Document:

EXHIBIT
10.66

     

    THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION (TOGETHER, THE “SECURITIES
LAWS”) AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR
ENCUMBERED IN THE ABSENCE OF COMPLIANCE WITH SUCH SECURITIES LAWS AND UNTIL THE
ISSUER THEREOF SHALL HAVE RECEIVED AN OPINION FROM COUNSEL REASONABLY ACCEPTABLE
TO IT THAT THE PROPOSED DISPOSITION WILL NOT VIOLATE ANY APPLICABLE SECURITIES
LAWS.

     

    SECURED PROMISSORY
NOTE

     

    
      	
              US$5,000,000

            	
              December
      14, 2009

            

    

     

    FOR VALUE
RECEIVED, Wits Basin Precious Minerals Inc., a corporation organized and
existing under the laws of the State of Minnesota (the “Company”), hereby
unconditionally promises to pay to Kenglo One Ltd., or its successors and
assigns (the “Holder”),
on or before February 14, 2011 (the “Maturity Date”), the principal
sum of Five Million U.S. Dollars (US$5,000,000.00) (the “Principal”).

     

    This
Secured Promissory Note (“Note”) is issued pursuant to
the terms of that certain Loan Agreement dated as of December 14, 2009 by
and between the Company and Holder (the “Loan Agreement”), in
consideration of a loan by Holder to the Company of
US$4,000,000.  This Note shall be deemed to be issued with an original
issue discount of US$1,000,000, and no additional interest shall accrue on the
Principal hereunder.  Capitalized terms used herein and not otherwise
defined shall have the meanings given to them in the Loan
Agreement.

     

    1.           Payment.  All
payments of Principal on this Note shall be made at such place as the Holder
shall designate to the Company in writing.  If any payment of
Principal on this Note is due on a day that is not a Business Day, such payment
shall be due on the next succeeding Business Day.  “Business Day”
means any day other than a Saturday, Sunday or legal holiday in the State of
Minnesota.

     

    2.           Prepayment.  This
Note may be prepaid in cash or other immediately available funds, in whole or in
part by the Company at any time and from time to time, without premium or
penalty.  At Holder’s option, any payments on this Note shall be
applied first to pay Holder for all costs of collection of any kind, including
reasonable attorneys’ fees and expenses, and thereafter to the payment of
Principal.

     

    3.           Security.  The
full and timely payment of this Note shall be secured pursuant to the terms of
that certain Security Agreement dated of even date herewith by and between
Issuer and Holder.

     

    4.           Events of
Default.  The occurrence of any of the following events shall
constitute a “Event of
Default” under this Note:  (a) the Company fails to pay any
monetary obligation under this Note when due in accordance with the terms
hereof; (b) the Company fails to cure a default in the payment of any
indebtedness for borrowed money exceeding $50,000 owing to any other entity or
person within the cure period, if any, applicable to such default and the
default shall not have been waived in writing; (c) the occurrence of any
violation under any document related to the Company’s indebtedness to China
Gold, including, without limitation, any loan agreement, note or security
agreement; (d) any representation or warranty set forth herein or in the Loan
Agreement or any other Transaction Document shall be untrue in any material
respect on the date as of which the facts set forth are stated or certified;
(e) the Company violates any provision of a Transaction Document; (f) the
Company shall generally fail to pay or admit in writing its inability to pay its
debts as they become due; or the Company shall apply for, consent to, or
acquiesce in the appointment of a trustee, receiver or other custodian for
itself or any of its property, or make a general assignment composition, or
similar device for the benefit of its creditors; or a trustee, receiver or other
custodian shall otherwise be appointed for the Company or any of its assets; an
attachment or receivership of assets or any bankruptcy, reorganization, debt
arrangement, or other case or proceeding under any bankruptcy or insolvency law,
or any dissolution or liquidation proceeding shall be commenced by or against
the Company; or the Company shall take any corporate action to authorize, or in
furtherance of any item set forth in subsection (f) hereof; or (g) the Company’s
dissolution or liquidation.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.           Remedies.  Upon
any Event of Default, Holder may without further notice declare the entire
unpaid Principal sum of this Note immediately due and payable; Holder’s failure
to declare the entire unpaid Principal sum of this Note immediately due and
payable shall not constitute a waiver by Holder of its right to so declare at
any other time; Holder may employ an attorney to enforce its rights and remedies
hereunder and the Company hereby agrees to pay Holder’s reasonable attorneys’
fees and other reasonable expenses incurred by Holder in exercising any of
Holder’s rights and remedies upon an Event of Default; and/or Holder’s rights
and remedies provided hereunder shall be cumulative and concurrent with all
other remedies provided by law or in equity and may be pursued singly,
successively or together in Holder’s sole discretion; and Holder’s failure to
exercise any such right or remedy shall not be a waiver or release of such
rights or remedies or the right to exercise any of them at another
time.

