TERMINATION OF OPTION AGREEMENT
EXHIBIT
10.3
THIS
TERMINATION OF OPTION AGREEMENT
(this
“Agreement”), dated as of December 12, 2007
(the
“Effective Date”), by and among SSC Mandarin Group Limited (“SSC”), China Global
Mining Resources Limited, a British Virgin Islands company (“CGMR BVI”), China
Global Mining Resources Limited, a Hong Kong company (“CGMR HK,” and together
with CGMR BVI, “CGMR”), SSC Mandarin Financial Services Limited (“SSCM FS”),
SSC
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Sino Gold Consulting Co. Ltd. (“SINO”), and Wits
Basin Precious Minerals, Inc. (“WITS”), is made with respect to the
relinquishment of WITS rights conferred by an Option Agreement, executed in
March 2007, by and among WITS, SSCM FS and SINO
(the
“Option Agreement”).
WHEREAS,
the
parties hereto (the “Parties”) wish to terminate the Option
Agreement.
NOW,
THEREFORE,
in
consideration of the mutual undertakings expressed in this Agreement
and
for
good
and valuable consideration,
the
receipt and sufficiency are hereby acknowledged, the Parties hereby agree that
the Option Agreement shall be superseded and replaced in its entirety by this
Agreement, and the Parties further agree as follows:
1. As
of the
Effective Date, the Option Agreement shall be terminated and WITS shall
relinquish its option to buy shares in SINO (representing a 60% ownership
interest in SINO).
2. As
of the
Effective Date, WITS shall be deemed to have 100%
legal ownership and control of CGMR as set forth in the Sale of Shares and
Claims Agreement, executed in March 2007, by and between WITS, SSC and CGMR
BVI
("BVI Agreement") and the Sale of Shares and Claims Agreement, executed in
March
2007, by and between WITS, SSC and CGMR HK ("HK Agreement," and together with
BVI Agreement, "CGMR Agreements"); and the Maanshan WFOE and the Hubei WFOE.
In
connection therewith, SSC shall transfer to WITS free from any debt or
incumberance the applicable share certificates, constituting 100% of the
outstanding shares of CGMR, corporate documents, company seals, company chops,
due diligence documents of such entities and reasonably assist WITS in taking
all applicable steps to effect the necessary resignation from, and appointment
of, directors and managers to such entities.
3. WITS
shall pay SSC (via wire transfer to the bank account to be designated by SSC)
within 60 days from the Effective Date:
3.1 (i)
HKD
925,000 on account of fees paid to Xx. Xxx of China Sun Fund Management Limited
for the Maanshan WFOE financing and (ii) HKD 925,000 on account of fees as
a fee
for establishing the Maanshan WFOE; and
3.2 HKD
2,000,000 on account of fees paid for the Hubei WFOE capitalization in
connection with CGMR on behalf of WITS.
4. WITS
shall further
pay SSC within 90 days from the later of (i) the Effective Date and (ii) the
completion of final due diligence of title and permits relating to the Maanshan
WFOE and the Hubei WFOE USD $2,250,000 that SSC has contributed to the Maanshan
WFOE in connection with CGMR on behalf of WITS; provided
that
WITS may offset such payment against the expenses (limited to direct expenses
for third party professionals) incurred by WITS and SINO on behalf of SSCM
FS in
connection with the Gold Project, as set forth in Exhibit B attached hereto.
WITS shall further be entitled to offset such payment against the payment
obligations of SSC to WITS pursuant to Section 5 below.
5. SSC
shall
pay WITS within 90 days from the later of (i) the Effective Date and (ii) the
completion of final due diligence of title and permits relating to the Maanshan
WFOE and the Hubei WFOE, the sum of USD $1,750,000 that WITS has paid to SSC
in
connection with SINO; provided
that SSC
may offset such payment against the expenses (limited to direct expenses for
third party) incurred by SSC with respect to CGMR in connection with the Iron
Ore Project and the Nickel Project as set forth in Exhibit C attached hereto.
