Unassociated Document


    EXHIBIT
10.71

    


    SECOND AMENDED AND RESTATED
SECURITY AGREEMENT

     

    THIS
SECOND AMENDED AND RESTATED SECURITY AGREEMENT (this “Agreement”) is dated as of
December 17, 2009, and is 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 (collectively with Wits Basin and Hunter
Bates, the “Debtors”),
and China Gold, LLC, a Kansas limited liability company, its successors and
assigns (together with its successors and assigns, “Secured Party”).

     

    RECITALS

     

    The
following recitals are a material part of this Agreement.

     

    A.          Debtor
and Secured Party are parties to that certain Convertible Notes Purchase
Agreement dated as of April 10, 2007, as amended on June 19, 2007 and November
10, 2008 (as amended, the “Purchase Agreement”), pursuant
to which, among other things, Debtor has issued Secured Party Secured
Convertible Notes in an aggregate principal amount of $9,800,000 (the “Prior Notes”).  All
capitalized terms used in this Agreement without definition have the definitions
given to them in the Purchase Agreement.

     

    B.           As
partial security for Debtor’s obligations under the Prior Notes, Debtor entered
into a Security Agreement with Secured Party dated June 19, 2007 (the “Original Security Agreement”),
whereby Debtor granted Secured Party a security interest in all of the assets
acquired by Debtor from the use of the proceeds from the sale of the Prior
Notes.

     

    C.           On
October 28, 2008, Secured Party loaned Debtor an additional $441,000 pursuant to
the terms of a Promissory Note dated October 28, 2008 (the “October 2008 Note”), with
Debtor’s payment obligations under the Additional Note secured by the Original
Security 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.

     

    E.           In
March 2009, Debtor entered into a joint venture transaction (the “JV Transaction”) with London
Mining Plc (“London
Mining”), whereby London Mining and Debtor 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, 2008, Debtor and Secured Party entered into that certain Amendment
No. 3 to the Purchase Agreement (“Amendment No. 3”) in an effort
to consolidate the First Amended Note and October 2008 Note, and Debtor issued
Secured Party in lieu thereof a promissory note dated December 22,
2008  in the aggregate principal amount of $10,241,000 (the “Second Amended
Note”).  Additionally, pursuant to Amendment No. 3, to enable
the Debtor to enter into the JV Transaction, the parties modified certain terms
of the First Amended Note and October 2008 Note to, among other modifications,
amend certain terms of Secured Party’s security interest to release from such
security interest the Rights, the PRC Properties and Debtor’s equity interest in
China Global Mining Resources Limited, a Hong Kong corporation (“CGMR HK”).  As a
result of such modifications, on December 19, 2009, Debtor and Secured Party
amended and superseded the terms of the Original Security Agreement pursuant to
an Amended and Restated Security Agreement (the “Amended Security
Agreement”).

     

    G.           On
April 20, 2009, the Secured Party 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 by and between Issuer and Platinum (the
“Platinum Purchase
Agreement”), pursuant to Issuer issued that certain 10% Senior Secured
Convertible Promissory Note in the principal amount of $1,020,000 issued by
Debtor 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 Debtor in favor of Platinum on or around July 10, 2008 (the
“Platinum
Notes”).  The Debtor’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 Debtor and Secured Party (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 the Debtor at such time.  Pursuant
to the Platinum Security Agreement, Secured Party holds a security interest in
all of Debtor’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 the Debtor, to the extent such entities or assets are located in
or relate to China and are subject to a lien in favor of Secured
Party.

     

    H.           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.

     

    I.         
  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.

     

    J.           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”).

     

    K.           Pursuant
to the terms of Amendment No. 4, Debtor and Secured Party wish to enter into
this Second Amended and Restated Security Agreement to consolidate the security
rights of Secured Party under the Amended Security 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 Amended
Security Agreement and Platinum Security Agreement, each of which shall have no
continuing effect from the date 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, Debtors and Secured Party agree as
follows:

     

    1.           Grant of Security
Interest.  Each Debtor hereby grants to Secured Party a present
and continuing security interest (the “Security Interest”) in all of
such Debtor’s right, title and interest in and to all personal property of
Debtor and all products and proceeds thereof, whether now owned or hereinafter
acquired, including the following (collectively, the “Collateral”):

     

    (a)           All
inventory, of every type and description, now owned or hereafter acquired by
Debtor, including inventory consisting of whole goods, spare parts or
components, supplies or materials and inventory acquired, held or furnished for
sale, for lease or under service contracts or for manufacture or processing, or
any other purpose, and wherever located.

     

    (b)           All
warehouse receipts, bills of lading and other documents of title of every type
and description now owned or hereafter acquired by Debtor.

     

    (c)           All
of Debtor’s accounts, now existing or hereafter arising, including each and
every right of Debtor to the payment of money, whether such right to payment now
exists or hereafter arises, whether such right to payment arises out of a sale,
lease or other disposition of goods or other property, out of a rendering of
services, out of a loan, out of the overpayment of taxes or other liabilities,
or any other transaction or event, whether such right to payment is created,
generated or earned by Debtor or by some other person whose interest is
subsequently transferred to Debtor, whether such right to payment is or is not
already earned by performance, and howsoever such right to payment may be
evidenced (including without limitation, that certain Promissory Note of CGMR
BVI in favor of Wits Basin in the principal amount of $4,800,000), together with
all other rights and interests (including all liens, security interests and
guaranties) which Debtor may at any time have by law or agreement against any
account debtor or other person obligated to make any such payment or against any
property of such account debtor or other person; all contract rights, chattel
papers, bonds, notes and other debt instruments, and all loans and obligations
receivable, tax refunds and other rights to payment in the nature of general
intangibles; all checking accounts, savings accounts and other depository
accounts and all savings certificates and certificates of deposit maintained
with or issued by any bank or financial institution.

