WITS BASIN PRECIOUS MINERALS INC
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>v05304_ex10-1.txt
<TEXT>
                                                                    EXHIBIT 10.1



                                   AGREEMENT




                THIS AGREEMENT made as of the 19th day of July,




                                    BETWEEN:

                           ARGYLE SECURITIES LIMITED

                                       of

           Trust House 112, Bonadie Street, Kingstown, Saint Vincent


                               OF THE FIRST PART.


                                    - and -



                       WITS BASIN PRECIOUS MINERALS INC.



                                       of

          520 Marquette Avenue, Suite 900, Minneapolis, MN 55402, USA



                              OF THE SECOND PART.

<PAGE>

      THIS AGREEMENT is made and entered into this 19th day of July 2004,
      ("Effective Date") by and between ARGYLE SECURITIES LIMITED, A CORPORATION
      ORGANIZED UNDER THE LAWS OF SAINT VINCENT ("ARGYLE"), and WITS BASIN
      PRECIOUS MINERALS INC, A MINNESOTA CORPORATION ("WITS");


      WHEREAS, ARGYLE and WITS entered into a Quota Purchase Agreement on the
      6th Day of February 2004, a copy of which attached hereto and marked
      Schedule "A" (the "QP Agreement"); and

      WHEREAS, WITS and ARGYLE intend to terminate the QP Agreement and replace
      same with those terms and conditions hereinafter set forth;

      NOW, THEREFORE, in consideration of the mutual covenants and agreements
      contained in this Agreement and in order to consummate a transaction
      desirous of both parties, it is hereby agreed as follows:

      1. BRAZMIN LTDA. QUOTAS:

      Subject to the terms and conditions hereinafter set forth, at the closing
      of the transaction contemplated hereby, WITS shall sell, convey, transfer,
      and deliver to ARGYLE, certificates representing 9,999 (nine thousand,
      nine hundred and ninety-nine) Quotas in the issued Quotas of the capital
      of BRAZMIN LTDA, (the "Company"), a limited liability company incorporated
      in the City of Rio de Janeiro, Brazil, which Company has issued Quotas of
      10,000 Quotas of R1.00 (1 real) per Quota; and AGYLE shall purchase from
      WITS such Quotas in consideration of the purchase price of US$1.00,
      payment of which is hereby acknowledged. The certificates representing the
      Company's Quotas, should certificates exist, shall be duly endorsed for
      transfer or accompanied by appropriate Quotas transfer powers duly
      executed in blank, and shall have all the necessary documentary transfer
      tax stamps affixed thereto, if any. In the absence of such certificates
      being in existence the parties agree that this clause will give legal
      effect to such sale, conveyance, transfer, and delivery. The closing of
      the transactions contemplated by this Agreement ("Closing"), shall be held
      at 25 Sheppard Avenue West, Suite 710, Toronto, Ontario, on or as close to
      the Effective Date as is possible or such other place, date and time as
      the parties hereto may otherwise agree.


      2. WITS SHARES:

      Subject to the terms and conditions hereinafter set forth, at the closing
      of the transaction contemplated hereby, ARGYLE shall sell, convey,
      transfer, and deliver to WITS, certificates representing 400,000
      restricted common shares of WITS ("WITM Shares") in consideration of the
      transfer of Quotas set forth in Paragraph 1 above. The certificates
      representing the WITM Shares shall be duly endorsed for transfer or
      accompanied by appropriate share transfer powers duly executed in blank,
      and shall have all the necessary documentary transfer tax stamps affixed
      thereto, if any. The closing of the transactions contemplated by this
      Agreement ("Closing"), shall be held at 25 Sheppard Avenue West, Suite
      710, Toronto, Ontario, on or as close to the Effective Date as is possible
      or such other place, date and time as the parties hereto may otherwise
      agree.

