Document:

Untitled Document

EXHIBIT 10.2 

 SECURED CONVERTIBLE PROMISSORY NOTE
  

	 $650,000 
	May 28, 2004

       FOR
  VALUE RECEIVED,
  the undersigned, WITS
  BASIN PRECIOUS MINERALS INC.,
  a Minnesota corporation (the “Maker”), hereby promises to pay to the
  order of Pandora Select Partners L.P., a British Virgin Islands limited partnership,
  or its assigns (the “Payee”), at such place as the Payee may designate
  in writing, the principal sum of Six Hundred Fifty Thousand Dollars ($650,000),
  under the terms set forth herein. 

 1.     
   Interest.
        The
  unpaid principal balance hereof from time to time outstanding shall bear interest from the date hereof at the rate of ten percent (10%)
  per annum. 

 2.     
   Payment.
        The
  principal and interest hereof is payable as follows: 

      (a)
  Payments of $5,416.67 in cash of interest only are payable in arrears on June
  28, July 28 and August 28, 2004; and 

      (b)
  Commencing on September 28, 2004, and on the 28th day of each of the following
  14 months, Maker shall pay amortized principal and interest on this Note of
  $46,278.15 (the “Monthly Scheduled Payment”).

 3.     
   Optional
  Payment in Stock.

      (a)
  In lieu of making a cash payment under subsection 2(b) above, Maker may pay
  the Monthly Scheduled Payment, or any portion thereof, but only to the extent
  permitted by this subsection (a), by the issuance of shares of its $0.01 par
  value common stock (the “Common Stock”), the per-share value of which
  is computed as provided in Subsection (b) below. Despite the foregoing, the
  number of shares of Common Stock which may be issued to pay all or any portion
  of a particular Monthly Scheduled Payment may not exceed the lesser of (i) 10%
  of the aggregate number of traded shares of Common Stock reported on the OTC
  Bulletin Board as reported by bigcharts.com (or if this service is discontinued,
  such other reporting service acceptable to Payee) for the 30 trading days immediately
  preceding such Monthly Scheduled Payment due or (ii) the greatest number of
  shares of Common Stock which, when added to the number of shares of Common Stock
  "Beneficially Owned" (within the meaning set forth in subsection (d) below)
  by Payee, would not cause Payee to Beneficially Own more than 4.99% of the Maker’s
  outstanding Common Stock. In computing under this subsection (a) the aggregate
  number of traded shares during any time period, the Maker shall exclude (i)
  shares sold by or for the account or at the direction of the Maker, officers
  or directors of Maker or any members of their immediate families or any affiliates
  of Maker and (ii) shares determined solely by Payee (for which Payee shall so
  inform the Maker in writing) to represent unlawful or potentially unlawful sales.
  Maker may pay the Monthly Scheduled Payment, or any portion thereof, by the
  issuance of Common Stock only if, at the time of such payment, Maker has in
  effect a registration statement on Form S-2 or SB-2 with the U.S. Securities
  and Exchange Commission (the “SEC”) and applicable state securities
  laws covering the original issuance of such shares by the Maker or the resale
  of such shares by the Payee (the “Registration Statement”). 

      (b)
  The per-share value of the Common Stock as of a specified Scheduled Monthly
  Payment date for the purposes of this Section 3 is 85% (rounded to the nearest
  $.01) of the average (rounded to the nearest $.01) of the high closing bid prices
  of Maker’s Common Stock on the OTC Bulletin Board as reported by bigcharts.com
  (or if this service is discontinued, such other reporting service acceptable
  to Payee) for the 20 trading days immediately preceding the particular Scheduled
  Monthly Payment date. 

      (c)
  Payment by Common Stock shall be deemed to be made by Maker by giving written
  notice to the Payee of the number of shares being issued in such payment, and
  the Maker’s calculation of the per-share market value under subsection
  (b) above; provided that certificates representing those shares are delivered
  to Payee within 20 days of the due date of the Scheduled Monthly Payment. 

 4.     
   Conversion.

      (a)
  At any time while any portion of the principal or interest of this Note is outstanding
  (including during the notice period prior to any optional cash prepayment by
  the Maker), the Payee may give the Maker written notice (the “Payee’s
  Notice”) of its intention to convert all or any portion of the outstanding
  principal and/or accrued but unpaid interest on this Note into shares of the
  Maker’s Common Stock based on a conversion rate per share computed below
  (the “Conversion Rate”). Upon receipt of the Payee’s notice,
  the Maker shall immediately cause certificates representing these shares to
  be delivered to Payee within 20 days of, and Payment shall be deemed to have
  been made on, the date of such notice. 

      The
  "Conversion Rate" is the average (rounded to the nearest $.01) of the high closing
  bid prices of Maker’s Common Stock on the OTC Bulletin Board as reported
  by bigcharts.com (or if this service is discontinued, such other reporting service
  acceptable to Payee) for the 30 trading days immediately following the effective
  date with the SEC of Maker’s Registration Statement on Form S-2, SEC File
  No. 333-110831 (the “S-2 Registration Statement”). However, the Conversion
  Rate shall not be lower than $0.35 or higher than $0.65 per share. If by the
  date of the Payee’s Notice, the SEC has not declared the S-2 Registration
  Statement effective, then the Conversion Rate is $0.35 per share. 

      (b)
  The Conversion Rate shall be adjusted proportionally for any subsequent stock
  dividend or split, stock combination or other similar recapitalization, reclassification
  or reorganization of or affecting Maker’s Common Stock. In case of any
  consolidation or merger to which the Maker is a party other than a merger or
  consolidation in which the Maker is the continuing corporation, or in case of
  any sale or conveyance to another corporation of the property of the Maker as
  an entirety or substantially as an entirety, or in the case of any statutory
  exchange of securities with another corporation (including any exchange effected
  in connection with a merger of a third corporation into the Maker), then instead
  of receiving shares of Maker’s Common Stock, Payee shall have the right
  thereafter to receive the kind and amount of shares of stock and other securities
  and property which the Payee would have owned or have been entitled to receive
  immediately after such consolidation, merger, statutory exchange, sale or conveyance
  had the same portion of this Note been paid or converted immediately prior to
  the effective date of such consolidation, merger, statutory exchange, sale or
  conveyance and, in any such case, if necessary, appropriate adjustment shall
  be made in the application of the provisions set forth in this Section with
  respect to the rights and interests thereafter of the Payee, to the end that
  the provisions set forth in this Section shall thereafter correspondingly be
  made applicable, as nearly as may reasonably be, in relation to any shares of
  stock and other securities and property thereafter deliverable in connection
  with this Note. The provisions of this subsection shall similarly apply to successive
  consolidations, mergers, statutory exchanges, sales or conveyances. 

