GUARANTY
Exhibit
10.4
GUARANTY
(the
“Guaranty”), dated as of February 11, 2008, by
Xxxxxxx
Gold Producers, Incorporated, a Colorado corporation, with an address of 900
IDS
Center, 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000
(a
“Guarantor”, and collectively with any other party executing this Guaranty, the
“Guarantors”), in favor of Platinum Long Term Growth V, LLC, a Delaware limited
liability company, with an office at 000 Xxxx 00xx
Xxxxxx,
00xx
Xxxxx,
Xxx Xxxx, XX 00000 (the “Secured Party”).
WHEREAS,
the Guarantors are affiliates of Wits Basin Precious Minerals Inc.
(the
“Borrower”);
and
WHEREAS,
in accordance with a certain senior secured convertible note, dated as of the
date hereof (the “Note”), executed by the Borrower, and certain related
agreements between the Borrower and the Secured Party (collectively, as amended,
restated, or extended from time to time, the “Loan Documents”), the Secured
Party has agreed to loan to the Borrower up to One Million Twenty Thousand
Dollars ($1,020,000) (the “Loan”); and
WHEREAS,
the obligation of the Secured Party to extend the loan is conditioned, among
other things, upon Guarantors executing and delivering this Guaranty;
and
WHEREAS,
the aforesaid Loan will be beneficial to the Guarantors inasmuch as the proceeds
of the Loan to the Borrower will indirectly benefit the Guarantors;
NOW,
THEREFORE, in order to induce the Secured Party to make the Loan to the Borrower
pursuant to the Loan Documents, and for other good and valuable consideration,
the receipt of which is hereby acknowledged by each of the Guarantors, the
Guarantors hereby agree as follows:
1.
Guaranty
of Payment and Performance. The
Guarantors hereby jointly and severally guarantee to the Secured Party the
full
and punctual payment when due (whether at maturity, by acceleration or
otherwise), and the performance, of all liabilities, agreements and other
obligations of the Borrower to the Secured Party, whether direct or indirect,
absolute or contingent, due or to become due, secured or unsecured, now existing
or hereafter arising or acquired (whether by way of discount, letter of credit,
lease, loan, overdraft or otherwise), including without limitation all
obligations under the Note (collectively, the “Obligations”). This Guaranty is
an absolute, unconditional and continuing guaranty of the full and punctual
payment and performance of the Obligations and not of their collectibility
only
and is in no way conditioned upon any requirement that the Secured Party first
attempt to collect any of the Obligations from the Borrower or resort to any
security or other means of obtaining their payment. Should the Borrower default
in the payment or performance of any of the Obligations, the obligations of
each
Guarantor hereunder shall become immediately due and payable to the Secured
Party, without demand or notice of any nature, all of which are expressly waived
by each Guarantor. Payments by each Guarantor hereunder may be required by
the
Secured Party on any number of occasions.
2.
Guarantors’
Agreement to Pay. Each
Guarantor further agrees, as the principal obligor and not as a guarantor only,
to pay to the Secured Party, on demand, all reasonable costs and expenses
(including court costs and reasonable legal expenses) incurred or expended
by
the Secured Party in connection with enforcement of this Guaranty, together
with
interest on amounts recoverable under this Guaranty from the time such amounts
become due under this Guaranty until payment, at the rate per annum equal to
the
default rate set forth in the Note; provided that if such interest exceeds
the
maximum amount permitted to be paid under applicable law, then such interest
shall be reduced to such maximum permitted amount.
3. Unlimited
Guaranty. The
liability of each Guarantor hereunder shall be unlimited.
