Exhibit 10.1 Material Definitive Agreement

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Exhibit 10.1

THIS AGREEMENT is dated for reference this 12th day of October, 2010

BETWEEN:

EAGLE TRAIL PROPERTIES INC., a company incorporated

under the laws of Saskatchewan, having an office at 1140

Rose Street, Regina, Saskatchewan, Canada

 

(“Eagle Trail”)

 

AND:

GUINNESS EXPLORATION, INC., a company incorporated

under the laws of the state of Washington, U.S.A., having an office at

P.O. Box 1910 – Level 7 Anzac House 181 Willis Street, Wellington,

New Zealand 6140

(“Guinness”)

A.       As of November 19, 2009, Eagle Trail was the legal and beneficial owner of 175 full or fractional mineral claims/leases located in the Mt. Nansen area of the Whitehorse Mining District of the Yukon Territory, Canada, (the “Mineral Claims”).

B.        Pursuant to an Option Agreement dated November 7, 2008 (the “Dome Option”) between Eagle Trail as optionee and Pricewaterhousecoopers Inc. as optionor, Eagle Trail has the option to purchase the mineral claim identified as Dome 12:73698 located in the Mt. Nansen area of the Whitehorse Mining District of the Yukon Territory (the “Dome Claim”).

C.        Pursuant to a Mineral Claims Purchase and Sale Agreement dated November 19, 2009, (the “Purchase and Sale Agreement”) Guinness purchased an undivided 65% interest in the Mineral Claims and the Dome Option upon the fulfillment of certain stated conditions, and subject to an NSR of 3% reserved by Eagle Trail (the “Initial Interest”), through its subsidiary, Nantawa Resources Inc. (“Nantawa”).

D.        As consideration for the purchase of the Initial Interest, Guinness issued 60,000,000 restricted shares in its capital to Eagle Trail at a deemed price of $0.00103 per share (the “Share Consideration”) and was required to pay $500,000 CAD by May 30, 2010 and a further $500,000 CAD by November 30, 2010.

E.         Pursuant to a Mineral Claim Option Agreement dated November 19, 2010, (the “Option Agreement”) Eagle Trail granted an option to Guinness  to acquire a further 35% undivided interest in the Mineral Claims and the Dome Option, subject to an NSR of 3% reserved by Eagle Trail (the “Optioned Interest”).

 

 

F.         As consideration for the purchase of the Optioned Interest, Guinness paid $1,000 CAD to Eagle Trail and is required to expend a minimum of $1,000,000 CAD by October 31, 2010 and a further $1,000,000 CAD by October 31, 2011 in exploration expenditures, and to keep the Mineral Claims and the Dome Claim in good standing.

G.        Pursuant to an Amendment Agreement dated February 4, 2010, the parties agreed to amend the Purchase and Sale Agreement and the Option Agreement to provide, inter alia, that the cash portion of the purchase price for the Initial Interest could be paid in USD, resulting in two payments of $471,934 USD (rather than two payments of $500,000 CAD) after exchange rate conversion.

H.        Following execution of the Purchase and Sale Agreement and the Option Agreement, certain of the Mineral Claims as set out in attached in Schedule “A” hereto, lapsed (the “TAWA Claims”) and could not longer form part of the transactions between the parties.

I.          Guinness does not have sufficient funds to pay the $471,934 USD. due on November 30, 2010, as required by the terms of the Purchase and Sale Agreement and does not anticipate under current market conditions that it could raise funds and is, as such, at risk of forfeiting its rights under the Purchase and Sale Agreement.

J.          Guinness has to date made exploration expenditures of approximately $894,000 CAD toward its obligations under the Option Agreement and does not have sufficient funds to make further exploration expenditures of approximately $106,000 CAD due by October 31, 2011, as required by the terms of the Option Agreement and does not anticipate under current market conditions that it could raise these funds and is, as such, at risk of forfeiting its rights under the Option Agreement.

K.         The parties have agreed to modify the Purchase and Sale Agreement and the Option Agreement, as amended, and to allocate and vest interests in the remaining Mineral Claims between them, on the terms and conditions contained herein.

NOW THEREFORE in consideration of the sum of $1.00 paid by each party, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each party, the parties covenant and agree as follows:

1.	Interpretation

1.1           Definitions. All terms used in this Agreement not specifically defined herein, shall have the same meaning as defined in the Purchase and Sale Agreement and the Option Agreement.