     

    6.           Transferability.  This
Note shall not be transferable, except in compliance with all applicable state
and federal securities laws, regulations and orders, and with all other
applicable laws, regulations and orders.  Holder shall not transfer
any right, title or interest in this Note without the prior written consent of
the Company, which consent shall not be unreasonably
withheld;  provided, however, that this Note may be sold or
transferred to an Affiliate (as defined under Regulation D promulgated under the
Securities Act of 1933, as amended (the “Securities Act”)) of the
Holder without the prior written consent of the Company provided that (i) such
assignee is an accredited investor within the meaning of the Securities Act,
(ii) the Holder has given prior written notice to the Company.

     

    7.           Waiver.  The
Company hereby waives presentment for payment, notice of nonpayment, protest,
notice of protest and all other notices, filing of suit and diligence in
collecting the amounts due under this Note and agrees that the Holder shall not
be required first to initiate any suit or exhaust its remedies against any other
person or parties in order to enforce payment of this Note.  No waiver
of any right or remedy of the Holder under this Note shall be valid unless in a
writing executed by the Holder and any such waiver shall be effective only in
the specific instance and for the specific purpose given.  All rights
and remedies of the Holder of this Note shall be cumulative and may be exercised
singly, concurrently or successively.

     

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

     

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

     

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

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

     

    13.         Miscellaneous
Provisions.  This Note may not be changed orally, but only by
an agreement in writing and signed by the Holder and the
Company.  This Note is subject to the terms, conditions and provisions
of the Loan Agreement.

     

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

     

    
      
        
          	 	
                  WITS
      BASIN PRECIOUS MINERALS INC.

                
	 	 
      	 
      
	 	
                  By:

                	
                  /s/ Stephen D. King

                
	 	
                  Name:  

                	
                  Stephen
      D. King

                
	 	
                  Title:

                	
                  Chief
      Executive OfficerEXHIBIT
10.67

    

    SECURITY
AGREEMENT

     

    THIS
SECURITY AGREEMENT (this “Agreement”) is dated as of
December 14, 2009, and is by and between Wits Basin Precious Minerals Inc., a
Minnesota corporation (“Wits
Basin”), Hunter Bates Mining Corporation, a Minnesota corporation (“Hunter Bates”), Gregory Gold
Producers, Inc., a Colorado corporation (“Gregory Gold”; and
collectively with Wits Basin and Hunter Bates, the “Debtors” and each
individually, a “Debtor”) and Kenglo One, Ltd.,
a company incorporated under the laws of Jersey, its successors and assigns
(together with its successors and assigns, “Secured Party”).

     

    RECITALS

     

    The
following recitals are a material part of this Agreement.

     

    A.           Wits
Basin and Secured Party are parties to that certain Loan Agreement dated of even
date herewith (the “Loan
Agreement”), pursuant to which, among other things, Wits Basin has issued
a Secured Promissory Note dated of even date herewith in favor of Secured Party
in a principal amount of US$5,000,000 (the “Secured Note”).  All
capitalized terms used in this Agreement without definition have the definitions
given to them in the Loan Agreement.

     

    B.           Pursuant
to a prior financing with China Gold, LLC (“China Gold”), the Debtors have
entered into a security agreement with China Gold whereby the Debtors have
granted China Gold a security interest in certain of their respective
assets.  As of the date of this Agreement, Hunter Bates and Gregory
Gold are indirect, majority-owned subsidiaries of Wits Basin.

