Exhibit 10.1
TRIMARK EXPLORATIONS LTD
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, X0X 0X0
Brownsville Company
00 Xxxx Xxxxxx Xxxxx Xxxx, Xxxx 00,
Xxxxxxxx Xxxx, Xxxxxxx,
X0X 0X0
Attention Xxxx Xxxxxxxxx
Dear Xx Xxxxxxxxx
September 26, 2006
Re: Option agreement between Trimark Explorations Ltd.
acting through and on behalf of it's 100% wholly owned
subsidiary Xxxxxxx Resources Limited ("Trimark" or
"Optionor") and Brownsville Company ("Brownsville" or
"Optionee,").
This option agreement (the "Agreement") sets out the terms
and conditions by which the Optionor, a corporation
incorporated under the laws of the Province of Ontario in
the case of Trimark and under the laws of Tanzania in the
case of Xxxxxxx, agrees to grant to Brownsville, a company
incorporated under the laws of the State of Nevada, the
sole and exclusive right and option to acquire up to a 100%
undivided right, title and interest in and to the Xxxxxxx
Resources Property (the "Option"), ") located in Njombe and
Songea districts, Tanzania and contains approximately 65.32
square miles being latitude 35 degree 00', 34 degrees 47'
west and longitudes 10 degrees 15'' and 10 degrees 27'
south, as described in Schedule A attached hereto (the
"Property").
This Agreement shall replace any previous agreements between
the parties and shall constitute the full agreement between
the parties.
1. THE OPTION
.1. The Optionor hereby grants to Brownsville the sole,
exclusive and irrevocable right and option (Option) to
acquire an undivided 100% right, title and interest in and
to the Property by:
Brownsville making the following cash, share and work
expenditure considerations to be delivered/met over a 36
month period from the signing of the definitive agreement as
more specifically detailed below:
A. Brownsville making, in favor of Trimark, the following
cash payments totaling $100,000.00 US dollars over a 3
year period:
i) $25,000.00 within 45 days of signing this agreement;
ii) an additional $35,000.00 within 2 years of signing of
the definitive agreement;
iii) an additional $40,000.00 within 3 years of signing of
the definitive agreement.
B. Brownsville completing the following cumulative
exploration expenditures on the property totaling
$1,000,000 US over a 36 month period:
i) $100,000.00 in cumulative exploration expenditure
within the first 12 months after signing the definitive
agreement;
ii) $500,000.00 in cumulative exploration expenditures
within 24 months of signing of the definitive agreement;
iii) $1,000,000.00 in cumulative exploration expenditures
within 36 months of signing of the definitive agreement.
C. If 36 months after the date of the definitive
agreement as set out in B above, Brownsville has not
completed exploration expenses of $1,000,000.00, Brownsville
may still earn its 100% interest in the property if
Brownsville issues, in favor of Trimark payments totaling up
to 1,000,000 common shares of Brownsville or cash of up to
$1,000,000.00 us at Brownsville's sole option less the
cumulative explorations expenditures already paid and/or met
on the property. The value of the shares shall be
determined as the average share price of the shares over the
30 business days of trading prior to the 36 month period as
set out herein however shall not be valued at less then
$1.00 per share. In the event such shares are valued at less
then $1.00, Brownsville may still execute this buyout using
cash. The shares shall be subject to restrictions imposed by
any exchange or trading system on which the shares are
traded as well or any other appropriate government or other
appropriate authority. All share certificates issued
pursuant to this definitive agreement shall have a 1 year
hold period from date of issue. For example if Brownsville
has paid $1,000,000.00 in cumulative exploration
expenditures on the property, Brownsville shall not be
required to issue any stock or cash to Trimark to earn its
100% interest in the property. IF however, Brownsville has
spent $500,000.00 in cumulative exploration expenditures
within 36 months, then Brownsville has the sole option of
paying Trimark $500,000.00 us in cash or issue shares in
Brownsville valued at $500,000.00 as determined by the
average share price over the last 30 days of trading or at a
minimum price of $1.00 per share or 500,000 common shares.
