EXHIBIT
        10.2

       

      NEITHER
        THIS CONVERTIBLE NOTE NOR THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
        HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE
        SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION (TOGETHER, THE “SECURITIES
        LAWS”) AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR
        ENCUMBERED IN THE ABSENCE OF COMPLIANCE WITH SUCH SECURITIES LAWS AND UNTIL
        THE
        ISSUER THEREOF SHALL HAVE RECEIVED AN OPINION FROM COUNSEL ACCEPTABLE TO
        IT THAT
        THE PROPOSED DISPOSITION WILL NOT VIOLATE ANY APPLICABLE SECURITIES
        LAWS.

       

      AMENDED
        SECURED CONVERTIBLE PROMISSORY NOTE

       

      

        
          	
                  $600,000

                	
                  September
                    30, 2005

                


        

      

       

      FOR
        VALUE RECEIVED,
        Wits
        Basin Precious Minerals Inc., a corporation organized and existing under
        the
        laws of the State of Minnesota (the “Company”),
        hereby unconditionally promises to pay to Pacific Dawn Capital, LLC, a
        California limited liability company, or its successors and assigns (the
        “Holder”)
        on or
        before April 1, 2006 (the “Maturity
        Date”),
        the
        principal sum of Six Hundred Thousand Dollars ($600,000.00), or such lesser
        amount actually advanced to the Company by Holder pursuant to the Loan Agreement
        (as hereinafter defined) (the “Principal”),
        together with accrued and unpaid interest thereon at the rate of twelve percent
        (12%) per annum, calculated on the basis of actual days elapsed in a year
        of 365
        days. From and after the earlier of the Maturity Date or an Event of Default
        (both as defined below), interest on any Principal and interest outstanding
        shall accrue at the rate of eighteen percent (18%) per annum.

       

      This
        Note
        is issued pursuant to the terms of that certain Amended and Restated Loan
        and
        Security Agreement dated as of November 1, 2005 by and between the Company
        and
        Holder (the “Loan Agreement”), and amends and restates the terms of that certain
        Secured Convertible Promissory Note of the Company in favor of the Holder
        dated
        September 30, 2005, which has been delivered by Holder to the Company on
        the
        date hereof and canceled by the Company. 

       

      ARTICLE
        1

      PAYMENTS

       

      1.1  Manner
        of Payment.
        All
        payments of Principal and interest on this Note, whether in cash or by the
        issuance of Common Stock (as set forth in Section 1.2), shall be made at
        such
        place as the Holder shall designate to the Company in writing. If any payment
        of
        Principal or interest on this Note is due on a day that is not a Business
        Day,
        such payment shall be due on the next succeeding Business Day, with such
        extension of time taken into account in calculating the amount of interest
        payable under this Note. “Business
        Day”
        means
        any day other than a Saturday, Sunday or legal holiday in the State of
        Minnesota.

       

      1.2  Prepayment.
        The
        Company shall have the option, in its sole discretion, on the last Business
        Day
        of each calendar month from the date hereof to the Maturity Date, to prepay
        any
        accrual of interest on the outstanding balance of this Note during such month
        (the “Monthly Accrual”), such payment to be made, at the option of the Company
        in its sole discretion, by:

       

      (a)  payment
        to the Holder in cash or other immediately available funds in the amount
        of the
        Monthly Accrual; or

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)  the
        issuance to Holder of 50,000 shares of the Company’s common stock, par value
        $.01 per share (the “Common Stock”). 

       

      If
        the
        Company elects to make a payment of a Monthly Accrual pursuant to this Section
        1.2, the amount of such Monthly Accrual shall be, on the date of such payment,
        subtracted from the outstanding balance of this Note. In the event the Company
        elects to make a payment of a Monthly Accrual pursuant to this Section 1.2,
        it
        shall use its best efforts to provide Holder written notice of its intent
        to do
        so at least five (5) days prior to the date of such payment; provided that,
        the
        Company’s failure to provide such notice shall not prevent it from making such
        payment. 

       

      Notwithstanding
        the foregoing, this Note may be prepaid in cash or other immediately available
        funds, in whole or in part by the Company at any time and from time to time,
        without premium or penalty, except as set forth in Section 4.4 of the Loan
        Agreement. At Holder’s option, any payments on this Note shall be applied first
        to pay Holder for all costs of collection of any kind, including reasonable
        attorneys’ fees and expenses, next to the payment of interest accrued through
        the date of payment, and thereafter to the payment of Principal.