     

    C.           As
a condition to Secured Party’s agreement to extend credit to Wits Basin under
the Secured Note, Secured Party has required the execution and delivery of this
Agreement by Debtors to provide Secured Party a security interest that is pari passu with China
Gold.

     

    AGREEMENT

     

    NOW,
THEREFORE, in consideration of the foregoing facts and premises hereby made a
part of this Agreement, the mutual promises hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, Debtors and Secured Party agree as
follows:

     

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

     

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

     

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

    
      
         

      

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

     

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

     

    (e)           All
investment property, whether now owned or hereafter acquired by Debtor,
including (without limitation) all securities, security entitlements, securities
accounts, commodity contracts, commodity accounts, stocks, bonds, mutual fund
shares, money market shares and U.S. Government securities, including, subject
to the limitations and/or exclusions below, all investment property and general
intangibles respecting ownership and/or other equity interests of Debtor in each
wholly-owned, majority-owned or minority owned subsidiary, including, without
limitation, the shares of capital stock and the other equity interests listed on
Schedule A
hereto (as the same may be modified from time to time pursuant to the terms
hereof, the “Pledged
Securities”), and any other shares of capital stock and/or other equity
interests of any other direct or indirect subsidiary of any Debtor obtained in
the future, and, in each case, all certificates representing such shares and/or
equity interests and, in each case, all rights, options, warrants, stock, other
securities and/or equity interests that may hereafter be received, receivable or
distributed in respect of, or exchanged for, any of the foregoing and all rights
arising under or in connection with the Pledged Securities, including, but not
limited to, all dividends, interest and cash (“Future Rights”).
Notwithstanding the foregoing, the Secured Party acknowledges and agrees that
1,839,000 shares of common stock of Standard Gold, Inc. (f/k/a Princeton
Acquisitions, Inc.) held by Wits Basin shall be excluded from the Collateral and
the Pledged Securities.

    
      
         

      

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

     

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

     

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

    

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

     

    3.           Delivery and Registration of
Pledged Securities.  With respect to each Debtor:

     

    (a)           All
certificates or instruments representing or evidencing the Pledged Securities
shall be promptly delivered by Debtor to Secured Party or Secured Party’s
designees pursuant to this Agreement at a location designated by Debtor and
shall be held by or on behalf of Secured Party pursuant to this Agreement, and
shall be in suitable form for transfer by delivery, or shall be accompanied by a
duly executed instrument of transfer or assignment in blank, in form and
substance satisfactory to Secured Party.

     

    (b)           Upon
the occurrence and during the continuance of an Event of Default, Secured Party
shall have the right, at any time in its discretion and without notice to
Debtor, to transfer to or to register on the books of a subsidiary of Debtor of
which Pledged Securities are held (or of any other person maintaining records
with respect to the Pledged Securities) in the name of Secured Party or any of
its nominees any or all of the Pledged Securities.  In addition,
Secured Party shall have the right at any time to exchange certificates or
instruments representing or evidencing Pledged Securities for certificates or
instruments of smaller or larger denominations.  Notwithstanding the
foregoing, in the event this Section 3(b) is applicable to Wits Basin’s equity
interest in CGMR BVI (as defined below in Section 3(f), Secured Party’s rights
shall be subject to the execution and delivery to CGMR BVI of a signed Deed of
Adherence (as defined in the Shareholders’ Agreement (as defined in Section
3(f)), which Secured Party undertakes to execute.

    
      
         

      

      
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    (c)           If,
at any time and from time to time, any Pledged Securities (including any
certificate or instrument representing or evidencing any Pledged Securities) is
in the possession of a person other than Secured Party, China Gold (who,
pursuant to the terms of an intercreditor agreement with Secured Party has
agreed or will agree to hold Pledged Securities for the benefit of Secured
Party) or Debtor (each, a “Holder”), then Debtor shall
immediately, at Secured Party’s option, either cause such Pledged Securities to
be delivered into Secured Party’s or China Gold’s possession, or cause such
Holder to enter into a control agreement, in form and substance satisfactory to
Secured Party, and take all other steps deemed necessary by Secured Party to
perfect the security interest of Secured Party in such Pledged Securities, all
pursuant to Sections 9-106 and 9-313 of the Uniform Commercial Code or other
applicable law governing the perfection of Secured Party’s security interest in
the Pledged Securities in the possession of such Holder.