 

 

 

1.2           Headings.  The division of this Agreement into sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.  The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, section or other portion hereof and includes any variation or amendment hereto from time to time and any agreement supplemental hereto.  Unless something in the subject matter or context is inconsistent therewith, references herein to Articles and Sections are to Articles and Sections of this Agreement.

1.3           Legislation.  Any reference to a provision in any legislation is a reference to that provision as now enacted, and as amended, re-enacted or replaced from time to time, and in the event of such amendment, re-enactment or replacement any reference to that provision shall be read as referring to such amended, re-enacted or replaced provision.

1.4           Extended Meanings.  In this Agreement words importing the singular number only shall include the plural and vice versa, words importing the masculine gender shall include the feminine and neuter genders and vice versa and words importing persons shall include individuals, partnerships, associations, trusts, unincorporated organizations and corporations. All references to mineral claims shall include map designated units.

1.5           Currency.  All references to currency herein are to lawful money of Canada, unless otherwise specified.

1.6           Non-Merger. The provisions contained in this Agreement shall survive the completion of the transactions contemplated by this Agreement and shall not merge in any conveyance, transfer, assignment, novation agreement or other document or instrument delivered pursuant hereto or in connection herewith.

1.7           Construction Clause. This Agreement has been negotiated and approved by counsel on behalf of all parties hereto and, notwithstanding any rule or maxim of construction to the contrary, any ambiguity or uncertainty will not be construed against any party hereto by reason of the authorship of any of the provisions hereof.

1.8           No partnership Nothing contained in this Agreement shall be construed as creating a partnership of any kind or as imposing on any party any partnership duty, obligation or liability to any other party.

 

 

2.1           Representations and Warranties of Eagle Trail.  Eagle Trail represents and warrants to Guinness that:

 

(a)

it has a business address at the address set forth beside its name on the first page of this Agreement;

 

 

 

(b)

it is a corporation duly subsisting under the laws of Saskatchewan with the corporate power to own its assets and to carry on its business in the jurisdiction in which the Property is located;

 

(c)

it has good and sufficient authority to enter into and deliver this Agreement;

 

(d)

the execution, delivery and performance of this Agreement by Eagle Trail, and the consummation of the transactions herein contemplated will not (i) violate or conflict with any term or provision of any of the articles, by-laws or other constating documents of Eagle Trail; (ii) violate or conflict with any term or provision of any order of any court, Government or Regulatory Authority or any law or regulation of any jurisdiction in which Eagle Trail’s business is carried on; or (iii) conflict with, accelerate the performance required by or result in the breach of any agreement to which it is a party or by which it is currently bound; and

 

(e)

this Agreement has been duly authorized, executed and delivered by Eagle Trail and constitutes a valid and binding obligation of Eagle Trail enforceable against Eagle Trail in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and except as limited by the application of equitable principles when equitable remedies are sought.

2.2           Representations and Warranties of Guinness.  Guinness represents and warrants to Eagle Trail that:

 

(a)

it has a business address at the address set forth beside its name on the first page of this Agreement.

 

(b)

it is a corporation duly incorporated, organized and subsisting under the laws of the state of Nevada with the corporate power to own its assets and to carry on its business in the jurisdiction in which the Mineral Claims and the Dome Claim are located;

(c)

Nantawa is a wholly owned subsidiary of Guinness and holds title to Guinness’ interest in the Mineral Claims as trustee for Guinness;

(d)

The facts contained in Recitals I and J herein are true;

 

(e)

it has all necessary power and authority to own or lease its assets and carry on its business as presently carried on, to carry out its obligations herein and to enter into this Agreement and any agreement or instrument referred to in or contemplated by this Agreement and to do all such acts and things as are required to be done, observed or performed by it, in accordance with the terms of this Agreement and any agreement or instrument referred to in or contemplated by this Agreement;

 

(f)

the execution, delivery and performance of this Agreement by Guinness, and the consummation of the transactions herein contemplated will not (i) violate or conflict with any term or provision of any of the articles, by-laws or other constating documents of Guinness; (ii) violate or conflict with any term or provision of any order of any court, Government or Regulatory Authority or any law or regulation of any jurisdiction in which Guinness’ business is carried on; or (iii) conflict with, accelerate the performance required by or result in the breach of any agreement to which it is a party or by which it is currently bound; and

 

 

 

 

(g)

this Agreement has been duly authorized, executed and delivered by Guinness and constitutes a valid and binding obligation of Guinness enforceable against Guinness in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and except as limited by the application of equitable principles when equitable remedies are sought.