 -2- 

      (c)
  Despite anything above to the contrary, the Payee may not convert this Note
  into Common Stock under this Section 4 during the time period and to the extent
  that the shares of Maker’s Common Stock that the Payee could acquire upon
  the conversion would cause Payee’s Beneficial Ownership of Maker’s
  Common Stock to exceed 4.99% of Maker’s outstanding Common Stock; provided,
  however, that the limitations on the right to exercise a warrant for Common
  Stock being issued to Payee in connection with this Note (the “Warrant”),
  as provided by such Warrant, shall first reduce Payee’s Beneficial Ownership
  of Maker’s Common Stock before limitation of Payee’s conversion rights
  hereunder; and provided further, that the limitation of Payee’s conversion
  rights hereunder shall first reduce Payee’s Beneficial Ownership before
  limiting the number of shares that Maker may issue to Payee as payment hereunder
  pursuant to Section 3(a) above. The Payee will, at the request of Maker, from
  time to time, notify Maker of Payee’s computation of Payee’s Beneficial
  Ownership. The parties shall compute Payee’s "Beneficial Ownership" of
  Maker’s Common Stock in accordance with SEC Rule 13d-3. 

      (d)
  If (but only if) the Common Stock shall be listed for trading on the NASDAQ
  System during the term of this Note, then, unless the Maker shall have obtained
  the approval of its voting shareholders to such issuance in accordance with
  the rules of NASDAQ or such other stock market with which the Maker shall be
  required to comply (but only to the extent required thereby), the Maker shall
  not issue shares of Common Stock upon conversion of the Note or in payment of
  interest on the Note, which when added to the number of shares of Common Stock
  previously issued by Maker (i) upon conversion of the Note, (ii) upon exercise
  of the Warrant and (iii) in payment of interest on the Note, would equal or
  exceed 20% of the number of shares of the Maker’s Common Stock which were
  issued and outstanding on the date of issuance (the “Maximum Issuance Amount”).
  In the event that a properly executed conversion notice is received by the Maker
  which would require the Maker to issue shares of Common Stock equal to or in
  excess of the Maximum Issuance Amount, the Maker shall honor such conversion
  request by (i) converting the Note into the number of shares of Common Stock
  stated in the conversion notice but not in excess of the Maximum Issuance Amount,
  and (ii) redeeming the number of shares of Common Stock stated in the conversion
  notice equal to or in excess of the Maximum Issuance Amount in cash at a price
  equal to the then-current fair market value (i.e., the closing bid price of
  Maker’s Common Stock on the NASDAQ System, or if not then traded on the
  NASDAQ System, then on the OTC Bulletin Board as reported by bigcharts.com,
  or if this service is discontinued, such other reporting service acceptable
  to Payee) on the date of redemption. In the event that the Maker shall elect
  to pay interest on this Note in shares of Common Stock which would require the
  Maker to issue shares of Common Stock equal to or in excess of the Maximum Issuance
  Amount, the Maker shall pay interest in shares of Common Stock equal to one
  share less than an amount which would result in the Maker issuing shares equal
  to the Maximum Issuance Amount, and the balance of the interest payment in cash.
  

 5. Contingent Additional
  Interest. In the event that Maker fails by the "Registration Deadline"
  (as that term is defined in Section 5(e) of the Warrant) to obtain effectiveness under the Securities Act of 1933, as amended, and applicable
  state securities laws of the Registration Statement as required by the terms of a Registration Rights Agreement of this date between
  Maker and Payee covering all of the shares of Common Stock issuable as payment under or upon conversion of this Note or upon exercise
  of the Warrant (the “Registration Rights Agreement”), then for each full month thereafter (prorated for partial months) that
  this failure continues (the “Failure Term”), Maker shall pay in arrears in cash, with the next otherwise Scheduled Monthly
  Payment under Sections 2(b) or 3(a) above (or if the last Scheduled Monthly Payment has been made, then on the same day of each succeeding
  month), additional interest (the “Contingent Additional Interest”) equal to the greater of $1,000 or 1% of the outstanding
  principal balance on this Note as of the last day of the prior month. Despite the foregoing, if the Payee consents (as provided under
  the Registration Rights Agreement) to an extension of the effective date of the Registration
  Statement beyond the original Registration Deadline, then the Registration Deadline hereunder shall be extended by a like period. 

 -3- 

 6.      Security.
       The full and timely payment of this Note (together with the Maker’s obligations under a Purchase
  Agreement of this date between Maker and Payee) shall be secured by a Security Agreement of this date (the “Security Agreement”)
  covering all of Maker’s assets, including all of the membership units owned by Maker in Active Hawk Minerals, LLC, a Minnesota
  limited liability company, and all of the capital stock owned by Maker in Brazmin Ltda., a limited liability company organized under
  the laws of Brazil. The security interest granted under the Security Agreement shall be a first priority security interest subordinate
  to no other secured rights. 

 7.      Optional
  Prepayments.      The Maker may prepay this
  Note, in whole or in part, and in cash, without penalty by Maker upon fifteen days written notice to Payee. Prepayments shall be applied
  first to accrued but unpaid interest and then to principal. 

 8.      Default.
       The occurrence of any one or more of the following events shall constitute an event of default, upon which
  Payee may declare the entire principal amount of this Note, together with all accrued but unpaid interest, to be immediately due and
  payable in cash (despite provisions otherwise for payment with Common Stock): 

      (a)
  The Maker shall fail
  to make any required payment of principal or interest (including Contingent
  Additional Interest) when due, and in its proper form (i.e., in cash, in stock
  or by a combination thereof), and such failure shall continue through five days
  after Payee gives written notice of such failure to Maker. 

      (b)
  The Maker shall be
  in material default of any term or provision of the Purchase Agreement, the
  Security Agreement, the Registration Rights Agreement or the Warrant, and such
  failure shall continue through five days after Payee gives written notice of
  such default to Maker. 

