EXHIBIT 10.72
 
THIRD AMENDED AND RESTATED PLEDGE AGREEMENT
 
Wits Basin Precious Minerals Inc.

THIS THIRD AMENDED AND RESTATED PLEDGE AGREEMENT (this “Agreement”), is entered
into as of December 17, 2009 by and between Wits Basin Precious Minerals Inc., a
Minnesota corporation (“Wits Basin”), Hunter Bates Mining Corporation, a
Minnesota corporation (“Hunter Bates”), Gregory Gold Producers, Inc., a Colorado
corporation (“Gregory Gold”; and collectively with Wits Basin and Gregory Gold,
the “Pledgors”), and China Gold, LLC, a Kansas limited liability company,
together with its successors and assigns and all other holders of securities and
equity interests pursuant to the Purchase Agreement (hereinafter defined)
(together with its respective successors and assigns, “Purchaser”).
 
RECITALS
 
The following recitals are a material part of this Agreement.
 
A.           Wits Basin and Purchaser are parties to that certain Convertible
Notes Purchase Agreement dated as of April 10, 2007 as amended from time to time
(as the same may hereafter be further modified, amended, restated or
supplemented from time to time, the “Purchase Agreement”), pursuant to which
Purchaser loaned Wits Basin an aggregate principal amount of $9.8 million in
convertible secured promissory notes (the “Prior Notes”).  On November 10, 2008,
the parties converted the Prior Notes (including accrued and unpaid interest
thereon) into a Promissory Note dated November 10, 2008 in the principal amount
of $9,800,000 (the “First Amended Note”).  Capitalized terms used in this
Agreement without definition have the definitions given to them in the Purchase
Agreement.
 
B.           Pursuant to the Purchase Agreement, Wits Basin and Purchaser
entered into that certain Pledge Agreement dated as of April 10, 2007 (“Original
Pledge Agreement”) whereby Wits Basin agreed to provide Purchaser security
documents, in form and substance satisfactory to Purchaser, granting Purchaser a
security interest in all of the assets acquired from the use of proceeds for its
purchase of the Prior Notes.  Accordingly, Wits Basin pledged certain shares of
common stock of Wits-China Acquisition Corp, a Minnesota corporation.  On
February 7, 2008, the parties amended the Original Pledge Agreement pursuant to
an Amended and Restated Pledge Agreement (the “Amended Pledge Agreement”) to
provide Purchaser a pledge of the equity interests in two additional wholly
owned subsidiaries of Wits Basin, namely China Global Mining Resources Limited,
a Hong Kong corporation (“CGMR HK”), and Wits Basin (BVI) Ltd, a British Virgin
Islands corporation with registered number 1386052 (“Wits BVI”), which held
assets acquired with proceeds from the Prior Notes received from Purchaser.
 
C.           On October 28, 2008, Purchaser loaned Wits Basin an additional
$441,000 pursuant to the terms of a Promissory Note dated October 28, 2008 (the
“Additional Note”), with Wits Basin’s payment obligations under the Additional
Note secured by the Amended Pledge Agreement, amongst other forms of security.
 
D.           Pursuant to Amendment No. 2 to the Purchase Agreement, on November
10, 2008, the parties converted the Prior Notes (including accrued and unpaid
interest thereon) into a Promissory Note dated November 10, 2008 in the
principal amount of $9,800,000 (the “First Amended Note”), the obligations under
which remained secured by the Original Security Agreement and Amended and Pledge
Agreement.

 
 

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E.           In March 2009, Wits Basin entered into a joint venture transaction
(the “JV Transaction”) with London Mining Plc (“London Mining”), whereby London
Mining and Wits Basin formed a joint venture entity in the British Virgin
Islands entitled China Global Mining Resources (BVI) Limited (registered number
1513743) (“CGMR BVI”) to acquire and operate certain mining properties in the
People’s Republic of China (the “PRC Properties”) pursuant to certain rights to
acquire the PRC Properties held by the Debtor and certain of its subsidiaries
(the “Rights”).  Such Rights were subject to the security interest of Secured
Party under the terms of the Original Security Agreement.  For the avoidance of
doubt, CGMR BVI is a separate entity to the Debtor’s wholly owned subsidiary
“China Global Mining Resources Limited” (registered number 1386052) registered
in the British Virgin Islands and referred to in the Original Security Agreement
(currently known as Wits Basin (BVI) Ltd.).
 
F.           On December 22, 2009, Wits Basin and Purchaser entered into that
certain Amendment No. 3 to the Purchase Agreement (“Amendment No. 3”), whereby
the parties consolidated the First Amended Note and Additional Note, and Wits
Basin issued Purchaser in lieu thereof a promissory note dated December19,
2008  in the aggregate principal amount of $10,241,000.  Additionally, pursuant
to Amendment No. 3, the parties modified certain terms of First Amended Note and
Additional Note to, among other modifications, amend certain terms of
Purchaser’s security interest to release from such security interest Wits
Basin’s equity interest in CGMR HK and include in such security interest Wits
Basin’s equity interest in the CGMR BVI.  As a result of such modifications, on
December 22, 2009, Debtor and Secured Party amended and superseded the terms of
the Amended and Restated Pledge Agreement pursuant to a Second Amended and
Restated Pledge Agreement (the “Second Amended Pledge Agreement”).
 
