-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PNvDHBqft5gyuOgbmNJJQEAlT0ztsURoGihFKAhc9h5FDZ8bJadyTjL/WhYxFFuU NEoJP6wTTOKnV/vc5XP0rg== 0001144204-04-021939.txt : 20041216 0001144204-04-021939.hdr.sgml : 20041216 20041216154623 ACCESSION NUMBER: 0001144204-04-021939 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20041210 ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041216 DATE AS OF CHANGE: 20041216 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WITS BASIN PRECIOUS MINERALS INC CENTRAL INDEX KEY: 0000912875 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 841236619 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12401 FILM NUMBER: 041208188 BUSINESS ADDRESS: STREET 1: 800 NICOLLET MALL STREET 2: SUITE 2690 CITY: MINNEAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: (612)664-0570 MAIL ADDRESS: STREET 1: 800 NICOLLET MALL STREET 2: SUITE 2690 CITY: MINNEAPOLIS STATE: MN ZIP: 55402 FORMER COMPANY: FORMER CONFORMED NAME: ACTIVE IQ TECHNOLOGIES INC DATE OF NAME CHANGE: 20010702 FORMER COMPANY: FORMER CONFORMED NAME: METEOR INDUSTRIES INC DATE OF NAME CHANGE: 19960313 8-K 1 v09979_8-k.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
________________

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported): December 10, 2004
 
WITS BASIN PRECIOUS MINERALS INC.
(Exact Name of Registrant as Specified in Charter)

 
Minnesota
(State or Other Jurisdiction
of Incorporation)
1-12401
(Commission
File Number)
84-1236619
(IRS Employer
Identification No.)


520 Marquette Avenue, Suite 900
Minneapolis, Minnesota
(Address of Principal Executive Offices)
 
55402
(Zip Code)


612.349.5277
(Registrant’s telephone number, including area code)

 
(Former Name or Former Address, if Changed Since Last Report)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 
     
 


Item 3.02. Unregistered Sales of Equity Securities.

On December 3, 2004, and December 10, 2004, Wits Basin Precious Minerals Inc. (the “Registrant”) completed private placements of units (the “Units”) of its securities, each Unit consisting of one share of the Registrant's common stock and a warrant to purchase one-half share of common stock at an exercise price of $0.25 per share. The warrants have an expiration date of December 31, 2006. The Registrant sold an aggregate of 8,450,000 units, resulting in gross proceeds of $845,000. There were no commissions paid in connection with the private placement. The offering was conducted as a private placement pursuant to the exemption from registration provided by Rule 506 of Regulation D under Section 4(2) of the Securities Act of 1933, as amended. The Company believes that the Investors are “accredited investors” as such term is defined in Rule 501(a) promulgated under the Securities Act. As of December 3, 2004, the Registrant had 33,901,612 shares of its $0.01 par value common stock issued and outstanding.

The Registrant agreed to file and cause to become effective a registration statement with the SEC within 60 days of the final closing date of the private placements, that registers the resale of the shares of common stock and the shares of common stock issuable upon exercise of the warrants. In the event an effective registration statement has not been completed within such time, the Registrant is required to reduce the exercise price of the one-half share warrant from $0.25 per share to $0.10 per share and further issue an additional one-half share warrant (the “Penalty Warrant”), with an exercise price of $0.10, for each Unit purchased.
 
The agreements regarding this transaction are filed as Exhibits 4.1, 10.1 and 10.2 to this current report on Form 8-K and are incorporated herein by reference.
 
This announcement does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdictions in which such an offer, solicitation or sale would be unlawful.


Item 9.01.   Financial Statements and Exhibits.

(c) Exhibits:

Exhibit
Description of Document
   
4.1
Form of Common Stock Purchase Warrant
   
10.1
Form of Subscription Agreement and Investment Representation.
   
10.2
Form of Supplement to Subscription Agreement and Investment Representation.

 

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
     
  WITS BASIN PRECIOUS MINERALS INC.
 