     

    (d)           All
equipment, now owned or hereafter acquired by Debtor and all fixtures of every
type and description now owned or hereafter acquired by Debtor, including
(without limitation) all present and future machinery, vehicles, furniture,
fixtures, manufacturing equipment, shop equipment, office and recordkeeping
equipment, parts, tools, supplies and all other goods (except inventory) used or
bought for use by Debtor for any business or enterprise; including (without
limitation) all goods that are or may be attached or affixed or otherwise become
fixtures upon any real property; and including specifically (without limitation)
the goods described in any equipment schedule or list herewith or hereafter
furnished to Secured Party by Debtor, all accessions attachments, parts and
repairs now or hereafter attached or affixed or used in connection with
equipment, all substitutions and replacements thereof, and all like or similar
property now owned or hereafter acquired by Debtor.  (No such schedule
or list need be furnished in order for the security interest granted herein to
be valid as to all of Debtor’s equipment.)


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    (e)           All
investment property, whether now owned or hereafter acquired by Debtor,
including (without limitation) all securities, security entitlements, securities
accounts, commodity contracts, commodity accounts, stocks, bonds, mutual fund
shares, money market shares and U.S. Government securities, including, subject
to the limitations and/or exclusions below, all investment property and general
intangibles respecting ownership and/or other equity interests of Debtor in each
wholly-owned, majority-owned or minority owned subsidiary, including, without
limitation, the shares of capital stock and the other equity interests listed on
Schedule A hereto (as the same may be modified from time to time pursuant to the
terms hereof, the “Pledged
Securities”), and any other shares of capital stock and/or other equity
interests of any other direct or indirect subsidiary of any Debtor obtained in
the future, and, in each case, all certificates representing such shares and/or
equity interests and, in each case, all rights, options, warrants, stock, other
securities and/or equity interests that may hereafter be received, receivable or
distributed in respect of, or exchanged for, any of the foregoing and all rights
arising under or in connection with the Pledged Securities, including, but not
limited to, all dividends, interest and cash (“Future
Rights”).  Notwithstanding the foregoing, the Secured Party
acknowledges and agrees 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 and the Pledged Securities.

     

    (f)           All
general intangibles of every type and description now owned or hereafter
acquired by Debtor, including (without limitation) all present and future
intellectual property, proprietary rights, foreign and domestic patents, patent
applications, trademarks, trademark applications, service marks, service mark
applications, trade dress, mask works, copyrights, trade names, trade secrets,
shop drawings, engineering drawings, blueprints, specifications, parts lists,
manuals, operating instructions, customer or supplier lists and contracts,
licenses, permits, franchises, the right to use Debtor’s corporate name, and the
goodwill of Debtor’s business.

     

    (g)           All
instruments, chattel paper, deposit accounts, documents, goods, letter-of-credit
rights, letters of credit, all sums on deposit in any collateral account, and
any items in any lockbox, now existing or hereafter arising, and any money or
other assets of Debtor that come into the possession, custody or control of
Secured Party.

     

    For
purposes of this Agreement, "Account", "Account Debtor", "Chattel Paper",
"Commercial Tort Claims", "Deposit Account", "Document", "Equipment",
"Fixtures", "General Intangibles", "Instrument", "Inventory", "Investment
Property", "Letter-of-Credit Rights", "Proceeds" and "Supporting Obligations"
shall have the meanings set forth in the Kansas Uniform Commercial Code, as
amended from time to time, and such meanings shall automatically change at the
time that any amendment to the Kansas Uniform Commercial Code, which changes
such meanings, shall become effective.  For purposes of this
Agreement, such terms may be capitalized, even if not capitalized in the Kansas
Uniform Commercial Code, provided, that if any additional goods, property or
rights shall be included in such terms under Article 2 thereof, such terms shall
be construed to include such additional goods, property or rights. To the extent
that the Uniform Commercial Code does not apply to any item of the Collateral,
it is the intention of the parties and this Agreement that Secured Party have a
common law pledge or collateral assignment of such item of
Collateral.

    


    2.           Security for
Obligations.  This Agreement secures the payment and
performance of all obligations of Wits Basin under the Purchase Agreement, the
Platinum Purchase Agreement, the Third Amended Note and the Platinum Notes
(collectively, the “Investment
Documents”; and all such obligations collectively referred to herein as
the “Obligations”), and
Hunter Bates and Gregory Gold each hereby absolutely and unconditionally
guarantee to Secured Party the full and prompt payment of the Obligations when
due to the extent of the value of each such Debtor’s
Collateral.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    3.           Acknowledgments of Secured
Party.  Secured Party acknowledges and agrees that, except with
respect to the pledge of Wits Basin’s equity interest pursuant to that certain
Third Amended and Restated Pledge Agreement dated of even date herewith by and
between Debtors and Secured Party (as amended, the “Pledge Agreement”), Secured
Party has no security interest in the assets of CGMR BVI and its subsidiary
undertakings, including any rights of CGMR BVI or its subsidiaries to acquire,
hold or operate certain mining properties in the People’s Republic of
China.

     

    4.           Release.  On
completion of any acquisition of all or part of Wits Basin'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"), Wits Basin’s
equity interest in CGMR BVI, or such part acquired, will automatically and
irrevocably be released and Secured Party 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 Secured Party pursuant to the terms of the Pledge
Agreement.