       

      ARTICLE
        2

      CONVERSION

       

      2.1  Conversion.
        At any
        time while any portion of the Principal or accrued and unpaid interest under
        this Note is outstanding, the Holder shall have the right, at the Holder’s
        option, to convert all or any portion of the unpaid Principal and accrued
        interest under this Note (the “Conversion
        Amount”)
        into
        the number of shares of Common Stock computed by dividing the Conversion
        Amount
        by a conversion price of $0.20 per share (the “Conversion
        Price”).

       

      2.2  Mechanics
        and Effect of Conversion.  Subject
        to the terms hereof, this Note may be converted by the Holder in whole or
        in
        part at any time from time to time after the date hereof, by delivering to
        the
        Company at its principal office a Notice of Conversion (by facsimile or other
        reasonable means of communication) on the Conversion Date prior to 6:00 p.m.
        local time in Minneapolis, Minnesota.

       

      Holder
        shall not be required to physically surrender this Note to the Company unless
        the entire unpaid Principal amount of this Note is so converted after the
        Maturity Date. The Holder and the Company shall maintain records showing
        the
        Principal and accrued and unpaid interest under the Note so converted and
        the
        dates of such conversions or shall use such other method, reasonably
        satisfactory to the Holder and the Company, so as not to require physical
        surrender of this Note upon each such conversion. In the event of any dispute
        or
        discrepancy, such records of the Company shall be controlling and determinative
        in the absence of manifest error. Notwithstanding the foregoing, if any portion
        of this Note is converted as aforesaid, the Holder may not transfer this
        Note
        unless the Holder first physically surrenders this Note to the Company,
        whereupon the Company will forthwith issue and deliver upon the order of
        the
        Holder a new Note of like tenor, registered as the Holder (upon payment by
        the
        Holder of any applicable transfer taxes) may request, representing in the
        aggregate the remaining unpaid Principal and any unpaid and accrued interest
        of
        this Note. The Holder and any assignee, by acceptance of this Note, acknowledge
        and agree that, by reason of the provisions of this paragraph, following
        conversion of a portion of this Note, the unpaid and unconverted Principal
        amount of this Note represented by this Note may be less than the amount
        stated
        on the face hereof. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Upon
        receipt of any Notice of Conversion, the Company shall, within five (5) Business
        days, issue and deliver to such Holder at the address designated by such
        Holder
        a certificate or certificates for the number of shares of Common Stock the
        Holder shall be entitled upon such conversion (bearing such legends as are
        required by applicable state and federal securities laws in the opinion of
        counsel to the Company). The person or persons entitled to receive the shares
        of
        Common Stock issuable upon such conversion shall be treated for all purposes
        as
        the record holder or holders of such shares of Common Stock as of the Conversion
        Date. Upon conversion of all or a portion of this Note, the Company will
        be
        forever released from all of its obligations and liabilities under this Note
        with regard to that portion of the Principal and accrued interest being
        converted, including without limitation the obligation to pay such portion
        of
        the Principal and accrued interest. 

       

      2.3  No
        Fractional Shares.
        No
        fractional shares shall be issued upon the conversion of this Note. In lieu
        of
        any fractional share of Common Stock to which Holder would otherwise be
        entitled, an amount in cash equal to such fraction multiplied by the Fair
        Market
        Value of a share of Common Stock, such Fair Market Value to be determined
        as
        follows (as applicable): (a) if the Common Stock is traded on an exchange
        or is
        quoted on The Nasdaq National Market, Nasdaq SmallCap Market or the OTC Bulletin
        Board, then the average closing or last sale prices, respectively, reported
        for
        the date of conversion; (b) if the Common Stock is traded in the
        over-the-counter market, then the average of the closing bid and asked prices
        reported on the date of conversion; (c) if the Common Stock is not publicly
        traded and there has been a bona fide sale for cash on an arm’s-length basis
        within 45 days prior to the conversion date of such Common Stock by the Company
        privately to one or more investors unaffiliated with the Company (a “Qualifying
        Sale”), then such most recent sales price; or (d) if the Common Stock is not
        publicly traded and there has been no Qualifying Sale, then fair market value
        of
        such stock will be determined by the Company’s board of directors, acting in
        good faith utilizing customary business valuation criteria and methodologies
        (without discount for lack of marketability or minority interest).