 		  
 		  
 
Date: December 16, 2004 By:   /s/ Mark D. Dacko
 
  Mark D. Dacko
Chief Financial Officer


 
     
 



EXHIBIT INDEX

Exhibit
Description of Document
   
4.1
Form of Common Stock Purchase Warrant
   
10.1
Form of Subscription Agreement and Investment Representation.
   
10.2
Form of Supplement to Subscription Agreement and Investment Representation.

       
       
       
 EX-4.1 2 v09979_ex4-1.txt THE WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS ("BLUE SKY LAWS"). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS WARRANT OR THE SECURITIES OR ANY INTEREST THEREIN MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE BLUE SKY LAWS OR (B) IF THE COMPANY HAS BEEN FURNISHED WITH BOTH AN OPINION OF COUNSEL FOR THE HOLDER, WHICH OPINION AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT NO REGISTRATION IS REQUIRED BECAUSE OF THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE BLUE SKY LAWS, AND ASSURANCES THAT THE TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION WILL BE MADE ONLY IN COMPLIANCE WITH THE CONDITIONS OF ANY SUCH REGISTRATION OR EXEMPTION. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF WITS BASIN PRECIOUS MINERALS INC. WARRANT NO. 2004-XXXX Minneapolis, Minnesota December XX, 2004 This certifies that, for value received, [Name], or [its/his] successors or assigns (the "Holder") is entitled to purchase from Wits Basin Precious Minerals Inc. (the "Company") Xxx Hundred (XXX) fully paid and nonassessable shares (the "Shares") of the Company's Common Stock, $0.01 par value (the "Common Stock"), at an exercise price of $0.25 per share (the "Exercise Price"), subject to adjustment as herein provided. This Warrant may be exercised by Holder at any time after the date hereof; provided, however, that, Holder shall in no event have the right to exercise this Warrant or any portion thereof after December 31, 2006, at which time all of Holder's rights hereunder shall expire. This Warrant is subject to the following provisions, terms and conditions: 1. Exercise of Warrant. The rights represented by this Warrant may be exercised by the Holder, in whole or in part (but not as to a fractional share of Common Stock), by the surrender of this Warrant (properly endorsed, if required, at the Company's principal office in Minneapolis, Minnesota, or such other office or agency of the Company as the Company may designate by notice in writing to the Holder at the address of such Holder appearing on the books of the Company at any time within the period above named), and upon payment to it by certified check, bank draft or cash of the purchase price for such Shares. The Company agrees that the Shares so purchased shall have and are deemed to be issued to the Holder as the record owner of such Shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such Shares as aforesaid. Certificates for the Shares of Common Stock so purchased shall be delivered to the Holder within a reasonable time, not exceeding ten (10) days, after the rights represented by this Warrant shall have been so exercised, and, unless this Warrant has expired, a new Warrant representing the number of Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be delivered to the Holder within such time. The Company may require that any such new Warrant or any certificate for Shares purchased upon the exercise hereof bear a legend substantially similar to that which is contained on the face of this Warrant. 2. Transferability of this Warrant. This Warrant is issued upon the following terms, to which Holder consents and agrees: (a) Until this Warrant is transferred on the books of the Company, the Company will treat the Holder of this Warrant registered as such on the books of the Company as the absolute owner hereof for all purposes without being affected by any notice to the contrary. (b) This Warrant may not be exercised, and this Warrant and the Shares underlying this Warrant 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. (c) The Warrant may not be transferred, and the Shares underlying this Warrant may not be transferred, without the Holder obtaining an opinion of counsel satisfactory in form and substance to the Company's counsel stating that the proposed transaction will not result in a prohibited transaction under the Securities Act of 1933, as amended ("Securities Act"), and applicable Blue Sky laws. By accepting this Warrant, the Holder agrees to act in accordance with any conditions reasonably imposed on such transfer by such opinion of counsel. (d) Neither this issuance of this Warrant nor the issuance of the Shares underlying this Warrant have been registered under the Securities Act. 3. Certain Covenants of the Company. The Company covenants and agrees that all Shares which may be issued upon the exercise of the rights represented by this Warrant, upon issuance and full payment for the Shares so purchased, will be duly authorized and issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue hereof, except those that may be created by or imposed upon the Holder or its property, and without limiting the generality of the foregoing, the Company covenants and agrees that it will from time to time take all such actions as may be requisite to assure that the par value per share of the Common Stock is at all times equal to or less than the effective purchase price per share of the Common Stock issuable pursuant to this Warrant. The Company further covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved free of preemptive or other rights for the exclusive purpose of issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. 