-----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, CXj4246/HJa+m7vcW6CzPXxhUNONnrU6LavbKpRQ90/AvQZbGGNslOKwVZmenq07 bo5MfGNtLMjEoebGswBloA== 0001171520-03-000361.txt : 20031126 0001171520-03-000361.hdr.sgml : 20031126 20031126154904 ACCESSION NUMBER: 0001171520-03-000361 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20031126 GROUP MEMBERS: BOSTON FINANCIAL PARTNERS, INC. GROUP MEMBERS: GAIL BRAZIL GROUP MEMBERS: THOMAS R. BRAZIL FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON FINANCIAL PARTNERS INC CENTRAL INDEX KEY: 0001259478 IRS NUMBER: 043222444 STATE OF INCORPORATION: MA FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 17 BAYNS HILL RD. CITY: BOXFORD STATE: MA ZIP: 01921 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WITS BASIN PRECIOUS MINERALS INC CENTRAL INDEX KEY: 0000912875 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO & HOME SUPPLY STORES [5531] IRS NUMBER: 841236619 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-50493 FILM NUMBER: 031026582 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 SC 13D 1 eps1306.txt WITS BASIN PRECIOUS MINERALS INC. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. ___)* Wits Basin Precious Minerals Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 977427 10 3 - -------------------------------------------------------------------------------- (CUSIP Number) Thomas E. Brazil Boston Financial Partners, Inc. 89 Turnpike Road, Suite 210 Ipswich, Massachusetts 01938 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 14, 2003 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box |_|. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. Seess.240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 977427 10 3 Schedule 13D Page 1 of 4 Pages - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. Name of Reporting Persons I.R.S. Identification Nos. of Above Persons (Entities Only) Boston Financial Partners, Inc. - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group* (a) |X| (b) |_| - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) WC - -------------------------------------------------------------------------------- 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E) |_| - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Massachusetts - -------------------------------------------------------------------------------- 7. Sole Voting Power 8,345,411 Number Of ------------------------------------------------------- Shares 8. Shared Voting Power Beneficially Owned By 8,345,411 Each ------------------------------------------------------- Reporting 9. Sole Dispositive Power Person 8,345,411 ------------------------------------------------------- 10. Shared Dispositive Power 8,345,411 - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 8,436,911 - -------------------------------------------------------------------------------- 12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) |_| - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 25.2 % - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- CUSIP No. 977427 10 3 Schedule 13D Page 2 of 4 Pages - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. Name of Reporting Persons I.R.S. Identification Nos. of Above Persons (Entities Only) Thomas E. Brazil - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group* (a) |X| (b) |_| - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) PF - -------------------------------------------------------------------------------- 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E) |X| - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization United States - -------------------------------------------------------------------------------- 7. Sole Voting Power 8,345,411 Number Of ------------------------------------------------------- Shares 8. Shared Voting Power Beneficially Owned By 8,345,411 Each ------------------------------------------------------- Reporting 9. Sole Dispositive Power Person 8,345,411 ------------------------------------------------------- 10. Shared Dispositive Power 8,345,411 - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 8,436,911 - -------------------------------------------------------------------------------- 12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) |_| - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 25.2 % - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) IN - -------------------------------------------------------------------------------- CUSIP No. 977427 10 3 Schedule 13D Page 3 of 4 Pages - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. Name of Reporting Persons I.R.S. Identification Nos. of Above Persons (Entities Only) Gail Brazil - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group* (a) |X| (b) |_| - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) PF - -------------------------------------------------------------------------------- 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(D) or 2(E) |_| - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization United States - -------------------------------------------------------------------------------- 7. Sole Voting Power 8,436,911 Number Of ------------------------------------------------------- Shares 8. Shared Voting Power Beneficially Owned By 8,436,911 Each ------------------------------------------------------- Reporting 9. Sole Dispositive Power Person 8,436,911 ------------------------------------------------------- 10. Shared Dispositive Power 8,436,911 - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 8,436,911 - -------------------------------------------------------------------------------- 12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) |_| - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 25.2 % - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) IN - -------------------------------------------------------------------------------- CUSIP No. 977427 