      (c)
  The Maker shall become
  insolvent or any bankruptcy, reorganization, debt arrangement or other proceeding
  under any bankruptcy or insolvency law shall be instituted by or against the
  Maker. 

       (d) Wayne W. Mills shall be in default of any term
  or provision of the Guaranty Agreement being entered into by him on the date hereof for the benefit of the Payee. 

       (e) The Maker shall be in default under a Supplemental
  Note or Supplemental Warrant, if any, issued by Maker to Payee after the date hereof in connection with a Call and Option Agreement
  of this date between such parties. 

       Without limiting the above, the Maker acknowledges
  that payments on the various scheduled due dates in Sections 2, 3(c) and 5 are of essence and that any failure to timely pay any installment
  of principal or interest (whether as permitted by cash, with stock or by a combination thereof and within any permitted grace period
  above) permits Payee to declare this Note immediately due in cash in its entirety without any prior notice of any kind to Maker, except
  for the specific notices provided above. 

 9.      Applicable
  Law.      THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY
  OF THE NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA,
  WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF. 

 -4- 

 10.      Waivers.
       The Maker hereby waives presentment for payment, notice of dishonor, protest and notice of payment and
  all other notices of any kind in connection with the enforcement of this Note. 

 11.      No
  Setoffs.      The Maker shall pay principal
  and interest under the Note without any deduction for any setoff or counterclaim. 

 12.      Costs
  of Collection.     If this Note is not paid
  when due, the Maker shall pay Payee’s reasonable costs of collection, including reasonable attorney’s fees.

	 	WITS BASIN PRECIOUS MINERALS INC.
	 	 	 
	 	By 	 /s/ Mark D. Dacko
	 	 	

	 	 	   Mark D. Dacko, Chief Financial Officer

-5-Untitled Document

Exhibit
  10.3

 REGISTRATION RIGHTS AGREEMENT
  

      THIS
  REGISTRATION RIGHTS AGREEMENT
  (the “Agreement”)
  is entered into as of May 28, 2004, by and among Wits
  Basin Precious Minerals Inc.,
  a Minnesota corporation (the “Company”),
  Pandora Select Partners
  L.P., a British
  Virgin Islands limited partnership (“Pandora”),
  Gary S. Kohler (“Kohler”)
  and Scot W. Malloy
  (“Malloy;”
  and with Pandora
  and Kohler, together referred to as the “Investors”).
  

 R E C I T A L S : 

      WHEREAS,
  the Company has entered into that certain Purchase Agreement, dated as of the
  date hereof (the “Purchase
  Agreement”)
  with Pandora pursuant to which the Company has agreed to issue and sell to Pandora
  a secured convertible promissory note (the “Note”)
  and a warrant (the “Warrant”)
  to purchase shares of the Company’s Common Stock, $0.01 par value per share
  (the “Common
  Stock”), and
  to issue to each of Kohler and Malloy warrants (in form substantially similar
  to the Warrant) each to purchase 100,000 shares of the Company’s Common
  Stock (the “Kohler
  & Malloy Warrants”);
  

      WHEREAS,
  conditioned on the Company’s timely satisfaction of particular milestones
  and conditions as described in a separate letter agreement (the “Call
  and Option Agreement”),
  Pandora has agreed to purchase, and the Company has agreed to issue to Pandora,
  an additional secured convertible promissory note of at least $350,000 (which,
  at Pandora’s option, may be for up to $850,000 inclusive of the foregoing
  $350,000) and an additional warrant to purchase Common Stock (respectively,
  the “Supplemental
  Note” and
  the “Supplemental
  Warrant”);
  

      WHEREAS,
  the Company may make certain principal and interest payments on the Note and,
  if issued, the Supplemental Note, by issuance of additional shares of its Common
  Stock; 

      WHEREAS,
  the Company has agreed to grant certain registration rights with respect to
  the shares of the Company’s Common Stock issuable as payments under the
  Note and Supplemental Note, upon conversion of the Note or Supplemental Note
  or upon exercise of the Warrant, the Supplemental Warrant or the Kohler &
  Malloy Warrants; 

      NOW,
  THEREFORE, in consideration
  of the foregoing and of the mutual promises and covenants contained herein,
  and for other good and valuable consideration, the receipt and sufficiency of
  which are hereby acknowledged, the parties, intending to be legally bound, hereby
  agree as follows: 

 ARTICLE 1

  DEFINITIONS 

      As used herein, the following
  terms shall have the following respective meanings: 

 1.1      “Commission”
  shall mean the U.S. Securities and Exchange Commission or any other successor federal agency at the time administering the Securities
  Act. 

 1.2      “Common
  Stock” shall mean the Company’s common stock, $0.01 par value
  per share. 

 1.3      “Exchange
  Act” shall mean the Securities and Exchange Act of 1934, as amended,
  or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the
  time. 

 1.4      “Holders”
  shall mean and include the Investors and any transferee thereof who holds Registrable Securities of record. 

 1.5      “Register,”
  “registered”
  and “registration”
  refer to a registration effected by preparing and filing with the Commission a registration statement in compliance with the Securities
  Act, and the declaration or ordering by the Commission of the effectiveness of such registration statement. 

 1.6      “Registrable
  Securities” means any and all shares of Common Stock: (i) issued or
  issuable as payments under the Note or Supplemental Note, upon conversion of the Note or Supplemental Note or upon exercise of the Warrant,
  the Supplemental Warrant or the Kohler & Malloy Warrants or (ii) issued or issuable with respect to the Common Stock upon any stock
  split, stock dividend, recapitalization, reclassification, merger, consolidation or other similar event. The term “Registrable
  Securities” shall exclude in all cases, however, such shares of Common Stock following sale by a Holder to the public pursuant
  to a registered offering or pursuant to Rule 144 promulgated under the Securities Act or sold in a private transaction in which the
  Holder’s registration rights under this Agreement are not assigned. 

 1.7      “Registration
  Expenses” shall mean all expenses incurred by the Company in complying
  with Articles 2 and 3 hereof, including, without limitation, all registration, qualification and Commission, National Association of
  Securities Dealers, Inc., stock exchange and other filing fees, printing expenses, escrow fees, fees and disbursements of legal counsel
  for the Company, blue sky fees and expenses, and the expense of any special audits incident to or required by any such registration
  (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company). 