     

    (d)           Any
and all Pledged Securities (including dividends, interest, and other cash
distributions relating to such Pledged Securities) at any time received or held
by Debtor shall be so received or held in trust for Secured Party, shall be
segregated from other funds and property of Debtor and shall be forthwith
delivered to Secured Party in the same form as so received or held, with any
necessary endorsements; provided that cash dividends or distributions received
by Debtor may be retained by Debtor subject to an Event of Default.

     

    (e)           If
at any time, and from time to time, any Pledged Securities consists of an
uncertificated security or a security in book entry form, then Debtor shall
immediately cause such Pledged Securities to be registered or entered, as the
case may be, in the name of Secured Party, or otherwise cause Secured Party’s
security interest thereon to be perfected in accordance with applicable
law.

     

    (f)           So
long as no Event of Default shall have occurred and be continuing, Debtor shall
be entitled to exercise any and all voting and other consensual rights
pertaining to the Pledged Securities or any part thereof for any purpose not
inconsistent with the terms of the Investment Documents and shall be entitled to
receive and retain any cash dividends or distributions paid or distributed in
respect of the Pledged Securities.  Upon the occurrence and during the
continuance of an Event of Default, all rights of Debtor to exercise the voting
and other consensual rights or receive and retain cash dividends or
distributions that it would otherwise be entitled to exercise or receive and
retain, as applicable pursuant to this Section 3(f), shall cease, and all such
rights shall thereupon become vested in Secured Party, who shall thereupon have
the sole right to exercise such voting or other consensual rights and to receive
and retain such cash dividends and distributions; provided that with respect to
Wits Basin and the exercise of any rights (including the right to receive and
retain dividends) relating to its equity interest in China Global Mining
Resources (BVI) Limited (registered number 1513743 in the British Virgin
Islands), and/or the subsidiary undertakings of CGMR BVI (“CGMR BVI”), such rights shall
be subject to the terms of that certain Shareholders’ Agreement dated on March
17, 2009 by and between London Mining Plc (“London Mining”), Wits Basin
and CGMR BVI (the “Shareholders’
Agreement”).  Wits Basin shall execute and deliver (or cause to
be executed and delivered) to Secured Party all such proxies and other
instruments as Secured Party may reasonably request for the purpose of enabling
Secured Party to exercise the voting and other rights which it is entitled to
exercise and to receive the dividends and distributions that it is entitled to
receive and retain pursuant to the preceding sentence; provided that with
respect to exercise of any rights (including the right to receive and retain
dividends) relating to the equity interest in CGMR BVI, such rights shall be
subject to the terms of the Shareholders’ Agreement.

    
      
         

      

      
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    4.           Acknowledgments of Secured
Party.  Secured Party acknowledges and agrees that, except with
respect to the pledge of Wits Basin’s equity interest in CGMR BVI and as
consented to by London Mining, Secured Party has no security interest in the
assets of CGMR BVI and its subsidiary undertakings, including any rights of CGMR
BVI or its subsidiaries to acquire, hold or operate certain mining properties in
the People’s Republic of China.

     

    5.           Release.   On
completion of any acquisition of all or part of Wits Basin’s equity interest in
CGMR BVI by London Mining or a member of its Group (as defined in the
Shareholders’ Agreement) or a third party under the “Come Along” provisions of
the Shareholders’ Agreement undertaken in accordance with the terms of the
Shareholders’ Agreement (an “Acquisition”), Wits Basin’s
equity interest in CGMR BVI, or such part acquired, will automatically and
irrevocably be released and Secured Party agrees to take any further action
(including the execution, delivery and filing (as applicable) of any necessary
documents or agreements) necessary to effect such release, and shall, prior to
the completion of the Acquisition, deliver to CGMR BVI all documents and items
held by Secured Party pursuant to Section 3 of this agreement.