4. Adjustment of Exercise Price and Number of Shares. The Exercise Price and number of Shares are subject to the following adjustments: (a) Adjustment of Exercise Price for Non-compliance with Registration of Shares purchased or purchasable by the Holder upon the exercise of the Warrant. In the event that the registration statement of the Company referred to in Section 6 hereof, has not become effective within 60 days of the final closing pursuant to which this Warrant and similar warrants were issued, the Warrant Exercise Price will be adjusted from $0.25 per share to $0.10 per share. 2 (b) Adjustment of Exercise Price for Stock Dividend, Stock Split or Stock Combination. In the event that (i) any dividends on any class of stock of the Company payable in Common Stock or securities convertible into or exercisable for Common Stock ("Common Stock Equivalents") shall be paid by the Company, (ii) the Company shall subdivide its then outstanding shares of Common Stock into a greater number of shares, or (iii) the Company shall combine its outstanding shares of Common Stock, by reclassification or otherwise, then, in any such event, the Exercise Price in effect immediately prior to such event shall (until adjusted again pursuant hereto) be adjusted immediately after such event to a price (calculated to the nearest full cent) determined by dividing (a) the number of shares of Common Stock outstanding immediately prior to such event, multiplied by the then existing Exercise Price, by (b) the total number of shares of Common Stock outstanding immediately after such event, and the resulting quotient shall be the adjusted Exercise Price per share. No adjustment of the Exercise Price shall be made if the amount of such adjustment shall be less than $0.05 per share, but in such case any adjustment that would otherwise be required then to be made shall be carried forward and shall be made at the time and together with the next subsequent adjustment which, together with any adjustment or adjustments so carried forward, shall amount to not less than $0.05 per share. (c) Adjustment of Number of Shares Purchasable on Exercise of Warrants. Upon each adjustment of the Exercise Price pursuant to Section 4(b) hereof, the Holder shall thereafter (until another such adjustment) be entitled to purchase at the adjusted Exercise Price the number of shares, calculated to the nearest full share, obtained by multiplying the number of shares specified in such Warrant (as adjusted as a result of all adjustments in the Exercise Price in effect prior to such adjustment) by the Exercise Price in effect prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price. (d) Notice as to Adjustment. Upon any adjustment of the Exercise Price (pursuant to Section 4(b) hereof) and any increase or decrease in the number of shares of Common Stock (pursuant to Section 4(c) hereof) purchasable upon the exercise of the Warrant, then, and in each such case, the Company within thirty (30) days thereafter shall give written notice thereof, by first class mail, postage prepaid, addressed to each Holder as shown on the books of the Company, which notice shall state the adjusted Exercise Price and the increased or decreased number of shares purchasable upon the exercise of the Warrants, and shall set forth in reasonable detail the method of calculation and the facts upon which such calculation is based. (e) Effect of Reorganization, Reclassification, Merger, etc. If at any time while this Warrant is outstanding there should be (i) any capital reorganization of the capital stock of the Company (other than the issuance of any shares of Common Stock in subdivision of outstanding shares of Common Stock by reclassification or otherwise and other than a combination of shares provided for in Section 4(b) hereof), (ii) any consolidation or merger of the Company with another corporation, or any sale, conveyance, lease or other transfer by the Company of all or substantially all of its property to any other corporation, which is effected in such a manner that the holders of Common Stock shall be entitled to receive cash, stock, securities, or assets with respect to or in exchange for Common Stock, or (iii) any dividend or any other distribution upon any class of stock of the Company payable in stock of the Company of a different class, other securities of the Company, or other property of the Company (other than cash), then, as a part of such transaction, lawful provision shall be made so that Holder shall have the right thereafter to receive, upon 3 the exercise hereof, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such consolidation or merger, or of the corporation to which the property of the Company has been sold, conveyed, leased or otherwise transferred, as