioned changes if, in the reasonable opinion of legal
counsel to the Purchaser, there is a reasonable risk of adverse tax, accounting
or securities law consequences to the Purchaser in connection with the
implementation of such changes. The parties further agree that any references
to
a deemed value for the 3,620,000 shares of common capital stock of Wits Basin,
which comprise a portion of the Purchase Price under the Purchase Agreement,
contained in the Purchase Agreement or in any of the transaction documents
ancillary to the Purchase Agreement shall not be binding on the parties thereto
in conjunction with any valuation of the Purchase Price for taxation purposes
and the Sellers and Covenantor shall be at liberty to employ any reasonable
method of valuation that is recommended by the tax advisors to Hunter Gold
Mining Inc. and Hunter Gold Mining Corp.
17. Clause
12.4(e) of the Purchase Agreement is hereby added with the following
language:
“(e)
any
costs not otherwise falling within the scope of subsections 12.4(a) - (e),
inclusive, which are reasonably incurred by or on behalf of the Beneficiary
(as
defined in the Deed of Trust), following enforcement by the Beneficiary of
its
remedies under the Deed of Trust, in effecting the remediation and/or
rehabilitation of the Acquired Real Property in respect of any activities of
the
Purchaser (or its related party successors) thereon where such activities (i)
contravene any Environmental Law (regardless of whether such contravention
is
enforced against the Purchaser or its successors) and (ii) take place after
January 15, 2005 and prior to the earlier of (a) time of repossession of the
Acquired Real Property by the Beneficiary or (b) transfer of the Acquired Real
Property to a third party unrelated to the Purchaser; provided, however, that
the maximum amount of the Purchaser's liability under this subsection 12.4(e)
shall be $4,750,000 CDN.”
18. The
Allocation Schedule set forth in Section 3.8 is hereby deleted in its entirety
and replaced with the allocation schedule attached hereto as Exhibit
K.
19. The
Parties agree that the following amounts, when advanced by the Purchasers on
behalf of the Sellers and/or the Covenantors, shall be credited against the
amount due under the Promissory Note attached hereto and to the Purchase
Agreement as Exhibit “C”, and Sellers shall deliver a receipt to the Purchasers
upon payment by the Purchasers of such amounts:
|
(i)
|
$15,000.00
to Xxxxxx Xxxxxxxx LLP in respect of past legal fees of the Covenantor
(paid),
|
|
(ii)
|
$5,000.00
to Xxxx Xxxx Xxxx Xxxxxxxxxx and Xxxxxxxxx, PC in respect of the
closing
legal costs of Hunter Gold Mining Inc.
(paid),
|
|
(iii)
|
$7,500.00
to Xxxxxx Xxxxxxxx LLP for the closing legal costs of the Covenantor
(pending),
|
|
(iv)
|
$3,467.16
to First American Heritage Title Company for the Sellers’ closing costs as
per the Sellers Closing Statement
(pending),
|
|
(v)
|
$1,376.60
for the Sellers’ 2008 personal property taxes
(pending)
|
for
a
total of $32,343.76.
20. At
the
end of the first sentence of Article 2 of the Purchase Agreement, the words
“(Assumed
Liabilities”)”
is
hereby added.
21. All
references to “Purchaser Losses” in Sections 6.4(d) and (e) of the Purchase
Agreement are hereby replaced with “Purchaser Environmental Losses.”
22. The
term
“Purchaser Losses” in Section 12.1 of the Purchase Agreement is hereby replaced
with the following language:
“loss,
liability, expense (including without limitation reasonable expenses of
investigation and reasonable attorneys’ fees and expenses in connection with any
action, suit or proceeding brought against the Purchaser (or its related party
successors)) or Damages suffered or incurred by the Purchaser (or its related
party successors) (the “Purchaser
Losses”)”
23. Except
as
provided for above, all the terms and conditions of the Purchase Agreement
shall
remain in full force and effect. This Fifth Amendment may be executed in
counterparts. A facsimile signature shall be deemed an original.
Signature
Page Follows
IN
WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to be
duly
executed and delivered, all on and as of the date first written
above.
|
XXXXXX
XXXXX MINING CORPORATION
a
Minnesota corporation
By:
/s/
Xxxx X. Xxxxx
Its:
CFO
|
|
|
CENTRAL
CITY CONSOLIDATED, CORP.
a
Colorado corporation
By:/s/
Xxxxxx X. Xxxxx
Its:
President
|
XXXXXX
XXXXX, a resident of Colorado
/s/
Xxxxxx X. Xxxxx
|
|
HUNTER
GOLD MINING CORP.
a
British Columbia corporation
By:
/s/
Xxxxxx X. Xxxxx
Its:President
|
HUNTER
GOLD MINING INC.
a
Colorado corporation
By:
/s/
Xxxxxx X. Xxxxx
Its:
President
|
The
foregoing is consented to by and joined solely with respect to Section 5.7
of
the Purchase Agreement, as amended by this Fifth Amendment:
a
Minnesota corporation
By:
/s/
Xxxx X. Xxxxx
Its:
CFO