G.           On April 20, 2009 Purchaser purchased from Platinum Long Term
Growth V, LLC (“Platinum”) the rights of Platinum under (i) that certain Note
and Warrant Purchase Agreement dated on or around February 11, 2008 (the
“Platinum Purchase Agreement”), pursuant to which Wits Basin issued Platinum
that certain 10% Senior Secured Convertible Promissory Note in the principal
amount of $1,020,000 issued by Wits Basin in favor of Platinum on or around
February 11, 2008 and (ii) that certain 10% Senior Secured Convertible
Promissory Note in the principal amount of $110,000 issued by Wits Basin in
favor of Platinum on or around July 10, 2008 (collectively, the notes issued to
Platinum are referred to herein as the “Platinum Notes”).  Wits Basin’s
obligations under the Platinum Notes are secured pursuant to the terms of (i)
that certain Security Agreement dated February 11, 2008 (the “Platinum Security
Agreement”) by and between Wits Basin and Purchaser (as a successor-in-interest
to Platinum) and (ii) that certain Amended and Restated Guaranty of Gregory Gold
Producers, Incorporated (“Gregory Gold”) and Hunter Bates Mining Corporation
(“Hunter Bates”), each of which were wholly owned subsidiaries of Wits Basin at
such time.  Pursuant to the Platinum Security Agreement, Purchaser holds a
security interest in all of Wits Basin’s assets with the exception of equity
interests and assets held in CGMR BVI, Wits Basin (BVI) Ltd., and Wits-China
Acquisition, a wholly owned subsidiary of Wits Basin, to the extent such
entities or assets are located in or relate to China and are subject to a lien
in favor of Purchaser.
 
H.           On September 29, 2009, Hunter Bates Mining Corporation, a Minnesota
corporation and a majority-owned subsidiary of Wits Basin (“Hunter Bates”),
completed a share exchange transaction with Princeton Acquisitions, Inc., a
Colorado corporation (“Princeton Acquisitions”), whereby all of the holders of
outstanding shares of Hunter Bates were acquired by Princeton Acquisitions in
consideration of, on a share-for-share basis, shares of Princeton Acquisitions
common stock.  To permit Wits Basin and Hunter Bates to (i) complete the share
exchange transaction and (ii) transfer the equity of Gregory Gold Producers,
Inc., a Colorado corporation and previously a wholly owned subsidiary of Wits
Basin (“Gregory Gold”), Purchaser consented to the release of its pledge in Wits
Basin’s shares of Hunter Bates and Gregory Gold, and agreed to take in lieu
thereof a pledge of Wits Basin’s shares of Princeton Acquisitions.

 
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I.            On June 9, 2009, Purchaser loaned Issuer an additional $100,000
pursuant to the terms of the Second Amended Note.  On September 1, 2009,
Purchaser loaned Issuer an additional $150,000 pursuant to terms of the Second
Amended Note.  On November 10, 2009, Purchaser loaned Issuer an additional
$150,000 pursuant to the terms of the Second Amended Note (the “Additional
Loans”).  The terms of the Additional Loans included, without limitation, that
Debtor’s payment obligations under the Additional Loans were to be secured by
the Amended Security Agreement, amongst other forms of security.
 
J.            On December 14, 2009, Issuer entered into a financing arrangement
with Kenglo One, Ltd., a company incorporated under the laws of Jersey
(“Kenglo”), whereby Issuer issued Kenglo a secured promissory note in the
principal amount of US$5,000,000.  As a condition to the financing, Purchaser
agreed to permit Issuer to grant Kenglo a security interest in certain assets of
Debtors on a  pari passu basis with Purchaser.
 
K.           On or around the date hereof, Debtor and Secured Party entered into
that certain Amendment No. 4 to the Purchase Agreement (“Amendment No. 4”) in an
effort to consolidate the Second Amended Note and the Additional Loans, and
Debtor issued Secured Party in lieu thereof a promissory note dated December 17,
2009  in the aggregate principal amount of $6,153,321.86 (the “Third Amended
Note”).
 
L.           Pursuant to the terms of Amendment No. 4, Wits Basin and Purchaser
wish to amend and restate the Second Amended Pledge Agreement to consolidate the
pledge of securities of Wits Basin to Purchaser under the Second Amended Pledge
Agreement and the Platinum Security Agreement into a single agreement under the
terms and conditions set forth herein.  This Agreement supersedes in its
entirety the Second Amended Pledge Agreement, which shall have no continuing
effect from the date hereof.  Hunter Bates and Gregory Gold, each of which have
provided Purchaser a guaranty of the obligations of Wits Basin and have entered
into that certain Second Amended and Restated Security Agreement dated of even
date herewith, have further agreed to be bound by the terms hereof.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the foregoing facts and premises hereby made
a part of this Agreement, the mutual promises hereinafter set forth and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, Issuer and Purchaser agree as follows:
 
1.           Pledge.  As security for the prompt payment and performance of the
Secured Obligations (defined below) in full when due, whether at stated
maturity, by acceleration or otherwise (including amounts that would become due
but for the operation of the provisions of the United States Bankruptcy Code (11
U.S.C. Section 101, et seq.), as in effect from time to time, and any successor
statute thereto (“Bankruptcy Code”)), each Pledgor by this Agreement pledges,
grants, transfers, and assigns to Purchaser a security interest in all of such
Pledgor’s right, title, and interest in and to the Collateral (defined below).