D Brownsville further agrees to be responsible for
making, through the offices of Gamaro, all necessary
property payments and taxes to keep and do whatever is
required to keep the property in good standing during
the earn in period. Brownsville shall further agree to
be bound by the terms and conditions of the Underlying
EPL (exploration license MEMC/M.100/86B, Reg.136),
which is attached hereto as schedule B to this
definitive agreement. Trimark shall be responsible for
advising Brownsville what it must do to keep the
property in good standing. The property shall remain in
the name of Gamaro until such time as Brownsville has
earned its 100% interest at which time the property
shall be transferred into the name of Brownsville.
E It is understood that Brownsville will act as operator
during the earn-in phase of the agreement and will be
entitled to charge a management fee of 15% on all
property exploration expenditures and related head
office overhead paid sole out of cumulative exploration
expenditures provided by Brownsville and from revenues
from the operation of the property pursuant to the
terms of this agreement. Xxxxx Xxxxxx shall be a
technical advisor to the board of directors of
Brownsville during the term of the earn in phase of
this agreement and on terms stated in a separate
consulting agreement. Brownsville covenants that it
will at all times conduct its operations on the
property at all times to conform with the mining act of
Tanzania and other applicable legislation.
F. Once Brownsville has earned its 100% interest in the
property, Trimark shall be entitled to a 2% net smelter
royalty which shall be reduced to 1% at the sole option
of Brownsville upon payment to Trimark of
$1,000,000.00. Net smelter Royalty is net sales value
of the product sold less insurance, shipping, refining
charges and any penalties for deleterious substances
contained in the product.
G A management committee consisting of two
representatives of each Company shall be formed upon
acceptance of the terms of this Agreement. Brownsville
shall be responsible for proposal of exploration
programs to the management committee. Brownsville as
funding partner shall be responsible for funding, in
full, any and all exploration programs approved by the
management committee in advance of the commencement of
exploration.
H All payments and expenditure commitments in this
definitive agreement are optional.
2. DEFINITIONS
.1. "Exploration Expenditures" shall mean all expenditures
for the exploration of the Property including but not
limited to, geological mapping, sampling, assaying,
geophysical and geochemical surveys, field support costs,
drilling and mobilization of equipment, metallurgical
sampling, report writing and tenure maintenance.
3. RIGHT OF ENTRY
Provided this Agreement is in good standing,
Brownsville, its servants and agents (persons authorized
by Brownsville) and any assigns, shall have the right of
access to and from the Property and the right to enter
upon, examine all work completed, sample as may be
required to confirm the work completed, explore and
develop the Property and fund the Exploration
Expenditures and undertake such other activities as may
be required to vest its interests hereunder in such a
manner as Brownsville, in its sole discretion, may deem
advisable.
4. REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR
The Optionor represents and warrants to, and covenants
with Brownsville that to the best of its knowledge and
where a party acting reasonably should have known:
4.1 the Property is accurately described in Schedule A,
and is presently in good standing under the
applicable laws of Tanzania;
4.2 there are no encumbrances, royalties or liens of any
kind associated in any way, save as outline in
Schedule C, with the Property;
4.3 the Optionor has the exclusive right to enter into
this Agreement and to dispose of an interest in the
Property in accordance with the terms and conditions
of this Agreement together with the applicable laws
of Tanzania;
4.4 the Optionor is validly subsisting corporation in
Tanzania;
4.5 All applicable regulatory approvals have been
received in respect of the Property;
4.6 there is no adverse claim or challenge against or to
the ownership of the Property, nor is there any
outstanding agreements or options to acquire or
purchase the Property or any portion thereof and no
person, firm or corporation has any proprietary or
possessory interest in the Property other than the
Optionor and as provided for under this Agreement;
4.7 there are no reclamation or rehabilitation
requirements outstanding on the Property of which
Brownsville has not or will not be advised and all
work has been carried out in accordance with all
applicable laws of the federal mining law of
Tanzania;
4.8 The Optionor is not aware of any material fact or
circumstance which has not been disclosed to
Brownsville which should be disclosed in order to
prevent the representations and warranties of the
Optionor provided in this Agreement from being
misleading; and
4.9 the Optionor has, or will throughout the term of
this agreement, advised Brownsville of all of the
material information about the Property generally
and specifically as to its mineral potential.
