Exhibit 99.3
Loan Agreement
Made this first day of March, 2005
Amount: $250,000.00 CDN Due: On Demand
As Provided Herein
FOR VALUE RECEIVED, the undersigned Yukon Gold Corporation, Inc., a
Delaware corporation (Yukon) promises to pay Medallion Capital Corp., an Ontario
corporation (Medallion) or to his order, the principal sum of $250,000 (the
"Principal Amount"), in lawful money of Canada plus interest at the rate of 9%
per annum calculated monthly not in advance and with interest payable on the 1st
day of each and every month on the Principal Amount outstanding from time to
time as well before and after maturity and both before and after default and
after judgment with interest on overdue interest at the rate calculated as
aforesaid until payment is made of the full Principal Amount plus accrued
interest. The Principal Amount represents amounts previously advanced by
Medallion on behalf of Yukon, including $100,000 advance on June 25, 2004,
$80,000 advanced on August 27, 2005, $50,000 on December 10, 2004 and $20,000
advanced on February 25, 2005 (the "Four Amounts"). This Loan Agreement replaces
all claims for such Four Amounts by Medallion. Payment of the Principle Amount
shall constitute payment in full of the Four Amounts.
Yukon hereby pledges as collateral securing the amounts outstanding
hereunder the Marg Property and all rights and interest of Yukon in and to the
Marg Property Purchase Agreement dated November 25, 2004 between Medallion and
ATNA Resources LTD. (the "Marg Property Purchase Agreement") (the foregoing Marg
Property Purchase Agreement, property and rights being referred to herein as the
"Collateral"). Such Collateral was assigned by Medallion to Yukon by an
Assignment Agreement of similar date hereto, a copy of which is attached hereto
as Schedule A. This Loan Agreement also shall constitute a security agreement
embodying the pledge of the Collateral by Yukon to Medallion to secure payment
hereunder.
As long as any portion of the Principal Amount or accrued interest is
outstanding hereunder Yukon undertakes to provide Medallion with proof of
payment of all payments of cash and stock due, after the date hereof, under the
Marg Property Purchase Agreement which forms part of Schedule A hereto, on or
before the due date of such payments.
Medallion shall not demand payment of the Principal Amount hereunder
prior to ninety (90) days after the date of this Loan Agreement. After such
initial 90-day period Medallion may demand payment of the Principal Amount due
hereunder by giving Yukon written notice of the demand for payment of the
Principal Amount (the "Demand Notice").
EVENTS OF DEFAULT
(1) In the event that Medallion fails to receive from Yukon proof of
the payments by Yukon due under the Marg Property Purchase Agreement when such
payment is due under the Marg Property Purchase Agreement and Yukon has not
provided a waiver or amendment to the Marg Property Purchase Agreement allowing
such non payment, Medallion at its option shall be entitled to make the said
payment(s) on behalf of Yukon and all amounts advanced by Medallion shall be
added to the Principal Amount secured hereunder and bear interest at the rate
specified in this Loan Agreement. If Yukon fails to reimburse Medallion for the
said payment(s) plus interest within 30 days, Medallion shall be entitled to
demand payment of the Principal Amount by delivering the Demand Notice.
(2) In event of default of any monthly payment of interest hereunder,
Medallion shall notify Yukon in writing of such default (the "Default Notice").
Yukon shall have up to thirty (30) days to cure such default. In the event the
default is not cured prior to the end of such 30-day cure period, together with
any payments of interest that become payable during the 30-day cure period,
Medallion shall be entitled to give notice of demand for payment of the
Principal Amount plus any accrued interest.
(3) In event there is a default, Medallion shall provide Demand Notice,
Yukon shall have 120 days to cure such default. In the event the default is not
cured prior to the end of the 120 day cure period, Medallion at its option shall
be entitled to take back the Collateral following the procedure described in
"Sale Process" below.
All or part of the Principal Amount due hereunder may be prepaid by
Yukon from time to time without notice, bonus, or penalty. Yukon agrees to pay
all of the Principal Amount due hereunder out of the working capital portion of
any future equity or debt financing completed by Yukon. If the Principal Amount
due hereunder is not paid in full within 180 days of the date hereof, Yukon
agrees to issue to Medallion 10,000 common shares of restricted common stock for
each 30 day period following the expiry of such 180 days that the Principal
Amount or any portion thereof remains unpaid.
Payment of both principal and interest shall be made to Medallion at
Xxxxx 000, 000 Xxx Xx. Xxxxxxx XX, X0X 0X0 or at such other place as Medallion
may designate in writing to Yukon.