     

    5.           Further
Assurances.

     

    (a)           Each
Debtor agrees that it shall, from time to time and at its sole expense, promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that Secured Party may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies under this Agreement with respect to any
Collateral.  Without limiting the generality of the foregoing, each
Debtor shall: (i) if any Collateral is or shall become evidenced by any
promissory note or other instrument or any certificate or document of title or
the like, deliver and pledge to Secured Party such note, instrument, certificate
or document duly endorsed with recourse by Debtor, and accompanied by duly
executed instruments of transfer or assignment, all in form and content
satisfactory to Secured Party; and (ii) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Secured Party may request, in
order to perfect and preserve the security interests granted or purported to be
granted hereby.

     

    (b)           Debtor
hereby authorizes Secured Party to file one or more financing or continuation
statements, and amendments thereto, relating to all or any part of the
Collateral, without the signature of Debtor to the extent permitted by
law.  A copy of this Agreement shall be sufficient as a financing
statement to the extent permitted by law.

     

    (c)           Each
Debtor will furnish to Secured Party from time to time statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral as Secured Party may reasonably request from time
to time, all in reasonable detail.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    6.           Secured Party’s
Duties.  The powers conferred on Secured Party under this
Agreement are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers.  Except for the
safe custody of any Collateral in its possession and the accounting for monies
actually received by it under this Agreement, Secured Party shall have no duty
as to any Collateral or as to the taking of any necessary steps to preserve
rights against other parties or any other rights pertaining to any
Collateral.  Upon full and complete payment and performance of all of
the Obligations under the Investment Documents, Secured Party shall release the
Collateral of the liens created and granted under this Agreement and, at each
Debtor’s expense, execute and deliver to each such Debtor such documents as such
Debtor shall reasonably request to evidence such release.

     

    7.           Debtor Remains
Liable.  Notwithstanding anything in this Agreement to the
contrary, (a) each Debtor shall remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this Agreement had
not been executed, (b) the exercise by Secured Party of any of its rights under
this Agreement shall not release such Debtor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) Secured Party shall not have any obligation or liability under the contracts
and agreements included in the Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform any of the obligations or duties of such
Debtor thereunder or to take any action to collect or enforce any claim for
payment assigned under this Agreement.

     

    8.           Representations, Warranties
and Agreements. Each Debtor hereby represents, warrants and agrees as
follows:

     

    (a)           Title.
Debtor (i) has absolute title to each item of Collateral in existence on the
date hereof, free and clear of all Liens except the Permitted Liens, (ii) will
have, at the time Debtor acquires any rights in the Collateral hereafter
arising, absolute title to, or valid leasehold interests in, each such item of
the Collateral, free and clear of all Liens except the Permitted Liens, (iii)
will keep all of the Collateral free and clear of all Liens ranking in priority
to or pari passu with
Liens created by this Security Interest except the Permitted Liens, and (iv)
will defend the Collateral against all claims or demands of all persons other
than the Secured Party, China Gold and the holder of any Permitted
Lien.  Debtor will not sell or otherwise dispose of the Collateral or
any interest therein, outside the ordinary course of business, without the prior
written consent of the Secured Party.  For the purposes of this
Agreement, the term “Liens” means any security
interest, mortgage, deed of trust, pledge, lien, charge, encumbrance, title
retention agreement or analogous instrument or device, including the interest of
each lessor under any capitalized lease and the interest of any bondsman under
any payment or performance bond, in, of or on any assets or properties of a
person, whether now owned or hereafter acquired and whether arising by agreement
or operation of law, and the term “Permitted Liens” means (1) the
Security Interest, (2) a pari
passu Lien in the Collateral held by Kenglo that is in all respects equal
and identical to the Security Interest, (3) covenants, restrictions, rights,
easements and minor irregularities in title that do not materially interfere
with the Company’s business or operations as presently conducted; (4) liens for
taxes not yet delinquent or liens for taxes being contested in good faith and by
appropriate proceedings for which adequate reserves have been established, (5)
liens in respect of property or assets imposed by law which were incurred in the
ordinary course of business, such as carriers’, warehousemen’s, materialmen’s,
landlord’s and mechanics’ liens and other similar liens arising in the ordinary
course of business which are not delinquent or remain payable without penalty or
which are being contested in good faith and by appropriate proceedings and (6)
matters of record as of the date hereof, itemized on Schedule
A hereof; provided, however, that notwithstanding the foregoing, Secured
party shall not be subject to any Permitted Lien unless Kenglo is also subject
to the same Permitted Lien.

     

    (b)           Location
of the Collateral.  As of the date hereof, the tangible Collateral is
located only in the state and at the address(es) identified on Schedule
B attached hereto.  Debtor will not permit any tangible
Collateral to be located in any state (and, if county filing is required, in any
county) in which a financing statement covering such Collateral is required to
be, but has not in fact been, filed in order to perfect the Security
Interest.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    (c)           Fixtures.  Except
as otherwise set forth in any lease agreement between Debtor and its landlord,
Debtor will not permit any tangible Collateral to become part of or to be
affixed to any real property without first assuring to the reasonable
satisfaction of the Secured Party that the Security Interest will be prior and
senior to any Lien then held or thereafter acquired by any mortgagee of such
real property or the owner or purchaser of any interest therein.

     

    (d)           Rights
to Payment.  Each right to payment and each instrument, document,
chattel paper and other agreement constituting or evidencing the Collateral is
(or will be when arising, issued or assigned to the Secured Party) the valid,
genuine and legally enforceable obligation, subject to no defense, setoff or
counterclaim (other than those arising in the ordinary course of business), of
the account debtor or other obligor named therein or in Debtor’s records
pertaining thereto as being obligated to pay such obligation.  Debtor
will neither agree to any material modification or amendment nor agree to any
forbearance, release or cancellation of any such obligation, and will not
subordinate any such right to payment to claims of other creditors of such
account debtor or other obligor.