10 3 Schedule 13D Page 4 of 4 Pages - -------------------------------------------------------------------------------- Item 1. Security and Issuer. This Schedule 13D relates to the common stock, $0.01 par value per share ("Common Stock"), of Wits Basin Precious Minerals Inc., a Minnesota corporation (the "Company"). The address of the principal executive office of the Company is 800 Nicollet Mall, Suite 2690, Minneapolis, Minnesota 55402. Item 2. Identity and Background. (a) This statement is being filed by the Reporting Parties: Boston Financial Partners, Inc., Thomas E. Brazil and Gail Brazil. (b) The business address of Boston Financial Partners, Inc. is 89 Turnpike Road, Suite 210, Ipswich, Massachusetts 01938. The residential address of each of Thomas E. Brazil and Gail Brazil is 17 Bavns Hill Road, Boxford, Massachusetts 01921. (c) Thomas E. Brazil's principal occupation is serving as the sole officer and director of Boston Financial Partners, Inc. Gail Brazil's principal occupation is homemaker. Gail Brazil is the sole stockholder of Boston Financial Partners, Inc. (d) None of the Reporting Parties has, during the last five years, been convicted in a criminal proceeding (excluding traffic violation or similar misdemeanors). (e) Thomas E. Brazil is subject to a proceeding brought by the Commodity Futures Trading Commission (CFTC). Pursuant to such proceeding, Thomas E. Brazil became a party to and is subject to an Offer of Settlement with the CFTC. Pursuant to the Offer of Settlement of Respondents Boston Trading Advisors, LLC, Thomas E. Brazil and Andrew W. Preston, dated August 25, 2003, Thomas E. Brazil and the other parties thereto, have agreed, among other things, (i) not to engage in any activity which requires registration with the CFTC as a CPO, including receiving customer funds for the purpose of pooling the funds to trade in commodity futures contracts for the benefit of the pool participants and (ii) not to engage in any activity which requires registration with the CFTC as an associated person of a CPO, in either case, until certain conditions have been met. (f) Thomas E. Brazil and Gail Brazil are citizens of the United States. Item 3. Source and Amount of Funds or Other Consideration. On October 14, 2003, Boston Financial Partners, Inc. purchased 1,550,000 shares of Common Stock and warrants to purchase 775,000 shares of Common Stock for a total purchase price of $387,500.00. The warrants to purchase 775,000 shares of Common Stock have an exercise price of $0.75 per share and are exercisable on or prior to October 14, 2004. Boston Financial Partners, Inc. used its working capital to purchase these securities. On October 24, 2003, Boston Financial Partners, Inc. acquired warrants to purchase 96,000 shares of Common Stock. The warrants to purchase 96,000 shares of Common Stock have an exercise price of $0.50 per share and are exercisable on or prior to October 24, 2007. Boston Financial Partners, Inc. acquired the warrants to purchase 96,000 shares of Common Stock in consideration for consulting services provided to the Company. On November 5, 2003, Boston Financial Partners, Inc. acquired warrants to purchase 1,000,000 shares of Common Stock. The warrants to purchase 1,000,000 shares of Common Stock have an exercise price of $0.62 per share and are exercisable on or prior to November 4, 2005. Boston Financial Partners, Inc. acquired the warrants to purchase 1,000,000 shares of Common Stock in consideration for consulting services provided to the Company. Prior to the transaction on October 14, 2003, the Reporting Parties beneficially owned 4,111,911 shares of Common Stock. These shares include warrants to purchase an aggregate of 904,000 shares of Common Stock. Gail Brazil also directly owns 91,500 shares of Common Stock which she purchased with personal funds. Item 4. Purpose of Transaction. The acquisition by Boston Financial Partners, Inc. of the shares of Common Stock beneficially owned by the Reporting Parties was effected because of the Reporting Parties' belief that the Common Stock represents an attractive investment. Boston Financial Partners, Inc. also accepted securities of the Company as payment for consulting services because of the Reporting Parties' belief that the Common Stock represents an attractive investment. The Reporting Parties may, from time to time, acquire additional shares of Common Stock or engage in discussions with the Company concerning further acquisitions of shares of Common Stock, or warrants to purchase Common Stock, or further investments in the Company. The Reporting Parties intend to review their investment in the Company on a continuing basis, and depending upon the price and availability of shares of Common Stock, subsequent developments affecting the Company, the Company's business and prospects, other investment and business opportunities available to the Reporting Parties, general stock market and economic conditions, tax considerations and other factors considered relevant, may decide at any time to increase, or to decrease, the size of their investment in the Company. Except as set forth above in this Schedule 13D, none of the Reporting Parties has any plans or proposals that relate to or would result in: (a) the acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) any change in the present Board of Directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Company; (f) any other material change in the Company's business or corporate structure; (g) changes in the Company's charter, by-laws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; (h) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Company being eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); or (j) any action similar to any of those enumerated above. Item 5. Interest in Securities of the Issuer. (a) Boston Financial Partners, Inc. beneficially owns 8,436,911 shares of Common Stock. These shares