Exhibit 10.3

 

SHAREHOLDERS’ AGREEMENT

 

MINERA LI ENERGY SpA

 

 

In Santiago, Chile, on January 27, 2014, appear before me: Li3 ENERGY INC.,
company incorporated under the laws of the State of Nevada, of the United States
of North America, with the trade activity of producing and commercializing
minerals, Single Taxing No. (Rol Único Tributario) No. 59.176.370-9, represented
by Mr. Luis Francisco Sáenz Rocha, Bolivian, married, economist, Passport No.
2.233.208 issued of the Republic of Bolivia 2233208, both bearing legal
residence for these purposes in this city, at Calle Marchant Pereira No. 150,
Oficina 802, District of Providencia, Santiago, Chile (hereinafter "Li3"), on
the one hand; and on the other, BBL SpA, company incorporated in Chile, of the
investment trade activity, Single Taxing No. (Rol Único Tributario)
76.319.337-3, represented herein conventionally and jointly by Mr. Andrés
Lafuente Domínguez, Chilean, married, business administration mayor, National
Identification Card No. 10.771.410-3 and by Mr. Francisco Bartucevic Sánchez,
Chilean, married, attorney, National Identification Card No. 10.567.206-3, all
bearing legal residence at Calle Rosario Norte No. 100, Oficina 403, District of
Las Condes, Santiago, Chile (hereinafter "BBL"); all those appearing of legal
age, who credit their identity with the aforementioned identification cards and
passports referred to herein above and thereby expound as follows:

 

ONE: General Background Information:

1.1. The parties hereto subscribed dated October 30, 2013 a Memorandum of
Understanding (hereinafter the “MOU"), through public deed granted in Santiago
before the Notary Public Mr. Eduardo Avello Concha, later subscribing its
extension, through public deed granted dated January 9, 2014 before the same
Notary Public, according to which the take-over was agreed to by BBL of the
company Li SpA. The MOU on this date is understood to be fully and completely
complied with, in full and total satisfaction of the parties, granting in its
respect the most extensive, complete and total termination.

 

1.2. The parties appearing declare to be the only and current shareholders of
the Chilean company called MINERA LI ENERGY SpA that has trade activities under
Single Taxing No. (Rol Único Tributario) 76.102.972-K, which hereinafter will be
indistinctly called as “Li SpA”, the "Company” or the "Firm”, whose company
capital is divided into 100 ordinary, nominative shares, of a single class and
with no nominal value, being the following its current shareholders: a) BBL,
shareholder and title holder of 51 shares; and b) Li3, shareholder and title
holder of 49 shares.

 

1.3. The Company was incorporated by public deed dated June 16, 2010, granted
before Notary Public of Santiago Mr. Patricio Zaldívar Mackenna, whose
incorporation extract was inscribed on page 31.270, No. 21.535, of the Trade
Register of the Real Estate Register of Santiago corresponding to 2010 and was
published in the Official Gazette on June 25, 2010. The Company was formed with
an initial statutory capital amounting to US$ 200,000 (two-hundred thousand
dollars of the United States of America), divided in a total of 1,000 ordinary,
nominative shares of a single class and with no nominal value, fully subscribed
and paid, which were later reduced by swap to 60 shares, in an agreement taken
by its single shareholder, Li3, in the Third Shareholders’ Meeting of Li SpA,
according to what is accounted for, in Section 1.4 below.

 

 

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1.4. The Company to date has been the object of company modifications,
corresponding to the following: a) The one executed in public deed granted on
December 30, 2013, by the shareholder Li3, granted before the Notary Public of
Santiago Ms. María Loreto Zaldívar Grass, through which the company was
rectified and renegotiated; and b) The one agreed to, in the Third Extraordinary
Shareholders’ Meeting by the company, held on January 27, 2014, whose minute was
extracted to public deed on the same date before the Notary Public of Santiago
Ms. Antonieta Mendoza Escalas, whose extract is in process of being inscribed
and published. Through this company modification BBL became a shareholder,
through the subscription of the 40 shares issued charged on the capital increase
agreed to in such Shareholders’ Meeting, prior to having the shareholder Li3
waive its right of preferred subscription, which the subscriber BBL paid through
the capitalization of credits against the company, for the total amount of US$
5,100,000, leaving a balance of US$ 400,000 pending payment. After two
consecutive capital increases that were approved in the aforementioned Third
Extraordinary Shareholders’ Meeting, the new company capital of Li SpA was left
in the sum of US$ 19,093,939, which is fully subscribed and partially paid. The
balance of 11 shares, to complete its shareholding participation of 51 shares,
BBL acquired them from Li3 for the sum of US$ 1,500,000 for the purchase-sale
entered into through public deed of an equal date (i.e., January 27, 2014),
granted before the Notary Public of Santiago Ms. Antonieta Mendoza Escalas.

 

SEGUNDO: Definitions

The terms below for the purposes of this Shareholders’ Agreement will be
understood to be as follows, unless another meaning is clearly construed from
their text:

a) Shareholders or Shareholder: are the following persons, considered jointly or
individually, according to the case and its respective allowed successors or
assignees, due to the number of Shares that they respectively have up to this
date in the company or due to the number of Shares that they own or that they
acquire in the future:

1)BBL SpA, for 51 Shares, equal to 51% of the company capital and shares issued
having the right to vote.