the case may be, which the Holder would have been entitled to receive upon such capital reorganization, reclassification of capital stock, consolidation, merger, sale, conveyance, lease or other transfer, if this Warrant had been exercised immediately prior to such capital reorganization, reclassification of capital stock, consolidation, merger, sale, conveyance, lease or other transfer. In any such case, appropriate adjustments (as determined by the Board of Directors of the Company) shall be made in the application of the provisions set forth in this Warrant (including the adjustment of the Exercise Price and the number of Shares issuable upon the exercise of the Warrant) to the end that the provisions set forth herein shall thereafter be applicable, as near as reasonably may be, in relation to any shares or other property thereafter deliverable upon the exercise of the Warrant as if the Warrant had been exercised immediately prior to such capital reorganization, reclassification of capital stock, such consolidation, merger, sale, conveyance, lease or other transfer and the Holder had carried out the terms of the exchange as provided for by such capital reorganization, consolidation or merger. The Company shall not effect any such capital reorganization, consolidation, merger or transfer unless, upon or prior to the consummation thereof, the successor corporation or the corporation to which the property of the Company has been sold, conveyed, leased or otherwise transferred shall assume by written instrument the obligation to deliver to the Holder such shares of stock, securities, cash or property as in accordance with the foregoing provisions such Holder shall be entitled to purchase. 5. No Rights as Shareholder. This Warrant shall not entitle the Holder as such to any voting rights or other rights as a shareholder of the Company. 6. Registration Rights. The Company agrees to file a "resale" registration statement (the "Registration Statement") with the United States Securities and Exchange Commission (the "Commission") on an appropriate form and to include therein the Shares purchased or purchasable by the Holder upon the exercise of the Warrant and to use its best efforts to cause the Registration Statement to become effective within sixty (60) days from the date of this Warrant. The Company shall bear all expenses and fees incurred in connection with the preparation, filing, and amendment of the Registration Statement with the Commission, except that the Holder shall pay all fees, disbursements and expenses of any counsel or expert retained by the Holder and all underwriting discounts and commissions, filing fees and any transfer or other taxes relating to the Shares included in the Registration Statement. The Holder of this Warrant agrees to cooperate with the Company in the preparation and filing of any Registration Statement, and in the furnishing of information concerning the Holder for inclusion therein, or in any efforts by the Company to establish that the proposed sale is exempt under the Securities Act as to any proposed distribution. The Holder understands that if the Company has not received such information requested by the Company in the Registration Notice within 20 days after Holder's receipt thereof, the Company shall have no obligation to include any of Holder's Shares in the Registration Statement. 7. Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Minnesota. 4 8. Amendments and Waivers. The provisions of this Warrant may not be amended, modified or supplemented, and waiver or consents to departures from the provisions hereof may not be given, unless the Company agrees in writing and has obtained the written consent of the Holder. 9. Redemption. This Warrant may be redeemed in whole at the option of the Company for $0.01 per share at any time following the later of (i) the average of the high and low trading prices is equal to or greater than $0.75 for at least 10 consecutive trading days during the term of this Warrant, and (ii) the Registration Statement has been declared effective by the Commission. The Company shall give the Holder at least ten (10) days' prior written notice of its intent to redeem this Warrant, at the address of the Holder as last recorded on the Company's records, which notice shall state the record date fixed for the redemption and the place designated for the surrender of this Warrant. Following any such redemption, this Warrant, unless previously exercised, shall be null and void. 10. Notices. All notices or communications hereunder, except as herein otherwise specifically provided, shall be in writing and if sent to the Holder shall be mailed, delivered, or facsimile transmission and confirmed to the Holder at his or her address set forth on the records of the Company; or if sent to the Company shall be mailed, delivered, or facsimile transmission and confirmed to Wits Basin Precious Minerals Inc., 80 South 8th Street, Suite 900, Minneapolis, Minnesota 55402, facsimile number (612) 395-5276, or to such other address as the Company or the Holder shall notify the other as provided in this Section. IN WITNESS WHEREOF, Wits Basin Precious Minerals Inc., has caused this