represent approximately 25.2% of the Common Stock outstanding. These shares include (i) 4,570,411 shares held directly by Boston Financial Partners, Inc.; (ii) 3,775,000 shares of Common Stock issuable upon exercise of warrants held by Boston Financial Partners, Inc.; and (iii) 91,500 shares held directly by Gail Brazil. Because of its relationship with Thomas E. Brazil and Gail Brazil, Boston Financial Partners, Inc. may be deemed to beneficially own all of the shares of Common Stock that Thomas E. Brazil and Gail Brazil beneficially own. Thomas E. Brazil beneficially owns 8,436,911 shares of Common Stock. These shares represent approximately 25.2% of the Common Stock outstanding. These shares include (i) 4,570,411 shares held directly by Boston Financial Partners, Inc.; (ii) 3,775,000 shares of Common Stock issuable upon exercise of warrants held by Boston Financial Partners, Inc.; and (iii) 91,500 shares held directly by Gail Brazil. Because of his relationship with Boston Financial Partners, Inc. and Gail Brazil, Thomas E. Brazil may be deemed to beneficially own all of the shares of Common Stock that Boston Financial Partners, Inc. and Gail Brazil beneficially own. Gail Brazil beneficially owns 8,436,911 shares of Common Stock. These shares represent approximately 25.2% of the Common Stock outstanding. These shares include (i) 4,570,411 shares held directly by Boston Financial Partners, Inc.; (ii) 3,775,000 shares of Common Stock issuable upon exercise of warrants held by Boston Financial Partners, Inc.; and (iii) 91,500 shares held directly by Gail Brazil. Because of his relationship with Boston Financial Partners, Inc. and Thomas E. Brazil, Gail Brazil may be deemed to beneficially own all of the shares of Common Stock that Boston Financial Partners, Inc. and Thomas E. Brazil beneficially own. (b) Number of shares as to which each of the Reporting Parties has: Sole power to vote or direct the vote of shares of Common Stock: Boston Financial Partners, Inc. 8,345,411 Thomas E. Brazil 8,345,411 Gail Brazil 8,436,911 Shared power to vote or direct the vote of shares of Common Stock: Boston Financial Partners, Inc. 8,345,411 Thomas E. Brazil 8,345,411 Gail Brazil 8,436,911 Sole power to dispose of or direct the disposal of shares of Common Stock: Boston Financial Partners, Inc. 8,345,411 Thomas E. Brazil 8,345,411 Gail Brazil 8,436,911 Shared power to dispose of or direct the disposal of shares of Common Stock: Boston Financial Partners, Inc. 8,345,411 Thomas E. Brazil 8,345,411 Gail Brazil 8,436,911 (c) Excepted as described below, none of the Reporting Parties has effected any transactions in the Common Stock during the past 60 days: (i) Boston Financial Partners, Inc. purchased 1,550,000 shares of Common Stock and warrants to purchase 775,000 shares of Common Stock in a private placement that closed on October 24, 2003. The description of this transaction is included in the first paragraph of Item 3 to this Schedule 13D and is incorporated herein by reference. (ii) Boston Financial Partners, Inc. acquired warrants to purchase 96,000 shares of Common Stock on October 24, 2003. The description of this transaction is included in the second paragraph of Item 3 to this Schedule 13D and is incorporated herein by reference. (ii) Boston Financial Partners, Inc. acquired warrants to purchase 1,000,000 shares of Common Stock on November 5, 2003. The description of this transaction is included in the third paragraph of Item 3 to this Schedule 13D and is incorporated herein by reference. (d) The Reporting Parties do not know of any other person who has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock reported in this Schedule 13D as beneficially owned by the Reporting Parties. (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. The Reporting Parties are parties to the following contracts, arrangements, understandings or relationships (legal or otherwise) with respect to any securities of the Company: (a) In connection with its purchase of 1,550,000 shares of Common Stock and warrants to purchase 775,000 shares of Common Stock, Boston Financial Partners, Inc. entered into the Wits Basin Precious Minerals Inc. Subscription Agreement and Investment Representation, dated as of October 14, 2003 with the Company (Subscription Agreement) as described in the first paragraph of Item 3 of this Schedule 13D, which description is incorporated herein by reference. The summary of the Subscription Agreement in this Schedule 13D is qualified in its entirety by reference to the form of the Subscription Agreement, which is attached as Exhibit 1 hereto and by the Form of the Supplement to Wits Basin Precious Minerals Inc. Subscription Agreement and Investment Representation, which is attached hereto as Exhibit 2. (b) The summary of the warrant to purchase 775,000 shares of Common Stock in this Schedule 13D is qualified in its entirety by reference to the warrant to purchase 775,000 shares of Common Stock, which is attached as Exhibit 3 hereto. (c) The summary of the warrant to purchase 96,000 shares of Common Stock in this Schedule 13D as described in the second paragraph of Item 3 of this Schedule 13D which description is incorporated by reference is qualified in its entirety by reference to the warrant to purchase 96,000 shares of Common Stock, which is attached as Exhibit 4 hereto. (d) The summary of the warrant to purchase 1,000,000 shares of Common Stock in this Schedule 13D as described in the third paragraph of Item 3 of this Schedule 13D which description is incorporated by reference is qualified in its entirety by reference to the warrant to purchase 1,000,000 shares of Common Stock, which is attached as Exhibit 5 hereto. Except as described above, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Parties with respect to any securities of the Company. Item 7. Material to be Filed as Exhibits. Exhibit 1. Form of Wits Basin Precious Minerals Inc. Subscription Agreement and Investment Representation. Exhibit 2. Form of Supplement to Wits Basin Precious Minerals Inc. Subscription Agreement and Investment Representation. Exhibit 3. Warrant to purchase 775,000 shares of Common Stock issued to Boston Financial Partners, Inc. on October 14, 2003. Exhibit 4. Warrant to purchase 96,000 shares of Common Stock issued to Boston Financial Partners, Inc. on October 24, 2003. Exhibit 5. Warrant to purchase 1,000,000 shares of Common Stock issued to Boston Financial Partners, Inc. on November 5, 2003. