AMENDMENT No. 2 TO CONVERTIBLE NOTES PURCHASE AGREEMENT
EXHIBIT
10.11
AMENDMENT
No. 2 TO
This
Amendment No. 2 to Convertible Notes Purchase Agreement
(this
“Amendment”)
is
entered into on this 10 day of November, 2008, by and between Wits Basin
Precious Minerals Inc., a Minnesota corporation (the “Issuer”),
and
China Gold, LLC, a Kansas limited liability company, its successors and assigns
(together with its successors and assigns “Purchaser”),
to
amend, as hereinafter set forth, the terms of that certain Convertible Notes
Purchase Agreement dated April 10, 2007 by and between Issuer and Purchaser,
as
previously amended on June 19, 2007 (as amended, the “Purchase
Agreement”).
Capitalized terms used in this Amendment and not otherwise defined herein shall
have the same meanings as defined in the Purchase Agreement.
A. Issuer
and Purchaser entered into the Purchase Agreement on April 10, 2007, which
contemplated the initial sale by Issuer, and purchase by Purchaser, of an
aggregate minimum of $12,000,000 and an aggregate maximum of $25,000,000 in
convertible notes of Issuer within 12 months of the Initial Closing
Date.
B. Pursuant
to the Purchase Agreement, on April 10, 2007, Issuer sold, and Purchaser
purchased, that certain Convertible Note in the amount of $3,000,000
(“Note 1”).
On
May 7, 2007, Issuer sold, and Purchaser purchased, that certain Convertible
Note
in the amount of $2,000,000 (“Note 2”).
On
June 19, 2007, Issuer sold and Purchaser purchased that certain Convertible
Note in the aggregate amount of $4,000,000 (“Note 3”).
On
July 9, 2007, Issuer sold, and Purchaser purchased, that certain Convertible
Note in the amount of $800,000 (“Note 4”;
collectively with Note 1, Note 2 and Note 3, the “Prior
Notes”).
C. On
even
date herewith, Issuer and Purchaser have cancelled the Prior Notes and Issuer
has issued Purchaser an Amended and Restated Promissory Note in the aggregate
principal amount of $9,800,000 in the form attached hereto as Exhibit
A
(the
“Amended
and Restated Note”),
which, amongst other amendments to the terms of the Prior Notes, terminates
the
conversion feature of the Prior Notes and terminates certain Purchase Rights
(as
defined in the Purchase Agreement) provided to Purchaser. In consideration
thereof, Issuer has issued Purchaser a five-year warrant to purchase up to
39,200,000 shares of the Issuer’s common stock, par value $0.01 per share, at an
exercise price of $0.15 per share, in the form attached hereto as Exhibit
B.
D. Issuer
and Purchaser wish to amend the Purchase Agreement, in the respects, but only
in
the respects, as set forth herein, to eliminate the Purchase Rights previously
provided to Purchaser in the event of satisfaction of the Prior Notes or the
Amended and Restated Note.
Now,
Therefore,
the
parties hereto hereby agree as follows:
Section
1. AMENDMENTS
1.1 Section
2.5 of the Purchase Agreement is hereby deleted in its entirety and replaced
with the following:
2.5 Prepayment
of Notes in Event of Iron Ore Closing.
Notwithstanding the specific terms and conditions of any Notes, in the event
Issuer and/or any of Issuer’s wholly owned subsidiaries complete a joint venture
with London Mining plc relating to China Global Mining Resources Limited, a
British Virgin Islands corporation (“CGMR”),
or any
affiliate thereof, and the related acquisition by CGMR, or any affiliate
thereof, of one or more iron ore mining properties in the People’s Republic of
China at a time when any Notes remain outstanding (the “Iron
Ore Closings”),
Issuer
shall, to the extent funds are available from the Iron Ore Closings, prepay
in
whole or in part the outstanding Notes issued under the Purchase Agreement
out
of the proceeds from the Iron Ore Closings.
Issuer
shall provide, as reasonably practicable, Purchaser notice of the proposed
time
of effectiveness of the Iron Ore Closings within a reasonable time prior to
any
such proposed effectiveness.
1.2 Section
8.25 of the Purchase Agreement is hereby deleted in its entirety.
1.3 The
definition of the term “Registrable Securities” in Section 2 of Appendix 1 to
the Purchase Agreement is hereby deleted and the following definition is
substituted in place thereof:
“Registrable
Securities means (i) any shares of Common Stock issuable upon exercise of the
Warrant issued to Purchaser by Issuer on November 10, 2008 or any warrant issued
in replacement thereof; and (ii) any additional shares of Common Stock issued
pursuant to stock splits, in-kind dividends and similar distributions with
respect to the stock described in the foregoing clause, but does not include
any
such shares, which, at the time the identity of the Registrable Securities
is to
be determined, previously have been sold pursuant to a registration or Rule
144,
including Rule 144(K) or Rule 144A.”
1.4 All
references to the defined term “Note” or “Notes” in the Purchase Agreement and
the other Investment Documents, including the Security Documents, incorporated
by reference in the Purchase Agreement shall hereinafter refer to the Amended
and Restated Note in lieu of the Initial Note and Additional Notes.
1.5 All
references to (i) conversion and the terms of conversion of the Notes and (ii)
Purchase Rights shall hereinafter have no legal effect.
Section
2. SUPPLEMENTAL
REPRESENTATION
2.1 On
November 10, 2008, Issuer makes to Purchaser the supplemental representation
and
warranty included in Exhibit C (the “Supplemental
Representation”).
The
Supplemental Representation is accurate as of November 10, 2008 and Issuer
does
not undertake any obligation to update the applicability, voracity or accuracy
of any representation on any other date, except as otherwise required under
the
Purchase Agreement.
Section
3. MISCELLANEOUS
3.1 This
Amendment shall be construed in connection with and as part of the Purchase
Agreement, and, except as modified and expressly amended by this Amendment,
all
terms, conditions and covenants contained in the Purchase Agreement, are hereby
ratified and shall be and remain in full force and effect.
3.2 Any
and
all notices, requests, certificates and other instruments executed and delivered
after the execution and delivery of this Amendment may refer to the Purchase
Agreement without making specific reference to this Amendment, but nevertheless
all such references shall include this Amendment, unless the context otherwise
requires.
3.3 The
description headings of the various sections or parts of this Amendment are
for
convenience only and shall not affect the meaning or construction of any of
the
provisions hereof.
3.4 This
Amendment shall be governed by and construed in accordance with Kansas
law.
3.5 This
Amendment may be executed in any number of counterparts, each executed
counterpart constituting an original, but all together only one agreement.
Signature to this Amendment may be given by facsimile or other electronic
transmission and such signatures shall be fully binding on the party sending
the
same.
[Signature
page follows]
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement on the date first written
above.
ISSUER:
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a
Minnesota corporation
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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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PURCHASER:
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CHINA
GOLD, LLC,
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a
Kansas limited liability company
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By:
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Pioneer
Holdings, LLC
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Its:
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Manager
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By:
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/s/
C. Xxxxxx Xxxxxx
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Name:
C. Xxxxxx Xxxxxx
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Title:
Manager, Member
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