                                       2
<PAGE>

      WITS hereby acknowledges that ARGYLE will retain ownership of 300,000
      restricted common shares of WITS. WITS agrees to use its best efforts to
      have the 300,000 abovementioned WITM Shares registered for resale under
      the United States Securities Act of 1933, as amended (the "Securities
      Act") as soon as is practical. WITS acknowledges that, following the
      registration of the 300,000 WITM Shares, ARGYLE will be free to transfer
      the WITM Shares as contemplated by such registration.

      To give effect to the above, on signature, ARGYLE shall return WITM Share
      Certificate Number 2136 in the amount of 700,000 shares to WITS and WITS
      will immediately issue and forward to ARGYLE a new WITS share certificate
      in the amount of 300,000 shares.

      WITS hereby agrees that ARGYLE will retain ownership of the 5-year warrant
      to purchase 150,000 common shares in WITS granted to ARGYLE pursuant to
      the QP Agreement.


      3. CASH PAYMENTS AND CARRIED INTEREST

      As total consideration for the purchase and sale of the Quotas, pursuant
      to this Agreement, ARGYLE shall pay or grant to WITS, the following:

            (i)   US$25,000.00 cash within 10 days of Effective Date; and

            (ii)  US$25,000.00 cash by no later than December 31, 2004; and

            (iii) US$100,000.00 cash, only in the event that the Company
                  commences a pre-feasibility study on any of the Rio Maria;
                  Campo Grande; Sao Juliao; and/or Serrita projects (such
                  projects being the only projects owned by the Company at
                  Effective Date, hereinafter being referred to as the
                  "Projects" and itemised in the "List of Claims" attached
                  hereto and marked Schedule "B"); and

            (iv)  US$100,000.00 cash only in the event that the Company
                  commences a bankable feasibility study on any of the Projects;
                  and

            (v)   10% carried interest of the Company's interest in any of the
                  Projects up until completion of a bankable feasibility should
                  same occur; and

            (vi)  10% of any proceeds obtained by the Company for the sale or
                  part sale of any of the Projects.

      4. OPTION PAYMENTS

      ARGYLE agrees to take over WITS obligations in terms of option payments
      payable on the Projects after the Effective Date, hereby releasing WITS of
      any obligations regarding the payment of such option payments after
      Effective Date. WITS hereby confirm it will pay any options payments on
      the Projects or any other obligations outstanding as at Effective Date.

      5. CONSULTING AGREEMENTS

      WITS agrees to terminate any consulting agreements in existence, if any
      between WITS and Alan Friedman (Tau Capital Corp); and WITS and Luis
      Azevedo (the "Consultants") and releases the Consultants from any duty,
      liability, damage, or responsibility arising now or at any time in the
      future.

                                       3
<PAGE>

      Notwithstanding such termination, WITS agrees to the payment of any
      outstanding consulting fees and disbursements due for the month of June
      2004.

      WITS further agrees that the ownership of the Options issued by WITS to
      the Consultants pursuant to the WITS 2001 Employee Stock Option Plan will
      be retained by the Consultants and that full ownership has been vested.



      6. REPRESENTATIONS AND WARRANTIES

            WITS hereby warrants and represents:


            (i)   Company is a company duly organized, validly existing and in
                  good standing under the laws of Brazil and has the corporate
                  power and authority to carry on its business as it is now
                  being conducted.

            (ii)  WITS is not a party to any agreement, written or oral,
                  creating rights in respect to the Company's Quotas in any
                  third person or relating to the voting of the Company's
                  Quotas, other than what has been disclosed.

            (iii) WITS is the lawful owner of the Quotas, free and clear of all
                  security interests, liens, encumbrances, equities and other
                  charges, other than what has been disclosed.

            (iv)  Neither the Company nor WITS has any existing warrants,
                  options, Quotas purchase agreements, redemption agreements,
                  restrictions of any nature, calls or rights to subscribe of
                  any character relating to the Quotas, nor are there any
                  securities convertible into such Quotas, other than what has
                  been disclosed.

            (v)   WITS warrants that the 300,000 WITS shares as described in
                  Paragraph 2 above will be freely trading by no later than
                  February 10, 2005.