Warrant to be signed by its duly authorized officer on the date set forth above. WITS BASIN PRECIOUS MINERALS INC. By:______________________________ Mark D. Dacko Chief Financial Officer 5 EX-10.1 3 v09979_ex10-1.txt EXHIBIT 10.1 WITS BASIN PRECIOUS MINERALS INC. SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION UNITS OF COMMON STOCK AND WARRANTS Wits Basin Precious Minerals Inc. 520 Marquette Avenue, Suite 900 Minneapolis, MN 55402 Ladies and Gentlemen: The undersigned represents that, if an individual, he/she is of legal age, and hereby subscribes for _________________ "Units," each Unit consisting of one (1) share of common stock, par value $0.01 per share (the "Common Stock") of Wits Basin Precious Minerals Inc., a Minnesota corporation (the "Company"), and one-half (1/2) of one common stock purchase warrant (the "Warrants"). Each whole common stock purchase warrant is exercisable on or before December 31, 2006 for one (1) share of common stock at a price of $0.25 per share (the "Warrants" and together with the Units, the "Securities"). The aggregate purchase price of the Securities shall be $_________ (the "Purchase Price"). The shares of Common Stock underlying the Units shall be referred to herein as the "Shares." Details of this Offering are in the Term Sheet, attached herewith as Exhibit A. The undersigned acknowledges that this Subscription Agreement and Letter of Investment Representations is contingent upon the acceptance in whole or in part by the Company. THE UNDERSIGNED ACKNOWLEDGES THAT AN INVESTMENT IN THE COMPANY IS HIGHLY SPECULATIVE, INVOLVES A HIGH DEGREE OF RISK AND IMMEDIATE DILUTION AND IS SUITABLE ONLY FOR PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. This subscription is made in connection with the Company's offering (the "Offering") of a minimum of 1,000,000 Units (the "Minimum") and a maximum of 20,000,000 Units (the "Maximum") and is subject to the following terms and conditions: 1. RIGHT OF REJECTION. This subscription is made subject to the right of the Company to reject any subscription in whole or in part. 2. PURCHASE PRICE. In payment for the Units, the undersigned hereby delivers the sum equal to the number of Units purchased (must be purchased in even increments) multiplied by $0.10 (the "Purchase Price"). 1 3. PAYMENT INSTRUCTIONS: Payment for the Units shall be made by bank wire transfer, certified cheque, or bank draft (without deduction of bank service charges or otherwise) payable to "Wits Basin Precious Minerals Inc" in US Dollars. The entire subscription price for all Units must be paid at the time of subscription. In the case of a bank wire transfer, funds should be wired to: Bank: Wells Fargo Bank Minneapolis, N.A., 90 So. 7th Street, Minneapolis, MN 55402 Routing #: 121000248 Account #: 1007325812 Account Name: Wits Basin Precious Minerals Inc. Bank Contact John Hicks at 612.667.1619 4. REGISTRATION INSTRUCTIONS: The undersigned hereby directs that the certificates representing the Units shall be delivered as indicated above at the time of the closing and shall be registered as follows: - -------------------------------------------------------------------------------- (Name) - -------------------------------------------------------------------------------- (Address, City, Postal Code, Country) 5. DELIVERY INSTRUCTIONS. The Company is authorized to deliver the Units to: - -------------------------------------------------------------------------------- (Name) - -------------------------------------------------------------------------------- (Address, City, Postal Code, Country) Attention: ---------------------------------------------------------------------- (Contact and Phone Number) 2 6. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER. The undersigned acknowledges, warrants, and represents as follows: (a) I have, either alone or with the assistance of my professional advisor, sufficient knowledge and experience in financial and business matters that I believe myself capable of evaluating the merits and risks of the prospective investment in the Units. (b) I have obtained, to the extent I deem necessary, professional advice with respect to the risks inherent in investment in the Units, the suitability of the investment in light of my financial condition and investment needs, and legal, tax and accounting matters. (c) I have been given access to full and complete information regarding the Company, including without limitation: (i) the Company's Annual Report on Form 10-K for the year ended December 31, 2003 filed with the Securities and Exchange Commission (the "SEC"), (ii) the Company's Quarterly Reports on Form 10-QSB for the quarters ended March 31, 2004 and June 30, 2004, and (iii) the Company's Current Reports on Form 8-K: dated February 6, 2004 and filed on February 12, 2004; dated March 1, 2004 and filed on March 2, 2004; dated May 17, 2004 and filed on May 17, 2004; dated May 28, 2004 and filed on June 4, 2004; dated June 10, 2004 and filed on June 14, 2004; dated August 3, 2004 and filed on August 4, 2004; dated August 30, 2004 and filed on September 1, 2004; dated September 10, 2004 and filed on September 16, 2004; and dated October 13, 2004 