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. ---------------------------------------------- (Date) ---------------------------------------------- (Signature) ---------------------------------------------- (Name/Title) Attention. Intentional misstatements or omissions of fact constitute federal criminal violations (see 18 U.S.C. 1001). EX-1 3 ex-1.txt Exhibit 1 WITS BASIN PRECIOUS MINERALS INC. SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION UNITS OF COMMON STOCK AND WARRANTS Wits Basin Precious Minerals Inc. 800 Nicollet Mall, Suite 2690 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 $.01 per share (the "Common Stock") of Wits Basin Precious Minerals Inc., a Minnesota corporation (the "Company"), and one-half of a (1) one-year warrant to purchase one share of common stock at a price of $0.75 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 5,000,000 Units (the "Minimum") and a maximum of 7,000,000 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 multiplied by $0.25 (the "Purchase Price"). 3. Payment Instructions: Method of Payment for Canadian Purchasers: 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 "IBK Capital Corp., US Trust Account #1". 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: 1 ACCOUNT NAME: IBK CAPITAL CORP, US TRUST ACCOUNT #1 Bank: TD Canada Trust Toronto Dominion Centre Branch 55 King Street West Toronto, Ontario, Canada M5K 1A2 TD's Swift Code: TDOMCATT TOR Transit #: 10202-004 Account Name Beneficiary: IBK Capital Corp., US Trust Account #1 US Trust Account #: 0690-7357673 Method of Payment for Non-Canadian Purchasers: 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 "Maslon Edelman Borman & Brand". 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 Name: US Bank, N.A., 800 Nicollet Mall, Minneapolis, MN 55402 Routing #: 091000022 Account #: 793400110 Account Name: Maslon Edelman Borman & Brand Trust Account Attention: WITS BASIN 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) 2 5. Delivery Instructions. The Company is authorized to deliver the Units to: - -------------------------------------------------------------------------------- (Name) - -------------------------------------------------------------------------------- (Address, City, Postal Code, Country) Attention: --------------------------------------------------------------------- (Contact and Phone Number) 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. (c) 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. (d) 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, 2002 filed with the Securities and Exchange Commission (the "SEC") on March 31, 2003, (ii) the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 (the "First Quarter 10-Q"), and (iii) the Company's Amendment to Current Report on Form 8-K/A dated March 14, 2003 and filed on May 27, 2003, and (iv) the Company's Current Report on Form 8-K dated June 26, 2003 and filed on July 1, 2003; 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. (e) 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 First Quarter 10-Q and those additional Risk Factors attached hereto as Exhibit B. (f) 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): 3 ___ (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. ___ (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). (g) 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. (h) I am not relying upon the Company with respect to the economic considerations involved in determining to make an investment in the Units. (i) 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. 4 (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. (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. 5 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." 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 Warrant, 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 one hundred twenty (120) days following the termination of the Offering by the Company, the Company shall be obligated to promptly pay the undersigned a penalty equal to 1/5 of a share of Common Stock for each Unit purchased hereby. 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 Warrant shall be redeemable in whole at the option of the Corporation for [$.01 per share] in the event that (i) the average of the high and low trading prices is equal to or greater than $1.50 for at least 10 consecutive trading days during the term of the Warrant; 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 Corporation shall give the undersigned at least ten days prior written notice of its intent to redeem the Warrant, at the address of the undersigned as last recorded on the Corporation's records, which notice shall state the record date fixed for the redemption and the place designated for the surrender of the Warrant. Following any such redemption, the Warrant, 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. 6 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. 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: ______________, 2003. - --------------------------------- ----------------------------------- 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: __________________, 2003. 