            (vi)  The Company is the lawful owner of the Projects, free and
                  clear of all security interests, liens, encumbrances, equities
                  and other charges, other than what has been disclosed.

            (vii) WITS have received the prerequisite number of board members
                  signatures to consummate this transaction.

            ARGYLE hereby warrants and represents:

            (i)   ARGYLE is not a party to any agreement, written or oral,
                  creating rights in respect to the 400,000 WITM Shares
                  described in Paragraph 2 above, in any third person or
                  relating to the voting of the WITM Shares.

                                       4
<PAGE>

            (ii)  ARGYLE has the authority to transfer 400,000 WITM Shares
                  described in Paragraph 2 above, free and clear of all security
                  interests, liens, encumbrances, equities and other charges.


      7. INDEMNIFICATION:


      The parties shall indemnify, defend and hold harmless each other and their
      directors, officers, employees, agents, consultants, representatives,
      successors, transferees and assigns (individually a "Indemnified Party";
      and collectively, the "Indemnified Parties"), promptly upon demand, at any
      time and from time to time, from, against, and in respect of any and all
      demands, claims, losses, damages, judgments, liabilities, assessments,
      suits, actions, proceedings, interest, penalties, and expenses (including,
      without limitation, legal expenses for investigating or defending any
      actions or threatened actions or for enforcing such rights of indemnity
      and defense) incurred or suffered by each of the Indemnified Parties, in
      connection with, arising out of or as a result of each and all of the
      following:

            (i)   any breach of any representation or warranty made by the
                  parties in this Agreement or in any other document or
                  instrument delivered by one party to the other or entered into
                  as part of the transactions contemplated by this Agreement;

            (ii)  the material breach of any covenant, agreement or obligation
                  of a party contained in this Agreement or any other document
                  or instrument delivered by one party to another or entered
                  into as part of the transactions contemplated by this
                  Agreement; and

            (iii) any and all liabilities and obligations arising from ownership
                  of the Quotas or WITM Shares or operation of the Company after
                  the Closing.


      8. SURVIVAL.

      The representations and warranties contained in this Agreement shall
      survive the Closing for a period of one (1) year.


      9. GENERAL PROVISIONS


      (A) ENTIRE AGREEMENT.

      This Agreement constitutes the entire Agreement and supersedes all prior
      agreements and understandings, oral and written, between the parties
      hereto with respect to the subject matter hereof. Notwithstanding, this
      Agreement shall be read in conjunction with the QP Agreement. In so far as
      the provisions of this Agreement is in conflict with those of the QP
      Agreement, the provisions of this Agreement will take precedent.

                                       5
<PAGE>

      (B) SECTIONS AND OTHER HEADINGS.

      The section and other headings contained in this Agreement are for
      reference purposes only and shall not affect the meaning or interpretation
      of this Agreement.

      (C) SEVERABILITY.

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

      (D) GOVERNING LAW.

      This agreement, and all transactions contemplated hereby, shall be
      governed by, construed and enforced in accordance with the laws of
      Ontario. The parties herein agree to submit to the jurisdiction and venue
      of a court of subject matter jurisdiction located in Ontario, Canada. In
      the event that litigation results from or arises out of this Agreement or
      the performance thereof, the parties agree to reimburse the prevailing
      party's reasonable attorney's fees, court costs, and all other expenses,
      whether or not taxable by the court as costs, in addition to any other
      relief to which the prevailing party may be entitled.

SIGNED AT                             THIS 3rd DAY OF AUGUST 2004.

AS WITNESSES:

1.


2.

/s/ Warren Newfield

ARGYLE SECURITIES LIMITED

being duly authorized thereto

SIGNED AT                       THIS 3rd DAY OF AUGUST 2004.

AS WITNESSES:

1. /s/ Walter E. Brooks
-----------------------

2. /s/ H. Vance White
---------------------

WITS BASIN PRECIOUS MINERALS INC.

being duly authorized thereto

                                       6

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