The representations and warranties of the Optionor herein
before set out are conditions on which Brownsville has
relied in entering into this Agreement and will survive the
acquisition of any interest in the Property by Brownsville
and/or the termination of this Agreement. The Optionor
hereby indemnifies and saves Brownsville harmless from all
loss, damage, costs, actions and suits arising out of or in
connection with any breach of any representation, warranty,
covenant, agreement or condition made by the Optionor, that
the Optionor had knowledge of, or acting reasonably should
have had knowledge of and contained in this agreement
5. REPRESENTATIONS AND WARRANTIES OF BROWNSVILLE
Brownsville represents and warrants to the Optionor
that:
.1. it is properly constituted and has the full power and
authority to enter into this Agreement; and
.2. there are no outstanding suits or actions for non-
performance on reclamation work or any other activities with
respect to Brownsville.
6. COVENANTS OF BROWNSVILLE
Brownsville covenants and agrees with the Optionor that
until the Option is exercised in accordance with the
terms and conditions of this Agreement, or the Option or
this Agreement otherwise terminates, Brownsville shall:
..1. keep the Property free and clear of liens and other
charges arising from the operations of Brownsville under
this Agreement;
..2. carry on all operations on the Property in a good and
miner-like manner and in compliance with all applicable
governmental regulations and restrictions;
..3. pay or cause to be paid any rates, taxes, duties,
royalties, assessments or fees levied with respect to the
Property or Brownsville's operations thereon in accordance
with this agreement;
..4. indemnify and hold the Optionor harmless from any and
all liabilities, costs, damages or charges arising from the
failure of Brownsville to comply with the covenants of
Brownsville contained herein or otherwise arising from the
operations on the Property by Brownsville, its servants or
agents; and
..5. provide the Optionor with copies of any and all
documents filed by Brownsville for recording of it's
interest with respect to the Property and any related
regulatory filings.
7. COVENANTS OF THE OPTIONOR
.1 To advise Brownsville as required of its obligations
relating to keeping the property in good standing as
set out above; and
.2 indemnify and hold Brownsville harmless from any and
all liabilities, costs, damages or charges arising from
the failure of the Optionor to comply with the
covenants of the Optionor contained herein or otherwise
arising from the operations on the Property by the
Optionor, its servants or agents.
8. TERMINATION
.1. Brownsville may terminate this Agreement at any time,
by giving written notice to the Optionor of the termination
of this Agreement (the "Notice of Termination") and such
termination shall be effective on the 15th day after the
Notice of Termination is sent to the Optionor.
.2. Notwithstanding Paragraph 8.1 above, if Brownsville
fails to make any payment (optional, discretionary or
otherwise) or fails to do anything on or before the last day
provided for such payment or performance under this
Agreement (in each or either case referred to as a "default"),
the Optionor may terminate this Agreement but only if:
..1. The Optionor has first given Brownsville written notice
of the default containing particulars of the payment which
Brownsville has not made or the act which Brownsville has
not performed; and
..2. Brownsville has not, within 30 days following delivery
of such notice, cured such default by appropriate payment or
performance (Brownsville hereby agreeing that should it so
commence to cure any default, they will prosecute the same
to completion without undue delay).
..3. Should Brownsville fail to comply with the provisions
of Sub-paragraph 8.2 above, the Optionor may thereafter
terminate this Agreement by notice to Brownsville with
respect to the default on the Property as laid out in Sub-
paragraph 8.2.
..4. Upon the termination of the Agreement, Brownsville
forfeits any and all interest in the Property and shall
cease to be liable to the Optionor in debt, damages or
otherwise. Upon the termination of this Agreement,
Brownsville shall vacate the Property within a reasonable
time after such termination, but shall have the right of
access to such Property for a period of three months
thereafter for the purpose of removing its chattels,
machinery, equipment and fixtures there from.