2)Li3 Energy Inc., for 49 Shares, equal to 49% of the company capital and shares
issued having the right to vote.

b) Shares: it means any shares that represent the company capital, including any
options, rights or values to acquire shares or options to subscribe shares
derived from capital increases.

c) Board of directors: it means the Company Board of Directors.

d) Statutes or Company By-Laws: it means the Company By-Laws, with the
respective modifications already approved or that are approved in the future.

 

 

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e) Agreement: it means this Shareholders’ Agreement according to what can be
modified by the Shareholders from time to time.

f) Control: it means the direct or indirect ownership of more than 50% of the
capital having the right to vote of a determined company or entity.

g) Right to a Preferred Option: it means the Preferred Purchase Option that is
granted in a reciprocal manner to the Shareholders in conformance to Clause
Four, Section 4.3 of this Shareholders’ Agreement.

h) Right of Adhesion to the Offer or of Tag Along: it means the sales option
that is granted in a reciprocal manner to the Shareholders in conformance to
Clause Four, Section 4.4 of this Shareholders’ Agreement.

i) Related Entity: it means, in reference to any Shareholder, (1) its Parent
Company; and (2) any other company in which the Shareholder or its Parent
Company owns, whether directly or indirectly, plus 50% of its capital having the
right to vote.

j) Affiliates: An affiliate of a company will be understood to be in terms of
the concept defined in Article 86 of Law No. 18,046 of Closely-Held Companies.

k) Parent Company: it means any company or entity that is the direct or indirect
owner of more than 50% of the total capital having the right to vote in another
company or entity.

l) Persona: it means an individual, company (including without limitation a
closely-held stock company, general partnership, limited liability company and
stock companies), association or a government entity. Person also includes
reference to the legal representatives or successors of such person.

m) Encumbrance or Encumbrances: it means any pledge, mortgage, embargo,
prohibition, usufruct, rights of way or any other actual rights, litigations,
precautionary measures (whether judicial or prejudicial), or any other
limitation or restriction to property, use, enjoyment or disposition of one or
more Shares or Essential Assets, according to what corresponds and any
resolutive condition or preferred right over the same granted in favor of any
Person.

n) Essential Assets: are the tangible or intangible assets owned by the company
and its affiliates that are considered essential for its trade activity,
including but not limited to: shares in legal mining companies that the company
owns and mining properties and the company or its affiliates are registered
owners of.

o) Equity insolvency: Equity insolvency will be understood to be such, when the
external auditors of a shareholder inform or warn regarding that its economic
insolvency, has been declared in bankruptcy, that it has been requested in its
own account, or simply propose preventive agreements or when a shareholder is
suspended or delisted from the Stock Exchange.

p) Milestone: it is a future fact consisting on obtaining authorizations and
permits necessary for the commercial exploitation of Mining Properties called
“Cocina Diecinueve a Veintisiete”. For the purpose of the above, all procedures,
steps and other actions tending to manage the achievement of the milestone must
be carried out complying with international standards of a mining nature.

q) Government Entity: it means any court, tribunal, administrative entity,
department, ministry, service, superintendence, commission or administrative
agency or other government or regulatory authority or entity, whether national
or foreign, state or local.

 

 

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THREE: Shareholders’ Agreement

The people appearing herein in their qualities of current and only Company
Shareholders with their shares called Minera Li Energy SpA, come to enter into
the Shareholders’ Agreement that is contained herein.

 

All shares issued, subscribed and/or paid and pending emission, representative
of 100% del company capital are subject and tied to this Shareholders’ Agreement
by the company that are the property of i) the shareholders; ii) the
shareholder’s legitimate assignees; and iii) any person who succeeds the
shareholders in the property of the shares. The standards of this Shareholders’
Agreement is applied with an equal extension to the shares that the persons
indicated in numbers i), ii) and iii) above have up to this date or that come to
stop or own in the future, at any title, including, but not limited to the
subscription, acquisition, swap, award and/or conversion of the convertible
bonds in shares and whether dealing of cash shares, shares freed from payment or
shares paid charged on profit, including shares that are derived from the
division, merger or transformation by the company.

 

FOUR: Transference of shares and preferred subscription rights of shares

The transference of the shares subject to this Shareholders’ Agreement and
preferred subscription rights of shares will be governed by the following rules:

 

4.1. General Rule

None of the Shareholders can directly or indirectly (through the issue of
shares, mergers, consolidations, re-capitalizations, reorganizations, change of
control or similar shares, transference of an usufruct right or of another type,
assignment of political or economic rights, independent if such event happens or
not by the ministry of the law) sell, assign, transfer, deliver, swap, donate,
consolidate, create convertibles options, convertibles values or any other
financial or derivative instrument, or in any other manner dispose (in each
case, with or without compensation), of any company share or right or property
in favor of any Person, without the prior exact and timely compliance of the
obligations and procedures that are established in this Shareholders’ Agreement.

 

In case of transferring the shares that is carried out in conformance to this
Shareholders’ Agreement and prior to the inscription and register of the shares
on behalf of a new shareholder, a written declaration will be demanded from the
new shareholder expressing that it knows of this Shareholders’ Agreement and
that they expressly accept the overall total of its provisions. The register of
the shares under the name of the new shareholder cannot be done, until
compliance of the preceding requirements has been credited.

