Document:

Unassociated Document

    Exhibit
      4.5 

     

    NEITHER
      THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
      BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
      COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
      MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
      OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
      EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
      SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY
      AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN
      CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
      SECURITIES.

    

    COMMON
      STOCK PURCHASE WARRANT

    

    To
      Purchase 2,100,000 Shares of Common Stock of

     

    WITS
      BASIN PRECIOUS MINERALS INC.

     

    THIS
      COMMON STOCK PURCHASE WARRANT (the “Warrant”)
      certifies that, for value received, Platinum Long Term Growth V, LLC (the
“Holder”),
      is
      entitled, upon the terms and subject to the limitations on exercise and the
      conditions hereinafter set forth, at any time on or after July 27, 2007 (the
      “Initial
      Exercise Date”)
      and on
      or prior to the close of business on the fifth anniversary of the Initial
      Exercise Date (the “Termination
      Date”)
      but
      not thereafter, to subscribe for and purchase from Wits Basin Precious Minerals
      Inc., a Minnesota corporation (the “Company”),
      up to
      2,100,000 shares (the “Warrant
      Shares”)
      of
      Common Stock, par value $.01 per share, of the Company (the “Common
      Stock”).
      The
      purchase price of one share of Common Stock under this Warrant shall be equal
      to
      the Exercise Price, as defined in Section 2(b). 

     

    Section
      1. Definitions.
      Capitalized terms used and not otherwise defined herein shall have the meanings
      set forth on Exhibit A hereto.

     

    
      
        
        

      

      
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    Section
      2. Exercise.

     

    a) Exercise
      of Warrant.
      Exercise of the purchase rights represented by this Warrant may be made, in
      whole or in part, at any time or times on or after the Initial Exercise Date
      and
      on or before the Termination Date by delivery to the Company of a duly executed
      facsimile copy of the Notice of Exercise Form annexed hereto (or such other
      office or agency of the Company as it may designate by notice in writing to
      the
      registered Holder at the address of such Holder appearing on the books of the
      Company); provided,
      however,
      within
      5 Trading Days of the date said Notice of Exercise is delivered to the Company,
      if this Warrant is exercised in full, the Holder shall have surrendered this
      Warrant to the Company and the Company shall have received payment of the
      aggregate Exercise Price of the shares thereby purchased by wire transfer or
      cashier’s check drawn on a United States bank. Notwithstanding anything herein
      to the contrary, the Holder shall not be required to physically surrender this
      Warrant to the Company until the Holder has purchased all of the Warrant Shares
      available hereunder and the Warrant has been exercised in full. Partial
      exercises of this Warrant resulting in purchases of a portion of the total
      number of Warrant Shares available hereunder shall have the effect of lowering
      the outstanding number of Warrant Shares purchasable hereunder in an amount
      equal to the applicable number of Warrant Shares purchased. The Holder and
      the
      Company shall maintain records showing the number of Warrant Shares purchased
      and the date of such purchases. The Company shall deliver any objection to
      any
      Notice of Exercise Form within 1 Business Day of receipt of such notice. In
      the
      event of any dispute or discrepancy, the records of the Company shall be
      controlling and determinative in the absence of manifest error. The Holder
      and
      any assignee, by acceptance of this Warrant, acknowledge and agree that, by
      reason of the provisions of this paragraph, following the purchase of a portion
      of the Warrant Shares hereunder, the number of Warrant Shares available for
      purchase hereunder at any given time may be less than the amount stated on
      the
      face hereof.

     

    b) Exercise
      Price.
      The
      exercise price of the Common Stock under this Warrant shall be $0.01,
      subject
      to adjustment hereunder (the “Exercise
      Price”).

     

    c) Cashless
      Exercise.
      This
      Warrant may also be exercised at any time by means of a “cashless exercise” in
      which the Holder shall be entitled to receive a certificate for the number
      of
      Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
      where:

     

    (A)
      = the
      VWAP on the Trading Day immediately preceding the date of such
      election;

    

    (B)
      = the
      Exercise Price of this Warrant, as adjusted; and 

    

    (X)
      = the
      number of Warrant Shares issuable upon exercise of this Warrant in accordance
      with the terms of this Warrant by means of a cash exercise rather than a
      cashless exercise.

    

    Notwithstanding
      anything herein to the contrary, on the Termination Date, this Warrant shall
      be
      automatically exercised via cashless exercise pursuant to this Section
      2(c).

    
      
        
        

      

      
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    d) Exercise
      Limitations.
      The
      Company shall not effect any exercise of this Warrant, and a 
      Holder
      shall not have the right to exercise any portion of this Warrant, pursuant
      to
      Section 2(c) or otherwise, to the extent that after giving effect to such
      issuance after exercise, such Holder (together with such Holder’s Affiliates,
      and any other person or entity acting as a group together with such Holder
      or
      any of such Holder’s Affiliates), as set forth on the applicable Notice of
      Exercise, would beneficially own in excess of 4.99% of the number of shares
      of
      the Common Stock outstanding immediately after giving effect to such
      issuance.  For purposes of the foregoing sentence, the number of shares of
      Common Stock beneficially owned by such Holder and its Affiliates shall include
      the number of shares of Common Stock issuable upon exercise of this Warrant
      with
      respect to which the determination of such sentence is being made, but shall
      exclude the number of shares of Common Stock which would be issuable upon (A)
      exercise of the remaining, nonexercised portion of this Warrant beneficially
      owned by such Holder or any of its Affiliates and (B) exercise or conversion
      of
      the unexercised or nonconverted portion of any other securities of the Company
      subject to a limitation on conversion or exercise analogous to the limitation
      contained herein beneficially owned by such Holder or any of its
      Affiliates.  Except as set forth in the preceding sentence, for purposes of
      this Section 2(d), beneficial ownership shall be calculated in accordance with
      Section 13(d) of the Exchange Act and the rules and regulations promulgated
      thereunder, it being acknowledged by a Holder that the Company is not
      representing to such Holder that such calculation is in compliance with Section
      13(d) of the Exchange Act and such Holder is solely responsible for any
      schedules required to be filed in accordance therewith. To the extent that
      the
      limitation contained in this Section 2(d) applies, the determination of whether
      this Warrant is exercisable (in relation to other securities owned by such
      Holder) and of which a portion of this Warrant is exercisable shall be in the
      sole discretion of a Holder, and the submission of a Notice of Exercise shall
      be
      deemed to be each Holder’s determination of whether this Warrant is exercisable
      (in relation to other securities owned by such Holder) and of which portion
      of
      this Warrant is exercisable, in each case subject to such aggregate percentage
      limitation, and the Company shall have no obligation to verify or confirm the
      accuracy of such determination. In addition, a determination as to any group
      status as contemplated above shall be determined in accordance with Section
      13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
      For purposes of this Section 2(d), in determining the number of outstanding
      shares of Common Stock, a Holder may rely on the number of outstanding shares
      of
      Common Stock as reflected in (x) the Company’s most recent Form 10-QSB or Form
      10-KSB, as the case may be, (y) a more recent public announcement by the Company
      or (z) any other notice by the Company or the Company’s Transfer Agent setting
      forth the number of shares of Common Stock outstanding.  Upon the written
      or oral request of a Holder, the Company shall within two Trading Days confirm
      orally and in writing to such Holder the number of shares of Common Stock then
      outstanding.  In any case, the number of outstanding shares of Common Stock
      shall be determined after giving effect to the conversion or exercise of
      securities of the Company, including this Warrant, by such Holder or its
      Affiliates since the date as of which such number of outstanding shares of
      Common Stock was reported. The provisions of this Section 2(d) may be waived
      by
      such Holder, at the election of such Holder, upon not less than 61 days’ prior
      notice to the Company, and the provisions of this Section 2(d) shall continue
      to
      apply until such 61st
      day (or
      such later date, as determined by such Holder, as may be specified in such
      notice of waiver). The
      provisions of this paragraph shall be implemented in a manner otherwise than
      in
      strict conformity with the terms of this Section 2(d) to correct this paragraph
      (or any portion hereof) which may be defective or inconsistent with the intended
      4.99% beneficial ownership limitation herein contained or to make changes or
      supplements necessary or desirable to properly give effect to such 4.99%
      limitation. The limitations contained in this paragraph shall apply to a
      successor holder of this Warrant. The holders of Common Stock of the Company
      shall be third party beneficiaries of this Section 2(d) and the Company may
      not
      waive this Section 2(d) without the consent of holders of a majority of its
      Common Stock. 