 1.8      “Securities
  Act” shall mean the Securities Act of 1933, as amended, or any similar
  federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 

  -2- 

 1.9      “Selling
  Expenses” shall mean all underwriting fees, discounts, selling commissions
  and stock transfer taxes applicable to the Registrable Securities registered by the Holders and the fees and expenses of any special
  counsel engaged by the Holders. 

 1.10      “Underwriter”
  shall mean (whether or not the term is capitalized) a broker-dealer engaged by the Company to distribute Registrable Securities as principal
  or agent. 

 1.11      “Underwriting”
  or “Underwritten” shall
  mean (whether or not the term is capitalized) a method of publicly distributing securities through an Underwriter. 

 ARTICLE 2

  REQUIRED REGISTRATION 

 2.1      Required
  Registration. Not later than August 28, 2004 (unless a majority in interest
  of the Holders request a delay of the Company for up to an additional 90 days in writing and in such case, upon expiration of this requested
  delaying period), the Company will prepare and file with the Commission a registration statement under the Securities Act (currently
  expected to be on Form S-2 or SB-2) covering all of the Registrable Securities and use its best efforts to obtain the effectiveness
  of such registration as soon as practicable as would permit or facilitate the original issuance or subsequent resale and distribution
  of all of such Registrable Securities. Such registration statement shall contain (unless the Holders otherwise direct) substantially
  the “Plan of Distribution” attached hereto as Annex A.
  The Company’s failure to obtain effectiveness of this registration statement by November 28, 2004 (subject to an extension of such
  date to correspond to a filing date extension, if any, granted by the Holders above, and subject to delays incurred by any Holder’s
  failure to comply with the provisions of Section 5(b) below) will commence the running of the first "Failure Term" as defined in Section
  5 of the Note and Supplemental Note and will also constitute an event of default under this Agreement. 

 2.2      Underwriting.
  

      (a)
  The resale distribution of the Registrable Securities covered by the registration
  statement referred to in Section 2.1 above shall be effected by means of the
  method of distribution selected by the Holders holding a majority of the Registrable
  Securities covered by such registration. The Holders holding a majority of the
  Registrable Securities may also change the resale distribution method from time
  to time (subject to amendment of the registration statement as required to describe
  such changes). If such distribution is effected by means of an underwriting,
  the right of any Holder to registration pursuant to this Article 2 shall be
  conditioned upon such Holder’s participation in such underwriting and the
  inclusion of such Holder’s Registrable Securities in the underwriting to
  the extent provided herein. 

      (b) If such distribution is effected by means of an
  underwriting, the Company (together with all Holders proposing to distribute their securities through such underwriting) shall enter
  into an underwriting agreement in customary form with a managing underwriter of nationally
  recognized standing selected for such underwriting by a majority in interest of the Holders and approved by the Company, which approval
  shall not be unreasonably withheld. 

  -3- 

      (c)
  If any Holder disapproves of the terms of the underwriting, such person may
  elect to withdraw therefrom by written notice to the Company, the managing underwriter
  and the other Holders. The Registrable Securities and/or other securities so
  withdrawn shall also be withdrawn from registration. 

 2.3      Inclusion
  of Shares by the Company. If the resale distribution of Registrable Securities
  is being effected by means of an underwriting and if the managing underwriter will not limit the number of Registrable Securities to
  be underwritten, the Company may include securities for its own account or for the account of others in such registration if the managing
  underwriter so agrees. The inclusion of such shares shall be on the same terms as the registration of shares held by the Holders. In
  the event that the underwriters exclude some of the securities to be registered, the securities to be sold for the account of the Company
  and any other holders shall be excluded in their entirety prior to the exclusion of any Registrable Securities. 

 ARTICLE 3

  COMPANY REGISTRATION
  

 3.1      Notice
  of Registration to Holders. If at any time or from time to time commencing
  after the date hereof, the Company shall determine to register any of its securities, either for its own account or the account of a
  security holder or holders, other than (i) a registration relating solely to employee benefit plans on Form S-8 (or any successor form)
  or (ii) a registration relating solely to a Commission Rule 145 transaction on Form S-4 (or any successor form), the Company will: 

      (a)
  promptly give to each Holder written notice thereof and 

      (b)
  include in such registration (and any related qualification under blue sky laws
  or other compliance), and in any underwriting involved therein, all the Registrable
  Securities specified in a written request or requests, made within 30 days after
  receipt of such written notice from the Company described in Section 3.1(a),
  by any Holder or Holders, but only to the extent that (i) if the proposed registration
  under this Article 3 is not an underwritten offering, the original issuance
  or resale distribution of such Registrable Securities is not already covered
  by an effective registration statement under Article 2 above or (ii) if the
  proposed registration under this Article 3 is an underwritten offering, such
  Registrable Securities are not then being offered in a separate underwritten
  offering under Article 2 above. 

 3.2     Underwriting.
  If the registration of which the Company gives notice is for an offering involving an underwriting, the Company shall so advise the
  Holders as a part of the written notice given pursuant to Section 3.1(a). In such event, the right of any Holder to registration pursuant
  to this Article 3 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s
  Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through
  such underwriting shall (together with the Company) enter into an underwriting agreement in customary form with the managing underwriter
  selected for such underwriting by the Company. 

  -4- 

      (a)
  Notwithstanding any other provision of this Article 3, if the managing underwriter
  determines that marketing factors require a limitation of the number of shares
  to be underwritten, the underwriter may exclude some or all Registrable Securities
  from such registration and underwriting. The Company shall so advise all Holders
  of Registrable Securities, and the number of shares of Common Stock to be included
  in such registration shall be allocated as follows: first, for the account of
  the Company, all shares of Common Stock proposed to be sold by the Company;
  and second, for the account of the Holders and any other shareholders of the
  Company participating in such registration, the number of shares of Common Stock
  requested to be included in the registration by the Holders and such other shareholders
  in proportion, as nearly as practicable, to the respective amounts of Registrable
  Securities that are proposed to be offered and sold by the Holders and such
  other shareholders of Registrable Securities at the time of filing the registration
  statement. No Registrable Securities excluded from the underwriting in this
  Article 3 by reason of the underwriters’ marketing limitation shall be
  included in such registration. 

