GUARANTY AGREEMENT
Exhibit
10.4
THIS
GUARANTY (the “Guaranty”),
made
as of this 10th day of April, 2007 by the undersigned for the benefit of China
Gold, LLC, a Kansas limited liability company (herein, with its participants,
successors and assigns, called “Purchaser”).
For
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to induce Purchaser to extend financial accommodations to
Wits
Basin Precious Minerals Inc., a Minnesota corporation and parent corporation
of
the undersigned (herein called “Issuer”)
pursuant to those certain Convertible Secured Promissory Notes of Issuer in
favor of Purchaser, in an aggregate amount of up to $25,000,000 (the
“Notes”),
issued pursuant to that certain Convertible Notes Purchase Agreement dated
of
even date herewith between Issuer and Purchaser (the “Purchase
Agreement”),
the
undersigned hereby guarantees and agrees as follows:
The
undersigned hereby absolutely and unconditionally guarantees to Purchaser the
due and punctual payment of principal, interest and liabilities when due under
the Notes (and all renewals, extensions, modifications and rearrangements
thereof) (the “Indebtedness”),
whenever the Indebtedness becomes due, (whether at a stated maturity or earlier
by reason of acceleration or otherwise), and the undersigned represents,
warrants and agrees that:
1. No
act or
thing need occur to establish the liability of the undersigned hereunder, and
no
act or thing, except full payment and discharge and completion of all
Indebtedness, shall in any way exonerate the undersigned or modify, reduce,
limit or release the liability of the undersigned hereunder. This is an
absolute, unconditional and continuing guaranty of payment and fulfillment
of
the Indebtedness and shall continue to be in force and be binding upon the
undersigned until all Indebtedness is paid in full and otherwise completed.
Any
adjudication of bankruptcy or death or disability or incapacity of the
undersigned shall not revoke this guaranty, except upon actual receipt of
written notice thereof by Purchaser and then only prospectively, as to future
transactions, as herein set forth.
2. If
the
undersigned shall be or become insolvent or shall initiate or have initiated
against the undersigned any act, process or proceeding under the United States
Bankruptcy Code or any other bankruptcy, insolvency or reorganization law or
otherwise for the modification or adjustment of the rights of creditors, then
the undersigned will forthwith pay to Purchaser, the full amount of all
Indebtedness then outstanding, whether or not any Indebtedness is then due
and
payable.
3. Until
all
of the Indebtedness and the obligations of the undersigned hereunder have been
paid in full and otherwise completed, the undersigned shall not have and waives
any right or subrogation to any of the rights of Purchaser against Issuer,
any
other guarantor, maker or endorser, and waives its rights to any reimbursement,
contribution, recourse and indemnity therefrom; waives any right to enforce
any
remedy which Purchaser now has or may hereafter have against Issuer, and any
other guarantor, maker or endorser; and waives any benefit of, and any other
right to participate in, any collateral security for the Indebtedness or any
guaranty of the Indebtedness now or hereafter held by Purchaser.
4. If
any
payment received and applied by Purchaser to Indebtedness is thereafter set
aside, recovered or required to be returned for any reason (including, without
limitation, the bankruptcy, insolvency or reorganization of Issuer or such
other
person), the Indebtedness to which such payment was applied shall, for the
purposes of this Guaranty, be deemed to have continued in existence,
notwithstanding such application, and this Guaranty shall be enforceable as
to
such Indebtedness as fully as if such application had not been
made.