     

    
      
        
        

      

      
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    e) Mechanics
      of Exercise.
      

     

    i. Authorization
      of Warrant Shares.
      The
      Company covenants that all Warrant Shares which may be issued upon the exercise
      of the purchase rights represented by this Warrant will, upon exercise of the
      purchase rights represented by this Warrant, be duly authorized, validly issued,
      fully paid and nonassessable and free from all taxes, liens and charges in
      respect of the issue thereof (other than taxes in respect of any transfer
      occurring contemporaneously with such issue). 

     

    ii. Delivery
      of Certificates Upon Exercise.
      Certificates for shares purchased hereunder shall be transmitted by the transfer
      agent of the Company to the Holder by crediting the account of the Holder’s
      prime broker with the Depository Trust Company through its Deposit Withdrawal
      Agent Commission (“DWAC”)
      system
      if the Company is a participant in such system, and otherwise by physical
      delivery to the address specified by the Holder in the Notice of Exercise within
      3 Trading Days from the delivery to the Company of the Notice of Exercise Form,
      surrender of this Warrant (if required) and payment of the aggregate Exercise
      Price as set forth above (“Warrant
      Share Delivery Date”),
      free
      and clear of all legends (other than as required by law). This Warrant shall
      be
      deemed to have been exercised on the date the Exercise Price is received by
      the
      Company. The Warrant Shares shall be deemed to have been issued, and the Holder
      or any other person so designated to be named therein shall be deemed to have
      become a holder of record of such shares for all purposes, as of the date the
      Warrant has been exercised by payment to the Company of the Exercise Price
      and
      all taxes required to be paid by the Holder, if any, pursuant to Section
      2(e)(vii) prior to the issuance of such shares, have been paid. 

     

    iii. Delivery
      of New Warrants Upon Exercise.
      If this
      Warrant shall have been exercised in part, the Company shall, at the request
      of
      a Holder and upon surrender of this Warrant certificate, at the time of delivery
      of the certificate or certificates representing Warrant Shares, deliver to
      Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased
      Warrant Shares called for by this Warrant, which new Warrant shall in all other
      respects be identical with this Warrant.

     

    iv. Rescission
      Rights.
      If the
      Company fails to cause its transfer agent to transmit to the Holder a
      certificate or certificates representing the Warrant Shares pursuant to this
      Section 2 by the Warrant Share Delivery Date, then the Holder will have the
      right to rescind such exercise.

     

    
      
        
        

      

      
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    v. Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Exercise.
      In
      addition to any other rights available to the Holder, if the Company fails
      to
      cause its transfer agent to transmit to the Holder a certificate or certificates
      representing the Warrant Shares pursuant to an exercise on or before the Warrant
      Share Delivery Date, and if after such date the Holder is required by its broker
      to purchase (in an open market transaction or otherwise) shares of Common Stock
      to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
      the Holder anticipated receiving upon such exercise (a “Buy-In”),
      then
      the Company shall (1) pay in cash to the Holder the amount by which (x) the
      Holder’s total purchase price (including brokerage commissions, if any) for the
      shares of Common Stock so purchased exceeds (y) the amount obtained by
      multiplying (A) the number of Warrant Shares that the Company was required
      to
      deliver to the Holder in connection with the exercise at issue times (B) the
      price at which the sell order giving rise to such purchase obligation was
      executed, and (2) at the option of the Holder, either reinstate the portion
      of
      the Warrant and equivalent number of Warrant Shares for which such exercise
      was
      not honored or deliver to the Holder the number of shares of Common Stock that
      would have been issued had the Company timely complied with its exercise and
      delivery obligations hereunder. For example, if the Holder purchases Common
      Stock having a total purchase price of $11,000 to cover a Buy-In with respect
      to
      an attempted exercise of shares of Common Stock with an aggregate sale price
      giving rise to such purchase obligation of $10,000, under clause (1) of the
      immediately preceding sentence the Company shall be required to pay the Holder
      $1,000. The Holder shall provide the Company written notice indicating the
      amounts payable to the Holder in respect of the Buy-In, together with applicable
      confirmations and other evidence reasonably requested by the Company. Nothing
      herein shall limit a Holder’s right to pursue any other remedies available to it
      hereunder, at law or in equity including, without limitation, a decree of
      specific performance and/or injunctive relief with respect to the Company’s
      failure to timely deliver certificates representing shares of Common Stock
      upon
      exercise of the Warrant as required pursuant to the terms hereof.

     

    vi. No
      Fractional Shares or Scrip.
      No
      fractional shares or scrip representing fractional shares shall be issued upon
      the exercise of this Warrant. As to any fraction of a share which Holder would
      otherwise be entitled to purchase upon such exercise, the Company shall pay
      a
      cash adjustment in respect of such final fraction in an amount equal to such
      fraction multiplied by the Exercise Price.

     

    
      
        
        

      

      
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    vii. Charges,
      Taxes and Expenses.
      Issuance of certificates for Warrant Shares shall be made without charge to
      the
      Holder for any issue or transfer tax or other incidental expense in respect
      of
      the issuance of such certificate, all of which taxes and expenses shall be
      paid
      by the Company, and such certificates shall be issued in the name of the Holder
      or in such name or names as may be directed by the Holder; provided,
      however,
      that in
      the event certificates for Warrant Shares are to be issued in a name other
      than
      the name of the Holder, this Warrant when surrendered for exercise shall be
      accompanied by the Assignment Form attached hereto duly executed by the Holder;
      and the Company may require, as a condition thereto, the payment of a sum
      sufficient to reimburse it for any transfer tax incidental thereto.

     

    viii. Closing
      of Books.
      The
      Company will not close its stockholder books or records in any manner which
      prevents the timely exercise of this Warrant, pursuant to the terms
      hereof.

     

    Section
      3. Certain
      Adjustments.

     

    a) Stock
      Dividends and Splits.
      If the
      Company, at any time while this Warrant is outstanding: (A) pays a stock
      dividend or otherwise make a distribution or distributions on shares of its
      Common Stock or any other equity or equity equivalent securities payable in
      shares of Common Stock (which, for avoidance of doubt, shall not include any
      shares of Common Stock issued by the Company pursuant to this Warrant), (B)
      subdivides outstanding shares of Common Stock into a larger number of shares,
      (C) combines (including by way of reverse stock split) outstanding shares of
      Common Stock into a smaller number of shares, or (D) issues by reclassification
      of shares of the Common Stock any shares of capital stock of the Company, then
      in each case the Exercise Price shall be multiplied by a fraction of which
      the
      numerator shall be the number of shares of Common Stock (excluding treasury
      shares, if any) outstanding immediately before such event and of which the
      denominator shall be the number of shares of Common Stock outstanding
      immediately after such event and the number of shares issuable upon exercise
      of
      this Warrant shall be proportionately adjusted. Any adjustment made pursuant
      to
      this Section 3(a) shall become effective immediately after the record date
      for
      the determination of stockholders entitled to receive such dividend or
      distribution and shall become effective immediately after the effective date
      in
      the case of a subdivision, combination or re-classification.