 
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For the purposes of this Agreement, with respect to each Pledgor, (a)
“Collateral” means Pledgor’s interest from time to time in the Pledged
Interests, the Future Rights, and the Proceeds, collectively; (b) “Pledged
Interests” means (i) all Equity Interests of Pledgor, and (ii) the certificates
or instruments representing such Equity Interests, if any; (c) “Equity
Interests” means all securities, shares, units, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of, (I) with
respect to Wits Basin, Kwagga Gold (Barbados) Ltd., Standard Gold, Inc. (f/k/a
Princeton Acquisitions, Inc.) and CGMR BVI and (II) with respect to Hunter
Bates, Gregory Gold; (d) “Future Rights” means: (x) all Equity Interests of
Pledgor, and all securities convertible or exchangeable into, and all warrants,
options, or other rights to purchase, Equity Interests of Pledgor; and (y) the
certificates or instruments representing such Equity Interests, convertible or
exchangeable securities, warrants, and other rights and all dividends, cash,
options, warrants, rights, instruments, and other property or proceeds from time
to time received, receivable, or otherwise distributed in respect of or in
exchange for any or all of such Equity Interests; and (e) “Proceeds” means all
proceeds (including proceeds of proceeds) of the Pledged Interests and Future
Rights including all: (I) rights, benefits, distributions, premiums, profits,
dividends, interest, cash, instruments, documents of title, accounts, contract
rights, inventory, equipment, general intangibles, payment intangibles, deposit
accounts, chattel paper, and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for, or as a
replacement of or a substitution for, any of the Pledged Interests, Future
Rights, or proceeds thereof (including any cash, Equity Interests, or other
securities or instruments issued after any recapitalization, readjustment,
reclassification, merger or consolidation with respect to Pledgor and any
security entitlements, as defined in Section 8-102(a)(17) of the Uniform
Commercial Code, with respect thereto); (II) “proceeds,” as such term is defined
in Section 9-102(a)(64) of the Uniform Commercial Code; (III) proceeds of any
insurance, indemnity, warranty, or guaranty (including guaranties of delivery)
payable from time to time with respect to any of the Pledged Interests, Future
Rights, or proceeds thereof; (VI) payments (in any form whatsoever) made or due
and payable to Pledgor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Pledged Interests, Future Rights, or proceeds thereof; and (V) other amounts
from time to time paid or payable under or in connection with any of the Pledged
Interests, Future Rights, or proceeds thereof.
 
Notwithstanding any other provision of this Agreement to the contrary, Purchaser
acknowledges and agrees that (A) (i) only Pledgor’s 50% interest in CGMR BVI
shall constitute an Equity Interest of Wits Basin hereunder, and (ii) that any
actions taken by Purchaser hereunder with respect to CGMR BVI or the related
Equity Interest shall be subject to the terms of that certain Shareholders’
Agreement entered into on London Mining’s subscription into CGMR BVI (the
“Shareholders’ Agreement”) and (B) that 1,839,000 shares of common stock of
Standard Gold, Inc. (f/k/a Princeton Acquisitions, Inc.) held by Wits Basin
shall be excluded from the Collateral, Pledged Interests, Equity Interests and
Future Rights as such terms are defined hereunder.
 
2.           Secured Obligations.  The obligations secured by this Agreement
(the “Secured Obligations”) are all liabilities, obligations, or undertakings
owing by each Pledgor to Purchaser of any kind or description arising out of or
outstanding under, advanced or issued pursuant to, or evidenced by this
Agreement, or the other Investment Documents, as amended from time to time,
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest (including
interest that accrues after the filing of a case under the Bankruptcy Code) and
any and all costs, fees (including attorneys fees), and expenses which such
Pledgor is required to pay pursuant to any of the foregoing, by law, or
otherwise.
 
3.           Delivery and Registration of Collateral.  With respect to each
Pledgor:
 
(a)           All certificates or instruments representing or evidencing the
Collateral shall be promptly delivered by Pledgor to Purchaser or Purchaser’s
designees pursuant to this Agreement at a location designated by Purchaser and
shall be held by or on behalf of Purchaser pursuant to this Agreement, and shall
be in suitable form for transfer by delivery, or shall be accompanied by a duly
executed instrument of transfer or assignment in blank, in form and substance
satisfactory to Purchaser.

 
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(b)           Upon the occurrence and during the continuance of an Event of
Default, Purchaser shall have the right, at any time in their discretion and
without notice to Pledgor, to transfer to or to register on the books of a
subsidiary or company of Pledgor of which Pledged Interests are held (or of any
other Person maintaining records with respect to the Collateral) in the name of
Purchaser or any of its nominees any or all of the Collateral.  In addition,
Purchaser shall have the right at any time to exchange certificates or
instruments representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations.  Notwithstanding the foregoing,
in the event this Section 3(b) is applicable to Wits Basin’s equity interest in
CGMR BVI, Purchaser’s rights shall be subject to the execution and delivery to
CGMR BVI of a signed Deed of Adherence (as defined in the Shareholders’
Agreement), which Purchaser undertakes to execute.
 
(c)           If, at any time and from time to time, any Collateral (including
any certificate or instrument representing or evidencing any Collateral) is in
the possession of a Person other than Purchaser, Kenglo (who has agreed or will
agree to the terms of an intercreditor agreement with Purchaser) or Pledgor
(each, a “Holder”), then Pledgor shall immediately, at Purchaser’s option,
either cause such Collateral to be delivered into Purchaser’s possession, or
cause such Holder to enter into a control agreement, in form and substance
satisfactory to Purchaser, and take all other steps deemed necessary by
Purchaser to perfect the security interest of Purchaser in such Collateral, all
pursuant to Sections 9-106 and 9-313 of the Uniform Commercial Code or other
applicable law governing the perfection of Purchaser’s security interest in the
Collateral in the possession of such Holder.
 
(d)           Any and all Collateral (including dividends, interest, and other
cash distributions) at any time received or held by Pledgor shall be so received
or held in trust for Purchaser, shall be segregated from other funds and
property of Pledgor and shall be forthwith delivered to Purchaser in the same
form as so received or held, with any necessary endorsements; provided that cash
dividends or distributions received by Pledgor may be retained by Pledgor in
accordance with Section 4.
 