     

    (e)           Commercial
Tort Claims.  Promptly upon knowledge thereof, Debtor will deliver to
the Secured Party notice of any commercial tort claims it may bring against any
person, including the name and address of each defendant, a summary of the
facts, an estimate of Debtor’s damages, copies of any complaint or demand letter
submitted by Debtor, and such other information as the Secured Party may
request.  Upon request by the Secured Party, Debtor will grant the
Secured Party a security interest in all commercial tort claims it may have
against any person.

     

    (f)           Miscellaneous
Covenants.  Debtor will:

     

    (1)             keep
all tangible Collateral in good repair, working order and condition, normal
depreciation excepted;

     

    (2)             promptly
pay all taxes and other governmental charges levied or assessed upon or against
any Collateral or upon or against the creation, perfection or continuance of the
Security Interest;

     

    (3)             at
all reasonable times, permit the Secured Party or its representatives to examine
or inspect any Collateral, wherever located, and to examine, inspect and copy
Debtor’s books and records pertaining to the Collateral and its business and
financial condition and to send and discuss with account debtors and other
obligors requests for verifications of amounts owed to Debtor;

     

    (4)             keep
accurate and complete records pertaining to the Collateral and pertaining to
Debtor’s business and financial condition and submit to the Secured Party such
periodic reports concerning the Collateral and Debtor’s business and financial
condition as the Secured Party may from time to time reasonably
request;

     

    (5)             promptly
notify the Secured Party of any material loss of or material damage to any
Collateral or of any material adverse change known to Debtor pertaining to the
prospect of payment of any sums due on or under any instrument, chattel paper,
or account constituting the Collateral;


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    (6)             from
time to time execute such financing statements as the Secured Party may
reasonably require in order to perfect the Security Interest (including, without
limitation, any filings with the United States Patent and Trademark Office,
Copyright or other Intellectual Property filings and any filings of financing or
continuation statements under the UCC) in order to create, preserve, upgrade in
rank (to the extent required hereby), perfect, confirm or validate the Security
Interest or to enable the Secured Party to obtain the full benefits of this
Agreement, or to enable the Secured Party to exercise and enforce any of its
rights, powers and remedies hereunder with respect to any of the Collateral and,
if any Collateral consists of a motor vehicle, execute such documents as may be
required to have the Security Interest properly noted on a certificate of
title;

     

    (7)             with
respect to the Pledged Securities, to the extent it may lawfully do so, use its
best efforts to prevent any subsidiary of Debtor of which Pledged Securities are
held from issuing Future Rights or Proceeds; and

     

    (8)             upon
receipt by Debtor of any material notice, report, or other communication from a
subsidiary of Debtor of which Pledged Securities are held or any Holder relating
to all or any part of the Pledged Securities, deliver such notice, report or
other communication to Secured Party as soon as possible, but in no event later
than five (5) days following the receipt thereof by Debtor.

     

    (9)             pay
when due or reimburse the Secured Party on demand for all costs of collection of
any of the Obligations and all other out-of-pocket expenses (including, in each
case, all reasonable attorneys’ fees) incurred by the Secured Party in
connection with the creation, perfection, satisfaction, protection, defense or
enforcement of the Security Interest or the creation, continuance, protection,
defense or enforcement of this Agreement or any or all of the Obligations,
including expenses incurred in any litigation or bankruptcy or insolvency
proceedings; and

     

    (10)           not
use or keep any Collateral, or permit it to be used or kept, for any unlawful
purpose or in violation of any federal, state or local law, statute or
ordinance.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    (g)           The
Secured Party’s Right to Take Action.  Debtor authorizes the Secured
Party to file from time to time where permitted by law, such financing
statements against the Collateral described as “all of Debtor’s assets” as the
Secured Party deems necessary or useful to perfect the Security
Interest.  Debtor will not amend any financing statements in favor of
the Secured Party, except as permitted by law.  Further, if Debtor at
any time fails to perform or observe any agreement contained in Section 8(f),
and if such failure continues for a period of 10 days after the Secured Party
gives Debtor written notice thereof (or, in the case of the agreements contained
in clauses (6) and (9) of Section 8(f), immediately upon the occurrence of such
failure, without notice or lapse of time), the Secured Party may (but need not)
perform or observe such agreement on behalf and in the name, place and stead of
Debtor (or, at the Secured Party’s option, in the Secured Party’s own name) and
may (but need not) take any and all other actions which the Secured Party may
reasonably deem necessary to cure or correct such failure (including, without
limitation, the payment of taxes, the satisfaction of security interests, liens,
or encumbrances, the performance of obligations under contracts or agreements
with account debtors or other obligors, the procurement and maintenance of
insurance, the execution of financing statements, the endorsement of
instruments, and the procurement of repairs or transportation); and, except to
the extent that the effect of such payment would be to render any loan or
forbearance of money usurious or otherwise illegal under any applicable law,
Debtor shall thereupon pay the Secured Party on demand the amount of all moneys
expended and all costs and expenses (including reasonable attorneys’ fees)
incurred by the Secured Party in connection with or as a result of the Secured
Party’s performance or observation of such agreements or any actions taken
thereunder, together with interest thereon from the date expended or incurred by
the Secured Party at the highest rate then applicable to any of the
Obligations.  To facilitate the performance or observance by the
Secured Party of such agreements of Debtor, Debtor hereby irrevocably appoints
(which appointment is coupled with an interest) the Secured Party, or its
delegate, as the attorney-in-fact of Debtor with the right (but not the duty)
from time to time to create, prepare, complete, execute, deliver, endorse or
file, in the name and on behalf of Debtor, any and all instruments, documents,
control agreements, financing statements, applications for insurance and other
agreements and writings required to be obtained, executed, delivered or endorsed
by Debtor under this Section 8 and Section 9, including: (i) to receive,
indorse, and collect all instruments made payable to Debtor representing any
dividend, interest payment or other distribution in respect of the Pledged
Securities 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
Pledged Securities on the books of a subsidiary of Debtor of which Pledged
Securities are held or any other person to the name of Secured Party or to the
names of Secured Party’s nominees.  In addition to the designation of
Secured Party as Debtor’s attorneys-in-fact, Debtor by this Agreement
irrevocably appoints Secured Party as Debtor’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 Debtor or any subsidiary of Debtor
of which Pledged Securities are held engage in business, in order to transfer or
to more effectively transfer any of the Pledged Securities or otherwise enforce
Secured Party’s rights under this Agreement.