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 |_| Tenants-in-Common (both parties enclose authority) must sign) |_| Other (explain): ----------------- ----------------------------- 8 EXHIBIT A TERM SHEET No securities commission or other similar regulatory authority has passed on the merits of the securities offered herein nor has it reviewed this Term Sheet and any representation to the contrary is an offence. This Term Sheet is not, and under no circumstances is to be interpreted as, a prospectus, public information or advertisement of the securities described herein. Reference should be made to the subscription agreement, which terms shall govern. Private Placement September 4, 2003 WITS BASIN PRECIOUS MINERALS INC. PRIVATE PLACEMENT OF UNITS Minimum Offering - US $1,250,000 Maximum Offering - US $1,750,000 Issuer: Wits Basin Precious Minerals Inc. (the "Company") Issue: The Company intends to raise a minimum of US$1,250,000 and a maximum of US$1,750,000 from the issuance of Units of the Company at a price of US$0.25 per Unit, each Unit consisting of one common share and one-half of one common share purchase warrant. Each whole common share purchase warrant (a "Warrant") is exercisable on or before August 31, 2004 for one common share upon payment of US$0.75 per common share. Outstanding Share Capital: The Company currently has 17,057,181 common shares issued and outstanding. It has reserved 7,000,000 common shares for issuance of the Units, and a further 3,750,000 common shares for issuance upon exercise of the Warrants attached to the units. In addition, there are currently 16,733,594 common shares reserved for issuance on the exercise of outstanding stock options and/or warrants. Use of Proceeds: Proceeds from the issuance of the Units will be used to fund exploration on the Company's FSC Farm-In Project with Kwagga Gold (Proprietary) Limited and for general working capital purposes including general and administrative expenses. Commission: The Company may engage registered securities dealers or finders ("Agents") to distribute the Units. The total amount of commission payable to the Agents will not exceed 10%. The commission may be paid in cash from the Company's working capital or common shares 9 of the Company priced at US$0.25 per share or any combination of the above, subject to regulatory approval. Offering Jurisdictions: The Units are being offered to residents of such jurisdictions as the Company may approve (collectively, the "Qualifying Jurisdictions"). Qualification for Subscription: Subscribers must qualify as exempt purchasers pursuant to the exemptions from prospectus and/or registration requirements of their respective jurisdictions of residence. The Company reserves the right to reject any subscriptions at its sole discretion. Resale Restrictions: The Units will be issued pursuant to exemptions from prospectus requirements and will be subject to resale restrictions under the securities laws of the Qualifying Jurisdictions. Registration Rights: The Company will use its best efforts to cause the shares and the shares underlying the warrants to be registered for resale within 90 days from the Closing. The Company will pay each Subscriber a penalty equal to 1/5 of a share for each Unit purchased in the event such registration has not occurred within 120 days of the final termination of the Offering. Costs and Expenses: Whether or not the Offering is completed, offering costs and expenses are to be borne by the Company, including the fees and disbursements of its designated legal counsel, payable on Closing. Closing Date: All subscriptions must be received by September 19, 2003, or such later date as the Company determines and the closing will take place on or before September 24, 2003 or such other date(s) as may be determined by the Company. Regulatory Approval: All terms contained herein are subject to regulatory approvals where necessary. 10 EXHIBIT B ADDITIONAL RISK FACTORS An investment in the Units involves certain risks. The following risk factors, as well as the other information contained in the Term Sheet and in the documents incorporated by reference herein, should be considered carefully by prospective investors. Fluctuations in Gold Prices The Corporation's development efforts and the profitability of the Corporation's operations once commenced, will be significantly affected by changes in the market price of gold. Mine production and the willingness of third parties such as central banks to sell or lease gold affect the supply of gold. Demand for gold can be influenced by economic conditions, attractiveness as an investment vehicle and the relative strength of the US dollar and local investment currencies. Other factors include the level of interest rates, exchange rates, inflation and political stability. The aggregate effect of these factors is impossible to predict with accuracy. Gold prices are also affected by worldwide production levels. In addition, the price of gold has on occasion been subject to very rapid short-term changes due to speculative activities. Fluctuations in gold prices may adversely affect the Corporation's financial performance and results of operations. Uncertainty of Reserve and Mineral Resource Estimates The figures for proved and probable ore reserves and mineral resources presented by the Corporation are estimates and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realized. The ore grade actually recovered by the Corporation may differ from the estimated grades of the reserves and mineral resources. Such figures have been determined based upon assumed gold prices and operating costs. Future production could differ dramatically from ore reserve estimates for, among others, the following reasons: o mineralization or formations could be different from those predicted by drilling, sampling and similar examinations; o increases in operating mining costs and processing costs could adversely affect ore reserves; o the grade of the ore reserves may vary significantly from time to time and there is no assurance that any particular level of gold may be recovered from the ore