2.3           Reliance and Survival.  The representations, warranties and acknowledgments set out in this Section 2 have been relied on by the parties in entering into this Agreement.  All representations and warranties made herein will survive the delivery of this Agreement to the parties and the completion of the transactions contemplated hereby and, notwithstanding such completion, will continue in full force and effect for the benefit of the parties to whom they are provided, as the case may be, indefinitely.

3.	Mineral Claims

3.1           TAWA Claims Excluded.  The parties acknowledge and agree that in consideration of the compensation payable to Guinness pursuant to paragraph 3.2, the Schedule of Mineral Claims shall be modified to not include the TAWA claims and shall henceforth and herein comprise only those claims set out in Schedule “B” attached hereto.

3.2           TAWA Claims Compensation. As partial consideration of the removal of the TAWA claims from the Schedule of Mineral Claims, Eagle Trail shall return to the treasury of Guinness, for cancellation, 5,000,000 shares of the Share Consideration.

3.3           Release.   Subject to payment of the compensation pursuant to paragraph 3.2, Guinness, on behalf of itself, and its agents, directors, officers, employees, successors, subrogees and  assigns does hereby remise, release and forever discharge Eagle Trail, its agents, directors, officers, employees, successors, subrogees and  assigns of and from any claims, causes of action, damages, demands, interest, expenses, costs and compensation of any nature or kind whatsoever that Guinness now has, or at any time hereafter can, shall, or may have, for or by reason of or arising out of the lapse or loss of the TAWA Claims.

3.4           No Acknowledgment of Liability. Guinness acknowledges that this is a compromise settlement of a disputed claim and that nothing contained herein shall be deemed or construed to be an admission of liability by Eagle Trail.

4.	Earned and Retained Interests

4.1           Earned Interest of Guinness.  Notwithstanding anything to the contrary contained in the Purchase and Sale Agreement and the Option Agreement, and without payment of further consideration, the Parties hereto do hereby agree that in consideration of all amounts paid by Guinness to Eagle Trail to date, including the issuance of the Share Consideration, the partial payment of the cash consideration, the exploration work undertaken on the Mineral Claims and the removal of the TAWA Claims, Guinness shall be deemed to have earned and shall hereby be vested with an undivided 49% interest in and to the Mineral Claims and the Dome Option, su bject to the NSR of 3% retained by Eagle Trail.

 

 

 

4.2           Retained Interest of Eagle Trail. Notwithstanding anything to the contrary contained in the Purchase and Sale Agreement and the Option Agreement, Eagle Trail shall be deemed to retain and shall hereby be vested with an undivided 51% interest in and to the Mineral Claims and the Dome Option.

4.3           Assignment. Guinness shall not be entitled to assign its interests in the Mineral Claims or the Dome Option without the prior written consent of Eagle Trail provided that it may assign all of its interest (but not less than all) in the Mineral Claims to its wholly owned subsidiary, Nantawa Resources Inc., provided that Nantawa provides written its agreement to Eagle Trail of its intention to be bound by the term  of this Agreement.

4.4           Titles and Transfers. Title to the Mineral Claims shall be recorded in accordance with the respective interest of the parties. Within 30 days following the execution of this Agreement, Guinness shall register appropriate transfers at the Office of the Yukon Mining Recorder, to record the earned and retained interests in the Mineral Claims here provided.

5.	Maintenance of Mineral Claims

5.1           Payment of Charges. Until the sale of the Mineral Claims as contemplated by paragraph 6.1 or the formation of a joint venture as contemplated by paragraph 6.2, the parties shall pay all costs, taxes and assessments required to keep the Mineral Claims in good standing, in accordance with their respective interests.

5.2           Administrator. Guinness shall undertake the duties of administrator to ensure that the Mineral Claims remain in good standing and shall render an accounting to Eagle Trail at least 60 days before due, of all amounts payable by each party to keep the Mineral Claims in good standing and shall remit such payments on its own behalf and, upon receipt of funds from Eagle Trail, on behalf of Eagle Trail.