      (b)
  The Company shall so advise all Holders and the other holders distributing their
  securities through such underwriting of any such limitation, and the number
  of shares of Registrable Securities held by Holders that may be included in
  the registration. If any Holder disapproves of the terms of any such underwriting,
  such Holder may elect to withdraw therefrom by written notice to the Company
  and the managing underwriter. Any securities excluded or withdrawn from such
  underwriting shall be withdrawn from such registration, but the Holder shall
  continue to be bound by the terms hereof. 

      (c)
  The Company shall have the right to terminate or withdraw any registration initiated
  by it under this Article 3 prior to the effectiveness of such registration,
  whether or not a Holder has elected to include Registrable Securities in such
  registration. 

 ARTICLE 4

  EXPENSES OF REGISTRATION
  

      All
  Registration Expenses incurred in connection with any registration, qualification
  or compliance pursuant to Articles 2 and 3 hereof shall be borne by the Company.
  All Selling Expenses relating to Registrable Securities registered by the Holders
  shall be borne by the Holders of such Registrable Securities pro rata on the
  basis of the number of shares so registered.

 ARTICLE 5

  REGISTRATION PROCEDURES
  

      (a) In the case of each registration effected by the
  Company pursuant to this Agreement, the Company will keep each Holder advised in writing as to the initiation of each registration
  and as to the completion thereof. The Company agrees to use its best efforts to effect or cause such registration to permit the sale
  of the Registrable Securities covered thereby by the Holders thereof in accordance with the intended method or methods of distribution
  thereof described in such registration statement. In connection with any registration of any Registrable Securities, the Company shall,
  as soon as reasonably possible: 

  -5- 

        (i) prepare and file with the Commission a registration
    statement with respect to such Registrable Securities and use its efforts to cause such registration statement filed to become effective;
    

        (ii) prepare and file with the Commission such amendments
    and supplements to such registration statement and the prospectus included therein as may be necessary to effect and maintain the
    effectiveness of such registration statement as may be required by the applicable rules and regulations of the Commission and the
    instructions applicable to the form of such registration statement (provided, however, that the Company shall not be obliged to maintain
    the effectiveness of the registration statement described in Article 2 longer than through the earlier of (A) seven years from the
    date hereof or, if earlier, the second anniversary of the date on which the last of the Registrable Securities are issued or issuable
    as payment under the Note or Supplemental Note or upon exercise of the Warrant or Supplemental Warrant, (B) the date on which the
    Holder may sell all Registrable Securities then held by the Holder, or which may become issuable as payment under the Note or Supplemental
    Note or upon exercise of the Warrant or Supplemental Warrant, without restriction by the volume limitations of Rule 144(e) of the
    Securities Act or (C) such time as all Registrable Securities held by such Holder, or which may become issuable as payment under the
    Note or Supplemental Note or upon exercise of the Warrant or Supplemental Warrant, have been sold pursuant to a registration statement),
    and furnish to the holders of the Registrable Securities covered thereby copies of any such supplement or amendment prior to this
    being used and/or filed with the Commission; 

        (iii) promptly notify the Holders of Registrable
    Securities to be included in a registration statement hereunder, the sales or placement agent, if any, therefor and the managing underwriter
    of the securities being sold, and confirm such advice in writing, (A) when such registration statement or the prospectus included
    therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such registration
    statement or any post-effective amendment, when the same has become effective, (B) of the issuance by the Commission of any stop order
    suspending the effectiveness of such registration statement or the initiation of any proceedings for that purpose, (C) of the receipt
    by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any
    jurisdiction or the initiation or threatening of any proceeding for such purpose or (D) if, to the Company’s knowledge, it shall
    be the case, at any time when a prospectus is required to be delivered under the Securities Act, that such registration statement
    or prospectus, or any document incorporated by reference in any of the foregoing, contains an untrue statement of a material fact
    or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light
    of the circumstances then existing; 

  -6- 

        (iv) use its best efforts to obtain the withdrawal
    of any order suspending the effectiveness of such registration statement or any post-effective amendment thereto or of any order suspending
    or preventing the use of any related prospectus or suspending the qualification of any Registrable Securities included in such registration
    statement for sale in any jurisdiction at the earliest practicable date; 

        (v) furnish to each Holder of Registrable Securities
    to be included in such registration statement hereunder, each placement or sales agent, if any, therefor and each underwriter, if
    any, thereof a conformed copy of such registration statement, each such amendment and supplement thereto (in each case excluding all
    exhibits and documents incorporated by reference) and such number of copies of the registration statement (excluding exhibits thereto
    and documents incorporated by reference therein unless specifically so requested by such holder, agent or underwriter, as the case
    may be) of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus),
    in conformity with the requirements of the Securities Act, as such Holder, agent, if any, and underwriter, if any, may reasonably
    request in order to facilitate the disposition of the Registrable Securities owned by such Holder sold by such agent or underwritten
    by such underwriter and to permit such Holder, agent and underwriter to satisfy the prospectus delivery requirements of the Securities
    Act; 

        (vi) if required by applicable law, use its best
    efforts to (A) register or qualify the Registrable Securities to be included in such registration statement under such other securities
    laws or blue sky laws of such states of the United States or the District of Columbia to be designated by the Holders of a majority
    of such Registrable Securities participating in such registration and each placement or sales agent, if any, therefor and underwriter,
    if any, thereof, as any Holder and each underwriter, if any, of the securities being sold shall reasonably request (provided, that
    the Company shall not be required to use its best efforts to register or qualify the Registrable Securities in more than 10 such jurisdictions
    unless the expenses thereof are borne by the Holders requesting such efforts), (B) keep such registrations or qualifications in effect
    and comply with such laws so as to permit, as to a registration statement filed under Article 2 above, the continuance of offers,
    sales and dealings therein in such jurisdictions for the same period after the initial effective date of the registration statement
    filed under the Securities Act as described in Section 5(a)(ii) above or, as to a registration statement filed under Article 3 above,
    for a period of 90 days after the effective date of the registration statement, or if underwritten, as long as may be necessary to
    enable the underwriter to complete its distribution of the Registrable Securities pursuant to such registration statement and (C)
    take any and all such actions as may be reasonably necessary or advisable to enable such Holder, agent, if any, and underwriter to
    consummate the disposition in such jurisdictions of such Registrable Securities; provided, however, that in order to fulfill the foregoing
    obligations under this Section 5(a)(vi), the Company shall not (unless otherwise
    required to do so in any jurisdiction) be required to (1) qualify generally to do business as a foreign company or a broker-dealer,
    (2) execute a general consent to service of process or (3) subject itself to taxation; and

 -7- 

        (vii) furnish, at the request of a majority of the
    Holders participating in the registration, on the date that such Registrable Securities are delivered to the underwriters for sale,
    if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date
    that the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel
    representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an
    underwritten public offering and reasonably satisfactory to a majority in interest of the Holders requesting registration, addressed
    to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) a letter dated as of such
    date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent
    certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest
    of the Holders requesting registration, addressed to the underwriters, if any, and if permitted by applicable accounting standards,
    to the Holders requesting registration of Registrable Securities. 

