EXHIBIT 4.8
THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER
THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION (TOGETHER,
THE “SECURITIES LAWS”) AND MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED OR ENCUMBERED IN THE ABSENCE OF
COMPLIANCE WITH SUCH SECURITIES LAWS AND UNTIL THE ISSUER THEREOF
SHALL HAVE RECEIVED AN OPINION FROM COUNSEL ACCEPTABLE TO IT THAT
THE PROPOSED DISPOSITION WILL NOT VIOLATE ANY APPLICABLE SECURITIES
LAWS.
PROMISSORY
NOTE
FOR VALUE RECEIVED , Hunter Bates Mining Corporation, a corporation
organized and existing under the laws of the State of Minnesota
(“ Issuer ”), hereby unconditionally promises to
pay to the order of Wits Basin Precious Minerals Inc., a Minnesota
corporation, or its successors and assigns (the “
Holder ”), the principal sum of Two Million Five
Hundred Thousand Dollars and 00/100 Cents ($2,500,000.00) (the
“ Principal ”) plus interest on the unpaid
Principal at a per annum rate equal to six percent (6%) compounded
annually. Interest shall be calculated on a basis of the
actual number of days elapsed over a year of 365 days, commencing
as of the date hereof.
1.
Payment of Principal and Interest . Subject to
acceleration or earlier payment as provided for elsewhere in this
Note, the Principal, and any accrued and unpaid interest thereon,
shall be payable in installments of $150,000, commencing on
December 31, 2009 and then quarterly (on March 31, June 30 and
September 30) thereafter for the next 15 calendar quarters, with
all remaining outstanding Principal and interest accrued and unpaid
thereon being due and payable on December 31, 2013 (the “
Maturity Date ”). Issuer shall make all
payments payable in cash under this Note in lawful money of the
United States. All payments paid by Issuer to Holder
under this Note shall be applied in the following order of
priority: (a) to amounts, other than Principal and
interest, due to Holder pursuant to this Note for all costs of
collection of any kind, including reasonable attorneys’ fees
and expenses; (b) to accrued but unpaid interest on this Note; and
(c) to the unpaid Principal. If Issuer makes any payment
of Principal, interest or other amounts upon the indebtedness by
check, draft, or other remittance, Holder shall not be deemed to
have received such payment until Holder actually receives the
payment instrument.
2.
Acceleration of Maturity Date . If, prior to the
satisfaction in full of Issuer’s payment obligations under
this Note, Issuer either (i) generates net revenues in excess of
$2,000,000 during any fiscal year, (ii) completes one or more
financings in the aggregate amount of $10,000,000 or (iii)
completes a Change in Control (as defined herein), Holder shall be
entitled, at its option and with written notice delivered to
Issuer, accelerate all outstanding Principal and interest accrued
and unpaid thereon to be immediately due and
payable. For purposes of this Note, a “ Change
in Control ” shall mean: (a) the acquisition, directly or
indirectly, following the date hereof by any person (as such term
is defined in Section 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended), in one transaction or a series of related
transactions, of securities of the Company representing in excess
of fifty percent (50%) or more of the combined voting power of the
Company’s then outstanding securities if such person or his
or its affiliate(s) do not own in excess of 50% of such voting
power on the date of this Note; or (b) the future disposition by
Issuer (whether direct or indirect, by sale of assets or stock,
merger, consolidation or otherwise) of all or substantially all of
its business and/or assets in one transaction or series of related
transactions (other than a merger effected exclusively for the
purpose of changing the domicile of Issuer).
3.
Prepayment . This Note may be prepaid in cash or
other immediately available funds, in whole or in part, by Issuer
at any time and from time to time, without premium or penalty (a
“ Prepayment ”).
4.
Waiver . Payment of Principal and interest due
under this Note shall be made without presentment or
demand. The Issuer and all others at any time liable
directly or indirectly (including, without limitation, the Issuer,
any co-makers, endorsers, sureties and guarantors, all of which are
referred to herein as “ Parties ”), severally
waive presentment, demand and protest, notice of protest, demand,
and dishonor, and nonpayment of this Note, and all diligence in
collection and agree to pay all costs of collection when incurred,
including reasonable attorneys’ fees, and to perform and
comply with each of the covenants, conditions, provisions, and
agreements of the Issuer contained in every instrument now
evidencing the indebtedness. No release by Holder of any
security for payment of the Note or any modification or
restructuring in respect of any lien or security interest held or
at any time obtained or acquired by Holder for payment of such Note
shall operate to release, discharge, impair or alter the liability
of any Party liable at any time directly or indirectly for payment
of such indebtedness.
5.
Renewal and Modification . Issuer further agrees
that the Note may be from time to time, extended, renewed,
modified, rearranged, or evidenced by one or more other notes or
obligations in substitution for this Note and upon and for such
term or terms agreed to by Issuer and Holder in writing, and with
or without notice
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