     

    
      
        
        

      

      
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    b) Subsequent
      Equity Sales.
      If the
      Company or any Subsidiary thereof, as applicable, at any time while this Warrant
      is outstanding, shall offer, sell, grant any option to purchase or offer, sell
      or grant any right to reprice its securities, or otherwise dispose of or issue
      (or announce any offer, sale, grant or any option to purchase or other
      disposition) any Common Stock or Common Stock Equivalents entitling any Person
      to acquire shares of Common Stock, at an effective price per share less than
      the
      then Exercise Price (such lower price, the “Base
      Share Price”
and
      such issuances collectively, a “Dilutive
      Issuance”),
      as
      adjusted hereunder (if the holder of the Common Stock or Common Stock
      Equivalents so issued shall at any time, whether by operation of purchase price
      adjustments, reset provisions, floating conversion, exercise or exchange prices
      or otherwise, or due to warrants, options or rights per share which is issued
      in
      connection with such issuance, be entitled to receive shares of Common Stock
      at
      an effective price per share which is less than the Exercise Price, such
      issuance shall be deemed to have occurred for less than the Exercise Price
      on
      such date of the Dilutive Issuance), then the Exercise Price shall be reduced
      and only reduced to equal the Base Share Price and the number of Warrant Shares
      issuable hereunder shall be increased such that the aggregate Exercise Price
      payable hereunder, after taking into account the decrease in the Exercise Price,
      shall be equal to the aggregate Exercise Price prior to such adjustment. Such
      adjustment shall be made whenever such Common Stock or Common Stock Equivalents
      are issued. The Company shall notify the Holder in writing, no later than the
      Trading Day following the issuance of any Common Stock or Common Stock
      Equivalents subject to this section, indicating therein the applicable issuance
      price, or of applicable reset price, exchange price, conversion price and other
      pricing terms (such notice the “Dilutive
      Issuance Notice”).
      For
      purposes of clarification, whether or not the Company provides a Dilutive
      Issuance Notice pursuant to this Section 3(b), upon the occurrence of any
      Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
      entitled to receive a number of Warrant Shares based upon the Base Share Price
      regardless of whether the Holder accurately refers to the Base Share Price
      in
      the Notice of Exercise. Notwithstanding the foregoing, this Section 3(b) shall
      not apply in respect of an Exempt Issuance. 

     

    c) Pro
      Rata Distributions.
      If the
      Company, at any time prior to the Termination Date, shall distribute to all
      holders of Common Stock (and not to Holders of the Warrants) evidences of its
      indebtedness or assets (including cash and cash dividends) or rights or warrants
      to subscribe for or purchase any security other than the Common Stock (which
      shall be subject to Section 3(b)), then in each such case the Exercise Price
      shall be adjusted by multiplying the Exercise Price in effect immediately prior
      to the record date fixed for determination of stockholders entitled to receive
      such distribution by a fraction of which the denominator shall be the VWAP
      determined as of the record date mentioned above, and of which the numerator
      shall be such VWAP on such record date less the then per share fair market
      value
      at such record date of the portion of such assets or evidence of indebtedness
      so
      distributed applicable to one outstanding share of the Common Stock as
      determined by the Board of Directors in good faith. In either case the
      adjustments shall be described in a statement provided to the Holder of the
      portion of assets or evidences of indebtedness so distributed or such
      subscription rights applicable to one share of Common Stock. Such adjustment
      shall be made whenever any such distribution is made and shall become effective
      immediately after the record date mentioned above.

     

    
      
        
        

      

      
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    d) Fundamental
      Transaction.
      If, at
      any time while this Warrant is outstanding, (A) the Company effects any merger
      or consolidation of the Company with or into another Person, (B) the Company
      effects any sale of all or substantially all of its assets in one or a series
      of
      related transactions, (C) any tender offer or exchange offer (whether by the
      Company or another Person) is completed pursuant to which holders of Common
      Stock are permitted to tender or exchange their shares for other securities,
      cash or property, or (D) the Company effects any reclassification of the Common
      Stock or any compulsory share exchange pursuant to which the Common Stock is
      effectively converted into or exchanged for other securities, cash or property
      (in any such case, a “Fundamental
      Transaction”),
      then,
      upon any subsequent exercise of this Warrant, the Holder shall have the right
      to
      receive, for each Warrant Share that would have been issuable upon such exercise
      immediately prior to the occurrence of such Fundamental Transaction, at the
      option of the Holder, (a) upon exercise of this Warrant, the number of shares
      of
      common stock or other securities of the successor or acquiring corporation
      or of
      the Company, if it is the surviving corporation, and any additional
      consideration (the “Alternate
      Consideration”)
      receivable upon or as a result of such reorganization, reclassification, merger,
      consolidation or disposition of assets by a Holder of the number of shares
      of
      Common Stock for which this Warrant is exercisable immediately prior to such
      event or (b) if the Company is acquired in an all cash transaction, cash equal
      to the value of this Warrant as determined in accordance with the Black-Scholes
      option pricing formula. For purposes of any such exercise, the determination
      of
      the Exercise Price shall be appropriately adjusted to apply to such Alternate
      Consideration based on the amount of Alternate Consideration issuable in respect
      of one share of Common Stock in such Fundamental Transaction, and the Company
      shall apportion the Exercise Price among the Alternate Consideration in a
      reasonable manner reflecting the relative value of any different components
      of
      the Alternate Consideration. If holders of Common Stock are given any choice
      as
      to the securities, cash or property to be received in a Fundamental Transaction,
      then the Holder shall be given the same choice as to the Alternate Consideration
      it receives upon any exercise of this Warrant following such Fundamental
      Transaction. To the extent necessary to effectuate the foregoing provisions,
      any
      successor to the Company or surviving entity in such Fundamental Transaction
      shall issue to the Holder a new warrant consistent with the foregoing provisions
      and evidencing the Holder’s right to exercise such warrant into Alternate
      Consideration. A condition to the consummation of a Fundamental Transaction
      shall require any such successor or surviving entity to comply with the
      provisions of this Section 3(d) and ensure that this Warrant (or any such
      replacement security) will be similarly adjusted upon any subsequent transaction
      analogous to a Fundamental Transaction and upon any other circumstances as
      set
      forth in Section 3 herein.

     

    
      
        
        

      

      
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    e) Calculations.
      All
      calculations under this Section 3 shall be made to the nearest cent or the
      nearest 1/100th of a share, as the case may be. For purposes of this Section
      3,
      the number of shares of Common Stock deemed to be issued and outstanding as
      of a
      given date shall be the sum of the number of shares of Common Stock (excluding
      treasury shares, if any) issued and outstanding. To the extent that any Common
      Stock or any Common Stock Equivalents (or any warrants or other rights therefor)
      shall be issued for cash consideration, the consideration received by the
      Company therefor shall be the amount of the cash received by the Company
      therefor, or, if such Common Stock or Common Stock Equivalents are offered
      by
      the Company for subscription, the subscription price, or, if such Common Stock
      or Common Stock Equivalents are sold to underwriters or dealers for public
      offering without a subscription offering, the initial public offering price
      (in
      any such case subtracting any amounts paid or receivable for accrued interest
      or
      accrued dividends and without taking into account any compensation, discounts
      or
      expenses paid or incurred by the Company for and in the underwriting of, or
      otherwise in connection with, the issuance thereof). To the extent that such
      issuance shall be for a consideration other than cash, then, except as herein
      otherwise expressly provided, the amount of such consideration shall be deemed
      to be the fair value of such consideration at the time of such issuance as
      mutually determined in good faith by the Board of Directors of the Company
      and
      the Holder. The consideration for any Common Stock issuable pursuant to any
      warrants or other rights to subscribe for or purchase the same shall be the
      consideration received by the Company for issuing such warrants or other rights
      divided by the number of shares of Common Stock issuable upon the exercise
      of
      such warrant or right plus the additional consideration payable to the Company
      upon exercise of such warrant or other right for one share of Common Stock.
      The
      consideration for any Common Stock issuable pursuant to the terms of any Common
      Stock Equivalents shall be the consideration received by the Company for issuing
      such Common Stock Equivalent, divided by the number of shares of Common Stock
      issuable upon the conversion or other exercise of such Common Stock Equivalent,
      plus the additional consideration, if any, payable to the Company upon the
      exercise of the right of conversion or exchange in such Common Stock Equivalent
      for one share of Common Stock. In case of the issuance at any time of any Common
      Stock or Common Stock Equivalents in payment or satisfaction of any dividends
      upon any class of stock other than Common Stock, the Company shall be deemed
      to
      have received for such Additional Shares of Common Stock or Common Stock
      Equivalents a consideration equal to the amount of such dividend so paid or
      satisfied.