 

 

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When the Company issues certificates representative of the shares owned by the
shareholders, each certificate must contain an inscription, in Spanish, that in
its substantial part must express the following:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A SHAREHOLDERS’ AGREEMENT DATED JANUARY 27, 2014, SUBSCRIBED
BETWEEN THE COMPANIES BBL SpA AND Li3 ENERGY INC. THE SHARES REPRESENTED BY THIS
CERTIFICATE CANNOT BE SOLD OR TRANSFERRED IN ANY MANNER WHATSOEVER, UNLESS THE
TERMS AND CONDITIONS OF SUCH SHAREHOLDERS’ AGREEMENT AND WITH THE BY-LAWS ARE
COMPLIED WITH”.

 

Unless this Shareholders’ Agreement provides the contrary, all certificates
representative of shares issued in favor of, or acquired by any of the
shareholders or their successors or assignees authorized after this date must
contain the inscription detailed herein above and the shares represented by such
certificates will be subject to provisions applicable in this Shareholders’
Agreement. The company’s Shareholders’ Register must contain a similar
inscription, placed in a visible place of the first page and easily
recognizable.

 

4.2. Transference to Related Companies and Indirect Sales

The restrictions to the transference of shares that are dealt with in the
following sections of this Clause Four will not be applicable, and the
Shareholders are granted the faculty to transfer freely all or a part of their
shares, when the acquiring party is an affiliate or related entity to such
shareholder. The new shareholder must issue in writing its full responsibility
of all acts of the selling shareholder, accept and make its own this
Shareholders’ Agreement and the by-laws by which Li SpA is governed, which will
be a condition of validity and opposability of the referred to transference of
shares. Once the referred to conditions are complied with, the new shareholder
will have all the rights and benefits and will take on all the obligations that
this Shareholders’ Agreement establishes. In the sales contract, the
transference of shares or translated deeds among living must expressly consign a
declaration of the subscribing parties that the acquiring party is an affiliate
or related entity of the transferring shareholder. BBL cannot carry out direct
sales, i.e., sell rights or shares that imply the loss of control of the owner
companies of the shares, without the prior compliance of the standards of the
Shareholders’ Agreement. In turn, Li3 in case of starting a merger, absorption,
or integration process in any manner with another person must inform BBL within
10 (ten) days following its start, in a detailed and complete manner, not being
subject to the restrictions of Section 4.1 above.

 

4.3. Right of First Refusal or Preferred Option in the transfer of shares
between Shareholders, with the exception, when it corresponds, of the situation
foreseen in No. 4.2 above.

If any of the Shareholders, hereinafter called the “Offering Shareholder”,
wishes to sell, assign, or transfer all or a part of its shares to a third party
(hereinafter “Third Party Offeror”) or to other company shareholders, it must
previously express his decision in writing to the other shareholders and follow
the procedure explained below:

 

 

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(a) The Offering Shareholder will have to place this circumstance to the
knowledge of the other shareholders (hereinafter the “Receiving Shareholders”),
informing regarding the offer that it has received (hereinafter the “Third Party
Offer”) and must offer to sell, in such conditions, its shares to the Receiving
Shareholders (hereinafter the “Preferred Offer”) so that they can express or
their intention or not of acquiring them, also in writing.

 

(b) The Offering Shareholder will have to carry out the preferred offer in
writing, through a notification that must contain, at least, the following: (i)
the number of shares that it wishes to sell, assign or transfer and their
individualization; (ii) the price, way of payment and other conditions of the
preferred offer; and (iii) the terms and conditions of the third-party offer and
attaching the same, in which it must be evidenced, at lease, with precision and
clarity, the name of the third party Offeror, the number of shares to which the
offer refers to, the proposed price and the way of payment (which must
necessarily be identical to the ones indicated in letters (i) and (ii) above).

 

(c) The acceptance of the preferred offer must be pure and simple, and such
acceptance, necessarily must refer jointly, to the overall total shares
contained in the preferred offer, unless the Offering Shareholder expressly
consents in a partial acceptance. The Receiving Shareholders will have a time
period of thirty (30) consecutive days starting from the date of notification
referred to in letter (b) above, to accept or reject in writing the preferred
offer, understanding that they reject the preferred offer if they do not express
themselves in such period of time.

 

(d) The Receiving Shareholder who decides to reject the preferred offer will
have the right to communicate, jointly with such rejection, its decision to
exercise the Right of Adhesion to the Offer or Tag Along referred to in Section
4.4 below.

 

(e) The shares that corresponded for the shareholders to acquire that do not
accept in an express or tacit manner the preferred offer shall accrue in its
totality, in the proportion that corresponds, to the remaining Receiving
Shareholders that accepted such preferred offer, for which, the Offering
Shareholder will have to, within the time period of ten (10) consecutive days
starting from the end of the time period indicated in paragraph (c) above,
communicate in writing to the Receiving Shareholders who accepted the preferred
offer, the number of additional shares that corresponds for them to acquire
according to the accrual. Once the communication of the accrual stated herein
above has been dispatched, the shareholders who have accepted the preferred
offer will have a time period of ten (10) consecutive days to communicate the
Offering Shareholder of its intention to accept or reject the additional shares
that corresponds to them according to the accrual. If the offer of the
additional shares that correspond to them according to the accrual is rejected
by any of the Receiving Shareholders, or once the time period of ten (10)
consecutive days mentioned herein above in this letter (e) has elapsed without
the Receiving Shareholder expressing its intention to acquire the additional
shares that correspond according to the accrual stated above, it will be
understood that such Receiving Shareholder rejects in its integrity the
preferred offer, including both the initial preferred offer as well as the
additional shares that are the object of the accrual, unless that the Offering
Shareholder agrees to accept it, in a partial manner.