6.	Joint Marketing and Sale or Joint Venture

6.1           Joint Marketing and Sale. The parties shall use their best efforts to jointly market and sell their respective interests in the Mineral Claims and the Dome Option.

6.2           Joint Venture.  In the event the parties are unable to jointly sell their respective interests in the Mineral Claims and the Dome Option, within 120 days from the date of this Agreement, the interests of the parties in the Mineral Claims and the Dome Option will be governed by a Joint Venture Agreement,  the terms of which the parties will negotiate in good faith and enter into within 180 days following the date of this Agreement.

7.	Continuing Effect

7.1           Continuing Effect. This Agreement as and from the date hereof will be read and construed along with the Purchase and Sale Agreement and the Option Agreement and treated as a part thereof; and the Purchase and Sale  Agreement and Option Agreement, as hereby modified and extended, will continue to be of full force and effect; and the parties confirm and ratify the Purchase and Sale Agreement and the Option Agreement as hereby modified and extended.

 

8.1           Public Announcements.  Guinness  shall not, without the prior consent of Eagle Trail, make any disclosure regarding (i) the existence, purpose, scope, content, terms or conditions of this Agreement or other agreements relating thereto or (ii) the Mineral Claims and the Dome Option except to the extent such disclosure comprises information substantially already publicly available or unless it is necessary for any party to make such disclosure in order to comply with a statutory obligation, the requirements of a competent government or statutory agency, or the requ irements of any stock exchange; provided that, where practicable, a copy of any proposed announcement or statement shall be furnished by Guinness to Eagle Trail in advance of the proposed date of publication, and Eagle Trail shall make every reasonable effort to incorporate the reasonable comments of the other parties prior to dissemination.

 

9.1           Entire Agreement.  This Agreement, including all the Schedules hereto and the Purchase and Sale Agreement and the Option Agreement, as amended, constitutes the entire agreement between the parties pertaining to the subject matter hereof and supersedes any and all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties and there are no warranties, representations or other agreements among the parties in connection with the subject matter hereof except as specifically set forth herein and therein. Each party acknowledges that it shall have no right to rely on any amendment, promise, mod ification, statement or representation made or occurring subsequent to the execution of this Agreement unless it is in writing and executed by each of the parties.

9.2           Arbitration.  If there is a dispute between the parties with respect to this Agreement, or the interpretation of this Agreement, the dispute shall be referred to a single arbitrator appointed pursuant to the laws of Saskatchewan, the arbitration shall be conducted in Saskatchewan, and the decision of the arbitrator shall be final and binding upon the parties.

9.3           Waiver.  The failure of a party in any one or more instances to insist upon strict performance of any of the terms of this Agreement or to exercise any right or privilege arising under it shall not preclude it from requiring by reasonable notice that any other party duly perform its obligations or preclude it from exercising such a right or privilege under reasonable circumstances, nor shall waiver in any one instance of a breach be construed as an amendment of this Agreement or waiver of any later breach.

9.4           Enurement. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

9.5           Further Assurances.  The parties hereto shall from time to time at the request of any of the other parties hereto and without further consideration, execute and deliver all such other additional assignments, transfers, instruments, notices, releases and other documents and shall do all such other acts and things as may be necessary or desirable to assure more fully the consummation of the transactions contemplated hereby.

 

9.6           Time.  Time shall be of the essence of this Agreement.

9.7           Expenses. Each party shall be responsible for its own expense in connection with negotiating and settling this Agreement.

9.8.           Amendment.  This Agreement may be amended or varied only by agreement in writing signed by each of the parties.

9.9           Governing Law and Attornment.  This Agreement shall be governed by and interpreted in accordance with the laws of the Province of Saskatchewan and the federal laws of Canada applicable therein and the parties hereby irrevocably attorn to the non-exclusive jurisdiction of the Courts of the Province of Saskatchewan sitting in the City of Regina.

9.10           Counterparts.  This Agreement may be executed by facsimile and in as many counterparts as are necessary. All counterparts together shall constitute one agreement.

 

 

THE PARTIES, intending to be contractually bound, have entered into this Agreement as of the date set out on the first page.

EAGLE TRAIL PROPERTIES INC. By:     /s/ Curtis Sim (Authorized Signatory)

 

 

GUINNESS EXPLORATION, INC. By:     /s/ Alastair Brown (Authorized Signatory)