     

    f) Voluntary
      Adjustment By Company.
      The
      Company may at any time during the term of this Warrant reduce the then current
      Exercise Price to any amount and for any period of time deemed appropriate
      by
      the Board of Directors of the Company.

     

    g) Notice
      to Holders.
      

     

    i. Adjustment
      to Exercise Price.
      Whenever the Exercise Price is adjusted pursuant to this Section 3, the Company
      shall promptly mail to each Holder a notice setting forth the Exercise Price
      after such adjustment and setting forth a brief statement of the facts requiring
      such adjustment. If the Company issues a variable rate security, the Company
      shall be deemed to have issued Common Stock or Common Stock Equivalents at
      the
      lowest possible conversion or exercise price at which such securities may be
      converted or exercised.

     

    
      
        
        

      

      
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    ii. Notice
      to Allow Exercise by Holder.
      If (A)
      the Company shall declare a dividend (or any other distribution) on the Common
      Stock; (B) the Company shall declare a special nonrecurring cash dividend on
      or
      a redemption of the Common Stock; (C) the Company shall authorize the granting
      to all holders of the Common Stock rights or warrants to subscribe for or
      purchase any shares of capital stock of any class or of any rights; (D) the
      approval of any stockholders of the Company shall be required in connection
      with
      any reclassification of the Common Stock, any consolidation or merger to which
      the Company is a party, any sale or transfer of all or substantially all of
      the
      assets of the Company, of any compulsory share exchange whereby the Common
      Stock
      is converted into other securities, cash or property; (E) the Company shall
      authorize the voluntary or involuntary dissolution, liquidation or winding
      up of
      the affairs of the Company; then, in each case, the Company shall cause to
      be
      mailed to the Holder at its last address as it shall appear upon the Warrant
      Register of the Company, at least 10 calendar days prior to the applicable
      record or effective date hereinafter specified, a notice stating (x) the date
      on
      which a record is to be taken for the purpose of such dividend, distribution,
      redemption, rights or warrants, or if a record is not to be taken, the date
      as
      of which the holders of the Common Stock of record to be entitled to such
      dividend, distributions, redemption, rights or warrants are to be determined
      or
      (y) the date on which such reclassification, consolidation, merger, sale,
      transfer or share exchange is expected to become effective or close, and the
      date as of which it is expected that holders of the Common Stock of record
      shall
      be entitled to exchange their shares of the Common Stock for securities, cash
      or
      other property deliverable upon such reclassification, consolidation, merger,
      sale, transfer or share exchange; provided,
      that
      the failure to mail such notice or any defect therein or in the mailing thereof
      shall not affect the validity of the corporate action required to be specified
      in such notice. The Holder is entitled to exercise this Warrant during the
      10-day period commencing on the date of such notice to the effective date of
      the
      event triggering such notice.

     

    Section
      4. Transfer
      of Warrant; Registration Rights.

     

    a) Transferability.
      Subject
      to compliance with any applicable securities laws and the conditions set forth
      in Sections 5(a) and 4(d) hereof, this Warrant and all rights hereunder are
      transferable, in whole or in part, upon surrender of this Warrant at the
      principal office of the Company, together with a written assignment of this
      Warrant substantially in the form attached hereto duly executed by the Holder
      or
      its agent or attorney and funds sufficient to pay any transfer taxes payable
      upon the making of such transfer. Upon such surrender and, if required, such
      payment, the Company shall execute and deliver a new Warrant or Warrants in
      the
      name of the assignee or assignees and in the denomination or denominations
      specified in such instrument of assignment, and shall issue to the assignor
      a
      new Warrant evidencing the portion of this Warrant not so assigned, and this
      Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
      exercised by a new holder for the purchase of Warrant Shares without having
      a
      new Warrant issued. 

     

    b) New
      Warrants.
      This
      Warrant may be divided or combined with other Warrants upon presentation hereof
      at the aforesaid office of the Company, together with a written notice
      specifying the names and denominations in which new Warrants are to be issued,
      signed by the Holder or its agent or attorney. Subject to compliance with
      Section 4(a), as to any transfer which may be involved in such division or
      combination, the Company shall execute and deliver a new Warrant or Warrants
      in
      exchange for the Warrant or Warrants to be divided or combined in accordance
      with such notice.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

     

    c) Warrant
      Register.
      The
      Company shall register this Warrant, upon records to be maintained by the
      Company for that purpose (the “Warrant
      Register”),
      in
      the name of the record Holder hereof from time to time. The Company may deem
      and
      treat the registered Holder of this Warrant as the absolute owner hereof for
      the
      purpose of any exercise hereof or any distribution to the Holder, and for all
      other purposes, absent actual notice to the contrary.

     

    d) Transfer
      Restrictions.
      If,
      at the
time
      of
      the surrender of this Warrant in connection with any transfer of this Warrant,
      the transfer of this Warrant shall not be registered pursuant to an effective
      registration
      statement under the Securities Act
      and
under
      applicable state securities or blue sky laws, the Company may require, as a
      condition of allowing such transfer (i) that the Holder or transferee of this
      Warrant, as the case may be, furnish to the Company a written opinion of counsel
      (which opinion shall be in form, substance and scope customary for opinions
      of
      counsel in comparable transactions), at the Holder’s expense, to the effect that
      such transfer may be made without
      registration under
      the
      Securities Act and under applicable state securities or blue sky laws, (ii)
      that
      the holder or transferee execute and deliver to the Company an investment letter
      in form and substance acceptable to the Company and (iii) that the transferee
      be
      an “accredited
      investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
      promulgated under the Securities Act or a qualified institutional buyer as
      defined in Rule 144A(a) under the Securities Act. The Company will provide,
      at
      the Company’s expense, such legal opinions in the future as are reasonably
      necessary for the issuance and resale of the Common Stock issuable upon exercise
      of this Warrant pursuant to an effective Registration Statement, Rule 144 under
      the Securities Act or an exemption from registration. In the event that the
      Common Stock is sold in a manner that complies with an exemption from
      registration, the Company will promptly instruct its counsel (at the Company’s
      expense) to issue to the transfer agent an opinion permitting removal of the
      legend (indefinitely, if pursuant to Rule 144(k) under the Securities Act,
      or to
      permit sale of the shares pursuant to other provisions under Rule 144 under
      the
      Securities Act).

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

     

    e) Registration
      Rights.
      If the
      Company shall determine to prepare and file with the Commission a registration
      statement (a “Registration
      Statement”)
      relating to an offering for its own account or the account of others under
      the
      Securities Act of any of its equity securities, other than on Form S-4 or Form
      S-8 (each as promulgated under the Securities Act), or their then equivalents,
      relating to equity securities to be issued solely in connection with any
      acquisition of any entity or business or equity securities issuable in
      connection with stock option or other employee benefit plans, then the Company
      shall send to the Holder a written notice of such determination and, if within
      ten days after the date of such notice, the Holder shall so request in writing,
      the Company shall include in such registration statement all or any part of
      the
      Warrant Shares as the Holder requests to be registered so long as such Warrant
      Shares are proposed to be disposed in the same manner as those set forth in
      the
      Registration Statement; provided, however, that if the number of Warrant Shares
      offered for participation in the proposed offering is greater than, in the
      reasonable opinion of the managing underwriter of the proposed offering, can
      be
      accommodated without adversely affecting the proposed offering, then the number
      of shares of Common Stock included in such registration shall be subject to
      reduction to a number deemed satisfactory by the managing underwriter, which
      reduction shall be allocated pro rata among all parties offering securities
      pursuant to such registration statement. The Company shall use its best efforts
      to cause any Registration Statement to be declared effective by the Commission
      as promptly as is possible following it being filed with the Commission and
      to
      remain effective until all Warrant Shares subject thereto have been sold. All
      fees and expenses incident to the performance of or compliance with this Section
      4(e) by the Company shall be borne by the Company whether or not any Warrant
      Shares are sold pursuant to the Registration Statement. The Company shall,
      notwithstanding any full or partial exercise of this Warrant, indemnify and
      hold
      harmless the Holder, the officers, directors, members, partners, agents,
      brokers, investment advisors and employees of each of them, each person who
      controls the Holder (within the meaning of Section 15 of the Securities Act
      or
      Section 20 of the Exchange Act), and the officers, directors, members,
      shareholders, partners, agents and employees of each such controlling person,
      to
      the fullest extent permitted by applicable law, from and against any and all
      losses, claims, damages, liabilities, costs (including, without limitation,
      reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred,
      arising out of or relating to (1) any untrue or alleged untrue statement of
      a
      material fact contained in the Registration Statement, any prospectus included
      therein or any form of prospectus or in any amendment or supplement thereto
      or
      in any preliminary prospectus, or arising out of or relating to any omission
      or
      alleged omission of a material fact required to be stated therein or necessary
      to make the statements therein (in the case of any prospectus or form of
      prospectus or supplement thereto, in light of the circumstances under which
      they
      were made) not misleading or (2) any violation or alleged violation by the
      Company of the Securities Act, the Exchange Act or any state securities law,
      or
      any rule or regulation thereunder, in connection with the performance of its
      obligations under this Section 4(e), except to the extent, but only to the
      extent, that such untrue statements or omissions referred to in (1) above are
      based solely upon information regarding the Holder furnished in writing to
      the
      Company by the Holder expressly for use therein. The rights of the Holder under
      this Section 4(e) shall survive any full or partial exercise of this Warrant
      until all Warrant Shares have been either registered under a Registration
      Statement or been sold pursuant to an exemption to the registration requirements
      of the Securities Act or are saleable pursuant to Rule 144(k) under the
      Act.