(e)           If at any time, and from time to time, any Collateral consists of
an uncertificated security or a security in book entry form, then Pledgor shall
immediately cause such Collateral to be registered or entered, as the case may
be, in the name of Purchaser, or otherwise cause Purchaser’s security interest
thereon to be perfected in accordance with applicable law.
 
4.           Voting Rights and Dividends.
 
(a)           So long as no Event of Default shall have occurred and be
continuing, Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Collateral or any part thereof for any
purpose not inconsistent with the terms of the Investment Documents and shall be
entitled to receive and retain any cash dividends or distributions paid or
distributed in respect of the Collateral;
 
(b)           Upon the occurrence and during the continuance of an Event of
Default, all rights of Pledgor to exercise the voting and other consensual
rights or receive and retain cash dividends or distributions that it would
otherwise be entitled to exercise or receive and retain, as applicable pursuant
to Section 4(a), shall cease, and all such rights shall thereupon become vested
in Purchaser, who shall thereupon have the sole right to exercise such voting or
other consensual rights and to receive and retain such cash dividends and
distributions; provided that with respect to Wits Basin and the exercise of any
rights (including the right to receive and retain dividends) relating to the its
Equity Interest in CGMR BVI, such rights shall be subject to the terms of the
Shareholders' Agreement.  Wits Basin shall execute and deliver (or cause to be
executed and delivered) to Purchaser all such proxies and other instruments as
Purchaser may reasonably request for the purpose of enabling Purchaser to
exercise the voting and other rights which they are entitled to exercise and to
receive the dividends and distributions that they are entitled to receive and
retain pursuant to the preceding sentence; provided that with respect to
exercise of any rights (including the right to receive and retain dividends)
relating to the Equity Interest in CGMR BVI, such rights shall be subject to the
terms of the Shareholders' Agreement.

 
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5.           Release.  On completion of any acquisition of all or part of
Pledgor's equity interest in CGMR BVI by London Mining or a member of its Group
(as defined in the Shareholders' Agreement) or a third party under the "Come
Along" provisions of the Shareholders' Agreement undertaken in accordance with
the terms of the Shareholders' Agreement (an "Acquisition"), the Pledgor's
equity interest in CGMR BVI, or such part acquired, will automatically and
irrevocably be released and Purchaser agrees to take any further action
(including the execution, delivery and filing (as applicable) of any necessary
documents or agreements) necessary to effect such release, and shall, prior to
the completion of the Acquisition deliver to CGMR BVI all documents and items
held by Purchaser pursuant to Section 3 of this agreement.
 
6.           Representations and Warranties.  Each Pledgor represents, warrants,
and covenants as follows:
 
(a)           Pledgor has the authority to pledge the Pledged Interests to
Purchaser under the terms of this Agreement.
 
(b)           Pledgor has taken all steps it deems necessary or appropriate to
be informed on a continuing basis of changes or potential changes affecting the
Collateral (including rights of conversion and exchange, rights to subscribe,
payment of dividends, reorganizations or recapitalization, tender offers and
voting and registration rights), and Pledgor agrees that Purchaser shall have no
responsibility or liability for informing Pledgor of any such changes or
potential changes or for taking any action or omitting to take any action with
respect thereto.
 
(c)           All information in this Agreement or hereafter supplied to
Purchaser by or on behalf of Pledgor in writing with respect to the Collateral
is, or in the case of information hereafter supplied will be, accurate and
complete in all material respects.
 
(d)           Pledgor is and will be the sole legal and beneficial owner of the
Collateral (including the Pledged Interests and all other Collateral acquired by
Pledgor after the date hereof) free and clear of any adverse claim, Lien, or
other right, title, or interest of any party, other than the Liens in favor of
Purchaser and Kenglo.
 
(e)           This Agreement, and the filing of a UCC financing statement by
Purchaser with the Minnesota Secretary of State and Colorado Secretary of State
(as appropriate) describing the Collateral, creates a valid, perfected security
interest in the Pledged Interests in favor of Purchaser securing payment of the
Secured Obligations, and, except with respect to the filing of such UCC
financing statements, all actions of Pledgor necessary to achieve such
perfection have been duly taken.
 
(f)            Schedule 1 to this Agreement is true and correct and complete in
all material respects. Without limiting the generality of the foregoing: (i)
except as set forth on Schedule 1, all the Pledged Interests are in
uncertificated form, and, except to the extent registered in the name of
Purchaser or its nominees pursuant to the provisions of this Agreement and
Kenglo pursuant to the terms of its security agreement with Debtor, are
registered in the name of Pledgor; and (ii) as of the date of this Agreement,
the Pledged Interests as to any subsidiary or company of which Pledged Interests
are held (and with respect to Wits Basin, as to CGMR BVI) constitute at least
the percentage of all the fully diluted issued and outstanding Equity Interests
of such subsidiary or company (and CGMR BVI) as set forth in Schedule 1 to this
Agreement.
 
(g)           There are no presently existing Future Rights or Proceeds owned by
Pledgor.
 
(h)           The Pledged Interests have been duly authorized and validly issued
and are fully paid and non-assessable.