SSC shall further be entitled to offset such payment against the payment
obligations of WITS to SSC pursuant to Section 4 above.
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6. Each
of
the Parties (the “Releasing Party”) does hereby forever release, discharge and
acquit the other Party, and their respective parents, subsidiaries,
predecessors, directors, officers, shareholders, agents, employees, successors,
assigns, affiliates, heirs, executors, and administrators (the “Released Party”)
from any and all manner of action or actions, cause or causes of action whether
class, derivative or individual in nature, in law or in equity for indemnity
or
otherwise, suits, debts, liens, commitments, contracts, agreements, obligations,
promises, liabilities, claims, demands, damages, losses, costs, or expenses,
of
any kind or nature whatsoever, known or unknown, liquidated or unliquidated,
disputed or undisputed, suspected or unsuspected, fixed or contingent or based
on contract, tort, state or federal statutes or other legal or equitable theory
of recovery (“Claims”), that such Releasing Party may have had, may presently
have or in the future may have based upon, arising from, or in any way connected
with or related to the CGMR Agreements or the Option Agreement; provided,
however, that the foregoing release shall not constitute a release with respect
to any claims arising out of the obligations set forth in this Agreement and/or
any fraud perpetrated by one or more of the Parties to this Agreement.
7. This
Agreement is the complete and exclusive statement of the agreement between
the
Parties, which supersedes all prior or concurrent proposals and understandings,
whether oral or written, and all other communications between the Parties
relating to the subject matter of this Agreement. SSC, SSCM FS and Xxxxx Xxx
shall be required to maintain strict confidentiality at all times and shall
not
be permitted to discuss or reveal any terms or facts relating to this Agreement
or matters relating to WITS without WITS' prior written consent, except to
the
extent pursuant to applicable laws, rules, regulations or government requirement
or court order.
8. This
Agreement shall be governed by, construed and interpreted in accordance with
the
laws of the Hong Kong Special Administrative Region and any dispute, controversy
or claim arising out of or relating to this Agreement, or the breach termination
or invalidity thereof, shall be settled by arbitration in accordance with the
UNCITRAL Arbitration Rules as at present in force and as may be amended by
the
rest of this clause. The appointing authority shall be the Hong Kong
International Arbitration Centre. The place of arbitration shall be in Hong
Kong
at Hong Kong International Arbitration Centre (HKIAC). There shall be only
one
arbitrator.
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9. This
Agreement is prepared and executed by duly authorized officers of each
Party.
10. This
Agreement may be executed by facsimile or “.pdf” file and in counterparts, each
of which shall be deemed to be an original, and all of which together shall
be
deemed to be
one
and the same instrument.
(Remainder
of Page Intentionally Left Blank; Signature Page Follows)
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IN
WITNESS WHEREOF,
the
Parties have executed this Agreement as of the Effective Date.
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SSC
Mandarin Group Limited
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By:
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/s/
Xxxxx Xxx
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Name:
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Xxxxx
Xxx
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Title:
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Director
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SSC
Mandarin Financial Services Limited
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By:
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/s/
Xxxxx Xxx
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Name:
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Xxxxx
Xxx
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Title:
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Director
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China
Global Mining Resources Limited, a British Virgin Islands
company
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By:
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/s/
Xxxxx Xxx
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Name:
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Xxxxx
Xxx
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Title:
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Director
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China
Global Mining Resources Limited, a Hong Kong company
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By:
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/s/
Xxxxx Xxx
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Name:
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Xxxxx
Xxx
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Title:
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Director
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SSC –
Sino Gold Consulting Co. Ltd.
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By:
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/s/
Xxxxx Xxx
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Name:
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Xxxxx
Xxx
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Title:
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Managing
Director
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Wits
Basin Precious Minerals, Inc.
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By:
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/s/
Xxxxxxx X. xxxx
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Name:
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Xxxxxxx
X. xxxx
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Title:
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Chief
Executive Officer
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