5. The
liability of the undersigned shall not be affected or impaired by any of the
following acts or things (which Purchaser is expressly authorized to do, omit
or
suffer from time to time, both before and after revocation of this Guaranty,
without consent or approval by or notice to the undersigned): (i) any acceptance
of collateral security, guarantors, accommodation parties or sureties for any
or
all Indebtedness; (ii) one or more extensions or renewals of Indebtedness
(whether or not for longer than the original period) or any modification of
the
interest rates, maturities or other contractual terms applicable to any
Indebtedness; (iii) any waiver or indulgence granted to Issuer, any delay or
lack of diligence in the enforcement of Indebtedness, or any failure to
institute proceedings, file a claim, give any required notices or otherwise
protect any Indebtedness; (iv) any full or partial release of, compromise or
settlement with, or agreement not to xxx Issuer or any other guarantor or other
person liable in respect of any Indebtedness; (v) any release, surrender,
cancellation or other discharge of any evidence of Indebtedness or the
acceptance of any instrument in renewal or substitution therefor; (vi) any
failure to obtain collateral security (including rights of setoff) for
Indebtedness, or to see to the proper or sufficient creation and perfection
thereof, or to establish the priority thereof, or to preserve, protect, insure,
care for, exercise or enforce any collateral security; or any modification,
alteration, substitution, exchange, surrender, cancellation, termination,
release or other change, impairment, limitation, loss or discharge of any
collateral security; (vii) any collection, sale, lease or other disposition
of,
or any other foreclosure or enforcement of or realization on, any collateral
security; (viii) any assignment, pledge or other transfer of any Indebtedness
or
any evidence thereof; (ix) any manner, order or method of application of any
payments or credits upon Indebtedness. The undersigned waives any and all
defenses and discharges available to a surety, guarantor, or accommodation
co-obligor, dependent on its character as such.
6. The
undersigned waives any and all defenses, claims, setoffs, and discharges of
Issuer, or any other obligor, pertaining to Indebtedness, except the defense
of
discharge by payment in full and complete fulfillment of all obligations.
Without limiting the generality of the foregoing, the undersigned will not
assert against Purchaser any defense of waiver, release, discharge in
bankruptcy, statute of limitations, res judicata, statute of frauds,
anti-deficiency statute, fraud, incapacity, minority, usury, illegality or
unenforceability which may be available to Issuer or any other person liable
in
respect of any Indebtedness, or any setoff available against Purchaser to Issuer
or any such other person, whether or not on account of a related transaction,
and the undersigned expressly agrees that the undersigned shall be and remain
liable for any deficiency remaining after foreclosure of any mortgage or
security interest securing Indebtedness, whether or not the liability of Issuer
or any other obligor for such deficiency is discharged pursuant to statute
or
judicial decision. The undersigned will not assert against Purchaser any claim,
defense or setoff available to the undersigned against Issuer.
7. The
undersigned waives presentment, demand for payment, notice of dishonor or
nonpayment, and protest of any instrument evidencing Indebtedness. Purchaser
shall not be required first to resort for payment or fulfillment of the
Indebtedness to Issuer or other persons, or their properties, or first to
enforce, realize upon or exhaust any collateral security for Indebtedness,
before enforcing this Guaranty.
8. The
undersigned will pay or reimburse Purchaser for all costs and expenses
(including reasonable attorneys' fees and legal expenses) incurred by Purchaser
in connection with the collection of any Indebtedness or the enforcement of
this
Guaranty.
9. This
Guaranty shall be binding upon the undersigned, and the heirs, successors and
assigns of the undersigned and shall inure to the benefit of Purchaser and
its
respective participants, successors and assigns. Except to the extent otherwise
required by law, this Guaranty and the transaction evidenced hereby shall be
governed by the substantive laws of the State of Kansas. If any provision or
application of this Guaranty is held unlawful or unenforceable in any respect,
such illegality or unenforceability shall not affect other provisions or
applications which can be given effect, and this Guaranty shall be construed
as
if the unlawful or unenforceable provision or application had never been
contained herein or prescribed hereby. All representations and warranties
contained in this Guaranty or in any other agreement between the undersigned
and
Purchaser shall survive the execution, delivery and performance of this Guaranty
and the creation and payment of the Indebtedness. This Guaranty may not be
waived, modified, invalidated, terminated or released or otherwise changed
except by a writing signed by Purchaser. The Guaranty shall be effective whether
or not accepted in writing by Purchaser and the undersigned waives notice of
the
acceptance of this Guaranty by Purchaser.
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IN
WITNESS WHEREOF, this Guaranty has been duly executed and delivered by the
undersigned on the day and year first above written.
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WITS
- CHINA ACQUISITION CORP
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| By: | /s/ Xxxx X. Xxxxx | |
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Its: Treasurer |
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Address:
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00
Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx,
XX 00000
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