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 Xxxxxxx
OF THE FIRST PART.
- and -
WITS BASIN PRECIOUS MINERALS INC.
of
000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000, XXX
OF THE SECOND PART.
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 XXXXXXX ("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 00 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx, 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 00 Xxxxxxxx Xxxxxx Xxxx, Xxxxx
000, Xxxxxxx, Xxxxxxx, 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.
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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 Xxx Xxxxx;
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 Xxxx Xxxxxxxx (Tau Capital Corp); and WITS and Xxxx
Xxxxxxx (the "Consultants") and releases the Consultants from any duty,
liability, damage, or responsibility arising now or at any time in the
future.
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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.
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(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.
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(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/ Xxxxxx Xxxxxxxx
ARGYLE SECURITIES LIMITED
being duly authorized thereto
SIGNED AT THIS 3rd DAY OF AUGUST 2004.
AS WITNESSES:
1. /s/ Xxxxxx X. Xxxxxx
-----------------------
2. /s/ X. Xxxxx White
---------------------
WITS BASIN PRECIOUS MINERALS INC.
being duly authorized thereto
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