reserves; and o declines in the market price of gold may render the mining of some or all of the Corporation's ore reserves uneconomic. Any of these factors may require the Corporation to reduce its ore reserves estimates or increase its costs. Short term factors, such as the need for the additional development of a deposit or the processing of new different grades, may impair the Corporation's profitability. Should the market price of gold fall, the Corporation could be required to materially write down its investment in mining properties or delay or discontinue production or the development of new projects. Nature of Mineral Exploration and Mining The exploration for and development of mineral deposits involves significant financial risks which even a combination of careful evaluation, experience and knowledge may not eliminate. While the discovery of an ore body may result in substantial rewards, few properties which are explored are ultimately developed into producing mines. Major expenses may be required to establish ore reserves, to develop metallurgical processes and to construct mining and processing facilities at a site. It is impossible to ensure that the current programs 11 planned for the Corporation will result in a profitable commercial mining operation. The Corporation's operations are subject to all of the hazards and risks normally incident to exploration, development and production of gold, any of which could result in damage to life or property, environmental damage and possible legal liability for any or all damage. The Corporation's activities may be subject to prolonged disruptions due to weather conditions depending on the location of operations in which the Corporation has interests. Hazards, such as unusual or unexpected formations, rock bursts, pressures, cave-in, flooding or other conditions may be encountered in the drilling and removal of material. While the Corporation may obtain insurance against certain risks in such amounts as it considers adequate, the nature of these risks are such that liabilities could exceed policy limits or could be excluded from coverage. There are also risks against which the Corporation cannot insure or against which it may elect not to insure. The potential costs which could be associated with any liabilities not covered by insurance or in excess of insurance coverage or compliance with applicable laws and regulations may cause substantial delays and require significant capital outlays, adversely affecting the Corporation's earnings and competitive position in the future and, potentially, its financial position and results of operation. Whether a gold deposit will be commercially viable depends on a number of factors, some of which are the particular attributes of the deposit, such as its size and grade, proximity to infrastructure, financing costs and governmental regulations, including regulations relating to prices, taxes, royalties, infrastructure, land use, importing and exporting of gold and environmental protection. The effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Corporation not receiving an adequate return on invested capital. Capital Investment Mining exploration involves financial risk and capital investment. The Corporation's only means of acquiring investment capital will be by the sale of equity shares or the rights to acquire equity shares. It will have no source of funds to engage in additional exploration and development which may be necessary to exploit its properties other than interest earned on its short-term investments, and further financing. Additional Financing Needed for Joint Venture Investment To maintain the Corporation's interest in the Joint Venture, additional financing in excess of USD$2,000,000 will be required. If the additional financing cannot be obtained, the Corporation will lose its initial investment and any future investment. No assurance can be made that the Corporation will be able to obtain such additional financing. The Corporation's activities will be initially directed to the search for and the development of new mineral deposits, and significant capital investment will be required to achieve commercial production from successful exploration efforts. There is no assurance that the Corporation will have, or be able to raise, the required funds to continue these activities. 12 EX-2 4 ex-2.txt Exhibit 2 SUPPLEMENT TO WITS BASIN PRECIOUS MINERALS INC. SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION UNITS OF COMMON STOCK AND WARRANTS Wits Basin Precious Minerals Inc. 800 Nicollet Mall, Suite 2690 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. Change in Offering Size and Purchase Price. The undersigned investor hereby acknowledges and confirms that (i) the Maximum number of Units available for sale in the Offering is 10,000,000, increased from 7,000,000, and (ii) the Purchase Price is $0.25 per Unit. 2. Amendment of Registration Rights. The undersigned investor further understands that in the event the Registration Statement (referred to in Paragraph 8 of the Subscription Agreement) is not declared effective by the United States Securities and Exchange Commission within one hundred twenty (120) days following the termination of the Offering by the Company (following the final closing of the sale of the Units), the Company shall be obligated to promptly pay the undersigned a penalty equal to one-fifth (1/5) 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: _____________, 2003 - ----------------------------- ----------------------------- 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: __________________, 2003. WITS BASIN PRECIOUS MINERALS INC. By_____________________________________ Name:__________________________________ Title:_________________________________ EX-3 5 ex-3.txt Exhibit 3 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. 