Unassociated Document


    

      EXHIBIT
        10.4

       

      PROMISSORY
        NOTE

       

      
        
          	$2,640,000	
                  August
                    1,
                    2006

                


        

      

       

       

      FOR
        VALUE RECEIVED,
        MONTANA
        TUNNELS MINING, INC.,
        a
        Delaware corporation (“Borrower”),
        promises to pay to the order of, GREAT
        AMERICAN GROUP
        (“Lender”),
        at
        its office at 9 Parkway North, Suite 300, Deerfield, Illinois 60015, or such
        other place as the holder hereof may from time to time appoint in writing,
        in
        lawful money of the United States of America, the principal sum of Two Million
        Six Hundred Forty Thousand Dollars ($2,640,000),
        or
        such lesser principal amount as may be outstanding hereunder, together with
        interest on the principal balance from time to time unpaid at the rate of
        one
        and one-half percent (1.5%) per month (the “Loan
        Rate”)
        until
        maturity. From and after the occurrence of an Event of Default (as hereinafter
        defined), the outstanding principal amount hereof shall bear interest at
        the
        Loan Rate, plus two percent (2%) per month. Interest will be computed on
        the
        daily principal balance outstanding during the period from the last payment
        date
        to the current payment date. Interest shall be the product resulting when
        multiplying the rate of interest by the principal balance outstanding, dividing
        by 30, and then multiplying by the actual number of days interest has
        accrued.

       

      The
        principal indebtedness evidenced by this Note shall be payable monthly in
        the
        amount of $75,000 with the first payment, attorney fees and Closing Fee (as
        discussed below) due upon execution of this Note and thereafter on the first
        day
        of each successive month with the balance payable in full, together with
        all
        accrued interest thereon, on December 1, 2006. Notwithstanding the prior
        sentence, the second payment due Lender shall be payable on September 1,
        2006
        and then payments will be due on the first day of each successive month.
        The
        Borrower may prepay the outstanding principal amount of this Note in whole
        or in
        part at any time with no penalty. Borrower shall also be responsible to the
        Lender for payment of a Closing Fee in an amount equal to 1% of the total
        amount
        financed.

       

      The
        obligations detailed in this Note are secured by a Security Agreement dated
        the
        date hereof (the “Security
        Agreement”),
        which
        encumbers certain equipment described on Exhibit 1 attached to and made part
        of
        the Security Agreement (hereinafter referred to as the “Equipment”),
        between Borrower and Lender. This Note, the Security Agreement and any and
        all
        other agreements presently existing or hereafter entered into which evidence
        and/or secure any indebtedness from Borrower to Lender shall hereinafter
        be
        collectively referred to as the “Loan
        Documents”.
        The
        terms, covenants, conditions, provisions, stipulations and agreements of
        the
        Loan Documents are hereby made a part of this Note, to the same extent and
        with
        the same effect as if they were fully set forth herein. Borrower does hereby
        covenant to abide by and comply with each and every term, covenant, condition,
        provision, stipulation and agreement set forth in the Loan
        Documents.

       

      Borrower
        shall remain liable for the payment of this Note, including interest,
        notwithstanding any extensions of time of payment or any indulgence of any
        kind
        or nature that Lender may grant to Borrower, whether with or without notice
        to
        Borrower, and Borrower hereby expressly waives such notice. No release of
        any or
        all of the security given for this obligation shall release any other maker,
        co-maker, surety, guarantor, or other party hereto in any capacity. Lender
        shall
        not be required to look first to the Equipment for payment of this Note,
        but may
        proceed against Borrower in such manner as it deems desirable.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      The
        occurrence of any one or more of the following events (regardless of the
        reason
        therefore) shall constitute an “Event
        of Default”
        hereunder:

       

      (a) Borrower
        shall fail to make any payment of principal of, or interest on, this Note
        when
        due and payable or declared due and payable and such failure continues
        unremedied for a period of 5 business days.

       

      (b) Borrower
        shall fail or neglect to perform, keep or observe any provision of this Note,
        the Security Agreement or any other Loan Document and such failure continues
        unremedied for a period of 10 business days after the date upon which notice
        was
        given to Borrower by Lender.