       

      ARTICLE
        3

      CONVERSION
        PRICE ADJUSTMENTS

       

      3.1  Adjustment
        for Stock Splits or Combinations.
        In the
        event of: (i) the payment of dividends on any of Company’s capital stock payable
        in Common Stock or securities convertible into or exercisable for Common
        Stock;
        (ii) the subdivision of the Company’s outstanding shares of Common Stock into a
        greater number of shares; or (iii) the combination of the Company’s outstanding
        shares of Common Stock, by reclassification or otherwise; then the Conversion
        Price shall be adjusted proportionately to reflect the reduction or increase
        in
        the value of each share of Common Stock.

       

      3.2  Notice
        of Adjustment.
        Upon
        any adjustment of the Conversion Price, the Company shall give written notice
        thereof within 30 days, by first-class mail, postage prepaid, addressed to
        Holder as shown on the Company’s books, which notice shall state the adjusted
        Conversion Price and set forth in reasonable detail the method of calculation
        and the facts upon which such calculation is based.

       

      3.3  Effect
        of Reorganization, Reclassification, Merger, Etc. If
        at any
        time the Company: (i) reorganizes its capital stock (other than by the issuance
        of shares of Common Stock in subdivision of outstanding shares of Common
        Stock,
        and other than by a share combination, as provided for in Section 3.1),
        (ii)
        consolidates or merges with another corporation, or sells, conveys, leases
        or
        otherwise transfers all or substantially all of its property to any other
        corporation, which transaction is effected in a manner such that the holders
        of
        Common Stock shall be entitled to receive cash, stock, securities or assets
        with
        respect to or in exchange for Common Stock, or (iii) pays a dividend or makes
        any other distribution upon any class of its capital stock, which dividend
        or
        distribution is payable in Company securities or other Company property (other
        than cash); then, as a part of such transaction, lawful provision shall be
        made
        so that Holder shall have the right thereafter to receive, upon conversion
        of
        this Note, the number of shares of stock or other securities or property
        of the
        Company or of the successor corporation resulting from such transaction,
        or of
        the corporation to which the Company property has been sold, conveyed, leased
        or
        otherwise transferred, as the case may be, which Holder would have been entitled
        to receive upon transaction if this Note had been converted immediately prior
        thereto. In any such case, appropriate adjustments (as determined by the
        Company’s board of directors) shall be made in the application of the provisions
        set forth in this Note (including an adjustment to the Conversion Price)
        so that
        the provisions set forth herein shall thereafter be applicable, as near as
        reasonably may be, in relation to any shares or other property thereafter
        deliverable upon the conversion of this Note as if the Note had been converted
        immediately prior to such transaction and Holder had carried out the terms
        of
        the exchange as provided for by such transaction. The Company shall not effect
        any such capital reorganization, consolidation, merger or transfer unless,
        upon
        or prior to the consummation thereof, the successor corporation(s) to which
        Company property has been sold, conveyed, leased or otherwise transferred
        shall
        assume by written instrument the obligation to deliver to Holder such shares
        of
        stock, securities, cash or property which Holder is entitled to receive under
        the foregoing provisions of this Section 3.3.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        4

      DEFAULT

       

      4.1  Default.
        The
        occurrence of any of the following events shall constitute a “Default” under
        this Note:

       

      (a)  The
        Company’s failure to remit to Holder the Principal or interest hereof as the
        same becomes due hereunder;

       

      (b)  The
        Company’s assignment for the benefit of creditors, or filing of a petition in
        bankruptcy or for reorganization or to effect a plan or arrangement with
        creditors;

       

      (c)  The
        Company’s application for, or voluntary permission of, the appointment of a
        receiver of trustee for any or all Company property;

       

      (d)  any
        action or proceeding described in the foregoing paragraphs (b)
        and
(c)
        is
        commenced against the Company and such action or proceeding is not vacated
        within 60 days of its commencement; or

       

      (e)  The
        Company’s dissolution or liquidation.