and filed on October 15, 2004; and have utilized such access to my satisfaction to verify any information I may have sought relating to the Company and relevant to my investment decision. I have been given the opportunity to discuss all material aspects of this transaction with representatives of the Company and any questions asked have been answered to my full satisfaction. (d) I recognize that investment in the Units involves a high degree of risk, that the purchase of the Units is a long-term investment, that transferability and sale of the Units are restricted in many ways, and that I could sustain a total loss of my investment. I have carefully reviewed the Risk Factors in the Company's Annual Report on Form 10-K, the Company's Quarter Reports on Form 10-QSB and the additional Risk Factors attached hereto as Exhibit B. (e) I am an "Accredited Investor" as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act"). This representation is based on the following (check one or more, as applicable): ___ (1) I have had an individual income in excess of $200,000 in each of the two most recent years or joint income with my spouse in excess of $300,000 in each of the two most recent fiscal years and reasonably expect reaching the same income level in the current year; or ___ (2) As of the date hereof, I (either individually or with my spouse) have a net worth in excess of $1,000,000; or ___ (3) I am a director or executive officer of the Company; or ___ (4) The undersigned is a corporation or partnership not formed for the specific purpose of acquiring the Units and has total assets in excess of $5,000,000. 3 ___ (5) The undersigned, if not an individual, is an entity all of whose equity owners meet one of the tests set forth in (1) through (4) above (if relying on this category alone, each equity owner must complete a separate copy of this Agreement). (f) I have ____/have not _____ used the services of a purchaser representative in connection with this investment. If I have used a purchaser representative I have received a fully completed and executed Purchaser Representative Questionnaire. (g) I am not relying upon the Company with respect to the economic considerations involved in determining to make an investment in the Units. (h) I have no need for immediate liquidity with respect to my investments and have sufficient income to meet my current and anticipated obligations. The total loss of the Purchase Price being paid herewith would not cause financial hardship to me and would not adversely affect my current standard of living. In addition, my overall commitment to investments which are not readily marketable is not disproportionate to my net worth and my investment in the Units will not cause such overall commitment to become excessive. 7. INVESTMENT PURPOSE OF SUBSCRIBER. I represent and warrant that it is my intention to acquire the Units for my own account for investment purposes and not with a view to resale in connection with any distribution thereof. In order to assure the Company that I have no present intention to resell or dispose of the Units, I hereby represent and warrant the following facts: (a) I am domiciled in the State of _____________ or Country of ______________ and intend to receive and hold the Units for my personal account. (b) I have no contract, undertaking, agreement or arrangement with any person or company to sell or transfer the Units to any such person or company or to have any such person or company sell the Units on my behalf. (c) I am not aware of any occurrence, event, or circumstance upon the happening of which I intend to transfer or sell the Units and I do not have any present intention to transfer or sell the Units after a lapse of any particular period of time. (d) I have been informed that in the view of some state securities commissions, a purchase now with an intent to resell, by reason of any foreseeable specific contingency or anticipated change in market values, or any change in the condition of the Company, or that of the industry, or in connection with a contemplated liquidation or settlement of any loan obtained for the acquisition of the Units, would represent a purchase with an intent inconsistent with the representations set forth above, and that such state securities commissions might regard such sale or disposition as a deferred sale with regard to which an exemption from registration is not available. 