 

 

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(f) The purchase and sale of the shares that are the object of the preferred
offer by those Receiving Shareholders who accepted the preferred offer must be
perfected within the thirty (30) consecutive days following the date upon which
the Receiving Shareholder or Receiving Shareholders notified their acceptance to
the Offering Shareholder according to what is provided for in letters (c) or (e)
above, according to what corresponds.

 

(g) In case that the preferred offer is not accepted by the Receiving
Shareholders under the terms foreseen above in this clause, the Offering
Shareholder could sell to the third-party Offeror its shares, under the same
terms and conditions stated in the preferred offer, within the time period of
sixty (60) consecutive days starting from the express or tacit rejection
according to what has been indicated herein above, of the preferred offer by the
Receiving Shareholders. In no case can the sale, assignment or transfer of the
shares to the third-party Offeror can be performed in more favorable economic
conditions than the ones informed in the preferred offer to the Recipient
Shareholders.

 

(h) If the sale, assignment or transfer of the shares to the third-party Offeror
is not concluded within the time period and under the conditions referred to in
letter (g) above, the sale, assignment or transfer of the shares cannot be
carried out and it will be necessary to comply once again with the procedure,
requirements and conditions that are stated in this Clause 4.3.

 

4.4. Right of Adhesion to the Offer or Tag Along

The Shareholders confer the right in a reciprocal manner in this act to either
become part and be incorporated to any transfer of shares to third parties, due
to sales or other ownership transfer title of its shares that any other
shareholder wishes to carry out, according to the following terms: on complying
with the dealings and procedures agreed to in No. 4.3 above, according to what
corresponds and send to the Receiving Shareholders, the preferred offer, the
Offering Shareholder will have to grant them in an alternative manner, at the
exclusive option of the Receiving Shareholders, the right to be added to this
sale. The communication that is given for this effect will have to indicate all
the offer elements, such as individualizing the buyer, price, way of payment and
number of shares that are attempted to be sold.

 

Each Receiving Shareholder, receiver of this notice will have a time period of
thirty (30) consecutive days to answer if it accepts the informed sale or not.
If such shareholder does not respond, it will be understood that its response is
negative. If there is a positive answer, the Li SpA shares that the accepting
recipient of the notice is title holder of will be sold in a joint manner and in
the same conditions as those of the Offering Shareholder (original seller), pro
rata of the participation of each one of them has in the Li SpA shareholding
capital as of that date, until completing the total number of shares that the
acquiring third party is willing to buy.

 

 

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4.5. Insolvency

Any shareholder that enters into Insolvency and that has not remedied such
situation within the time period of sixty (60) days will be forced to offer in
sale their shareholding participation to the other shareholders under the terms
and conditions referred to, in the clauses above, the market value of such
shares will be established by the parties’ mutual agreement. If there is no
agreement regarding the market value of the shares, it will be established by an
expert appointed by the parties’ mutual agreement, appointment that must be
given to a company of re-known prestige specialized in the valuation of mining
companies. In case there is no agreement in the appointment of an expert, he/she
will be appointed by the arbitrating judge to be designated according to Clause
Nineteen below of this Shareholders’ Agreement. Without detriment to what is
provided for in the clauses above herein, the parties agree that in case of
Insolvency or that any of the shareholders, individual or company has been
declared in bankruptcy, that has been requested on its own account, or simply
proposes preventive agreements, the Insolvent Shareholder, by this mere fact is
forced to transfer the shares that it owns in Li SpA, in the manner and with the
same limitations that are stated in the numbers above, providing (a) that such
situation of insolvency has not been solved, or (b) it has not given guaranteed
to the satisfaction of the other shareholders, which must be evidenced in
writing, of giving faithful and timely compliance to all and each one of the
obligations that is imposed upon by this Shareholders’ Agreement, within a time
period of thirty (30) days starting from the date in which it is required to
transfer them, whether personally or by registered letter sent by the company
President or by any of the shareholders, addressed to the residence registered
in the company by the insolvent shareholder. If the Insolvent Shareholder does
not solve the insolvency situation or does not grant sufficient guarantees under
the terms and within the time period indicated herein above, it will have to
proceed to transfer the shares within the maximum time period of sixty (60)
consecutive days starting from expiry of the time period of thirty (30) days
above. The non-timely exercise by the shareholders of the right that is
recognized in this clause will not mean in any way whatsoever waiving the same,
the shareholders reserving the faculty to exercise such right when they deem
convenient, while the insolvency situation of the other shareholder prevails.

 

4.6. Special Rule Applicable to the BBL Shareholder. A temporary limitation of
the transferability of the 51 shares of Li SpA that are owned by BBL is agreed
to for the period of one year starting from the date of this Shareholders’
Agreement, period during which BBL is forced not to transfer its shares in Li
SpA. Once the aforementioned time period of one-year has expired, this temporary
specific limitation will be without effect, without the need of nay declaration
or act by the shareholders, the company or third parties, being starting from
that date fully applicable the other restrictions considered in this
Shareholders’ Agreement.

 

4.7. General Declaration. In general and, for the purposes of this Clause Four
of the Shareholders’ Agreement, the shareholders are forced in a reciprocal
manner, from this point on, ones in favor of the others, to consent in all legal
acts that are necessary to perfect compliance of the provisions of this clause.