       

      (c) Borrower
        shall fail to take any action that results in Lender failing to have an
        enforceable first priority lien on and security interest in the
        Equipment.

       

      (d) (i)
        Borrower seeks the appointment of a receiver, trustee, liquidator, custodian
        or
        other similar official; for itself or for all or any part of its property;
        (ii)
        Borrower files a petition for relief under the United States Bankruptcy Code
        or
        under any insolvency statute in any state of competent jurisdiction; (iii)
        an
        involuntary bankruptcy petition is filed against Borrower which petition
        is not
        dismissed within thirty (30) days or (iv) Borrower makes a general assignment
        for the benefit of creditors.

       

      (e) Any
        judgments or arbitration awards are entered against Borrower in an aggregate
        amount of $175,000 or more in excess of available insurance coverage to the
        extent not fully paid or discharged for a period of 15 consecutive days during
        which execution is not effectively stayed.

       

      (f) Any
        default occurs under any agreement in connection with any credit Borrower
        has
        obtained from any person other than Lender or which Borrower has guaranteed
        in
        the amount of $175,000 or more in the aggregate and such default consists
        of
        failing to make a payment when due or gives such other person the right to
        accelerate the obligation.

       

      Upon
        the
        occurrence of any Event of Default, Lender may (i) declare all indebtedness
        evidenced by this Note to be immediately due and payable, whereupon all such
        indebtedness shall become due and payable, without presentment, demand, protest
        or further notice of any kind, all of which are expressly waived by Borrower,
        and (ii) exercise all rights and remedies available under the Security
        Agreement, the other Loan Documents and applicable law.

       

      In
        the
        event that Lender institutes legal proceedings to enforce the Loan Documents,
        Borrower agrees to pay to Lender, in addition to any indebtedness due and
        unpaid, all costs and expenses of such proceedings, including reasonable
        attorneys’ fees.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      Lender
        shall not by any act of omission or commission be deemed to waive any of
        its
        rights or remedies hereunder unless such waiver be in writing and signed
        by an
        authorized officer of Lender and then only to the extent specifically set
        forth
        therein. A waiver on one occasion shall not be construed as continuing or
        as a
        bar to or waiver of such right or remedy on any other occasion. All remedies
        conferred upon Lender by the Loan Documents shall be cumulative and none
        is
        exclusive, and such remedies may be exercised concurrently or consecutively
        at
        Lender’s option.

       

      Except
        as
        expressly provided for in this Note or any other Loan Document, every person
        at
        any time liable for the payment of the debt evidenced hereby waives presentment
        for payment, demand, notice of nonpayment of this Note, protest and notice
        of
        protest, all exemptions and homestead laws and all rights thereunder and
        consents that Lender may extend the time of payment of any part or the whole
        of
        the debt, or grant any other modifications or indulgence pertaining to payment
        of this Note at any time, at the request of any other person liable for said
        debt.

       

      This
        Note
        is hereby expressly limited so that in no contingency or event whatsoever,
        whether by acceleration of maturity of the indebtedness evidenced hereby
        or
        otherwise, shall the amount paid or agreed to be paid to Lender for the use,
        forbearance or detention of the money advanced or to be advanced hereunder
        exceed the highest lawful rate permissible under the laws of the State of
        Illinois as applicable to Borrower. If, from any circumstances whatsoever,
        fulfillment of any provision of this Note or of any of the other Loan Documents
        shall, at the time performance of such provisions shall be due, involve the
        payment of interest in excess of that authorized by law, the obligation to
        be
        fulfilled shall be reduced to the limit so authorized by law, and if, from
        any
        circumstances, Lender shall ever receive as interest an amount which would
        exceed the highest lawful rate applicable to Borrower, such amount which
        would
        be excessive interest shall be applied to the reduction of the unpaid principal
        balance of the indebtedness evidenced hereby and not to the payment of
        interest.

       

      All
        covenants, agreements, representations and warranties made herein and in
        the
        other Loan Documents are deemed to have been relied upon by Lender,
        notwithstanding any investigation by Lender.