2003-17 Minneapolis, Minnesota October 14, 2003 This certifies that, for value received, Boston Financial Partners, Inc., or [its/his] successors or assigns (the "Holder") is entitled to purchase from Wits Basin Precious Minerals Inc. (the "Company") Seven Hundred Seventy Five Thousand (775,000) fully paid and nonassessable shares (the "Shares") of the Company's Common Stock, $.01 par value (the "Common Stock"), at an exercise price of $0.75 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 October 14, 2004, 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 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 2 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 $.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 $.05 per share. (b) Adjustment of Number of Shares Purchasable on Exercise of Warrants. Upon each adjustment of the Exercise Price pursuant to this Section, 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. (c) Notice as to Adjustment. Upon any adjustment of the Exercise Price and any increase or decrease in the number of shares of Common Stock 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. (d) 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(a) 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 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, 3 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 ninety (90) 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 $.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 $1.50 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 telefaxed 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 telefaxed and confirmed to Wits Basin Precious Minerals Inc., 800 Nicollet Mall, Suite 2690, Minneapolis, Minnesota 55402, facsimile number (612) 338-7332, 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 in the date set forth above. WITS BASIN PRECIOUS MINERALS INC. By: ---------------------------- Mark D. Dacko Chief Financial Officer 5 SUBSCRIPTION FORM To be signed only upon exercise of Warrant. The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, ____________________ of the shares of Common Stock of Wits Basin Precious Minerals Inc. (the "Shares") to which such Warrant relates and herewith makes payment of $_____________ therefor in cash, certified check or bank draft and requests that a certificate evidencing the Shares be delivered to, ____________________________, the address for whom is set forth below the signature of the undersigned: Dated: ____________________ -------------------------------------------------- (Signature) -------------------------------------------------- -------------------------------------------------- (Address) ASSIGNMENT FORM To be signed only upon authorized transfer of Warrant. FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto _____________________________________ the right to purchase shares of Common Stock of Wits Basin Precious Minerals Inc. to which the within Warrant relates and appoints ____________________ attorney, to transfer said right on the books of _________________ with full power of substitution in the premises. Dated: ____________________ -------------------------------------------------- (Signature) -------------------------------------------------- -------------------------------------------------- (Address) 6 EX-4 6 ex-4.txt Exhibit 4 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. 2003-BW6 Minneapolis, Minnesota October 24, 2003 This certifies that, for value received, Boston Financial Partners, Inc., or [its/his] successors or assigns (the "Holder") is entitled to purchase from Wits Basin Precious Minerals Inc. (the "Company") Ninety Six Thousand (96,000) fully paid and nonassessable shares (the "Shares") of the Company's Common Stock, $.01 par value (the "Common Stock"), at an exercise price of $0.50 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 October 24, 2007, 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 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 2 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 $.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 $.05 per share. (b) Adjustment of Number of Shares Purchasable on Exercise of Warrants. Upon each adjustment of the Exercise Price pursuant to this Section, 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. (c) Notice as to Adjustment. Upon any adjustment of the Exercise Price and any increase or decrease in the number of shares of Common Stock 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. (d) 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(a) 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 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, 3 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 ninety (90) 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. 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. 4 9. Redemption. This Warrant may be redeemed in whole at the option of the Company for $.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 $1.50 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 telefaxed 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 telefaxed and confirmed to Wits Basin Precious Minerals Inc., 800 Nicollet Mall, Suite 2690, Minneapolis, Minnesota 55402, facsimile number (612) 338-7332, 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 in the date set forth above. WITS BASIN PRECIOUS MINERALS INC. By: --------------------------------- Mark D. Dacko Chief Financial Officer 5 SUBSCRIPTION FORM To be signed only upon exercise of Warrant. The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, ____________________ of the shares of Common Stock of Wits Basin Precious Minerals Inc. (the "Shares") to which such Warrant relates and herewith makes payment of $_____________ therefor in cash, certified check or bank draft and requests that a certificate evidencing the Shares be delivered to, ____________________________, the address for whom is set forth below the signature of the