 

 

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FIVE: Board of Directors and Shareholders’ Meetings

Both the matters of the Shareholders’ Meetings as well as those of the board of
directors, and the quorums to adopt agreements in both managing bodies will be
governed by the provisions of the Company By-Laws of Minera Li Energy SpA,
without detriment of what the parties herein consent to, in the following
agreements:

 

5.1. Board of Directors

a) The Company Board of Directors is formed by 7 title holding members and their
respective alternates, of which (i) 4 will be always appointed by the votes of
the Shareholding Owner (s) of 51% of Minera Li Energy SpA, today the company BBL
SpA, including among them its President, as well as also its main executives and
managers; and (ii) 3 will always be appointed by the votes of shareholding owner
(s) of 49%, today Li3.

 

b) The Board of Directors will legally hold sessions with a minimum of five (5)
Directors. However, if the board of directors that has been duly called for such
purpose cannot hold session for not having reached the required quorum, the
President of the board of directors will have to call to meet in writing by
means of a registered letter sent through a public notary and addressed to the
residence registered in the company by the directors, without detriment that
there could be a communication and confirmation by e-mail, to hold a new session
of board of directors that must be held not before ten (10) days or later than
twenty (20) days from the date of the failed session. The new session of the
aforementioned Board of Directors can be validly held with the attendance of a
minimum of four (4) directors. The Board of Directors itself can agree to those
other rules that it deems necessary to complete this procedure.

 

c) The agreements of the Board of Directors will be adopted by the majority of
the directors attending the respective session, whether regular or
extraordinary, excepting for the agreements related to the following matters,
which will have to be with a qualified quorum, since they will always require
the affirmative vote of at least five (5) directors given in the session,
whether regular or extraordinary, i.e.:

i) Creation of affiliates, subsidiaries or related companies to take on new
projects different from the company trade activity;

ii) Operations that are performed by the company with its related parties,
understanding as such the ones defined in Article 100 of Law No. 18,045 of the
Securities Market and that must strictly uphold what is foreseen in Article 89
of Law No. 18,046 on Closely-Held Companies;

iii) Granting loans to third parties, unless dealing with emergency loans to
company employees, up to a maximum amount equal to 1% per cent of the same
company equity; and

iv) Granting actual or personal guarantees to warrant third party obligations.

  

 

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5.2. The Shareholders’ Meetings

a) The Regular and Extraordinary Shareholders’ Meetings will be held in the
times that are indicated in the Company By-Laws. Unless there is a contractual
provision to the contrary, the agreements of the shareholders accepted in a
shareholders’ meeting or assembly will be adopted with the accepting vote of the
absolute majority of the shares issued by the company having the right to vote.

 

b) Notwithstanding the above, exceptionally, the following matters will require
the approval of the Shareholders’ Meeting, whether Regular or Extraordinary,
according to what corresponds, with the favorable vote of the shares
representing at least 60% of the total company shareholding capital by the
company having the right to vote:

i.Executing any act or contract that implies or commits the transfer,
disposition or encumbrance in any manner of the Essential Company Assets;

ii.Modifying the company dividend policy;

iii.Modifying the number of directors;

iv.Modifying the faculties reserved to the Shareholders’ Meeting or the
limitations to the attributes of the Board of Directors;

v.Modifying the company by-laws, except regarding capital increases;

vi.The company transformation, its division and its merger with another company;

vii.Modifying the company duration time period;

viii.The anticipated dissolution of the Company;

ix.The change of company residence;

x.The decrease of the company capital;

xi.The approval of contributions and estimate of non-monetary goods;

xii.The transfer of 50% or more of the company’s assets, whether they are
included or not in its liabilities, which will be determined according to the
balance sheet of the prior accounting period and the formulation or modification
of any business plan that considers the transfer of assets for an amount that is
over such percentage;

xiii.The manner of distributing company benefits;

xiv.The acquisition or buy-in of own issuance shares;

xv.The rectification of annulment, caused by factual defects that the
incorporation of the company may have or a modification of its company by-laws
that comprises one or more matters of those stated in prior numbers;

xvi.The approval of the company business plans, entrepreneurial strategies and
policies, both in terms of investment, projects and operations of the company
trade; and

xvii.Modifying this special quorum for reaching agreements in the Shareholders’
Meeting.

 

SIX: Financing of Investments and Company Capital Increases

6.1. The Shareholders have agreed as the company’s objective and immediate
purpose obtaining or achieving the already defined milestone, which is attempted
to be achieved within a time period not over four (4) years. The shareholders
will make the disbursement of necessary sums for obtaining the milestone in the
same shareholding proportion as the one they have in the company, proportion
that to date is 51% for BBL and 49% for Li3.

 

 

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6.2. Financing of company operations: In case that the company requires
additional financing for its operations and investments, beyond its current
capital, such additional financing will have to be obtained from the following
sources and in the following preference order:

 

(a) Credits granted by the Shareholders themselves (hereinafter “Shareholder
Credit") in proportion to their respective shareholding participation in the
company. Such credits will have to be granted to the company in equity
conditions, similar to the ones that currently prevail in the market and in the
same re-payment, interest, guarantees and other conditions, for each shareholder
by the company. In turn, these credits must be granted in such conditions that
the company cannot repay the credit to one of the shareholders if it does not do
so at the same time, in the proportion corresponding to the other shareholders;
and

 

(b) Capital increase. The agreements on company capital increases of Li SpA will
be adopted with the approving vote of the absolute majority of the shares the
company issues having the right to vote. Contributions must be paid and entered
into the company treasury, in cash, within the time period of thirty (30) days
starting from the approval date of the increase by the Shareholders’ Meeting.