     

    Debtor shall pay the costs of, or
incidental to, any recording or filing of any financing statements, financing
statement amendments or continuation statements concerning the
Collateral.

    


    9.           Rights of the Secured
Party.

     

    (a)           Account
Verification. At any time and from time to time, whether before or after an
Event of Default, the Secured Party may send or require a Debtor to send
requests for verification of Accounts to account debtors and other
obligors.  The Secured Party may also at any time and from time to
time telephone account debtors and other obligors to verify
accounts.

     

    (b)           Direct
Collection.  At any time after the occurrence and during the
continuation of an Event of Default, the Secured Party may notify any account
debtor, or any other person obligated to pay any amount due, that such chattel
paper, Account, or other right to payment has been assigned or transferred to
the Secured Party for security and shall be paid directly to the Secured
Party.  At any time after the Secured Party or any Debtor gives such
notice to an account debtor or other obligor, the Secured Party may (but need
not), in its own name or in such Debtor’s name, demand, sue for, collect or
receive any money or property at any time payable or receivable on account of,
or securing, any such chattel paper, Account, or other right to payment, or
grant any extension to, make any compromise or settlement with or otherwise
agree to waive, modify, amend or change the obligations (including collateral
obligations) of any such account debtor or other obligor.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    10.         Assignment of
Insurance.  Each Debtor hereby assigns to the Secured Party, as
additional security for the payment of the Obligations, any and all moneys
(including, but not limited to, proceeds of insurance and refunds of unearned
premiums) due or to become due under, and all other rights of such Debtor under
or with respect to any and all policies of insurance covering the Collateral,
and such Debtor hereby directs the issuer of any such policy to pay any such
moneys directly to the Secured Party.  After the occurrence and during
the continuation of an Event of Default, the Secured Party may (but need not),
in its own name or in such Debtor’s name, execute and deliver proofs of claim,
receive all such moneys, endorse checks and other instruments representing
payment of such moneys, and adjust, litigate, compromise or release any claim
against the issuer of any such policy.

     

    11.         Events of
Default.  Each of the following occurrences (subject to any
applicable grace periods) shall constitute an Event of Default under this
Agreement (herein called an “Event of
Default”):  (i)  Wits Basin shall fail to pay any or
all of the Obligations when due or, if payable on demand, on demand; or
(ii)  the occurrence of an “Event of Default” as defined under any
Investment Document; or (iii) payment of any substantial indebtedness of Wits
Basin, other than the Obligations, shall be demanded or the maturity of any such
indebtedness shall be accelerated, or any precondition or circumstance
permitting any creditor of Wits Basin, acting individually or with the consent
of other creditors, to accelerate the maturity of any such indebtedness shall
have occurred (for this purpose indebtedness shall be deemed substantial if it
exceeds $50,000); or (iv) Wits Basin shall become insolvent or shall commit an
act of bankruptcy under the United States Bankruptcy Act, or shall file or have
filed against it, voluntarily or involuntarily, a petition in bankruptcy or for
reorganization or for the adoption of an arrangement or plan under the United
States Bankruptcy Code or shall procure or suffer the appointment of a receiver
for any substantial portion of its properties, or shall initiate or have
initiated against it, voluntarily or involuntarily, any act, process or
proceeding under any insolvency law or other statute or law providing for the
modification or adjustment of the rights of creditors.

     

    12.         Remedies.  If
any Event of Default shall have occurred and be continuing:

     

    (a)           Secured
Party shall have the right pursuant to the applicable Uniform Commercial Code
(or pursuant to applicable law for any Collateral not subject to the Uniform
Commercial Code) to declare all unmatured Obligations to be immediately due and
payable, and the same shall thereupon be immediately due and payable, without
presentment or other notice or demand, exercise and enforce any or all rights
and remedies available upon default to a secured party under the UCC, including,
but not limited to, the right to take possession of any Collateral, proceeding
without judicial process or by judicial process (without a prior hearing or
notice thereof, which Debtor hereby expressly waives), and (i) to require each
Debtor to assemble the Collateral, at Debtor’s expense, and make it available to
Secured Party at a place designated by Secured Party which is reasonably
convenient to both parties, and (ii) to enter any of the premises of any Debtor
or wherever any of the Collateral shall be located, and to keep and store the
same on such premises until sold or otherwise realized upon (and if such
premises are the property of such Debtor, such Debtor agrees not to charge
Secured Party for storage thereof).

     

    (b)           Secured
Party shall have the right to sell or otherwise dispose of all or any Collateral
at public or private sale or sales, with such notice as may be required by law,
all as Secured Party, in its sole discretion, may deem
advisable.  Each Debtor agrees that ten (10) days written notice to
such Debtor of any public or private sale or other disposition of such
Collateral shall be reasonable notice thereof, and such sale shall be at such
locations as Secured Party may designate in such notice.  Secured
Party shall have the right to conduct such sales on such Debtor’s premises,
without charge therefor.  All public or private sales may be adjourned
from time to time in accordance with applicable law.  Secured Party
shall have the right to sell, lease or otherwise dispose of such Collateral, or
any part thereof, for cash, credit or any combination thereof, and Secured Party
may purchase all or any part of such Collateral at public or, if permitted by
law, private sale and, in lieu of actual payment of such purchase price, may set
off the amount of such price against the Obligations.