 
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(i)            Neither the pledge of the Collateral pursuant to this Agreement
nor the extensions of credit represented by the Secured Obligations violates
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
 
7.           Further Assurances.  With respect to each Pledgor:
 
(a)           Pledgor agrees that from time to time, at the expense of Pledgor,
Pledgor will promptly execute and deliver all further instruments and documents,
and take all further action that may be necessary or reasonably desirable, or
that Purchaser may request, in order to perfect and protect any security
interest granted or purported to be granted by this Agreement or to enable
Purchaser to exercise and enforce their rights and remedies under this Agreement
with respect to any Collateral. Without limiting the generality of the
foregoing, Pledgor will: (i) at the request of Purchaser, mark conspicuously
each of its records pertaining to the Collateral with a legend, in form and
substance reasonably satisfactory to Purchaser, indicating that such Collateral
is subject to the security interest granted by this Agreement; (ii) execute such
instruments or notices as may be necessary or reasonably desirable, or as
Purchaser may request, in order to perfect and preserve the Liens granted or
purported to be granted by this Agreement; (iii) allow inspection of the
Collateral by Purchaser or Persons designated by Purchaser; and (iv) appear in
and defend any action or proceeding that may affect Pledgor’s title to or
Purchaser’s security interest in the Collateral.
 
(b)           Pledgor by this Agreement authorizes Purchaser to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral. A carbon, photographic, or other reproduction of
this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.
 
(c)           Pledgor will furnish to Purchaser, upon the request of Purchaser:
(i) a certificate executed by Pledgor, and dated as of the date of delivery to
Purchaser, itemizing in such detail as Purchaser may request, the Collateral
which, as of the date of such certificate, has been delivered to Purchaser by
Pledgor pursuant to the provisions of this Agreement; and (ii) such statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Purchaser may request.
 
8.           Covenants of Pledgor.  Each Pledgor shall:
 
(a)           To the extent it may lawfully do so, use its best efforts to
prevent a subsidiary or company of which Pledged Interests are held from issuing
Future Rights or Proceeds; and
 
(b)           Upon receipt by Pledgor of any material notice, report, or other
communication from a subsidiary or company of which Pledged Interests are held
or any Holder relating to all or any part of the Collateral, deliver such
notice, report or other communication to Purchaser as soon as possible, but in
no event later than five (5) days following the receipt thereof by Pledgor.
 
9.           Purchaser as Pledgor’s Attorneys-in-Fact.
 
(a)           Each Pledgor by this Agreement irrevocably appoints Purchaser as
such Pledgor’s attorneys-in-fact, with full authority in the place and stead of
Pledgor and in the name of Pledgor, Purchaser or otherwise, to enter into any
control agreements Purchaser deems necessary pursuant to Section 3 of this
Agreement, and from time to time at Purchaser’s discretion, upon the occurrence
and during the continuance of an Event of Default, to take any action and to
execute any instrument that Purchaser may reasonably deem necessary or advisable
to accomplish the purposes of this Agreement, including: (i) to receive,
indorse, and collect all instruments made payable to such Pledgor representing
any dividend, interest payment or other distribution in respect of the
Collateral or any part thereof to the extent permitted under this Agreement and
to give full discharge for the same and to execute and file governmental
notifications and reporting forms; or (ii) to arrange for the transfer of the
Collateral on the books of a subsidiary or company of which Pledged Interests
are held by such Pledgor or any other Person to the name of Purchaser or to the
names of Purchaser’s nominees.

 
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(b)          In addition to the designation of Purchaser as Pledgor’s
attorneys-in-fact in subsection (a), each Pledgor by this Agreement irrevocably
appoints Purchaser as such Pledgor’s agents and attorneys-in-fact to make,
execute and deliver after the occurrence and during the continuance of an Event
of Default any and all documents and writings which may be necessary or
appropriate for approval of, or be required by, any regulatory authority located
in any city, county, state or country where Pledgor or any subsidiary or company
of which Pledged Interests are held engage in business, in order to transfer or
to more effectively transfer any of the Pledged Interests or otherwise enforce
Purchaser’s rights under this Agreement.
 
10.         Remedies upon Default.  Upon the occurrence and during the
continuance of an Event of Default:
 
(a)           Purchaser may exercise in respect of the Collateral, in addition
to other rights and remedies provided for in this Agreement or otherwise
available to it, all the rights and remedies of a secured party on default under
the Uniform Commercial Code (irrespective of whether the Uniform Commercial Code
applies to the affected items of Collateral), and Purchaser may also without
notice (except as specified below) sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange, broker’s board
or at any of Purchaser’s office or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as Purchaser may deem commercially reasonable, irrespective of the impact
of any such sales on the market price of the Collateral. To the maximum extent
permitted by applicable law, Purchaser may be the purchaser of any or all of the
Collateral at any such sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply all or any part of
the Secured Obligations as a credit on account of the purchase price of any
Collateral payable at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of any
Pledgor, and such Pledgor by this Agreement waives (to the extent permitted by
law) all rights of redemption, stay, or appraisal that it now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. Each Pledgor agrees that, to the extent notice of sale shall
be required by law, at least ten (10) calendar days notice to such Pledgor of
the time and place of any public sale or the time after which a private sale is
to be made shall constitute reasonable notification. Purchaser shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. Purchaser may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. To
the maximum extent permitted by law, each Pledgor by this Agreement waives any
claims against Purchaser arising because the price at which any Collateral may
have been sold at such a private sale was less than the price that might have
been obtained at a public sale, even if Purchaser accepts the first offer
received and do not offer such Collateral to more than one offeree.
 
(b)           Each Pledgor by this Agreement agrees that any sale or other
disposition of the Collateral conducted in conformity with reasonable commercial
practices of banks, insurance companies, or other financial institutions in the
city and state where Purchaser is located in disposing of property similar to
the Collateral shall be deemed to be commercially reasonable.