 

6.3 If due to any reason Li3 is not in economic or financial conditions of
supplying and contributing company financing, whether through a shareholder
credit or in virtue of a capital increase, pro rata corresponding to its
shareholding participation in the company, it will be enough to credit such fact
in a letter issued by its board of directors reporting such fact, in turn, BBL
declares that it commits to finance Li3 throughout the whole period that
corresponds until reaching the milestone, up to the pro rata that corresponds
paying to Li3 of such shareholder credit or capital increase, through the
payment of such amounts to the company on Li3’s behalf. BBL will contribute and
deliver these amounts directly to the company on Li3’s behalf. Against BBL’s
disbursement or contribution to the company of these sums of money, according to
what corresponds, and in guarantee of the obligation of restituting such
disbursed or contributed amounts to the company on Li3’s behalf (plus interests
agreed to later on), Li3 will constitute a pledge over its shares in the manner
that is indicated herein below: (a) in case of dealing with a capital increase,
Li3 will constitute collateral security over the new cash shares it subscribes
due to such capital increase. If the financing that BBL provides is only
regarding a part of the pro rata that corresponds Li3 to contribute, the pledge
will be constituted over the number of new cash shares Li3 subscribes that
correspond in proportion to the percentage of the total contribution that Li3
makes that BBL financed; and (b) in case of dealing with a shareholder credit,
(i) Li3 will constitute collateral security over the number of shares it owns
that corresponds, in proportion to the amount that BBL has financed, regarding
the total value of Li3’s shareholding participation in the company, (ii) for the
purpose of what is provided in this letter (b), the parties herein agree that
the total value of Li3’s shareholding participation in the company amounts to
US$ 6,725,490.00, value that will be restated proportionally either higher or
lower, according to what corresponds, in case that the pro rata of the
shareholders varies in the company’s shareholding capital (e.g., if the part of
the shareholder credit that corresponds Li3 to disburse amounts to a total sum
of US$ 1,000,000 and BBL finances Li3 for the totality of such amount, then the
proportion of the amount that BBL has financed regarding the total value of
Li3’s shareholding participation in the company - i.e. US$ 6,725,490 – equal to
14.87%, for which Li3 must constitute a pledge over the 14.87% of the total of
its shares the company subscribes). The largest disbursement (in case of a
Shareholder Credit) or contribution (in case of the capital increase) that BBL
makes on Li3’s behalf complying with this agreement will be deposited in a
direct manner in the company checking account, jointly with BBL and Li3’s
signature of a contract where the collateral security is constituted over the
respective part of the Li Spa shares.

 

 

12

 

6.4. According to the agreement specified in Section 6.3 above, Li3 declares
that it is forced to pay BBL for the total sums that BBL has disbursed or
contributed on its behalf and risk to the Company, within a maximum time period
of twenty-four (24) months starting from the reception date by the company of
the shareholder credit or capital contribution that BBL makes on Li3’s behalf.
Simultaneously with the payment, BBL will release the collateral securities
constituted over Li3’s shares.

 

6.5. If Li3 does not comply in time, manner and amount (that includes capital,
readjustments and interests of 1.0% monthly), with its obligation to restitute
to BBL the disbursement in money that has been done on its own account and risk
in virtue of a shareholder credit according to what is indicated in the numbers
above, the facultative right of executing the shares owned by Li3 constituted in
pledge in favor of BBL will begin for BBL, or to capitalize in the company the
credit granted to Li SpA on Li3’s behalf in the execution of the contractual
stipulations in this Clause Six, right that emerges from the mere fact of
delinquency in Li3’s compliance and without the need to accept, declare or
express Li3’s will, which are understood to be expressly conferred in this act,
in an irrevocable manner, in such a way that initiating the capitalization
right, the sum that BBL enters in the company treasury as a contribution of the
fee attributable to Li3 will be transformed by the sole minister of law in
contribution of BBL’s capital, in whose case it must also release the pledge
constituted over the shares Li3 owns. Delinquency in complying with the payment
of the debt will begin on the first effective day of the time period of
twenty-four (24) months previously agreed to, and by the mere fact of reaching
such deadline.

 

Charged on the debt that is capitalized, cash shares will be issued in favor of
BBL in proportion of the capitalization value. The materialization of this
capitalization will be made in the Li SpA Extraordinary Shareholders’ Meeting,
which will be quoted for such effect by the board of directors, in which, with
the vote of 51% of the shares issued having the right to vote by the company,
the agreement will be adopted to perfect the capitalization agreement of the
contribution, the issue of cash shares on behalf of BBL in the percentage
corresponding to the shareholding participation and the corresponding
modification of the company by-laws.

 

 

13

 

SEVEN: Distribution of Dividends

Unless there is a different agreement adopted in a Shareholders’ Meeting with
the favorable vote of the shares that represent at least 60% of the total of the
company shareholding capital, the company must distribute annually to the
shareholders and each one of them will have the right to receive dividends for
an amount of at least 30% of the company’s net consolidated profits
corresponding to the accounting period above, which are available to be
distributed according to applicable legislation.