9. INDEPENDENT ACTIVITIES
Except as expressly provided herein, both parties shall
have the free and unrestricted right to independently
engage in and receive the full benefit of any and all
business endeavours of any sort whatsoever, whether or
not competitive with the endeavours contemplated herein
without consulting the others or inviting or allowing
the others to participate therein. Neither party shall
be under any fiduciary or other duty to the other, which
will prevent them from engaging in, or enjoying the
benefits of competing endeavours within the general
scope of the endeavours contemplated herein. The legal
doctrines of "corporate opportunity" sometimes applied
to persons engaged in a joint venture or having
fiduciary status shall not apply in the case of any of
either of the parties. In particular, without limiting
the foregoing, neither of the parties shall have an
obligation to the other party as to:
..1. any opportunity to acquire, explore and develop any
mining property, interest or right presently owned by them
or offered to them outside of the Property at any time; and
..2. the erection of any mining plant, mill, smelter or
refinery, whether or not such mining plant, mill, smelter or
refinery is erected for processing ores or concentrates from
the Property.
10. CONFIDENTIALITY OF INFORMATION
Both parties hereto shall treat all data, reports,
records and other information relating to this agreement
and the Property as confidential. While this agreement
is in effect, neither of the parties hereto shall,
without the express written consent of the other,
disclose to any third party any information concerning
the results of the operations hereunder nor issue any
press releases concerning this agreement or its
exploration operations except where:
.1. such disclosure is mandatory under the law or is deemed
necessary by Brownsville's or the Optionor's counsel for the
satisfaction by Brownsville or the Optionor of their
obligations to applicable securities regulatory bodies; or
.2. Brownsville or the Optionor is seeking the
participation of such third party in the exploration,
development or production or financing of the Property and
such information is divulged under confidential
circumstances.
Due consideration shall be given to present and future
governmental regulations with respect to such data
disclosures. The parties shall provide to each other,
with minimum 24 hour notice where possible, draft
planned press releases for comment.
11. ASSIGNMENT
.1. Each of the parties has the right to assign all or any
part of their interest in the Property and in this
agreement. It shall be a condition precedent to any such
assignment that the assignee of the interest being
transferred agree in writing to be bound by the terms of
this agreement, as if it had been an original party hereto.
.2. Brownsville shall have a 30 day first right of refusal
on any sale or transfer of the Optionor' rights title or
interest in the Property or any royalty from the Property.
12. UNAVOIDABLE DELAYS
If either party should be delayed in or prevented from
performing any of the terms, covenants or conditions of
this Agreement by reason of a cause beyond the control
of such parties, including fires, floods, earthquakes,
subsidence, ground collapse or landslides, interruptions
or delays in transportation or power supplies, strikes,
lockouts, wars, acts of God, government regulation or
interference, including but without restricting the
generality of the foregoing, forest or highway closures
or any other cause beyond such parties' control, then
any such failure on the part of such parties to so
perform shall not be deemed to be a breach of this
agreement and the time within which such parties are
obliged to comply with any such term, covenant or
condition of this agreement shall be extended by the
total period of all such delays. In order that the
provisions of this article may become operative, such
party shall give notice in writing to the other party,
forthwith and for each new cause of delay or prevention
and shall set out in such notice particulars of the
cause thereof and the day upon which the same arose, and
shall give like notice forthwith following the date that
such cause ceased to subsist.
If Notice under this clause is provided the Optionor
shall also provide Notice to the Government of Tanzania
and make reasonable commercial efforts to have
provisions made for additional time with respect to
completion of work requirements and payment of mineral
taxes and associated deadlines. However, there is no
assurance that theses efforts will be successful and if
not the requirement for maintaining claims in good
standing shall be waived if necessary.
13. ARBITRATION
If there is any disagreement dispute or controversy (a
"Dispute") between the parties with respect to any
matter arising under this agreement or the construction
hereof, then the Dispute may be determined by
arbitration in accordance with the following procedures
or may be determined in accordance with a court of
competent jurisdiction in Ontario:
.1. The parties on both sides of the Dispute shall inform
the other parties by notice of the name of an appointed
independent person as Arbitrator, who is a recognized expert
in the area which is the subject matter of the Dispute; and
.2. The appointed Arbitrators shall agree on the name of
the one person that they wish to act as the third
Arbitrator. If the two Arbitrators can not agree within 30
days of their appointment on a third Arbitrators they may
apply to the Ontario Court General Division for guidance by
the court on the selection a third Arbitrator.