       

      Should
        this Note be signed by more than one person, firm or corporation or combination
        thereof, all of the obligations herein contained shall be considered joint
        and
        several obligations of each signer hereof. In such case, the liability of
        each
        such signer shall be absolute, unconditional and without regard to the liability
        of any other party hereto.

       

      This
        Note
        is given and accepted as evidence of indebtedness only and not in payment
        or
        satisfaction of any indebtedness or obligation.

       

      The
        form
        and essential validity of this Note shall be governed by the laws of the
        State
        of Illinois. If any provision of this Note is prohibited by, or is unlawful
        or
        unenforceable under, any applicable law of any jurisdiction, such provision
        shall, as to such jurisdiction, be ineffective to the extent of such prohibition
        without invalidating the remaining provisions hereof; provided that where
        the
        provisions of any such applicable law may be waived, they hereby are waived
        by
        Borrower to the full extent permitted by law in order that this Note shall
        be
        deemed to be a valid and binding promissory note in accordance with its
        terms.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      Time
        is
        of the essence with respect to all Borrower’s obligations and agreements under
        this Note.

       

      This
        Note
        and all the provisions, conditions, promises and covenants hereof shall inure
        to
        the benefit of Lender, its successors and assigns, and shall be binding in
        accordance with the terms hereof upon Borrower, its successors and assigns,
        provided nothing herein shall be deemed consent to any assignment restricted
        or
        prohibited by the terms of the Loan Documents.

       

      All
        notices required under this Note or any of the Loan Documents will be in
        writing
        and will be transmitted by personal delivery, first class mail, overnight
        courier or facsimile to the addresses or facsimile numbers appearing on the
        signature page to this Note, or to such other addresses or facsimile numbers
        as
        Borrower and Lender may specify from time to time in writing. Every notice
        shall
        be deemed to have been duly given or served on the date on which personally
        delivered, in person or by overnight courier service, or the date of facsimile
        transmission or five days after the same shall have been deposited in the
        United
        States mail. Failure or delay in delivering copies of any notice shall in
        no way
        adversely affect the effectiveness of such notice.

       

      To
        induce
        Lender to extend to Borrower the loan evidenced by this Note, Borrower
        irrevocably agrees that, subject to Lender’s sole and absolute election, ALL
        ACTIONS OR PROCEEDINGS IN ANY WAY ARISING OUT OF OR RELATED TO THIS NOTE
        OR ANY
        LOAN DOCUMENT WILL BE LITIGATED IN COURTS HAVING SITUS IN CHICAGO, ILLINOIS.
        BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY COURT LOCATED
        WITHIN CHICAGO, ILLINOIS, WAIVES PERSONAL SERVICE OF PROCESS UPON BORROWER,
        AND
        AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL DIRECTED
        TO BORROWER AT THE ADDRESS STATED ON THE SIGNATURE PAGE HEREOF AND SERVICE
        SO
        MADE WILL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT.

       

      BORROWER
        AND LENDER EACH WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
        TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE OR ANY DOCUMENT OR UNDER
        ANY
        AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
        FUTURE BE DELIVERED IN CONNECTION WITH THIS NOTE AND AGREES THAT ANY SUCH
        ACTION
        OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. BORROWER
        AGREES THAT BORROWER WILL NOT ASSERT ANY CLAIM AGAINST LENDER ON ANY THEORY
        OF
        LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE
        DAMAGES.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      IN
        WITNESS WHEREOF,
        the
        undersigned has caused its duly authorized officers to execute this Note
        on its
        behalf as of the date and year first set forth above.

       

      MONTANA
        TUNNELS MINING, INC.

      a
        Delaware corporation

       

      By:
        ________________________________

      Name:
        ______________________________

      Title:
        _______________________________

       

      Address:

       

      P.O.
        Box
        176

      Jefferson
        City, MT 59638

      Facsimile
        No.: ____________

       

      Address
        for Notices to Lender:

       

      Great
        American Group

      Attn:
        Mark Naughton,

      Vice-President
        and General Counsel

      9
        Parkway
        North, Suite 300

      Deerfield,
        Illinois 60015

      Facsimile
        No.: 847-444-1401

      


      
        
           

        

        
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