 
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(c)           Each Pledgor by this Agreement acknowledges that the sale by
Purchaser of any Collateral pursuant to the terms hereof in compliance with the
Securities Act of 1933 as now in effect or as hereafter amended, or any similar
statute hereafter adopted with similar purpose or effect (the “Securities Act”),
as well as applicable “Blue Sky” or other state securities laws may require
strict limitations as to the manner in which Purchaser or any subsequent
transferee of the Collateral may dispose thereof. Each Pledgor acknowledges and
agrees that in order to protect Purchaser’s interest it may be necessary to sell
the Collateral at a price less than the maximum price attainable if a sale were
delayed or were made in another manner, such as a public offering under the
Securities Act. Each Pledgor has no objection to sale in such a manner and
agrees that Purchaser shall have no obligation to obtain the maximum possible
price for the Collateral. Without limiting the generality of the foregoing, such
Pledgor agrees that upon the occurrence and during the continuation of an Event
of Default, Purchaser may, subject to applicable law, from time to time attempt
to sell all or any part of the Collateral by a private placement, restricting
the bidders and prospective Purchaser to those who will represent and agree that
they are purchasing for investment only and not for distribution. In so doing,
Purchaser may solicit offers to buy the Collateral or any part thereof for cash
from a limited number of investors reasonably believed by Purchaser to be
institutional investors or other accredited investors who might be interested in
purchasing the Collateral. If Purchaser shall solicit such offers, then the
acceptance by Purchaser of one of the offers shall be deemed to be a
commercially reasonable method of disposition of the Collateral.
 
Each Pledgor acknowledges that there is no adequate remedy at law for failure by
it to comply with the provisions of this Section and that such failure would not
be adequately compensable in damages, and therefore agrees that its agreements
contained in this Section may be specifically enforced.
 
(d)           EACH PLEDGOR EXPRESSLY WAIVES TO THE MAXIMUM EXTENT PERMITTED BY
LAW: (i) ANY CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING PRIOR TO THE
TIME PURCHASER DISPOSES OF ALL OR ANY PART OF THE COLLATERAL AS PROVIDED IN THIS
SECTION; (ii) ALL RIGHTS OF REDEMPTION, STAY, OR APPRAISAL THAT IT NOW HAS OR
MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY RULE OF LAW OR STATUTE NOW EXISTING
OR HEREAFTER ENACTED; AND (iii) EXCEPT AS SET FORTH IN SUBSECTION (a) OF THIS
SECTION 10, ANY REQUIREMENT OF NOTICE, DEMAND, OR ADVERTISEMENT FOR SALE.
 
(e)           Notwithstanding any term of this Agreement to the contrary, any
rights or actions by Purchaser under this Section 10 relating to the CGMR BVI
shall be subject to the terms of the Shareholders’ Agreement.
 
11.         Application of Proceeds.  Upon the occurrence and during the
continuance of an Event of Default, any cash held by Purchaser as Collateral and
all cash Proceeds received by Purchaser in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral pursuant to
the exercise by Purchaser of their remedies as secured creditors as provided in
Section 10 shall be applied from time to time by Purchaser as provided in
Section 9-615 of the Uniform Commercial Code.
 
12.         Indemnity and Expenses.  Each Pledgor agrees:
 
(a)           To indemnify and hold harmless Purchaser and each of their
directors, officers, employees, agents and affiliates from and against any and
all claims, damages, demands, losses, obligations, judgments and liabilities
(including, without limitation, reasonable attorneys’ fees and expenses) in any
way arising out of or in connection with this Agreement or the Secured
Obligations, except to the extent the same shall arise as a result of the gross
negligence or willful misconduct of the party seeking to be indemnified; and

 
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(b)           To pay and reimburse Purchaser upon demand for all reasonable
costs and expenses (including, without limitation, reasonable attorneys’ fees
and expenses) that Purchaser may incur in connection with (i) the custody, use
or preservation of, or the sale of, collection from or other realization upon,
any of the Collateral, including the reasonable expenses of re-taking, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing on
the Collateral, (ii) the exercise or enforcement of any rights or remedies
granted under this Agreement or under any of the other Investment Documents or
otherwise available to them (whether at law, in equity or otherwise), or (iii)
the failure by Pledgor to perform or observe any of the provisions hereof. The
provisions of this Section shall survive the execution and delivery of this
Agreement, the repayment of any of the Secured Obligations, and the termination
of this Agreement or any other Investment Document.
 
13.         Duties of Purchaser.  The powers conferred on Purchaser under this
Agreement are solely to protect their interests in the Collateral and shall not
impose on them any duty to exercise such powers. Except as provided in Section
9-207 of the Uniform Commercial Code, Purchaser shall have no duty with respect
to the Collateral or any responsibility for taking any necessary steps to
preserve rights against any Persons with respect to any Collateral.
 
14.         Amendments; etc.  No amendment or waiver of any provision of this
Agreement nor consent to any departure by any Pledgor from this Agreement shall
in any event be effective unless the same shall be in writing and signed by
Purchaser and such Pledgor, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No
failure on the part of Purchaser to exercise, and no delay in exercising any
right under this Agreement, any other Investment Document, or otherwise with
respect to any of the Secured Obligations, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right under this Agreement, any
other Investment Document, or otherwise with respect to any of the Secured
Obligations preclude any other or further exercise thereof or the exercise of
any other right. The remedies provided for in this Agreement or otherwise with
respect to any of the Secured Obligations are cumulative and not exclusive of
any remedies provided by law.
 