 

EIGHT: Exercise of the Right to Vote

Each one of the shareholders is forced in reference to the others to exercise
all its rights to vote and the powers of control that each one of them have in
relation to Li SpA, in order to fully comply with the terms and stipulations of
this Shareholders’ Agreement, and each one of them will adopt any other action
necessary to carry out the terms and stipulations of this Shareholders’
Agreement.

 

NINE: Usufruct over the Shares

In cases of constituting usufruct on the shares by the company. These are
inscribed in the Shareholders’ Register on behalf of the bare owner and the
usufructuary, in separate pages for each, expressing the existence, modalities
and time periods of the usufruct. Unless there is an express provision to the
contrary of the title of the respective usufruct, the total power to vote of the
shares given in usufruct will always correspond to the usufructuary, as well as
the right to receive the total amount of the dividends corresponding to the
shares levied with the usufruct and that are agreed to distribute during the
enforcement of the usufruct itself. In case there is a community of usufructs,
the corresponding shareholder will be the respective community, acknowledging
accrual rights that could be agreed to. In this case, the co-proprietors are
forced to appoint a proxy representing all of them to act before the company, as
briefly as possible.

 

TEN: Embargo on the Shares

In case that any company shareholders of all or a part of the shares that it is
the title holder of, in property, usufruct or in any other right, are embargoed
in a judicial cause followed against the shareholder, it will have to inform the
company board of directors and the rest of the shareholders, within a period of
ten (10) consecutive days following the date in which the embargo is executed,
by registered letter sent through public notary and addressed to the residence
of each one of them registered in the company the following: (i) the fact of the
embargo, (ii) the jury that decreed such embargo, (iii) the role of the legal
proceeding, (iv) the parties, and (v) its reasons or causes. Once the embargo is
notified to the affected shareholder, it will have a time period of ninety (90)
consecutive days to remedy such situation and manage the release of the embargo.
If the time period of ninety (90) days mentioned herein above expires, and the
affected shareholder is unable to release the embargo over the shares, starting
from the maturity of such time period and up to the date of the eventual
auction, the shareholders expressly stipulate that a right is created for the
other shareholders of acquiring the embargoed shares at the market value of the
company shares (without considering in them, the potential effects of the
embargo), which will be established by the parties’ mutual agreement. If there
is no agreement in terms of the shares market value, it will be established by
an expert appointed by the parties’ mutual agreement, appointment that must be
given to a company of re-known prestige specialized in the valuation of mining
companies. In case there is no agreement in the appointment of an expert, he/she
will be appointed by the arbitrating judge to be designated according to Clause
Nineteen below of this Shareholders’ Agreement. The above, in order to have the
interested shareholder be able to carry out dealings to raise or release the
embargo at its own expense and charge, being able to be charged for what is paid
for the purpose of performing such release, at the shares purchase price that
the shareholder suffering the embargo must make. This right is proportional for
all other shareholders that are interesting in saving the shares from the
auction and acquiring the shareholding participation of the shareholder affected
with the embargo.

 

 

14

 

ELEVEN: Other Agreements of the Shareholders

11.1. Loan

(a) In conformance with what is established in clause one of the Memorandum of
Understanding entered into between Li3 and BBL granted in public deed in
Santiago on October 30, 2013 before the Notary Public Mr. Eduardo Avello Concha,
the parties agreed that jointly with the take-over of Li SpA by BBL in the
manner foreseen in such instrument, BBL will grant an additional credit to Li3
for the sum of US$ 2,500,000 (two-million five-hundred thousand dollars of the
United States of America) to be exclusively allocated to paying Li3’s direct
debts, credit that will be guaranteed with the pledge over the shares that Li3
owns in Li SpA and that will be paid within the time period of 18 months
starting from the time it is granted.

(b) In compliance with the obligation referred to, in the letter above, the
parties agree that the credit referred to will amount to the only and total
amount of US$ 1,800,000 (one million eight-hundred thousand dollars of the
United States of America), for which BBL will open a financing account for the
amount referred to, in favor of Li3, that the parties subscribe in a separate
instrument, with pledge over one (1) Li3 Share in Li SpA for each US$ 100,000
(one-hundred thousand dollars of the United States of America) that Li3
effectively disburses. Without detriment to what is indicated herein below,
according to this financing account, Li3 will be able to draw no more than US$
100,000 this month, starting from April 1, 2014 and starting on May 1, 2014 it
can draw money in sums that cannot be greater than US$ 200,000 a month, until
exhausting the credit referred to, having to pay each installment within the 18
months following the time it was granted and received by Li3. Notwithstanding
the above, in case that Li SpA does not effectively receive and pay to Li3 the
sum of US$ 1,600,000 (one million six-hundred thousand dollars of the United
States of America) for the concept of the transaction of the failures to appear
and assignments of the rights referred to in Sections 11.2 and 11.3 below,
before March 27, 2014, Li3 can, starting March 28, 2014, draw up to US$ 600.000
(six-hundred thousand dollars of the United States of America) against the
financing account referred to herein, which BBL will disburse no later than
March 31, 2014.