       

      4.2  Remedies
        Upon Default.
        Upon
        any Default:

       

      (a)  Holder
        may without further notice declare the entire remaining Principal sum of
        this
        Note, together with all interest accrued thereon, immediately due and payable;
        and Holder’s failure to declare the entire remaining Principal sum of this Note,
        together with all interest accrued thereon, immediately due and payable shall
        not constitute a waiver by Holder of its right to so declare at any other
        time;

       

      (b)  Holder
        may employ an attorney to enforce its rights and remedies hereunder and Company
        hereby agrees to pay Holder’s reasonable attorneys’ fees and other reasonable
        expenses incurred by Holder in exercising any of Holder’s rights and remedies
        upon Default; and/or Holder’s
        rights and remedies provided hereunder shall be cumulative and may be pursued
        singly, successively or together in Holder’s sole discretion; and Holder’s
        failure to exercise any such right or remedy shall not be a waiver or release
        of
        such rights or remedies or the right to exercise any of them at another
        time.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        5

      OTHER
        AGREEMENTS

       

      5.1  Security.
        The
        full and timely payment of this Note shall be secured by a security interest
        in
        certain assets of the Company and that certain Guaranty of Stephen D. King
        dated
        as of September 30, 2005 in favor of the Holder, as the same may be amended.
        

       

      5.2  Call
        Option. At any time the average over twenty (20) consecutive trading days
        of the
        daily average of the high and low Fair Market Value of the Common Stock is
        at or
        above $0.50 per share and the shares of Common Stock issuable upon conversion
        of
        this Note have been registered for resale pursuant to an effective registration
        with the Securities and Exchange Commission, the Company shall have the option
        to prepay the Note by requiring the Holder to convert the outstanding Principal
        and all accrued and unpaid interest under this Note at the Conversion Price
        then
        in effect. In the event the Company exercises its option under this Section
        5.2,
        it shall provide the Holder written notice of its intent to call (the “Call
        Notice”), identifying the date of conversion and the number of shares of Common
        Stock into which the Note shall be convertible. The Company shall deliver
        to
        Holder certificates representing the number of shares of Common Stock identified
        in the Call Notice within five (5) Business Days of the date of conversion
        specified in the Call Notice. 

       

      ARTICLE
        6

      MISCELLANEOUS

       

      6.1  Transferability.
        Without
        the prior written consent of the Company, Holder is prohibited from transferring
        its right, title and interest in this Note.

       

      6.2  Waiver.
        The
        Company hereby waives presentment, demand, protest and notice of dishonor
        and
        protest. No waiver of any right or remedy of the Holder under this Note shall
        be
        valid unless in a writing executed by the Holder and any such waiver shall
        be
        effective only in the specific instance and for the specific purpose given.
        All
        rights and remedies of the Holder of this Note shall be cumulative and may
        be
        exercised singly, concurrently or successively

       

      6.3  Notices.
        Any
        notice required or permitted to be given hereunder shall be given by the
        Company
        to the Holder or the Holder to the Company in accordance with the Loan
        Agreement.

       

      6.4  Severability.
        If any
        provision in this Note is held invalid or unenforceable by any court of
        competent jurisdiction, the other provisions of this Note will remain in
        full
        force and effect. Any provision of this Note held invalid or unenforceable
        only
        in part or degree will remain in full force and effect to the extent not
        held
        invalid or unenforceable.

       

      6.5  Governing
        Law.
        This
        Note will be governed by the laws of the State of California without regard
        to
        conflicts of laws principles. 

       

      6.6  Parties
        in Interes.
        The
        terms and conditions of this Note shall inure to the benefit of and be binding
        upon the respective successors and assigns of the parties. 

       

      6.7  Section
        Headings, Construction.
        The
        headings of Sections in this Note are provided for convenience only and will
        not
        affect its construction or interpretation. All references to “Section” or
“Sections” refer to the corresponding Section or Sections of this Note unless
        otherwise specified. All words used in this Note will be construed to be
        of such
        gender or number as the circumstances require. Unless otherwise expressly
        provided, the words “hereof” and “hereunder” and similar references refer to
        this Note in its entirety and not to any specific section or subsection
        hereof.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the Company has executed and delivered this Note as of the
        date
        first stated above.

       

      WITS
        BASIN PRECIOUS MINERALS INC.

      


      


      


      By: /s/
        Mark
        D. Dacko

      Name: Mark
        D.
        Dacko

      Title: CFO