15.         Notices.  Unless otherwise specifically provided in this Agreement,
all notices shall be in writing addressed to the respective party as set forth
below, and may be personally served, faxed, or sent by overnight courier service
or United States mail:
 
           If to Pledgors (respectively):

Wits Basin Precious Minerals Inc.
80 South Eighth Street, Suite 900
Minneapolis, MN  55402-8773
Attn: Mark Dacko, Chief Financial Officer
Facsimile: (612) 395-5276

Hunter Bates Mining Corporation
80 South Eighth Street, Suite 900
Minneapolis, MN  55402-8773
Attn: Mark Dacko, Chief Financial Officer
Facsimile: (612) 395-5276
 
Gregory Gold Producers, Inc.
80 South Eighth Street, Suite 900
Minneapolis, MN  55402-8773
Attn: Mark Dacko, Chief Financial Officer
Facsimile: (612) 395-5276

 
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with a copy to:
 
Maslon Edelman Borman & Brand, LLP
3300 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN  55402-4140
Attn: Ranga Nutakki, Esq.
Facsimile: (612) 642-8311

           If to Purchaser:
 
China Gold, LLC
4520 Main Street, Suite 1650
Kansas City, MO  64111
Attn: C. Andrew Martin
Facsimile: 816-753-5117

with a copy to:
 
William M. Schutte, Esq.
Polsinelli Shalton Flanigan Suelthaus PC
6201 College Boulevard, Suite 500
Overland Park, KS  66211
Facsimile: 913-451-6205

Any notice given pursuant to this Section shall be deemed to have been given:
(a) if delivered in person, when delivered; (b) if delivered by fax, on the date
of transmission if transmitted on a Business Day before 5:00 p.m. at the place
of receipt or, if not, on the next succeeding Business Day; (c) if delivered by
overnight courier, two (2) days after delivery to such courier properly
addressed; or (d) if by United States mail, four (4) Business Days after
depositing in the United States mail, with postage prepaid and properly
addressed. Any party to this Agreement may change the address or fax number at
which it is to receive notices under this Agreement by notice to the other party
in writing in the foregoing manner.
 
16.         Continuing Security Interest.  This Agreement shall create a
continuing security interest in the Collateral and shall: (a) remain in full
force and effect until the indefeasible payment in full of the Secured
Obligations; (b) be binding upon each Pledgor and its successors and assigns;
and (c) inure to the benefit of Purchaser and their successors, transferees, and
assigns. Upon the indefeasible payment in full of the Secured Obligations, the
security interests granted in this Agreement shall automatically terminate and
all rights to the Collateral shall revert to Pledgors. Upon any such
termination, Purchaser will, at each Pledgor’s expense, execute and deliver to
such Pledgor such documents as such Pledgor shall reasonably request to evidence
such termination. Such documents shall be prepared by such Pledgor and shall be
in form and substance reasonably satisfactory to Purchaser.
 
17.         Security Interest Absolute.  To the maximum extent permitted by law,
all rights of Purchaser, all security interests under this Agreement, and all
obligations of Pledgors under this Agreement, other than under the terms of the
Shareholders' Agreement where applicable, shall be absolute and unconditional
irrespective of:
 
(a)           any lack of validity or enforceability of any of the Secured
Obligations or any other agreement or instrument relating thereto, including any
of the Investment Documents;
 
(b)           any change in the time, manner, or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from any of the Investment Documents,
or any other agreement or instrument relating thereto;

 
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(c)           any exchange, release, or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty for all or any of the Secured Obligations; or
 
(d)           any other circumstances that might otherwise constitute a defense
available to, or a discharge of, any Pledgor.
 
18.         Construction.  Section and subsection headings in this Agreement are
included in this Agreement for convenience of reference only and shall not
constitute a part of this Agreement or be given any substantive effect.  Unless
the context of this Agreement clearly requires otherwise, references to the
plural include the singular and to the singular include the plural, the part
includes the whole, the term “including” is not limiting, and the term “or” has,
except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and other
similar terms in this Agreement refer to this Agreement as a whole and not
exclusively to any particular provision of this Agreement. Article, section,
subsection, exhibit, and schedule references are to this Agreement unless
otherwise specified. All of the exhibits or schedules attached to this Agreement
shall be deemed incorporated in this Agreement by reference. Any reference to
any of the following documents includes any and all alterations, amendments,
restatements, extensions, modifications, renewals, or supplements thereto or
thereof, as applicable: this Agreement or any of the other Investment
Documents.  No inference in favor of, or against, any party shall be drawn from
the fact that such party has drafted any portion of this Agreement, each party
having been represented by counsel of its choice in connection with the
negotiation and preparation of this Agreement and the other Investment
Documents.
 
19.         Interpretation.  Neither this Agreement nor any uncertainty or
ambiguity in this Agreement shall be construed or resolved against Purchaser or
any Pledgor, whether under any rule of construction or otherwise. On the
contrary, this Agreement has been reviewed by both of the parties and their
respective counsel and shall be construed and interpreted according to the
ordinary meaning of the words used so as to fairly accomplish the purposes and
intentions of the parties to this Agreement.
 
20.         Severability.  In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
 
21.         Counterparts; Facsimile Execution.  This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same Agreement. Delivery of an
executed counterpart of this Agreement by facsimile shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by facsimile also
shall deliver an original executed counterpart of this Agreement but the failure
to deliver an original executed counterpart shall not affect the validity,
enforceability, or binding effect of this Agreement.
 
22.         Waiver of Marshaling.  Each of the Pledgors and Purchaser
acknowledge and agree that in exercising any rights under or with respect to the
Collateral: (a) Purchaser is under no obligation to marshal any Collateral; (b)
may, in their absolute discretion, realize upon the Collateral in any order and
in any manner they so elect; and (c) may, in their absolute discretion, apply
the proceeds of any or all of the Collateral to the Secured Obligations in any
order and in any manner they so elect. Each Pledgor and Purchaser waive any
right to require the marshaling of any of the Collateral.
 