     


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    (c)           Debtors
by this Agreement acknowledge that the sale by Secured Party of any Pledged
Securities 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 Secured Party or any subsequent transferee
of the Pledged Securities may dispose thereof. Debtors acknowledge and agree
that in order to protect Secured Party’s interest it may be necessary to sell
the Pledged Securities 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 such Debtor has no objection to sale in such a
manner and agrees that Secured Party shall have no obligation to obtain the
maximum possible price for the Pledged Securities. Without limiting the
generality of the foregoing, such Debtor agrees that upon the occurrence and
during the continuation of an Event of Default, Secured Party may, subject to
applicable law, from time to time attempt to sell all or any part of the Pledged
Securities by a private placement, restricting the bidders and prospective
Secured Party to those who will represent and agree that they are purchasing for
investment only and not for distribution. In so doing, Secured Party may solicit
offers to buy the Pledged Securities or any part thereof for cash from a limited
number of investors reasonably believed by Secured Party to be institutional
investors or other accredited investors who might be interested in purchasing
the Pledged Securities. If Secured Party shall solicit such offers, then the
acceptance by Secured Party of one of the offers shall be deemed to be a
commercially reasonable method of disposition of the Pledged
Securities.

     

    Each Debtor 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)           Secured
Party may exercise with respect to the Collateral all of the rights and remedies
(i) provided for in this Agreement, (ii) provided under the Purchase Agreement
or under the other Investment Documents, (iii) afforded to a secured party upon
a default under the Uniform Commercial Code, or (iv) otherwise available at law
or in equity.

     

    13.         Indemnity and
Expenses.

     

    (a)           Each
Debtor agrees to indemnify Secured Party from and against any and all claims,
losses and liabilities arising out of or relating to this Agreement or any of
the Obligations (including enforcement of this Agreement and Secured Party’s
exercise of its rights and remedies under this Agreement), unless such claims,
losses and liabilities are caused solely by Secured Party’s gross negligence or
willful misconduct.

     

    (b)           Each
Debtor shall upon demand pay to Secured Party the amount of any and all charges,
costs, fees and expenses, including the reasonable fees and disbursements of its
counsel and of any experts and agents, that Secured Party may incur following
such Debtor’s default in connection with (i) the custody, preservation, use of,
or the sale of, collection from, or other realization upon, any of the
Collateral, (ii) the exercise or enforcement of any of the rights of Secured
Party under this Agreement, or (iii) the failure by such Debtor to perform or
observe any of the provisions of this Agreement.  All such fees,
expenses and disbursements shall be deemed Obligations secured by this
Agreement.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    14.         Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Kansas without regard to any choice of
law rule thereof giving effect to the laws of any other jurisdiction; provided, however, that if any
of the Collateral is located in any jurisdiction other than Kansas, then the
laws of such jurisdiction shall govern the method, manner and procedure for
foreclosure of Secured Party’s security interest in such Collateral and the
enforcement of Secured Party’s other remedies in respect of such Collateral to
the extent that the laws of such jurisdiction are different from or inconsistent
with the laws of Kansas.

     

    15.         Organizational
Representations; UCC Filing Offices.

     

    (a)           Wits
Basin represents and warrants to Secured Party that (i) it is a corporation
incorporated under the laws of Minnesota, (ii) its chief executive office is
located at 80 South Eighth Street, Suite 900, Minneapolis, Minnesota 55402-8773
and (iii) its organizational identification number is 11M-931.

     

    (b)           Hunter
Bates represents and warrants to Secured Party that (i) it is a corporation
incorporated under the laws of Minnesota, (ii) its chief executive office is
located at 80 South Eighth Street, Suite 900, Minneapolis, Minnesota 55402-8773
and (iii) its organizational identification number is 2820102-2.

     

    (c)           Gregory
Gold represents and warrants to Secured Party that (i) it is a corporation
incorporated under the laws of Colorado, (ii) its chief executive office is
11438 County Road 19, Ft. Lupton, CO 80321 and (iii) its organizational
identification number is 20041114473.

     

    If any
Debtor changes the address of its chief executive office, or its name, identity,
corporate structure or state of incorporation (without implying any right of
such Debtor to make any such change without the prior consent of Secured Party),
then, in each case, such Debtor shall give Secured Party not less than ten (10)
Business Days prior written notice thereof.

    


    16.         Miscellaneous.

     

    (a)           The
mere delay or failure to act shall not preclude the exercise or enforcement of
any of the Secured Party’s rights or remedies.  All rights and
remedies of the Secured Party shall be cumulative and may be exercised
singularly or concurrently, at the Secured Party’s option, and the exercise or
enforcement of any one such right or remedy shall neither be a condition to nor
bar the exercise or enforcement of any other.  The Secured Party’s
duty of care with respect to the Collateral in its possession (as imposed by
law) shall be deemed fulfilled if the Secured Party exercises reasonable care in
physically safekeeping such Collateral or, in the case of any Collateral in the
custody or possession of a bailee or other third person, exercises reasonable
care in the selection of the bailee or other third person, and the Secured Party
need not otherwise preserve, protect, insure or care for any
Collateral.  The Secured Party shall not be obligated to preserve any
rights of any Debtor may have against prior parties, to realize on the
Collateral at all or in any particular manner or order, or to apply any cash
proceeds of Collateral in any particular order of application.  All
representations and warranties contained in this Agreement shall survive the
execution, delivery and performance of this Agreement and the creation and
payment of the Obligations.