      (b)
  The Company may require each Holder of Registrable Securities as to which any
  registration is being effected to furnish to the Company such information regarding
  such Holder and such Holder’s method of distribution of such Registrable
  Securities as the Company may from time to time reasonably request in writing.
  Each such Holder agrees to notify the Company as promptly as practicable of
  any inaccuracy or change in information previously furnished by such Holder
  to the Company or of the occurrence of any event in either case as a result
  of which any prospectus relating to such registration contains or would contain
  an untrue statement of a material fact regarding such Holder or the distribution
  of such Registrable Securities or omits to state any material fact regarding
  such Holder or the distribution of such Registrable Securities required to be
  stated therein or necessary to make the statements therein not misleading in
  light of the circumstances then existing, and promptly to furnish to the Company
  any additional information required to correct and update any previously furnished
  information or required so that such prospectus shall not contain, with respect
  to such Holder or the distribution of such Registrable Securities, an untrue
  statement or a material fact or omit to state a material fact required to be
  stated therein or necessary to make the statements therein not misleading in
  light of the circumstances then existing. 

      (c)
  Each of the Holders will comply with the provisions of the Securities Act with
  respect to disposition of the Registrable Securities to be included in any registration
  statement filed by the Company. 

 -8-

 ARTICLE 6

  INDEMNIFICATION 

 6.1     The Company will indemnify each Holder, each of
  its officers, directors and partners, and such Holder’s legal counsel and independent accountants, if any, and each person controlling
  any such persons within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification or compliance
  has been effected pursuant to this Agreement, and each underwriter, if any, and each person who controls any underwriter within the
  meaning of Section 15 of the Securities Act, against all expenses, claims, losses, damages and liabilities (or actions in respect thereof),
  including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on any untrue
  statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or
  other document, or any amendment or supplement thereof, incident to any such registration, qualification or compliance, or based on
  any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements
  therein not misleading, or any violation by the Company of any rule or regulation promulgated under the Securities Act or any state
  securities laws applicable to the Company and relating to action or inaction by the Company in connection with any such registration,
  qualification or compliance, and will reimburse each such Holder, each of its officers, directors and partners and such Holder’s
  legal counsel and independent accountants, and each person controlling any such persons, each such underwriter and each person who controls
  any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending
  any such claim, loss, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent
  that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission or alleged untrue
  statement or omission made in reliance upon and in conformity with written information furnished to the Company by such Holder, officers,
  directors, partners, legal counsel, accountants, underwriter or controlling persons, and expressly intended for use in such registration
  statement, prospectus, offering circular or other document, or any amendment or supplement thereof. 

 6.2      Each Holder will, if Registrable Securities held
  by such Holder are included in the securities as to which such registration, qualification or compliance is being effected, indemnify
  the Company, each of its directors and officers and its legal counsel and independent accountants, each underwriter, if any, of the
  Company’s securities covered by such a registration statement, each person who controls the Company or such underwriter within
  the meaning of Section 15 of the Securities Act, and each other such Holder, each of its officers, directors, partners, legal counsel
  and independent accountants, if any, and each person controlling such Holder within the meaning of Section 15 of the Securities Act,
  against all expenses, claims, losses, damages and liabilities (or actions in respect thereof), including any of the foregoing incurred
  in settlement of any litigation, commenced or threatened, arising out of or based on any untrue statement (or alleged untrue statement)
  of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any amendment or
  supplement thereto, incident to any such registration, qualification or compliance or based on any
  omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein
  not misleading, and will reimburse the Company, such Holders, such directors, officers, partners, legal counsel, independent accountants,
  underwriters or control persons for any legal or any other expenses reasonably incurred in connection with investigating, preparing
  or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue
  statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering
  circular, other document or amendment or supplement in reliance upon and in conformity with written information furnished to the Company
  by such Holder and expressly intended for use in such registration statement, prospectus, offering circular or other document, or any
  amendment or supplement thereof; provided, however, that the obligations of each Holder hereunder shall be limited to an amount equal
  to the proceeds to such Holder of Registrable Securities sold as contemplated herein. 

  -9- 

 6.3      Each party entitled to indemnification under this
  Section 6 (the “Indemnified Party”)
  shall give notice to the party required to provide indemnification (the “Indemnifying
  Party”) promptly after such Indemnified Party has actual knowledge
  of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or
  any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or
  litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld). The Indemnified Party may
  participate in such defense at such party’s expense; provided, however, that the Indemnifying Party shall bear the expense of such
  defense of the Indemnified Party if representation of both parties by the same counsel would be inappropriate due to actual or potential
  conflicts of interest. The failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party
  of its obligations under this Agreement, unless such failure is prejudicial to the ability of the Indemnifying Party to defend the action.
  No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent
  to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant
  or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation. 

 6.4      If the indemnification provided for in Section
  6.1 or 6.2 is unavailable or insufficient to hold harmless an Indemnified Party, then each Indemnifying Party shall contribute to the
  amount paid or payable by such Indemnified Party as a result of the expenses, claims, losses, damages or liabilities (or actions or
  proceedings in respect thereof) referred to in Section 6.1 or 6.2, in such proportion as is appropriate to reflect the relative fault
  of the Company on the one hand and the sellers of Registrable Securities on the other hand in connection with statements or omissions
  which resulted in such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) or expenses, as well as
  any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the
  untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information
  supplied by the Company or the sellers of Registrable Securities and the parties’ relative intent, knowledge, access to information
  and opportunity to correct or prevent such untrue statement or omission. The
  Company and the Holders agree that it would not be just and equitable if contributions pursuant to this Section 6.4 were to be determined
  by pro rata allocation (even if all Sellers of Registrable Securities were treated as one entity for such purpose) or by any other method
  of allocation which does not take account of the equitable considerations referred to in the first sentence of this Section 6.4. The
  amount paid by an Indemnified Party as a result of the expenses, claims, losses, damages or liabilities (or actions or proceedings in
  respect thereof) referred to in the first sentence of this Section 6.4 shall be deemed to include any legal or other expenses reasonably
  incurred by such Indemnified Party in connection with investigating or defending any claim, action or proceeding which is the subject
  of this Section 6.4. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall
  be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of sellers of Registrable
  Securities to contribute pursuant to this Section 6.4 shall be several in proportion to the respective amount of Registrable Securities
  sold by them pursuant to a registration statement. 