4 (e) I further represent and agree that if, contrary to the foregoing representations and warranties, I should later desire to dispose of or transfer any of the Units in any manner, I shall not do so without first obtaining an opinion of counsel satisfactory to the Company that such proposed disposition or transfer may be made lawfully without the registration of the Units pursuant to the Securities Act and applicable state laws. 8. REGISTRATION STATUS OF SECURITIES. I understand that the Units to be issued hereunder have not been registered under the Securities Act or under applicable state securities acts, on the grounds that the Units are being issued in a transaction involving a limited group of knowledgeable investors fully familiar with the affairs and proposed operations of the Company and not involving a public offering and that, consequently, such transaction is exempt from registration under the Securities Act and state securities acts. In that regard, I understand that the Units may not be sold, transferred or otherwise disposed of except pursuant to an effective registration statement or appropriate exemption from registration under applicable state law and, as a result, I may be required to hold the Units for an indefinite period of time. Except as described above, I understand that the Company has not agreed to register the Units for distribution in accordance with the provisions of the Act or state law, and that the Company has not agreed to comply with any exemption under the Act or state law for the resale of the Units. I understand that the Units have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission. I acknowledge that the Company will rely on my representations herein as a basis for the exemption from registration. I agree to indemnify the Company for and from any claim, liability, cost or expense, including reasonable attorneys' fees, arising from any unlawful sale by me or offer by me to sell or transfer any of the Units subscribed for hereby. I understand that no assurance can be made that any of the Units can be resold at any price. I understand that no representations or warranties of any kind are intended nor should any be inferred with respect to the economic viability of this investment or with respect to any benefits, which may accrue to investment in the Company. I understand that the Company, its directors, officers and employees, do not in any way represent, guarantee or warrant any economic gain or profit with regard to the business or that favorable income tax consequences will flow therefrom. 9. LEGEND ON CERTIFICATES TO BE ISSUED. I understand and acknowledge that the certificates representing the Shares and Warrants subscribed for hereby and to be issued by the Company upon acceptance of this Subscription Agreement, will contain substantially the following legend: "The Shares represented by this Certificate has not been registered under the Securities Act of 1933, as amended, or any state Blue Sky law. Such Shares have been acquired by the registered holder hereof for his or her own account for investment purposes and may not be sold, transferred or otherwise disposed of for value, except pursuant to registration under all applicable securities laws or the receipt by the Company of an opinion of counsel, satisfactory in form and substance to the Company, that registration is not required under such securities laws." 5 10. REGISTRATION RIGHTS. The Company agrees to file a "resale" registration statement (the "Registration Statement") with the United States Securities and Exchange Commission ("SEC") on an appropriate form and to include therein the Common Stock included in the Units and the Common Stock purchasable by the undersigned upon the exercise of the Warrants, to allow the resale of such Securities by the undersigned, and to use its best efforts to cause the Registration Statement to become effective within ninety (90) days from the date of issuance of the Securities. In the event the Registration Statement has not been declared effective by the SEC within ninety (90) days following the termination of the Offering by the Company, the Company shall be obligated to reduce the exercise price of the Warrants from $0.25 per share to $0.10 per share. The Company shall bear all expenses and fees incurred in connection with the preparation, filing, and amendment of the Registration Statement with the Commission, except that the undersigned shall pay all fees, disbursements and expenses of any counsel or expert retained by the undersigned and all underwriting discounts and commissions, filing fees and any transfer or other taxes relating to the Securities included in the Registration Statement. The undersigned agrees to cooperate with the Company in the preparation and filing of any Registration Statement, and in the furnishing of information concerning the undersigned for inclusion therein, or in any efforts by the Company to establish that the proposed sale is exempt under the 1933 Act as to any proposed distribution. The undersigned understands that if the Company has not received such information requested by the Company in the Registration Notice within 20 days after undersigned's receipt thereof, the Company shall have no obligation to include any of undersigned's Securities in the Registration Statement. 11. REDEMPTION. The Warrants shall be redeemable in whole at the option of the Company for $0.01 per share in the event that (i) the average of the high and low trading prices is equal to or greater than $0.75 for at least 10 consecutive trading days during the term of the Warrants; and (ii) a registration statement enabling the resale of the Shares (as described in paragraph 8 above) has been declared effective by the Securities and Exchange Commission. The Company shall give the undersigned at least ten days prior written notice of its intent to redeem the Warrants, at the address of the undersigned as last recorded on the Company's records, which notice shall state the record date fixed for the redemption and the place designated for the surrender of the Warrants. Following any such redemption, the Warrants, unless previously exercised, shall be null and void. 12. ADDITIONAL INFORMATION AVAILABLE. I acknowledge that the Company has provided me with access to such other information as I have deemed necessary or important in my evaluation of the investment in the Units. 