undersigned: Dated: ____________________ -------------------------------------------------- (Signature) -------------------------------------------------- -------------------------------------------------- (Address) ASSIGNMENT FORM To be signed only upon authorized transfer of Warrant. FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto _____________________________________ the right to purchase shares of Common Stock of Wits Basin Precious Minerals Inc. to which the within Warrant relates and appoints ____________________ attorney, to transfer said right on the books of _________________ with full power of substitution in the premises. Dated: ____________________ -------------------------------------------------- (Signature) -------------------------------------------------- -------------------------------------------------- (Address) EX-5 7 ex-5.txt Exhibit 5 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. TB-5 Minneapolis, Minnesota November 5, 2003 This certifies that, for value received, BOSTON FINANCIAL PARTNERS, INC., or his successors or assigns (the "Holder") is entitled to purchase from Wits Basin Precious Minerals Inc. (the "Company") One Million (1,000,000) fully paid and nonassessable shares (the "Shares") of the Company's Common Stock, $.01 par value (the "Common Stock"), at an exercise price of $0.62 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 later than the two (2) year anniversary of the date hereof, 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 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 2 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 $.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 $.05 per share. (b) Adjustment of Number of Shares Purchasable on Exercise of Warrants. Upon each adjustment of the Exercise Price pursuant to this Section, 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. (c) Notice as to Adjustment. Upon any adjustment of the Exercise Price and any increase or decrease in the number of shares of Common Stock 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. (d) 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(a) 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 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 3 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 Shareholders. 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. If at any time the Company shall propose to file any registration statement (other than any registration on Form S-4, S-8 or any other similarly inappropriate form, or any successor forms thereto) under the 1933 Act covering a public offering of the Company's Common Stock (the "Registration Statement"), it will notify the Holder hereof at least thirty (30) days prior to each such filing (the "Registration Notice") and will use its best efforts to include in the Registration Statement (to the extent permitted by applicable regulation), the Shares purchased or purchasable by the Holder upon the exercise of the Warrant to the extent requested by the Holder hereof within twenty (20) days after receipt of notice of such filing (which request shall specify the interest in this Warrant or the Shares intended to be sold or disposed of by such Holder and describe the nature of any proposed sale or other disposition thereof); provided, however, that if a greater number of Shares is offered for participation in the proposed offering than in the reasonable opinion of the managing underwriter of the proposed offering can be accommodated without adversely affecting the proposed offering, then the amount of Shares proposed to be offered by such Holder for registration, as well as the number of securities of any other selling shareholders participating in the registration, shall be proportionately reduced to a number deemed satisfactory by the managing underwriter. 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 1933 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. 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. 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 telefaxed and confirmed to the Holder at his or her address set forth on the records of the Company; 4 or if sent to the Company shall be mailed, delivered, or telefaxed and confirmed to Wits Basin Precious Minerals Inc., 800 Nicollet Mall, Suite 2690, Minneapolis, Minnesota 55402, 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 in the date set forth above. WITS BASIN PRECIOUS MINERALS INC. By: --------------------------------------- Its: -------------------------------- 5 SUBSCRIPTION FORM (To be signed only upon exercise of Warrant) The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, ____________________ of the shares of Common Stock of Active IQ Technologies, Inc. (the "Shares") to which such Warrant relates and herewith makes payment of $_____________ therefor in cash, certified check or bank draft and requests that a certificate evidencing the Shares be delivered to, ____________________________, the address for whom is set forth below the signature of the undersigned: Dated: ____________________ -------------------------------------------------- (Signature) -------------------------------------------------- -------------------------------------------------- (Address) ASSIGNMENT FORM (To be signed only upon authorized transfer of Warrant) FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto _____________________________________ the right to purchase shares of Common Stock of Active IQ Technologies, Inc. to which the within Warrant relates and appoints ____________________ attorney, to transfer said right on the books of _________________ with full power of substitution in the premises. Dated: ____________________ -------------------------------------------------- (Signature) -------------------------------------------------- -------------------------------------------------- (Address) 6 -----END PRIVACY-ENHANCED MESSAGE-----