     

    Section
      5. Miscellaneous.

     

    a) Title
      to Warrant.
      Prior
      to the Termination Date and subject to compliance with applicable laws and
      Section 4 of this Warrant, this Warrant and all rights hereunder are
      transferable, in whole or in part, at the office or agency of the Company by
      the
      Holder in person or by duly authorized attorney, upon surrender of this Warrant
      together with the Assignment Form annexed hereto properly endorsed. The
      transferee shall sign an investment letter in form and substance reasonably
      satisfactory to the Company.

     

    b) No
      Rights as Shareholder Until Exercise.
      This
      Warrant does not entitle the Holder to any voting rights or other rights as
      a
      shareholder of the Company prior to the exercise hereof. Upon the surrender
      of
      this Warrant and the payment of the aggregate Exercise Price (or by means of
      a
      cashless exercise), the Warrant Shares so purchased shall be and be deemed
      to be
      issued to such Holder as the record owner of such shares as of the close of
      business on the later of the date of such surrender or payment.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

     

    c) Loss,
      Theft, Destruction or Mutilation of Warrant.
      The
      Company covenants that upon receipt by the Company of evidence reasonably
      satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
      or any stock certificate relating to the Warrant Shares, and in case of loss,
      theft or destruction, of indemnity or security reasonably satisfactory to it
      (which, in the case of the Warrant, shall not include the posting of any bond),
      and upon surrender and cancellation of such Warrant or stock certificate, if
      mutilated, the Company will make and deliver a new Warrant or stock certificate
      of like tenor and dated as of such cancellation, in lieu of such Warrant or
      stock certificate.

     

    d) Saturdays,
      Sundays, Holidays, etc.
      If the
      last or appointed day for the taking of any action or the expiration of any
      right required or granted herein shall be a Saturday, Sunday or a legal holiday,
      then such action may be taken or such right may be exercised on the next
      succeeding day not a Saturday, Sunday or legal holiday.

     

    e) Authorized
      Shares.
      

     

    The
      Company covenants that during the period the Warrant is outstanding, it will
      reserve from its authorized and unissued Common Stock a sufficient number of
      shares to provide for the issuance of the Warrant Shares upon the exercise
      of
      any purchase rights under this Warrant. To the extent there exist insufficient
      shares of Common Stock available for reservation on the Initial Exercise Date,
      the Company shall use its best efforts to promptly amend its charter documents
      to permit for such reservation. The Company further covenants that its issuance
      of this Warrant shall constitute full authority to its officers who are charged
      with the duty of executing stock certificates to execute and issue the necessary
      certificates for the Warrant Shares upon the exercise of the purchase rights
      under this Warrant. The Company will take all such reasonable action as may
      be
      necessary to assure that such Warrant Shares may be issued as provided herein
      without violation of any applicable law or regulation, or of any requirements
      of
      the Trading Market upon which the Common Stock may be listed. If the Company
      shall list any shares of Common Stock on any securities exchange or market
      it
      will, at its expense, list thereon, maintain and increase when necessary such
      listing, of, all shares of Warrant Stock from time to time issued upon exercise
      of this Warrant or as otherwise provided hereunder, and, to the extent
      permissible under the applicable securities exchange’s rules, all unissued
      shares of Warrant Stock which are at any time issuable hereunder, so long as
      any
      shares of Common Stock shall be so listed. The Company will also so list on
      each
      securities exchange or market, and will maintain such listing of, any other
      securities which the Holder of this Warrant shall be entitled to receive upon
      the exercise of this Warrant if at the time any securities of the same class
      shall be listed on such securities exchange or market by the
      Company.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

     

    Except
      and to the extent as waived or consented to by the Holder, the Company shall
      not
      by any action, including, without limitation, amending its certificate of
      incorporation or through any reorganization, transfer of assets, consolidation,
      merger, dissolution, issue or sale of securities or any other voluntary action,
      avoid or seek to avoid the observance or performance of any of the terms of
      this
      Warrant, but will at all times in good faith assist in the carrying out of
      all
      such terms and in the taking of all such actions as may be necessary or
      appropriate to protect the rights of Holder as set forth in this Warrant against
      impairment. Without limiting the generality of the foregoing, the Company will
      (a) not increase the par value of any Warrant Shares above the amount payable
      therefor upon such exercise immediately prior to such increase in par value,
      (b)
      take all such action as may be necessary or appropriate in order that the
      Company may validly and legally issue fully paid and nonassessable Warrant
      Shares upon the exercise of this Warrant, and (c) use commercially reasonable
      efforts to obtain all such authorizations, exemptions or consents from any
      public regulatory body having jurisdiction thereof as may be necessary to enable
      the Company to perform its obligations under this Warrant.

     

    Before
      taking any action which would result in an adjustment in the number of Warrant
      Shares for which this Warrant is exercisable or in the Exercise Price, the
      Company shall obtain all such authorizations or exemptions thereof, or consents
      thereto, as may be necessary from any public regulatory body or bodies having
      jurisdiction thereof.

     

    f) Jurisdiction.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Warrant shall be governed by and construed and enforced in accordance
      with the internal laws of the State of New York, without regard to the
      principles of conflict of laws thereof. The Company hereby irrevocably submits
      to the exclusive jurisdiction of the state and federal courts sitting in the
      City of New York, borough of Manhattan for the adjudication of any dispute
      hereunder or in connection herewith or with any transaction contemplated hereby
      or discussed herein, and hereby irrevocably waives, and agrees not to assert
      in
      any suit, action or proceeding, any claim that it is not personally subject
      to
      the jurisdiction of any such court, that such suit, action or proceeding is
      improper or inconvenient venue for such proceeding. The Company and the Holder
      hereby irrevocably waive personal service of process and consent to process
      being served in any such suit, action or proceeding by mailing a copy thereof
      via registered or certified mail or overnight delivery (with evidence of
      delivery) to such party at the address set forth in the Consulting Agreement
      and
      agrees that such service shall constitute good and sufficient service of process
      and notice thereof. Nothing contained herein shall be deemed to limit in any
      way
      any right to serve process in any manner permitted by law. The parties hereby
      waive all rights to a trial by jury. If the Company or the Holder shall commence
      an action or proceeding to enforce any provisions of this Warrant, then the
      prevailing party in such action or proceeding shall be reimbursed by the other
      party for its attorneys’ fees and other costs and expenses incurred with the
      investigation, preparation and prosecution of such action or
      proceeding.