13. BINDING EFFECT. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and to the successors and assigns of the Company and to the personal and legal representatives, heirs, guardians, successors, and permitted assignees of the undersigned. 14. ENTIRE AGREEMENT. This instrument contains the entire agreement of the parties, and there are no representations, covenants or other agreements except as stated or referred to herein. 15. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. Signature and acceptance page follows 6 I further acknowledge that I have determined that an investment in the Units is appropriate for me, in view of my overall financial condition. Dated:______________, 2004. _________________________________ ___________________________________ Signature Signature _________________________________ ___________________________________ Name Typed or Printed Name Typed or Printed ACCEPTANCE On behalf of Wits Basin Precious Minerals Inc., the undersigned authorized officer hereby accepts this Subscription and agrees to issue a certificate representing _____________ Units consisting of Shares of Common Stock and Warrants to the foregoing subscriber. Dated:__________________, 2004. WITS BASIN PRECIOUS MINERALS INC. By_____________________________________ Name:________________________________ Title:_______________________________ 7 SUBSCRIBER INFORMATION ______________________________________ _____________________________________ Name Name ______________________________________ _____________________________________ Tax Identification or Social Security Tax Identification or Social Security Number Number _________________________________ _________________________________ _________________________________ Residence Address _________________________________ _________________________________ _________________________________ Mailing Address (for registration on books of the Company) Type of Ownership (Check One): |_| Individual Ownership |_| Joint Tenants with right of Survivorship |_| Trust or Estate (Describe, and enclose |_| Tenants-in-Common (both parties authority) must sign) |_| Other (explain):________________ ________________________________ 8 EX-10.2 4 v09979_ex10-2.txt EXHIBIT 10.2 SUPPLEMENT TO WITS BASIN PRECIOUS MINERALS INC. SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION UNITS OF COMMON STOCK AND WARRANTS Wits Basin Precious Minerals Inc. 520 Marquette Avenue, Suite 900 Minneapolis, MN 55402 Ladies and Gentlemen: This letter serves to supplement that certain Subscription Agreement and Investment Representation between Wits Basin Precious Minerals Inc. (the "Company") and the undersigned, relating to the purchase of units consisting of common stock and warrants of the Company (as heretofore amended or supplemented, the "Subscription Agreement"). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed in the Subscription Agreement. 1. Amendment of Registration Rights. The undersigned investor understands that in the event the Registration Statement (referred to in Section 10 of the Subscription Agreement, the "Registration Statement") is not declared effective by the United States Securities and Exchange Commission (the "SEC") within sixty (60) days following the termination of the Offering by the Company (following the final closing of the sale of the Units, the "Final Closing"), the Company shall be obligated to reduce the exercise price of the Warrants from $0.25 per share to $0.10 per share. 2. Change in Unit Size. The undersigned investor further understands that in the event the Registration Statement is not declared effective by the SEC within sixty (60) days following the Final Closing of the Offering by the Company, the Company shall be obligated to promptly issue the undersigned an additional warrant, in form similar to the Warrants, allowing the purchase of one-half (1/2) of a share of Common Stock for each Unit purchased. The undersigned investor understands that, except as expressly modified by this Supplement, all other terms and provisions of the Subscription Agreement remain in full force and effect. Dated:_____________, 2004 __________________________________ ________________________________ Signature Signature __________________________________ ________________________________ Name Typed or Printed Name Typed or Printed ----------------------------ACCEPTANCE------------------------------ On behalf of Wits Basin Precious Minerals Inc., the undersigned authorized officer hereby accepts this Supplement to the Subscription Agreement. Dated:__________________, 2004. WITS BASIN PRECIOUS MINERALS INC. By_____________________________________ Name:________________________________ Title:_______________________________ -----END PRIVACY-ENHANCED MESSAGE-----