4. Waivers
by Guarantors; Secured Party’s Freedom to Act. Each
Guarantor agrees that the Obligations will be paid and performed strictly in
accordance with their respective terms regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such
terms
or the rights of the Secured Party with respect thereto. Each Guarantor waives
presentment, demand, protest, notice of acceptance, notice of Obligations
incurred and all other notices of any kind, all defenses which may be available
to Borrower by virtue of any valuation, stay, moratorium law or other similar
law now or hereafter in effect, any right to require the marshalling of assets
of the Borrower, and all suretyship defenses generally. Without limiting the
generality of the foregoing, each Guarantor agrees to the provisions of any
instrument evidencing, securing or otherwise executed in connection with any
Obligation and agrees that the obligations of each Guarantor hereunder shall
not
be released or discharged, in whole or in part, or otherwise affected by
(i) the
failure of the Secured Party to assert any claim or demand or to enforce any
right or remedy against the Borrower; (ii) any
extensions or renewals of any Obligation; (iii) any
rescissions, waivers, amendments or modifications of any of the terms or
provisions of any agreement evidencing, securing or otherwise executed in
connection with any Obligation; (iv) the
substitution or release of any entity primarily or secondarily liable for any
Obligation; (v) the
adequacy of any rights the Secured Party may have against any collateral or
other means of obtaining repayment of the Obligations; (vi) the
impairment of any collateral securing the Obligations, including without
limitation the failure to perfect or preserve any rights the Secured Party
might
have in such collateral or the substitution, exchange, surrender, release,
loss
or destruction of any such collateral; or (vii) any
other act or omission which might in any manner or to any extent vary the risk
of any Guarantor or otherwise operate as a release or discharge of any other
Guarantor, all of which may be done without notice to any
Guarantor.
5. Unenforceability
of Obligations Against Borrower.
If for
any reason the Borrower has no legal existence or is under no legal obligation
to discharge any of the Obligations, or if any of the Obligations have become
irrecoverable from the Borrower by operation of law or for any other reason,
this Guaranty shall nevertheless be binding on each Guarantor to the same extent
as if each Guarantor at all times had been the principal obligor on all such
Obligations. In the event that acceleration of the time for payment of the
Obligations is stayed upon the insolvency, bankruptcy or reorganization of
the
Borrower, or for any other reason, all such amounts otherwise subject to
acceleration under the terms of any agreement evidencing, securing or otherwise
executed in connection with any Obligation shall be immediately due and payable
by each Guarantor.
2
6. Subrogation;
Subordination.
Until
the payment and performance in full of all Obligations and any and all
obligations of the Borrower to any affiliate of the Secured Party, no Guarantor
shall exercise any rights against the Borrower arising as a result of payment
by
any Guarantor hereunder, by way of subrogation or otherwise, and will not prove
any claim in competition with the Secured Party or its affiliates in respect
of
any payment hereunder in bankruptcy or insolvency proceedings of any nature;
no
Guarantor will claim any set-off or counterclaim against the Borrower in respect
of any liability of any Guarantor to the Borrower; and each Guarantor waives
any
benefit of and any right to participate in any collateral which may be held
by
the Secured Party or any such affiliate. The payment of any amounts due with
respect to any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the prior payment in full of the
Obligations. Each Guarantor agrees that after the occurrence of any default
in
the payment or performance of the Obligations, after the expiration of any
applicable cure period, it will not demand, xxx for or otherwise attempt to
collect after such time any such indebtedness of the Borrower to such Guarantor
until the Obligations shall have been paid in full. If, notwithstanding the
foregoing sentence, any Guarantor shall collect, enforce or receive any amounts
in respect of such indebtedness, such amounts shall be collected, enforced
and
received by such Guarantor as trustee for the Secured Party and be paid over
to
the Secured Party on account of the Obligations without affecting in any manner
the liability of any Guarantor under the other provisions of this
Guaranty.
7. Further
Assurances.
Each
Guarantor agrees to do all such things and execute all such documents, as the
Secured Party may consider reasonably necessary or desirable to give full effect
to this Guaranty and to perfect and preserve the rights and powers of the
Secured Party hereunder.
8. Termination;
Reinstatement.
This
Guaranty shall remain in full force and effect until the Secured Party is given
written notice of each Guarantor’s intention to discontinue this Guaranty,
notwithstanding any intermediate or temporary payment or settlement of the
whole
or any part of the Obligations. No such notice shall be effective unless
received and acknowledged by an officer of the Secured Party at its head office.