     

    g) Restrictions.
      The
      Holder acknowledges that the Warrant Shares acquired upon the exercise of this
      Warrant, if not registered, will have restrictions upon resale imposed by state
      and federal securities laws.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

     

    h) Nonwaiver
      and Expenses.
      No
      course of dealing or any delay or failure to exercise any right hereunder on
      the
      part of Holder shall operate as a waiver of such right or otherwise prejudice
      Holder’s rights, powers or remedies, notwithstanding the fact that all rights
      hereunder terminate on the Termination Date. If the Company willfully and
      knowingly fails to comply with any provision of this Warrant, which results
      in
      any material damages to the Holder, the Company shall pay to Holder such amounts
      as shall be sufficient to cover any costs and expenses including, but not
      limited to, reasonable attorneys’ fees, including those of appellate
      proceedings, incurred by Holder in collecting any amounts due pursuant hereto
      or
      in otherwise enforcing any of its rights, powers or remedies
      hereunder.

     

    i) Notices.
      Any
      notice, request or other document required or permitted to be given or delivered
      hereunder shall be delivered by certified mail or courier to the addresses
      set
      forth in the Consulting Agreement, dated as of the date hereof, between the
      Holder and the Company (the “Consulting
      Agreement”),
      or
      such other address as specified by the relevant party in writing.

     

    j) Limitation
      of Liability.
      No
      provision hereof, in the absence of any affirmative action by Holder to exercise
      this Warrant or purchase Warrant Shares, and no enumeration herein of the rights
      or privileges of Holder, shall give rise to any liability of Holder for the
      purchase price of any Common Stock or as a stockholder of the Company, whether
      such liability is asserted by the Company or by creditors of the
      Company.

     

    k) Remedies.
      Holder,
      in addition to being entitled to exercise all rights granted by law, including
      recovery of damages, will be entitled to specific performance of its rights
      under this Warrant. The Company agrees that monetary damages would not be
      adequate compensation for any loss incurred by reason of a breach by it of
      the
      provisions of this Warrant and hereby agrees to waive the defense in any action
      for specific performance that a remedy at law would be adequate.

     

    l) Successors
      and Assigns.
      Subject
      to applicable securities laws, this Warrant and the rights and obligations
      evidenced hereby shall inure to the benefit of and be binding upon the
      successors of the Company and the successors and permitted assigns of Holder.
      The provisions of this Warrant are intended to be for the benefit of all Holders
      from time to time of this Warrant and shall be enforceable by any such Holder
      or
      holder of Warrant Shares.

     

    m) Amendment.
      This
      Warrant may be modified or amended or the provisions hereof waived with the
      written consent of the Company and the Holder.

     

    n) Severability.
      Wherever possible, each provision of this Warrant shall be interpreted in such
      manner as to be effective and valid under applicable law, but if any provision
      of this Warrant shall be prohibited by or invalid under applicable law, such
      provision shall be ineffective to the extent of such prohibition or invalidity,
      without invalidating the remainder of such provisions or the remaining
      provisions of this Warrant.

     

    o) Headings.
      The
      headings used in this Warrant are for the convenience of reference only and
      shall not, for any purpose, be deemed a part of this Warrant.

     

    

    Signature
      Page Follows

    

    ********************

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
      officer thereunto duly authorized.

     

    

    Dated:
      February 11, 2008

     

    
      	
              WITS
                BASIN PRECIOUS MINERALS INC.

               

            
	
              By:__________________________________________

              Name:
                Mark D. Dacko

              Title:
                Chief Financial Officer

               

            

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

     

    

    Signature
      Page

    Common
      Stock Purchase Warrant

    To
      Purchase 2,100,000 Shares of Common Stock

     

    

    
      
        
        

        
        

      

      
        16

        
          

        

      

      
        
        

        
        

      

    

     

    NOTICE
      OF EXERCISE

    

    TO: WITS
      BASIN PRECIOUS MINERALS INC.

    

    (1) The
      undersigned hereby elects to purchase ________ Warrant Shares of the Company
      pursuant to the terms of the attached Warrant (only if exercised in full),
      and
      tenders herewith payment of the exercise price in full, together with all
      applicable transfer taxes, if any.

     

    (2) Payment
      shall take the form of (check applicable box):

     

    o in
      lawful money of
      the United States; or

     

    o the
      cancellation
      of such number of Warrant Shares as is necessary, in accordance with the formula
      set forth in subsection 2(c), to exercise this Warrant with respect to the
      maximum number of Warrant Shares purchasable pursuant to the cashless exercise
      procedure set forth in subsection 2(c).

     

    (3) Please
      issue a certificate or certificates representing said Warrant Shares in the
      name
      of the undersigned or in such other name as is specified below:

     

    _______________________________

     

    

    The
      Warrant Shares shall be delivered to the following:

    

    _______________________________

     

    _______________________________

     

    _______________________________

    

    (4)
      Accredited
      Investor.
      The
      undersigned is an “accredited investor” as defined in Regulation D promulgated
      under the Securities Act of 1933, as amended.

    

    [SIGNATURE
      OF HOLDER]

     

    Name
      of
      Investing Entity:
      ________________________________________________________________________

    Signature
      of Authorized Signatory of Investing Entity:
      _________________________________________________

    Name
      of
      Authorized Signatory:
      ___________________________________________________________________

    Title
      of
      Authorized Signatory:
      ____________________________________________________________________

    Date:
      ________________________________________________________________________________________

    

    

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

     

    ASSIGNMENT
      FORM

    

    (To
      assign the foregoing warrant, execute

    this
      form
      and supply required information. 

    Do
      not
      use this form to exercise the warrant.)

    

    

    

    FOR
      VALUE
      RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
      assigned to

     

    

    _______________________________________________
      whose address is

    

    _______________________________________________________________.

    

    

    

    _______________________________________________________________

    

    Dated:
      ______________, _______

    

    

    Holder’s
      Signature: _____________________________

    

    Holder’s
      Address: _____________________________

     

    _____________________________

    

    

    

    Signature
      Guaranteed: ___________________________________________

    

    

    NOTE:
      The
      signature to this Assignment Form must correspond with the name as it appears
      on
      the face of the Warrant, without alteration or enlargement or any change
      whatsoever, and must be guaranteed by a bank or trust company. Officers of
      corporations and those acting in a fiduciary or other representative capacity
      should file proper evidence of authority to assign the foregoing
      Warrant.

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    (Certain
      Definitions)

    

     

    “Affiliate”
means
      any Person that, directly or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with a Person, as such
      terms are used in and construed under Rule 144 under the Securities
      Act. 

     

    “Business
      Day”
means
      any day except Saturday, Sunday, any day which shall be a federal legal holiday
      in the United States or any day on which banking institutions in the State
      of
      New Jersey are authorized or required by law or other governmental action to
      close.

     

    “Common
      Stock Equivalents”
means
      any securities of the Company or its subsidiaries which would entitle the holder
      thereof to acquire at any time Common Stock, including, without limitation,
      any
      debt, preferred stock, rights, options, warrant or other instrument that is
      at
      any time convertible into or exercisable or exchangeable for, or otherwise
      entitles the holder thereof to receive, Common Stock.

     

    “Exempt
      Issuance”
means
      the issuance of (a) shares of Common Stock or options to employees, officers
      or
      directors of the Company pursuant to any stock or option plan duly adopted
      by a
      majority of the non-employee members of the Board of Directors of the Company
      or
      a majority of the members of a committee of non-employee directors established
      for such purpose, (b) securities upon the exercise or exchange of or conversion
      of any securities issued hereunder and/or securities exercisable or exchangeable
      for or convertible into shares of Common Stock issued and outstanding on the
      Initial Exercise Date, provided that such securities have not been amended
      since
      the Initial Exercise Date to increase the number of such securities or to
      decrease the exercise, exchange or conversion price of any such securities,
      (c)
      securities issued pursuant to acquisitions or strategic transactions, provided
      any such issuance shall only be to a person which is, itself or through its
      subsidiaries, an operating company in a business synergistic with the business
      of the Company and in which the Company receives benefits in addition to the
      investment of funds, but shall not include a transaction in which the Company
      is
      issuing securities primarily for the purpose of raising capital or to an entity
      whose primary business is investing in securities, and (d) shares of Common
      Stock (other than as set forth in (a) through (c) above) in an aggregate amount
      not to exceed 3% of the number of shares of Common Stock outstanding on the
      Initial Exercise Date.