  -10- 

ARTICLE 7

  RULE 144 REPORTING 

      With
  a view to making available the benefits of certain rules and regulations of
  the Commission which may at any time permit the sale of securities of the Company
  to the public without registration, the Company agrees to use its best efforts
  to: 

 7.1      Make and keep public information available as
  those terms are understood and defined in Rule 144 under the Securities Act, at all times after the date hereof; and 

 7.2      File with the Commission in a timely manner all
  reports and other documents required of the Company under the Securities Act and the Exchange Act. 

 ARTICLE 8

  TRANSFER OF REGISTRATION RIGHTS 

      The rights to cause the Company to register Registrable
  Securities under this Agreement may be assigned by a Holder to Whitebox Advisors, LLC ("Whitebox")
  or to a transferee or assignee of Registrable Securities that (i) is a subsidiary, parent or affiliated entity, general partner or limited
  partner, member or retired partner or member of a Holder or of Whitebox, (ii) is an affiliated fund, a follow-on fund or predecessor
  fund of a Holder or a related fund or of Whitebox, (iii) is a Holder’s family member or trust for the benefit of an individual
  Holder or (iv) acquires at least 50,000 shares
  of Registrable Securities (as adjusted for stock splits, stock dividends, stock combinations, reclassifications, recapitalizations,
  mergers, consolidations or other similar events); provided, however, (A) the transferor shall, within ten days before such transfer,
  furnish to the Company written notice of the name and address of such transferee or assignee and the securities with respect to which
  such registration rights are being assigned and (B) such transferee shall agree in writing to be subject to all restrictions set forth
  in this Agreement. In each case, such rights may only be transferred together with the underlying Registrable
  Securities in a transfer permitted by the Securities Act and applicable state securities laws. Any such transferee or assignee shall
  be deemed a Holder hereunder. 

  -11- 

 ARTICLE 9

  LIMITATIONS ON REGISTRATION RIGHTS GRANTED TO OTHER SECURITIES
  

      From
  and after the date of this Agreement, the Company shall not without the prior
  written consent of the holders of a majority of the Registrable Securities then
  outstanding, enter into any agreement with any holder or prospective holder
  of any securities of the Company providing for the grant to such holder of registration
  rights superior to those granted herein. 

 ARTICLE 10

  MISCELLANEOUS 

 10.1      Governing
  Law. The laws of the state of Minnesota shall govern the interpretation,
  validity and performance of the terms of this agreement, regardless of the law that might be applied under principles of conflicts of
  law. 

 10.2      Successors
  and Assigns. Except as otherwise expressly provided herein, the provisions
  hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties
  hereto. 

 10.3      Entire
  Agreement. This Agreement constitutes the full and entire understanding
  and agreement between the parties with regard to the subject matter hereof. 

 10.4      Termination.
  The obligations of the Company to register Registrable Securities under this Agreement shall terminate on the tenth anniversary of the
  date of this Agreement. In addition, the right of any Holder to request inclusion in any registration under Article 3 shall terminate
  on the date hereafter when (i) such Holder (together with its affiliates, partners, members and former partners and members) holds less
  than 1% of the Company’s outstanding Common Stock and (ii) all Registrable Securities held by or issuable to such Holder (and its
  affiliates, partners, members and former partners and members) as payment under the Note or Supplemental Note or upon exercise of the
  Warrant or Supplemental Warrant may be sold under Rule 144 during any 90 day period. 

 10.5      Notices.
  All notices, requests, consents, and other communications hereunder shall be in writing and shall be deemed effectively given and received
  when delivered in person or by national overnight courier service or by certified or registered mail, return receipt requested, or by
  telecopier, addressed as follows: 

 -12-

	 	(a)	if to the Company, at
	 	 	 
	 	 	Wits Basin Precious Minerals Inc.
	 	 	520 Marquette Avenue, Suite 900
	 	 	Minneapolis, Minnesota 55402
	 	 	Attention: H. Vance White, Chief Executive Officer
	 	 	Facsimile: (612) 371-2077
	 	 	 
	 	 	with a copy to:
	 	 	 
	 	 	Maslon Edelman Borman & Brand, LLP
	 	 	90 South Seventh Street, Suite 3300
	 	 	Minneapolis, Minnesota 55402
	 	 	Attention: William M. Mower, Esq.
	 	 	Facsimile: (612) 642-8358
	 	 	 
	 	(b)	if to the Investors, in care of:
	 	 	 
	 	 	Whitebox Advisors, LLC
	 	 	3033 Excelsior Boulevard, Suite 300
	 	 	Minneapolis, Minnesota 55416
	 	 	Attention: Jonathan Wood, Chief Financial Officer
	 	 	Facsimile: (612) 253-6151
	 	 	 
	 	 	with a copy to:
	 	 	 
	 	 	Messerli & Kramer P.A.
	 	 	150 South Fifth Street, Suite 1800
	 	 	Minneapolis, Minnesota 55402
	 	 	Attention: Jeffrey C. Robbins, Esq.
	 	 	Facsimile: (612) 672-3777

      (c)
  if to any other Holder, to the address reflected on the records of the Company,
  or such other address or addresses as shall have been furnished in writing by
  such party to the Company and to the other parties to this Agreement. 

 10.6      
  Severability.
  The invalidity, illegality or unenforceability of one or more of the provisions of this Agreement in any jurisdiction shall not affect
  the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability
  of this Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the
  parties hereunder shall be enforceable to the fullest extent permitted by law. 

 -13-

 10.7      
  Titles and
  Subtitles. The titles of the sections and subsections of this Agreement
  are for convenience of reference only and are not to be considered in construing this Agreement. 