     

    6.           Further
Assurances.

     

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

     

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

     

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

    
      
         

      

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

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

     

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

     

    (f)          Miscellaneous
Covenants.  Debtor will:

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

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

     

    10.          Rights of the Secured
Party.

     

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

     

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

     

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

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

    (c)           Debtors
by this Agreement acknowledge that the sale by Secured Party of any Pledged
Securities pursuant to the terms hereof in compliance with the Securities Act of
1933 as now in effect or as hereafter amended, or any similar statute hereafter
adopted with similar purpose or effect (the “Securities Act”), as well as
applicable “Blue Sky” or other state securities laws may require strict
limitations as to the manner in which Secured Party or any subsequent transferee
of the Pledged Securities may dispose thereof. Debtors acknowledge and agree
that in order to protect Secured Party’s interest it may be necessary to sell
the Pledged Securities at a price less than the maximum price attainable if a
sale were delayed or were made in another manner, such as a public offering
under the Securities Act. Each such Debtor has no objection to sale in such a
manner and agrees that Secured Party shall have no obligation to obtain the
maximum possible price for the Pledged Securities. Without limiting the
generality of the foregoing, such Debtor agrees that upon the occurrence and
during the continuation of an Event of Default, Secured Party may, subject to
applicable law, from time to time attempt to sell all or any part of the Pledged
Securities by a private placement, restricting the bidders and prospective
Secured Party to those who will represent and agree that they are purchasing for
investment only and not for distribution. In so doing, Secured Party may solicit
offers to buy the Pledged Securities or any part thereof for cash from a limited
number of investors reasonably believed by Secured Party to be institutional
investors or other accredited investors who might be interested in purchasing
the Pledged Securities. If Secured Party shall solicit such offers, then the
acceptance by Secured Party of one of the offers shall be deemed to be a
commercially reasonable method of disposition of the Pledged
Securities.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    Each Debtor acknowledges that there
is no adequate remedy at law for failure by it to comply with the provisions of
this Section and that such failure would not be adequately compensable in
damages, and therefore agrees that its agreements contained in this Section may
be specifically enforced.

     

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

     

    14.         Indemnity and
Expenses.

     

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

     

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

     

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

     

    16.         Organizational
Representations; UCC Filing Offices.

     

    (a)           Wits
Basin represents and warrants to Secured Party that (a) it is a corporation
incorporated under the laws of Minnesota, (b) its chief executive office is
located at 80 South Eighth Street, Suite 900, Minneapolis, Minnesota 55402-8773
and (c) its organizational identification number is 84-1236619.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (b)           Hunter
Bates represents and warrants to Secured Party that (a) it is a corporation
incorporated under the laws of Minnesota, (b) its chief executive office is
located at 80 South Eighth Street, Suite 900, Minneapolis, Minnesota 55402-8773
and (c) its organizational identification number is 26-2543036.

     

    (c)           Gregory
Gold represents and warrants to Secured Party that (a) it is a corporation
incorporated under the laws of Colorado, (b) its chief executive office is 11438
County Road 19, Ft. Lupton, CO 80321 and (c) its organizational identification
number is 56-2454853.

     

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

    

    17.         Miscellaneous.

     

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

     

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

     

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

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

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

     

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

     

    (f)           Any
notice or demand that Secured Party may wish to give to any Debtor shall be
served upon it in the fashion prescribed for notices in Section 16 hereof at the
address and facsimile number for Debtor set forth in the Loan Agreement, and any
notice or demand so sent shall be deemed to be served as set forth in the Loan
Agreement.