     

    “Person”
means
      an individual or corporation, partnership, trust, incorporated or unincorporated
      association, joint venture, limited liability company, joint stock company,
      government (or an agency or subdivision thereof) or other entity of any
      kind.

     

    “Trading
      Day”
means
      a
      day on which the Trading Markets are open for business, or if the Common Stock
      is not then listed on a Trading Market, any business day in New York
      City.

     

    “Trading
      Market”
means
      the following markets or exchanges: the Nasdaq Capital Market, the American
      Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or
      the
      Over-the-Counter Bulletin Board.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    

     

    “VWAP”
means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
      the daily volume weighted average price of the Common Stock for such date (or
      the nearest preceding date) on the Trading Market on which the Common Stock
      is
      then listed or quoted as reported by BigCharts (based on a Trading Day from
      9:30
      a.m. New York City time to 4:02 p.m. New York City time); (b) if the OTC
      Bulletin Board is not a Trading Market, the volume weighted average price of
      the
      Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
      Board; (c) if the Common Stock is not then listed or quoted on the OTC Bulletin
      Board and if prices for the Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets, LLC (or a similar organization or agency succeeding
      to
      its functions of reporting prices), the most recent bid price per share of
      the
      Common Stock so reported; or (d) in all other cases, the fair market value
      of a
      share of Common Stock as determined by an independent appraiser selected in
      good
      faith by the Holder and reasonably acceptable to the Company.Exhibit
      10.38

     

    SALE
      OF SHARES AND CLAIMS AGREEMENT

     

    1
      PARTIES

     

    
      	
              1.1

            	
              The
                parties to this agreement are –

            

    

     

    
      	
              1.1.1

            	
              Wits
                Basin Precious Minerals
                Inc;

            

    

     

    
      	
              1.1.2

            	
              SSC
                Mandarin Group Limited;
                and

            

    

     

    
      	
              1.1.3

            	
              China
                Global Mining Resources
                Limited.

            

    

     

    
      	
              1.2

            	
              The
                parties agree as set out below.

            

    

     

    2
      INTERPRETATION

     

    
      	
              2.1

            	
              In
                this agreement, unless inconsistent with or otherwise indicated by
                the
                context -

            

    

     

    
      	
              2.1.1

            	
              "the/this
                agreement"
                means the agreement as set out herein together with all appendices
                hereto;

            

    

     

    
      	
              2.1.2

            	
              "business
                day"
                means a day which is not a Saturday, Sunday or a United States public
                holiday;

            

    

     

    
      	
              2.1.3

            	
              "the
                company"
                means China Global Mining Resources Limited, with registration number
                1386052, a company duly incorporated in accordance with the laws
                of the
                British Virgin Islands, herein represented by Lee Sing Leung, Robin,
                he
                being duly authorised;

            

    

     

    
      	
              2.1.4

            	
              "the
                subsidiary"
                means Maanshan Global Resources Limited, a company duly incorporated
                in
                accordance with the laws of the People's Republic of China and a
                wholly
                owned foreign enterprise of the company with its registered address
                at
                Hongqinanlu, Development District, Ma'anshan, Anhui
                Province;

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
      	
              2.1.5

            	
              "the
                documents of title"
                means collectively

            

    

     

    
      	
              2.1.5.1

            	
              the
                share certificates in respect of the subject shares, together with
                share
                transfer forms in respect thereof duly completed in accordance with
                the
                articles of association of the company, indicating the purchaser
                or his
                nominee as the transferee of the subject shares and dated the effective
                date;

            

    

     

    
      	
              2.1.5.2

            	
              a
                certified copy of a resolution of the directors of the company passed
                in
                accordance with the articles of association of the company approving
                the
                transfer of the subject shares in the name of the purchaser or its
                nominee;

            

    

     

    
      	
              2.1.5.3

            	
              the
                written and signed cession of the claims in favour of the purchaser
                or its
                nominee;

            

    

     

    
      	
              2.1.6

            	
              "the
                effective date"
                means the signature date;

            

    

     

    
      	
              2.1.7

            	
              "the
                parties"
                means all the parties to this
                agreement;

            

    

     

    
      	
              2.1.8

            	
              "the
                purchaser"
                means Wits Basin Precious Minerals Inc. (OTCBB: WITM), a public company
                duly incorporated in accordance with the laws Minnesota, United States
                of
                America, or its appointed nominee, herein represented by Stephen
                David
                King, he having been duly authorised
                hereto;

            

    

     

    
      	
              2.1.9

            	
              "the
                Seller"
                means SSC Mandarin Group Limited, with registration number 137917,
                a
                company duly incorporated in terms of the laws of the British Virgin
                Islands, herein represented by Lee Sing Leung, Robin, he being duly
                authorised thereto;

            

    

     

    
      	
              2.1.10

            	
              "the
                signature date"
                means the date of signature of this agreement as identified on the
                signature page;

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
              2.1.11

            	
              "the
                subject claims"
                means any and all claims of whatsoever nature and howsoever arising
                held
                by the seller against the company as at the effective
                date;

            

    

     

    
      	
              2.1.12

            	
              "the
                subject shares"
                means 1 (one) ordinary par value share amounting to 100% (one hundred
                percentum) of the company's issued share capital at the effective
                date;

            

    

     

    
      	
              2.1.13

            	
              any
                reference to the singular includes the plural and vice
                versa;

            

    

     

    
      	
              2.1.14

            	
              any
                reference to natural persons includes legal persons and vice
                versa;

            

    

     

    
      	
              2.1.15

            	
              any
                reference to a gender includes the other
                genders.

            

    

     

    
      	
              2.2

            	
              If
                any provision in a definition is a substantive provision conferring
                rights
                or imposing obligations on any party, effect shall be given to it
                as if it
                were a substantive clause in the body of the agreement notwithstanding
                that it is only contained in the interpretation
                clause.

            

    

     

    
      	
              2.3

            	
              The
                clause headings in this agreement have been inserted for convenience
                only
                and shall not be taken into account in its
                interpretation.

            

    

     

    
      	
              2.4

            	
              If
                any period is referred to in this agreement by way of reference to
                a
                number of days, the days shall be reckoned exclusively of the first
                and
                inclusively of the last day unless the last day falls on a day other
                than
                a business day, in which case the last day shall be the next succeeding
                business day.

            

    

     

    
      	
              2.5

            	
              Words
                and expressions defined in any sub-clause shall, for the purposes
                of the
                clause of which that sub-clause forms part, bear the meaning assigned
                to
                such words and expressions in that
                sub-clause.

            

    

     

    
      	
              2.6

            	
              This
                agreement shall be governed by and construed and interpreted in accordance
                with the laws of the United Sates of
                America.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    3
      INTRODUCTION

     

    
      	
              3.1

            	
              It
                is recorded that – 

            

    

     

    
      	
              3.1.1

            	
              the
                seller is the owner of the subject shares and the subject
                claims;

            

    

     

    
      	
              3.1.2

            	
              the
                purchaser wishes to acquire the subject shares and the subject claims
                from
                the seller and the seller is willing to dispose of the subject shares
                and
                the subject claims to the purchaser on the effective date, subject
                to the
                terms and conditions set out in this
                agreement.

            

    

     

    
      	
              3.2

            	
              The
                parties accordingly agree as set out
                herein.

            

    

     

    4 PURCHASE
      AND SALE

     

    With
      effect from the effective date the seller hereby sells the subject shares and
      the subject claims to the purchaser, who hereby purchases same from the seller,
      subject to the terms and conditions set out in this agreement.

     

    5 SHARE
      CAPITAL OF THE COMPANY

     

    
      	
              5.1

            	
              It
                is recorded that the company is duly registered with a share capital
                as
                follows

            

    

     

    
      	
              5.1.1

            	
              an
                authorised share capital of USD50,000 (fifty thousand United States
                Dollars) divided into 50,000 (fifty thousand) ordinary par value
                shares of
                USD1,00 (one United States Dollar) each;
                and

            

    

     

    
      	
              5.1.2

            	
              an
                issued share capital of USD1,00 (one United States Dollar) divided
                into 1
                (one) ordinary par value share of USD1,00 (one United States
                Dollar).