The arbitration shall be conducted in accordance with
the Arbitrations Act (Ontario ) and the decision of the
arbitrator panel shall be made within 30 days following
their being named, shall be based exclusively on the
advancement of exploration, development and production
work on the Property and not on the financial
circumstances of the parties. The costs of arbitration
shall be borne equally by the parties to the Dispute
unless otherwise determined by the arbitrator in the
award.
14. NOTICES
Any notice, election, consent or other writing required
or permitted to be given hereunder shall be deemed to be
sufficiently given if delivered by courier or if mailed
by registered mail, addressed as follows:
In the case of Trimark
C/o the President
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, X0X 0X0
Facsimile:
In the case of Brownsville Company:
C/o Xxxx Xxxxxxxxx, President Brownsville Company
00 Xxxx Xxxxxx Xxxxx Xxxx, Xxxx 00,
Xxxxxxxx Xxxx, Xxxxxxx,
X0X 0X0
Facsimile:
And any such notice given as aforesaid shall be deemed
to have been given to the parties hereto if delivered,
when delivered, or if mailed, on the tenth (10th)
business day following the date of mailing, or, if
telegraphed or faxed, on the next succeeding day
following the telegraphing or faxing thereof PROVIDED
HOWEVER that during the period of any postal
interruption in either the country of mailing or the
country of delivery, any notice given hereunder by mail
or if mailed by registered mail shall be deemed to have
been given only as of the date of actual delivery of the
same. Either party may from time to time by notice in
writing change its address for the purpose of this
paragraph.
15. GENERAL TERMS AND CONDITIONS
..1. The parties hereto hereby covenant and agree that they
will execute such further agreements, conveyances and
assurances as may be requisite, or which counsel for the
parties may deem necessary to effectually carry out the
intent of is agreement.
..2. This Agreement shall represent the entire understanding
between the parties with respect to the Property. No
representations or inducements have been made save as herein
set forth. No changes, alterations, or modifications of this
agreement shall be binding upon all parties until and unless
a memorandum in writing to such effect shall have been
signed by both parties hereto.
..3. The titles to the articles to this agreement shall not
be deemed to form part of this agreement but shall be
regarded as having been used for convenience of reference
only.
..4. The schedules to this agreement shall be construed with
and as an integral part of this agreement to the same extent
as if they were set forth verbatim herein.
..5. All reference to dollar amounts contained in this
agreement are references to United States funds.
..6. This Agreement shall be governed by and interpreted in
accordance with the laws in effect in Ontario, and the
parties hereto attorn to the courts of Ontario for the
resolution of any disputes arising out of this agreement.
..7. The Agreement may be executed in any number of
counterparts. Each counterpart shall be deemed for all
purposes to be an original, and all such counter-parts shall
constitute one and the same instrument, binding on all of
the parties hereto. A copy of this Agreement signed by one
party and faxed to another party shall be deemed to have
been executed and delivered by the signing party as though
an original. A photocopy of this Agreement shall be
effective as an original for all purposes.
..8. This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective
successors and assigns.
..9. The parties will each be responsible for their own
internal costs and legal and other professional fees
incurred in connection herewith, the negotiation,
preparation and execution of this Definitive Agreement, or
otherwise relating to the Proposed Transaction.
If the foregoing correctly sets forth your understanding of
the terms and conditions agreed to between us with respect
to the Option granted to Brownsville please acknowledge
the same by signing and returning to us the duplicate copy
of this letter enclosed for that purpose, whereupon a
binding agreement among us will be in effect.
TRIMARK EXPLORATIONS LTD
Per: /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
President and Director
XXXXXXX RESOURCES LIMITED (formerly Trimark Explorations (T)
Limited-Tanzania)
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
President and Director ASO
The Undersigned, Brownsville, hereby confirm our acceptance
of the foregoing terms and conditions and agree to be bound
thereby as of this 13th day of October 2006.
Brownsville Company
Per: /s/ Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxx,
President and Director
SCHEDULE A
Claim Schedule and Map
SCHEDULE B
Exploration license
SCHEDULE C
ENCUMBRANCES (to include any and all underlying agreements
and amendments)
The encumbrances of the claims are:
SCHEDULE D
Letter of Intent dated June 16, 2006