     

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

     

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

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

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

    

    
      
        	
                DEBTORS:

              	
                Wits
      Basin Precious Minerals Inc.,

              
	 
      	
                a
      Minnesota corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Stephen D. King

              
	 
      	 
      	
                Stephen
      D. King, Chief Executive
      Officer

              
	 
      	 
      
	 
      	
                Hunter
      Bates Mining Corporation,

              
	 
      	
                a
      Minnesota corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Stephen D. King

              
	 
      	 
      	
                Stephen
      D. King, Chief Executive
      Officer

              
	 
      	 
      
	 
      	
                Gregory
      Gold Producers, Inc.,

              
	 
      	
                a
      Colorado corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Stephen D. King

              
	 
      	 
      	
                Stephen
      D. King, Chief Executive
      Officer

              
	 
      	 
      
	
                SECURED
      PARTY:

              	
                Kenglo
      One, Ltd.

              
	 
      	
                a
      company incorporated under the laws of Jersey

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Ann Williams

              
	 
      	 
      	
                Ann
      Williams, Director

              

      

    

    

    SIGNATURE
PAGE TO

    SECURITY
AGREEMENT

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    SCHEDULE
A

    

    Pledged
Securities

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Name of Subsidiary

                                	 	
                                  Jurisdiction

                                  of

                                  Organization

                                	 	
                                  Type of

                                  Interest

                                	 	
                                  Number of

                                  Shares/Units

                                  (if applicable)

                                	 	 	
                                  Certificate

                                  Numbers

                                  (if any)

                                	 	 	
                                  Percentage of

                                  Outstanding

                                  Interests in

                                  Subsidiary

                                	 
	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 
	
                                  WITS BASIN PRECIOUS
MINERALS

                                	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 
	
                                  Standard
      Gold, Inc. (f/k/a Princeton Acquisitions, Inc.)1

                                	 	
                                  Colorado

                                	 	
                                  Common
      Stock

                                	 	 	18,584,544	 	 	
                                  
                                  

                                  various

                                	 	 	 	85	%
	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 
	
                                  Kwagga
      Gold (Barbados) Limited

                                	 	
                                  Barbados

                                	 	
                                  Common
      Shares

                                	 	 	1,884,615	 	 	
                                  2

                                	 	 	 	35	%
	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 
	
                                  China
      Global Mining Resources (BVI) Limited (1513743)

                                	 	
                                  British
      Virgin Islands

                                	 	
                                  Common
      Stock

                                	 	
                                  100
      B Shares

                                	 	 	
                                  1

                                	 	 	 	50	%
	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 
	
                                  HUNTER BATES MINING
    CORPORATION

                                	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 
	
                                  Gregory
      Gold Producers, Inc.

                                	 	
                                  Colorado

                                	 	
                                  Common
      Stock

                                	 	 	100	 	 	
                                  1

                                	 	 	 	100	%

                        

                      

                    

                  

                

              

            

          

        

      

    

     

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

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    SCHEDULE
B

    

    Permitted
Liens

    

    Wits Basin Precious
Minerals

    

    1.           All
assets security interest to China Gold, LLC.

    

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

    

    Hunter Bates Mining
Corporation

    

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

    

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

    

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

    

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

    

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

    

    6.           The
right of proprietor of a vein or lode to extract or remove his ore should the
same be found to penetrate or intersect the premises thereby granted as reserved
in United States Patent recorded on June 20, 1872, in Book 53 at Page 277; and
any and all assignments thereof or interest therein.(Affects
Parcel A-3)

    

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

    

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

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

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

    

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

    

    31.           Secondary
Deed of Trust and Security Agreement from Hunter Bates Mining Corporation, a
Minnesota corporation, to the Public Trustee of Gilpin County, for the benefit
of China Gold, LLC (as assignee of Platinum Long Term Growth V, LLC) securing
(i) an original principal indebtedness of One Million Twenty Thousand Dollars
(U.S.) pursuant to a senior secured convertible note of Wits Basin Precious
Minerals Inc. dated February 11, 2008, (ii) an original principal indebtedness
of One Hundred Ten Thousand Dollars (U.S.) pursuant to a secured promissory note
dated on or about July 10, 2008 and (iii) any other amounts and/or obligations
to China Gold, LLC under such notes, recorded on September 15, 2008 at Reception
No. 137375.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    SCHEDULE
C

    

    Location(s) of the
Collateral

    

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

    

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

    

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

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