 
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23.         Conflict Among Provisions.  In the event of a conflict between the
terms, covenants and conditions of this Agreement and those of any other
Investment Document (unless otherwise specifically provided), the terms,
covenants and conditions of the document which shall enlarge the interest of
Purchaser in the Collateral, afford Purchaser greater financial benefits or
financial security or better assure payment of the Obligations in full, shall
control; provided, however, that in the event of a conflict between any
provision of this Agreement and the provisions of any other document, instrument
or agreement which grants Purchaser a security interest in all or any part of
the Pledged Interest, the provisions of this Agreement shall control.
 
24.         Sole and Absolute Discretion of Purchaser. Whenever pursuant to this
Agreement (a) Purchaser exercises any right given to them to consent, approve or
disapprove, (b) any arrangement, document, item or term is to be satisfactory to
Purchaser, or (c) any other decision or determination is to be made by
Purchaser, the decision of Purchaser to consent, approve or disapprove, all
decisions that arrangements, documents, items, or terms are satisfactory or not
satisfactory and all other decisions and determinations made by Purchaser, shall
be in the sole and absolute discretion of Purchaser and shall be final and
conclusive, except as may be otherwise expressly and specifically provided in
this Agreement.
 
25.         Consent to Forum. AS PART OF THE CONSIDERATION FOR NEW VALUE THIS
DAY RECEIVED, EACH PLEDGOR BY THIS AGREEMENT CONSENTS TO THE JURISDICTION OF ANY
STATE COURT LOCATED WITHIN JOHNSON COUNTY, KANSAS OR FEDERAL COURT IN THE
DISTRICT COURT OF KANSAS, AND CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY
CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH PLEDGOR AT THE ADDRESS STATED IN
THE PURCHASE AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON
ACTUAL RECEIPT THEREOF.  EACH PLEDGOR WAIVES ANY OBJECTION TO JURISDICTION AND
VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED IN THIS AGREEMENT AND
AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE.  EACH
PLEDGOR FURTHER AGREES NOT TO ASSERT AGAINST PURCHASER (EXCEPT BY WAY OF A
DEFENSE OR COUNTERCLAIM IN A PROCEEDING INITIATED BY PURCHASER) ANY CLAIM OR
OTHER ASSERTION OF LIABILITY WITH RESPECT TO THE INVESTMENT DOCUMENTS,
PURCHASER’S CONDUCT OR OTHERWISE IN ANY JURISDICTION OTHER THAN THE FOREGOING
JURISDICTIONS.
 
26.         Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, AND AS
SEPARATELY BARGAINED-FOR CONSIDERATION TO PURCHASER, EACH PLEDGOR BY THIS
AGREEMENT WAIVES ANY RIGHT TO TRIAL BY JURY (WHICH PURCHASER ALSO WAIVES) IN ANY
ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR OTHERWISE
RELATING TO ANY OF THE INVESTMENT DOCUMENTS, THE OBLIGATIONS, THE PLEDGED
INTEREST, OR PURCHASER’S CONDUCT IN RESPECT OF ANY OF THE FOREGOING.
 
27.           Entire Agreement. This agreement, the Purchase Agreement,
Amendment No. 4, the Third Amended Note and the Second Amended and Restated
Security Agreement between the parties thereto dated on or around the date of
the Agreement (i) constitute the final expression of the agreement between
Pledgors and Purchaser concerning the Pledge; and (ii) may not be contradicted
by evidence of any prior or contemporaneous oral agreements or understandings
between Pledgors and Purchaser.  Neither this agreement nor any of the terms
hereof may be terminated, amended, supplemented, waived or modified orally, but
only by an instrument in writing executed by the party against which enforcement
of the termination, amendment, supplement, waiver or modification is sought.
 
[Remainder of page intentionally left blank; signature page follows]

 
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IN WITNESS WHEREOF, Pledgor and Purchaser have caused this Agreement to be duly
executed and delivered by their officers thereunto duly authorized as of the
date first written above.
 
PLEDGORS:
Wits Basin Precious Minerals Inc.,
 
a Minnesota corporation
     
By: 
/s/ Stephen D. King
   
Stephen D. King, Chief Executive Officer
     
Hunter Bates Mining Corporation,
 
a Minnesota corporation
       
By:
/s/ Stephen D. King
   
Stephen D. King, Chief Executive Officer
     
Gregory Gold Producers, Inc.,
 
a Colorado corporation
       
By:
/s/ Stephen D. King
   
Stephen D. King, President

PURCHASER:
China Gold, LLC
 
a Kansas limited liability company
         
By:
Pioneer Holdings, LLC
 
Its:
Manager
           
By:
/s/ C. Andrew Martin
   
Name:  C. Andrew Martin
   
Title:    Manager

 
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SCHEDULE 1
 
Pledged Interests
 
Name of
Subsidiary/Entity
 
Jurisdiction
of
Organization
 
Type of
Interest
 
Number of
Shares/Units
(if applicable)
 
Certificate
Numbers
(if any)
 
Percentage of
Outstanding
Interests in
Subsidiary
                         
WITS BASIN PRECIOUS MINERALS
                                     
Standard Gold, Inc. (f/k/a Princeton Acquisitions, Inc.)1
 
Colorado
 
Common Stock
 
18,584,544
 
various
 
85
%                         
Kwagga Gold (Barbados) Limited
 
Barbados
 
Common Shares
 
1,884,615
 
2
 
35
%                         
China Global Mining Resources (BVI) Limited (1513743)
 
British Virgin Islands
 
Common Stock
 
100 B Shares
 
1
 
50
%                         
HUNTER BATES MINING CORPORATION
                                     
Gregory Gold Producers, Inc.
 
Colorado
 
Common Stock
 
100
 
1
 
100
% 

 

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1 Security interest excludes 1,839,000 shares of common stock of Standard Gold
held by Wits Basin Precious Minerals Inc.

 
 

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