 10.8      
  Counterparts.
  This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together constitute
  one instrument. 

      IN WITNESS WHEREOF,
  the parties hereto have caused this Agreement to be executed and delivered by their respective duly authorized officers or representatives
  as of the date first written above. 

		WITS BASIN PRECIOUS MINERALS INC.
	 	 	 
	 	 	 
	 	By 	/s/ Mark D. Dacko
	 	 	 

	 	 	Mark D. Dacko, Chief Financial Officer
	 	 	 
		PANDORA SELECT PARTNERS L.P.
	 	 	 
	 	 	 
	 	By	 
	 	 	 

	 	 	 
	 	Its	 
	 	 	 

	 	 	 
	 	 	/s/ Gary S. Kohler
	 	 	 

	 		Gary S. Kohler
	 	 	 
	 	 	/s/ Scot W. Malloy
	 	 	 

	 		Scot W. Malloy

-14-

 ANNEX A

 ANNEX A

  PLAN OF DISTRIBUTION 

      We
  are registering the shares offered by this prospectus on behalf of the selling
  shareholders. The selling shareholders, which as used herein includes donees,
  pledgees, transferees or other successors-in-interest selling shares of common
  stock or interests in shares of common stock received after the date of this
  prospectus from a selling shareholder as a gift, pledge, partnership distribution
  or other transfer, may, from time to time, sell, transfer or otherwise dispose
  of any or all of their shares of common stock or interests in shares of common
  stock on any stock exchange, market or trading facility on which the shares
  are traded or in private transactions. These dispositions may be at fixed prices,
  at prevailing market prices at the time of sale, at prices related to the prevailing
  market price, at varying prices determined at the time of sale, or at negotiated
  prices. 

      The
  selling shareholders may use any one or more of the following methods when disposing
  of shares or interests therein: 

	ordinary brokerage transactions and transactions in which the broker-dealer solicits
    purchasers;

    

  
	block trades in which the broker-dealer will attempt to sell the shares as agent,
    but may position and resell a portion of the block as principal to facilitate the transaction;

    

  
	purchases by a broker-dealer as principal and resale by the broker-dealer for
    its account;

    

  
	an exchange distribution in accordance with the rules of the applicable exchange;

    

  
	privately negotiated transactions;

    

  
	short sales;

    

  
	through the writing or settlement of options or other hedging transactions, whether
    through an options exchange or otherwise;

    

  
	broker-dealers may agree with the selling shareholders to sell a specified number
    of such shares at a stipulated price per share;

    

  
	a combination of any such methods of sale; and

    

  
	any other method permitted pursuant to applicable law.

      The selling shareholders may, from time to time, pledge
  or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their
  secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from time to time, under this prospectus,
  or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list
  of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus.
  The selling shareholders also may transfer the shares of common stock in other
  circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes
  of this prospectus. 

 ANNEX A

      In
  connection with the sale of our common stock or interests therein, the selling
  shareholders may enter into hedging transactions with broker-dealers or other
  financial institutions, which may in turn engage in short sales of the common
  stock in the course of hedging the positions they assume. The selling shareholders
  may also sell shares of our common stock short and deliver these securities
  to close out their short positions, or loan or pledge the common stock to broker-dealers
  that in turn may sell these securities. The selling shareholders may also enter
  into option or other transactions with broker-dealers or other financial institutions
  or the creation of one or more derivative securities which require the delivery
  to such broker-dealer or other financial institution of shares offered by this
  prospectus, which shares such broker-dealer or other financial institution may
  resell pursuant to this prospectus (as supplemented or amended to reflect such
  transaction). 

      The
  aggregate proceeds to the selling shareholders from the sale of the common stock
  offered by them will be the purchase price of the common stock less discounts
  or commissions, if any. Each of the selling shareholders reserves the right
  to accept and, together with their agents from time to time, to reject, in whole
  or in part, any proposed purchase of common stock to be made directly or through
  agents. We will not receive any of the proceeds from this offering. Upon any
  exercise of the warrants by payment of cash, however, we will receive the exercise
  price of the warrants. 

      The
  selling shareholders also may resell all or a portion of the shares in open
  market transactions in reliance upon Rule 144 under the Securities Act of 1933,
  provided that they meet the criteria and conform to the requirements of that
  rule. 

      The
  selling shareholders and any broker-dealers that act in connection with the
  sale of securities might be deemed to be “underwriters” within the
  meaning of Section 2(11) of the Securities Act, and any commissions received
  by such broker-dealers and any profit on the resale of the securities sold by
  them while acting as principals might be deemed to be underwriting discounts
  or commissions under the Securities Act.

      To
  the extent required, the shares of our common stock to be sold, the names of
  the selling shareholders, the respective purchase prices and public offering
  prices, the names of any agents, dealer or underwriter, and any applicable commissions
  or discounts with respect to a particular offer will be set forth in an accompanying
  prospectus supplement or, if appropriate, a post-effective amendment to the
  registration statement that includes this prospectus. 

      In
  order to comply with the securities laws of some states, if applicable, the
  common stock may be sold in these jurisdictions only through registered or licensed
  brokers or dealers. In addition, in some states the common stock may not be
  sold unless it has been registered or qualified for sale or an exemption from
  registration or qualification requirements is available and is complied with.
  

 ANNEX A

      We
  have advised the selling shareholders that the anti-manipulation rules of Regulation
  M under the Exchange Act may apply to sales of shares in the market and to the
  activities of the selling shareholders and their affiliates. In addition, we
  will make copies of this prospectus (as it may be supplemented or amended from
  time to time) available to the selling shareholders for the purpose of satisfying
  the prospectus delivery requirements of the Securities Act. The selling shareholders
  may indemnify any broker-dealer that participates in transactions involving
  the sale of the shares against certain liabilities, including liabilities arising
  under the Securities Act. 

      We
  have agreed to indemnify the selling shareholders against liabilities, including
  liabilities under the Securities Act and state securities laws, relating to
  the registration of the shares offered by this prospectus. 

      We
  have agreed with the selling shareholders to keep the registration statement
  that includes this prospectus effective until the earlier of (1) such time as
  all of the shares covered by this prospectus have been disposed of pursuant
  to and in accordance with the registration statement or (2) the date on which
  the shares may be sold pursuant to Rule 144(k) of the Securities Act.

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