            

    

     

    6
      PURCHASE PRICE

     

    The
      purchase price payable by the purchaser to the seller in respect of the subject
      shares and the subject claims shall be an amount of HKD10,000 (ten thousand
      Hong
      Kong Dollars), the receipt of which is hereby acknowledged by
      seller.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    7
      PAYMENT OF PURCHASE PRICE

     

    It
      is
      recorded that the purchase price for the subject shares and the subject claims
      has been paid by the purchaser to the seller in cash.

     

    8
      WARRANTIES

     

    The
      seller warrants that on the effective date –

     

    
      	
              8.1

            	
              the
                company will not be under any obligations to issue any shares or
                debentures to any person, and no resolution will have been passed
                to
                increase its capital or to issue further shares or any
                debentures;

            

    

     

    
      	
              8.2

            	
              no
                person will have any lien or other preferential right in respect
                of the
                share capital of the company, nor will any person other than the
                seller
                have any claim to any of the subject shares in the
                company;

            

    

     

    
      	
              8.3

            	
              the
                company will not have declared any dividends which will not have
                been paid
                in full.

            

    

     

    
      	
              8.4

            	
              Except
                as set out above, the shares and claims are sold without any warranties
                of
                any nature, either express or
                implied.

            

    

     

    9
      DELIVERY AND CLOSING

     

    At
      10h00
      on the effective date, the parties shall meet at the address of the seller
      referred to in 13.2.1 below or at such other premises as agreed to between
      them.
      At that meeting the seller shall:

     

    
      	
              9.1

            	
              deliver
                to the purchaser or its nominee –

            

    

     

    
      	
              9.1.1

            	
              the
                share certificates in respect of the sale shares together with duly
                signed
                and currently dated share transfer forms in respect thereof duly
                completed
                in negotiable form;

            

    

     

    
      	
              9.1.2

            	
              a
                copy of a resolution of the seller approving the transaction contemplated
                in terms of this agreement.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    10
      CONFIDENTIALITY

     

    The
      parties agree not to disclose details of this agreement or any other matter
      in
      relation to the transactions set out in this agreement to any third party at
      any
      time and further undertake not to make any public announcement relating to
      the
      matters contemplated herein without the prior written approval of the seller
      and
      the purchaser first being had and obtained and which approval shall not be
      unreasonably withheld.

     

    11
      RISK AND BENEFIT

     

    
      	
              11.1

            	
              All
                risk in and benefit to the subject shares and subject claims shall
                pass to
                the purchaser on the effective
                date.

            

    

     

    
      	
              11.2

            	
              Ownership
                of the subject shares and subject claims shall pass to the purchaser
                with
                effect from the effective date.

            

    

     

    12
      BREACH

     

    Should
      any party ("the
      party in default")
      breach
      any material term, condition, undertaking, warranty or representation contained
      in this agreement and fail to remedy such breach within seven days (or such
      reasonable longer period as the parties may agree on) after receipt of a written
      notice from any of the other parties ("the
      innocent party/ies"),
      requiring such breach to be remedied, then, without prejudice to any other
      rights that it may have in terms hereof or in law, the innocent party/ies shall
      be entitled to forthwith cancel this agreement on written notice thereof to
      the
      party in default.

     

    13
      NOTICES AND DOMICILIA

     

    
      	
              13.1

            	
              The
                parties choose as their domicilia
                citandi et executandi
                their respective addresses set out in this clause for all purposes
                arising
                out of or in connection with this agreement at which addresses all
                processes and notices arising out of or in connection with this agreement,
                its breach or termination may validly be served upon or delivered
                to the
                parties.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
              13.2

            	
              For
                purposes of this agreement the parties' respective addresses shall
                be
                –

            

    

     

    
      	
              13.2.1

            	
              the
                seller at Suite 3015, 30/F, One International Finance Centre, 1 Harbour
                View Street, Central, Hong Kong;

            

    

     

    facsimile
      number ~ +852 2504 3232;

     

    
      	
              13.2.2

            	
              the
                purchaser at 900 IDS Center 80 South 8. Street Minneapolis, MN 55402,
                United States for attention Mr. Mark D.
                Dacko,

            

    

     

    facsimile
      number ~ +1612 395 5276;

     

    
      	
              13.2.3

            	
              the
                company at P.O. Box 957, Offshore Incorporations Centre, Road Town,
                Tortola, British Virgin Islands;

            

    

     

    facsimile
      number ~ +852 2504 3232,

     

    or
      at
      such other address of which the party concerned may notify the other/s in
      writing provided that no street address mentioned in this sub-clause shall
      be
      changed to a post office box or poste restante.

     

    
      	
              13.3

            	
              Any
                notice given in terms of this agreement shall be in writing and shall
                –

            

    

     

    
      	
              13.3.1

            	
              if
                delivered by hand be deemed to have been duly received by the addressee
                on
                the date of delivery;

            

    

     

    
      	
              13.3.2

            	
              if
                transmitted by facsimile be deemed to have been received by the addressee
                on the day following the date of despatch, unless the contrary is
                proved.

            

    

     

    
      	
              13.4

            	
              Notwithstanding
                anything to the contrary contained or implied in this agreement,
                a written
                notice or communication actually received by one of the parties from
                another including by way of facsimile transmission shall be adequate
                written notice or communication to such
                party.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    14
      WHOLE AGREEMENT

     

    This
      agreement constitutes the whole agreement between the parties as to the subject
      matter hereof and no agreements, representations or warranties between the
      parties regarding the subject matter hereof other than those set out herein
      are
      binding on the parties.

     

    15
      VARIATION

     

    No
      addition to or variation, consensual cancellation or novation of this agreement
      and no waiver of any right arising from this agreement or its breach or
      termination shall be of any force or effect unless reduced to writing and signed
      by all the parties or their duly authorised representatives.

     

    16
      RELAXATION

     

    No
      latitude, extension of time or other indulgence which may be given or allowed
      by
      any party to the other parties in respect of the performance of any obligation
      hereunder, and no delay or forbearance in the enforcement of any right of any
      party arising from this agreement, and no single or partial exercise of any
      right by any party under this agreement, shall in any circumstances be construed
      to be an implied consent or election by such party or operate as a waiver or
      a
      novation of or otherwise affect any of the party's rights in terms of or arising
      from this agreement or preclude any such party from enforcing at any time and
      without notice, strict and punctual compliance with each and every provision
      or
      term hereof.

     

    17
      COSTS

     

    Each
      party shall bear its own costs in respect of the negotiation, drafting and
      implementation of this agreement. All stamp duty, if any, shall be borne and
      paid by the purchaser.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
      	
              SIGNED
                at _______________________________________

            	 	
              as of
                ________________________________________

            
	 	 	 	 
	
              AS
                WITNESS:

            	 	 	 
	 	 	 	 
	 	 	 	
              WITS
                BASIN PRECIOUS

            
	 	 	
              For:

            	
              MINERALS
                INC.

            
	 	 	 	 
	 	 	 
	
              (Name
                of witness in print)

            	 	
              Duly
                Authorised

            
	 	 	 	 
	
              SIGNED
                at _______________________________________

            	 	
              as of ________________________________________

            
	 	 	 	 
	
              AS
                WITNESS:

            	 	 	 
	 	 	 	 
	 	 	 	
              SSC
                MANDARIN GROUP

            
	 	 	
              For:

            	
              LIMITED

            
	 	 	 	 
	 	 	 
	
              (Name
                of witness in print)

            	 	
              Duly
                Authorised

            
	 	 	 	 
	
              SIGNED
                at _______________________________________

            	 	
              as of
                _________________________________________

            
	 	 	 	 
	
              AS
                WITNESS:

            	 	 	 
	 	 	 	 
	 	 	 	
              CHINA
                GLOBAL MINING

            
	 	 	
              For:   

            	
              RESOURCES
                LIMITED

            
	 	 	 	 
	 	 	 
	
              (Name
                of witness in print)

            	 	
              Duly
                Authorised

            

    

     

    
      
        
        

      

      
        9

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