No such notice shall affect any rights of the Secured Party or of any affiliate
hereunder with respect to any Obligations incurred prior to such notice. This
Guaranty shall continue to be effective or be reinstated, notwithstanding any
such notice or termination, if at any time any payment made or value received
with respect to an Obligation is rescinded or must otherwise be returned by
the
Secured Party upon the insolvency, bankruptcy or reorganization of the Borrower,
or otherwise, all as though such payment had not been made or value received.
9. Successors
and Assigns.
This
Guaranty shall be jointly and severally binding upon each Guarantor, its
successors and assigns, and shall inure to the benefit of and be enforceable
by
the Secured Party and its successors, transferees and assigns. Without limiting
the generality of the foregoing sentence, the Secured Party may assign or
otherwise transfer any agreement or any note held by it evidencing, securing
or
otherwise executed in connection with the Obligations, or sell participations
in
any interest therein, to any other person or entity, and such other person
or
entity shall thereupon become vested, to the extent set forth in the agreement
evidencing such assignment, transfer or participation, with all the rights
in
respect thereof granted to the Secured Party herein.
10. Amendments
and Waivers.
No
amendment or waiver of any provision of this Guaranty nor consent to any
departure by any Guarantor therefrom shall be effective unless the same shall
be
in writing and signed by the Secured Party. No failure on the part of the
Secured Party to exercise, and no delay in exercising, any right hereunder
shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right.
3
12. Governing
Law; Consent to Jurisdiction.
This
Guaranty shall be governed by, and construed in accordance with, the laws of
the
State of New York without reference to its conflicts of laws provisions. Each
Guarantor agrees that any suit for the enforcement of this Guaranty may be
brought in the courts of the State of New York or any federal court sitting
therein and consents to the non-exclusive jurisdiction of such court and to
service of process in any such suit being made upon the Guarantors by mail
at
the address specified in Section 11 hereof. Each Guarantor hereby waives any
objection that it may now or hereafter have to the venue of any such suit or
any
such court or that such suit was brought in an inconvenient court. Any
enforcement action relating to this Guaranty may be brought by motion for
summary judgment in lieu of a complaint pursuant to Section 3213 of the New
York
Civil Practice Law and Rules.
13. WAIVER
OF JURY TRIAL. EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THIS GUARANTY, THE
SECURED PARTY, HEREBY WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH
RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF: (A) THIS GUARANTY OR ANY
OTHER INSTRUMENT OR DOCUMENT DELIVERED IN CONNECTION WITH THE OBLIGATIONS;
(B) THE VALIDITY, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF; OR
(C) ANY OTHER CLAIM OR DISPUTE HOWEVER ARISING BETWEEN ANY GUARANTOR AND
THE SECURED PARTY.
14. Certain
References.
All
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural, as the identity of the person, persons,
entity or entities may require. The terms “herein”, “hereof” or “hereunder” or
similar terms used in this Guaranty refer to this entire Guaranty and not only
to the particular provision in which the term is used.
15. Miscellaneous.
This
Guaranty, together with the Security Agreement, delivered by the Guarantors
as
of the date hereof to the Secured Party, constitutes the entire agreement of
the
Guarantors with respect to the matters set forth herein. The rights and remedies
herein provided are cumulative and not exclusive of any remedies provided by
law
or any other agreement, and this Guaranty shall be in addition to any other
guaranty of the Obligations. The invalidity or unenforceability of any one
or
more sections of this Guaranty shall not affect the validity or enforceability
of its remaining provisions. Captions are for the ease of reference only and
shall not affect the meaning of the relevant provisions. The meanings of all
defined terms used in this Guaranty shall be equally applicable to the singular
and plural, masculine, feminine and generic forms of the terms
defined.
4
IN
WITNESS WHEREOF,
each
Guarantor has caused this Guaranty to be executed and delivered as of the date
appearing in the introductory paragraph of this Guaranty.
|
XXXXXXX
GOLD PRODUCERS, INCORPORATED
|
||
|
By:
|
/s/
Xxxx X. Xxxxx
|
|
|
Name:
Xxxx X. Xxxxx
Title:
Chief Financial Officer
|
||
Signature
Page
to
Guaranty
5