     

    (b)           No
amendment or waiver of any provision of this Agreement nor consent to any
departure by Debtor from the terms or provisions of this Agreement, shall in any
event be effective unless it shall be in writing and signed by the party against
whom enforcement of such amendment, waiver or consent is sought, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    (c)           The
paragraph and section headings in this Agreement are solely for convenience and
shall not be deemed to limit or otherwise affect the meaning or construction of
any part of this Agreement.  This Agreement shall be construed without
regard to any presumption or rule requiring construction against the party
causing such document or any portion thereof to be drafted.  The
section and other headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect any of the terms of this
Agreement.  Any pronoun used in this Agreement shall be deemed to
cover all genders.  The terms “include”, “including” and similar terms
shall be construed as if followed by the phrase “without being limited
to.”  The term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.”  The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
refer to this Agreement as a whole and not to any particular provision or
section of this Agreement.  An Event of Default shall “continue” or be
“continuing” until such Event of Default has been waived in writing by Secured
Party.

     

    (d)           If
any provision or provisions of this Agreement shall be unlawful, then such
provision or provisions shall be null and void, but the remainder of the
Agreement shall remain in full force and effect and be binding on the
parties.

     

    (e)           This
Agreement may be validly executed and delivered by fax or other electronic
transmission and in one or more counterpart signature pages by different
signatories thereto.

     

    (f)           Any
notice or demand that Secured Party may wish to give to Debtor shall be served
upon it in the fashion prescribed for notices in Section 15 at the address and
facsimile number for Debtor set forth in the Purchase Agreement, and any notice
or demand so sent shall be deemed to be served as set forth in the Purchase
Agreement.

     

    17.         Waiver of Jury
Trial.  TO THE FULLEST EXTENT PERMITTED BY LAW, AND AS
SEPARATELY BARGAINED-FOR CONSIDERATION TO SECURED PARTY, DEBTORS HEREBY WAIVE
ANY RIGHT TO TRIAL BY JURY (WHICH SECURED PARTY ALSO WAIVES) IN ANY ACTION,
SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR OTHERWISE
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER INVESTMENT DOCUMENTS, THE
OBLIGATIONS, THE COLLATERAL, SECURED PARTY’S CONDUCT IN RESPECT OF ANY OF THE
FOREGOING, ANY OTHER INVESTMENT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY, REGARDLIESS OF WHICH PARTY INITATES SUCH ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM.  TO EFFECTUATE THE FOREGOING, SECURED PARTY IS HEREBY
GRANTED AN IRREVOCABLE POWER OF ATTORNEY, COUPLED WITH AN INTEREST, TO FILE, AS
ATTORNEY-IN-FACT FOR SUCH DEBTOR, A COPY OF THIS AGREEMENT IN ANY COURT, AND THE
COPY OF THIS AGREEMENT SO FILED SHALL CONCLUSIVELY BE DEEMED TO CONSTITUTE SUCH
DEBTOR’S WAIVER OF TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR OTHERWISE
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER INVESTOR DOCUMENTS, THE
OBLIGATIONS, THE COLLATERAL OR SECURED PARTY’S CONDUCT IN RESPECT OF ANY OF THE
FOREGOING.

     

    [Remainder
of page intentionally left blank; signature page follows.]


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on the date first written
above.

    


    
      
        	
                DEBTOR:

              	 
      	
                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

              
	 
      	 
      	 
      	 
      
	
                SECURED
      PARTY:

              	 
      	
                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

              


      

    

    


    SIGNATURE
PAGE TO SECOND AMENDED AND RESTATED

    SECURITY
AGREEMENT


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    SCHEDULE
A

    


    Permitted
Liens

    


    Wits Basin Precious
Minerals

    


    1.           All
assets security interest to Kenglo One, Ltd.

    


    2.           Security
interest in favor of Hawk Uranium Inc. with respect to Wits Basin’s right to
acquire the other 65% interest in Kwagga Gold (Barbados) Limited.

    


    Hunter Bates Mining
Corporation

    


    1.           Easements,
or claims of easements, not shown by public records.

    


    2.           Discrepancies,
conflicts in boundary lines, shortage in area, encroachments, and any facts
which a correct survey and inspection of the land would disclose, and which are
not shown by the public records.

    


    3.           Any
water rights or claims or title to water, in, on or under the land.

    


    4.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on November 21, 1876, in Book 62 at Page 287;
and any and all assignments thereof or interest therein. (Affects Parcel
A-1)

    


    5.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on August 7, 1879, in Book 68 at Page 349; and
any and all assignments thereof or interest therein. (Affects Parcel
A-2)

    


    6.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on June 20, 1872, in Book 53 at Page 277; and
any and all assignments thereof or interest

    therein.(Affects
Parcel A-3)

    


    7.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on August 24, 1874, in Book 58 at Page 74; and
any and all assignments thereof or interest therein. (Affects Parcels A-4 and
A-5)

    


    8.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on September 16, 1970, in Book 268 at Page 311;
and any and all assignments thereof or interest therein. (Affects Parcel
A-6)


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    9.       
    The right of proprietor of a vein or lode to extract or
remove his ore should the same be found to penetrate or intersect the premises
thereby granted as reserved in United States Patent recorded on June 22, 1883,
in Book 93 at Page 137; and any and all assignments thereof or interest therein.
(Affects Parcel A-7)

    


    10.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded in Book 246 at Page 437; and any and all
assignments thereof or interest therein. (Affects Parcel A-8)

    


    11.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on November 6, 1871, in Book 53 at Page 83; and
any and all assignments thereof or interest therein. (Affects Parcel
A-9)

    