This Loan Agreement supersedes the promissory note issued to Xxxxxxxx
Xxxxxx on June 25th 2004 in the amount of $100,000. This promissory note has
been assigned to Medallion and is hereby cancelled, provided that Xxxxxxxx
Xxxxxx shall still be entitled to the $5,000 fee Yukon agreed to pay Xxxxxxxx
Xxxxxx for such $100,000 loan.
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SALE PROCESS
Yukon may offer the Marg Property for sale during any notice or cure
period (the Allotted Time) as set out herein and may dispose of the Marg
Property at any price provided that the cash portion of the sale is sufficient
to satisfy the Principal Amount plus accrued interest on closing of the sale. If
the Marg Property does not sell or Yukon has not cured the default during the
Allotted Time, Medallion shall be entitled to the return of the Collateral.
Provided Yukon may and Medallion will continue to offer the Marg Property for
sale for a further period of 120 days. Medallion shall be at liberty to accept
any offer during this 120 period that equals the minimum of (a) the transaction
costs of the sale plus (b) the outstanding Principal Amount plus accrued
interest to date of closing. Any surplus in excess of the amounts set out in (a)
and (b) will be paid to Yukon. If the Marg Property does not sell during the 120
day period Medallion shall provide Yukon with a full release and discharge of
the Loan Agreement and be entitled to do as it wishes with the Marg Property.
Should the proceeds of any offer received for the Collateral during the
120 day period include a combination of cash and stock of a third party company,
the cash portion, if sufficient, shall be applied first to (a) and then to (b)
above, except that Medallion will have the option of accepting such stock in
lieu of cash to satisfy the Principal Amount plus accrued interest in whole or
in part. In the event Medallion agrees to accept stock in the third party
company, such stock will be valued at the same price as used in the sale
transaction irrespective of the current market value. If no value was ascribed
to the stock in the sale transaction the value will be the closing price on the
day preceding the closing of the transaction.
At any point during the Sale Process, Yukon shall have the right to
stop the Sale Process by paying the outstanding Principal Amount and all
interest due hereunder.
Nothing in the forgoing Sale Process shall prevent
1) Yukon from agreeing to sell the property to Medallion
2) Yukon and Medallion agreeing at any time to retain the services of
a third party to sell the property
3) Medallion from, at any time, and at Medallion's option, receiving
stock of Yukon to satisfy all or a portion of the obligations
hereunder. In the event Medallion elects to take stock of Yukon,
the price per share received will be at the maximum discount
allowable by applicable regulation but in no event will the
discount exceed 25% of the weighted average market price for the
preceding 10 trading days.
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Yukon and Medallion hereby agree that the Courts of Ontario shall have
jurisdiction to entertain any action or other legal proceedings based on any
provisions of this Loan Agreement. Yukon and Medallion hereto do hereby attorn
to the jurisdiction of the Courts of the Province of Ontario.
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NOTICES
Any notice, election, consent or other writing required or permitted to
be given hereunder shall be deemed to be sufficiently given if delivered or if
mailed by registered air mail or by telegram or fax, addressed as follows:
In the case of Yukon
Yukon Gold Corporation, Inc
000 - 000 Xxx Xxxxxx
Xxxxxxx, XX X0X 0X0
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxx
In the case of Medallion
Medallion Capital Corp.
000 - 000 Xxx Xxxxxx
Xxxxxxx, XX X0X 0X0
Fax: (000) 000-0000
Attention: Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX X0X 0X0
Fax: (000) 000-0000
and any such notice given as aforesaid shall be deemed to have been
given to the parties hereto if delivered, when delivered, or if mailed, on the
tenth business day following the date of mailing, or, if telegraphed or faxed,
on the next succeeding day following the telegraphing or faxing thereof PROVIDED
HOWEVER that during the period of any postal interruption in either the country
of mailing or the country of delivery, any notice given hereunder by mail shall
be deemed to have been given only as of the date of actual delivery of the same.
Any party may from time to time by notice in writing change its address for the
purpose of this paragraph.
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This Loan Agreement shall be binding upon the successors, heirs and legal
representatives of Yukon and Medallion, as applicable and binding upon and
enure to the benefit of the successors and assigns of Yukon and Medallion. This
Loan Agreement may not be assigned by Yukon without the prior written consent of
Medallion.
Signed by the authorized signing officers of the parties hereto as of the date
first written above
YUKON GOLD CORPORATION, INC.
By: /s/Xxxxxx Xxxxxx
----------------
Xxxxxx Xxxxxx, Chairman and CEO
MEDALLION CAPITAL CORP.
By: /s/ Xxxxxxxx Xxxxxx
-------------------
Xxxxxxxx Xxxxxx, President
XXXXXXXX X. XXXXXX
By: /s/ Xxxxxxxx Xxxxxx
-------------------
Xxxxxxxx Xxxxxx, Individually
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