    12.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on September 12, 1988, in Book 296 at Page 419;
and any and all assignments thereof or interest therein. (Affects Parcel
A-10)

    


    13.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded in Book 296 at Page 426; and any and all
assignments thereof or interest therein. (Affects Parcel A-11)

    


    14.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on November 6, 1871, in Book 53 at Page 80; and
any and all assignments thereof or interest therein.  (Affects Parcel
B-1)

    


    15.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on September 12, 1988, in Book 393 at Page 333;
and any and all assignments thereof or interest therein. (Affects Parcel
B-2)

    


    16.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on December 16, 1881, in Book 82 at Page 12;
and any and all assignments thereof or interest therein. (Affects Parcel
B-3)

    


    17.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on November 6, 1871, in Book 53 at Page 77; and
any and all assignments thereof or interest therein. (Affects Parcel
B-4)


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    18.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on December 17, 1975, in Book 296 at Page 413;
and any and all assignments thereof or interest therein. (Affects Parcel
B-5)

    


    19.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on February 28, 1892, in Book 82 at Page 40;
and any and all assignments thereof or interest therein. (Affects Parcel
B-6)

    


    20.           Terms,
agreements, provisions, conditions and obligations as contained in the Mammoth
Hill Project, State of Colorado, Division of Minerals and Geology, Colorado
Inactive Mine Reclamation Program, Consent for Right of Entry for Reclamation
Activities recorded on February 10, 1997 in Book 615 at Page 240. (Affects
Parcels B-3 and B-5.)

    


    21.           Reservations
contained in the Patent to the City of Central recorded on July 21, 1876, in
Book 62 at Page 193, as follows: “Providing that no title shall be hereby
acquired to any mine of gold, silver, cinnabar or copper or to any valid mining
claim or possession held under existing laws.”  (Affects Parcels A-12,
A-13 and A-14)

    


    22.           The
effect of the inclusion of the subject property in the Black Hawk-Central City
Sanitation District, as disclosed by the instrument recorded July 26, 1968, in
Book 259 at Page 288.

    


    23.           The
effect of the inclusion of portions of the subject property in the Central City
Business Improvement District, as disclosed by the instrument recorded on May
21, 2003 at Reception No. 117343.

    


    24.           Rights
of co-tenants, including, but not limited to, the right of partition. (Affects
Parcel A-4).

    


    25.           Exception
of rights of way, if any, for existing roads, as contained in the Deed from the
County of Gilpin to William C. Russell, Jr. recorded on January 22, 1970, in
Book 26 at Page 297.  (Affects Parcel A-15).

    


    26.           A
one percent (1%) net smelter return royalty as granted to GSR Goldsearch
Resources (U.S.), Inc. by the deed recorded on August 15, 1996, in Book 605 at
Page 410, and any assignment thereof or interest therein. (Affects Parcels A-1,
A-4, A-5, A-6, A-7., A-8, A-10, A-11, A-12, A-13, A-14 and A-15 and Parcels B-1,
B-2, B-3, B-4 and B-5).

    


    27.           Any
question as to the size or location of the easements referred to as Parcel
B-7.

    


    28.           A
two percent (2%) net smelter return royalty as granted to Kenneth Swaisland by
the deed recorded on January 22, 2009, in Gilpin County, Colorado, and any
assignment thereof or interest therein.   (Affects Parcels A-1,
A-4, A-5, A-6, A-7., A-8, A-10, A-11, A-12, A-13, A-14 and A-15 and Parcels B-1,
B-2, B-3, B-4 and B-5).


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    29.           Deed
of Trust from Hunter Bates Mining Corporation, a Minnesota corporation, to the
Public Trustee of Gilpin County, for the benefit of George E. Otten, securing an
original principal indebtedness of Six Million Seven Hundred Fifty Thousand
Canadian Dollars (CND $6,750,000.00), and any other amounts and/or obligations
dated June 6, 2008, recorded on June 25, 2008 at Reception No.
136731.

    


    30.           Deed
of Trust to Public Trustee, Mortgage, Security Agreement, Assignment of
Production and Proceeds, Financing Statement and Fixture Filing of Hunter Bates
Mining Corporation, as debtor, in favor of The Public Trustee of Gilpin County,
Colorado, as trustee f/b/o Cabo Drilling (America), Inc., as secured party,
securing principal indebtedness in the aggregate amount of $511,589.59, and any
other amounts and/or obligations pursuant to a Convertible Debenture dated April
27, 2009.

    


    31.           Secondary
Deed of Trust and Security Agreement from Hunter Bates Mining Corporation, a
Minnesota corporation, to the Public Trustee of Gilpin County, for the benefit
of Kenglo One Ltd. securing (i) an original principal indebtedness of Five
Million Dollars (U.S.) pursuant to a secured promissory note of Wits Basin
Precious Minerals Inc. dated December 14, 2009 and (ii) any other amounts and/or
obligations to Kenglo One Ltd. under such note.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    SCHEDULE
B

    


    Location(s) of the
Collateral

    


    (1)           Wits
Basin Precious Minerals Inc., with a legal address of 900 IDS Center, 80 South
8th Street, Minneapolis, MN 55402-8773.

    


    (2)           Hunter
Bates Mining Corporation, with a legal address of 900 IDS Center, 80 South 8th
Street, Minneapolis, MN 55402-8773 acquired the following assets: land,
buildings, equipment, mining claims and permits.  All assets are
located on the Bates-Hunter mining property, located at 422 Gregory Street,
Central City, CO 80427.

    


    (3)           Gregory
Gold Producers, Inc., with a legal address of 11438 County Road 19, Ft. Lupton,
CO 80321, holds depreciable assets at 422 Gregory Street, Central City, CO
80427.