 

 

15

 

11.2. Take-Over Additional Sum

11.2.1. In conformance with what is established in Clause One of the Memorandum
of Understanding entered into between Li3 and BBL granted in public deed in
Santiago on October 30, 2013 before the Notary Public Mr. Eduardo Avello Concha,
the parties hereto agreed that jointly with BBL’s take-over of Li SpA in the
manner foreseen in such instrument, BBL would pay Li3 the additional sum for the
Take-Over (according to how this concept is defined in the Memorandum of
Understanding, referred to) of US$ 1,000,000 (one million dollars of the United
States of America), once any of the following events happens: a) Joint Venture
is subscribed between Li SpA with CODELCO for the exploitation of the properties
owned by both companies in the Salar de Maricunga, constituted before 1979; b)
the necessary authorizations and permits are obtained for the commercial
exploitation of the properties called Cocina; c) the arrival of the time period
of twenty-four (24) months starting from the materialization of the Take-Over;
and/or d) in case that Li SpA does not manage to obtain the payment of the
failures to appear produced in the SLM referred to in point b, below the
Memorandum of Understanding referred to, within 60 calendar days starting from
the signature of the transaction to be subscribed in a separate document.

11.2.2. The parties appearing hereto come to this act and by this document
ratify and reiterate the agreement referred to in all its parts, excepting in
terms of the transaction of the failures to appear, in which the minority
shareholder Mr. Ernesto De Val Gutiérrez has been included and the price of the
transaction has been reduced to the only and total sum of US$ 1,200,000 (one
million two-hundred thousand dollars of the United States of America).

11.2.3. Without detriment to the above, the parties hereto have agreed in a
separate instrument, on the assignment of litigation rights of the trials
pertaining to failures to appear followed by Li SpA in its capacity as
administrating associate of the SLM 1 to 6 of La Sierra Hoyada de Maricunga
against the minority shareholder Mr. Ernesto De Val Gutiérrez and the assignment
of the credit for the failures referred to, that appear for the single and total
price of US$ 400,000 (four-hundred thousand dollars of the United States of
America).

11.2.4. The payment of the transaction and assignment of the litigation and
credit rights already referred to in Nos. 11.2.2 and 11.2.3 above, amounting to
the only and total sum of US$ 1,600,000 (one-million six-hundred thousand
dollars of the United States of America), have been conditioned by the parties
to the transference of shares that the minority shareholders own in the SLM
Litio 1 to 6 of La Sierra Hoyada de Maricunga, with the exclusion of the shares
owned by the minority shareholder Mr. Ernesto De Val Gutiérrez, to the
purchasing or acquiring company called Tierras Raras SpA, which if it does not
happen within the time period of 60 days starting from the time they are
granted, will give Li3 the right to collect the additional sum for the Take-Over
referred to in Point 11.2.1 above, amounting to the only and total sum of US$
1,000,000 (one-million dollars of the United States of America).

11.2.5. In case that the transference of the shares owned by the minority
shareholders in SLM Litio 1 to 6 of La Sierra Hoyada de Maricunga, with the
exclusion of the shares owned by the minority shareholder Mr. Ernesto De Val
Gutiérrez, to the to the purchasing or acquiring company called Tierras Raras
SpA is produced after sixty (60) days starting from the time it is granted and
Li3 has collected and received the additional sum for the Take-Over referred to,
in Point 11.2.1 above, amounting to the only and total sum of US$ 1,000,000
(one-million dollars of the United States of America), its payment will be
credited to the sum agreed to, in the transaction and assignment of rights
already referred to herein, the purchasing or acquiring company called Tierras
Raras SpA will have to pay Li3 the additional sum of US$ 600,000 (six-hundred
thousand dollars of the United States of America) and to BBL the sum of US$
1,000,000 (one-million dollars of the United States of America).

11.2.6. Once the event foreseen in No. 11.2.5 above has been materialized, i.e.,
that the transference of shares that the minority shareholders own in the SLM
Litio 1 to 6 of La Sierra Hoyada de Maricunga, with the exclusion of the shares
owned by the minority shareholder Mr. Ernesto De Val Gutiérrez, to the
purchasing or acquiring company called Tierras Raras SpA 60 days after their
being granted starts and Li3 has collected and received the only and total sum
of US$ 1,600,000 (one-million six-hundred thousand dollars of the United States
of America) agreed to, in terms of BBL’s obligation to pay the additional sum
for the Take-Over referred to, in Point 11.2.1 above under the terms established
herein will be re-started.

 

 

16

 

11.3. Payment of the Transaction

11.3.1. In case that Li SpA collects and receives the sum of US$ 1,600,000
(one-million six-hundred thousand dollars of the United States of America) for
the concept of the transaction of failures to appear and assignment of rights
referred to in Section 11.2 above, it will immediately allocate such full sum to
the payment of the debt it has, for the concept of failure to appear of the
minority shareholders with Li3. This last-mentioned obligation is considered
essential to this Shareholders’ Agreement.

11.3.2. For such purpose, once the payment stated in Point 11.3.1 above has been
given to Li3 and without it being a condition for the latter, Li SpA will
subscribe with Li3 a transaction contract or any other contractual form that the
shareholders agree at that time in order to obtain the full and complete payment
of the debt and thus grant the most ample, complete and total termination of
such debt.

 

11.4 Responsibility due to Taxing and Accounting Contingencies

11.4.1 The parties hereto agree that all taxing and accounting contingencies
that originate in the company administration developed by Li3 up to the date in
which BBL’s Take-Over has been materialized of the company and that it was not
revealed or known by BBL, its affiliates or representatives during the review or
due diligence phase of the company background information, of its affiliates and
assets will be Li3’s sole and exclusive responsibility, for which it will be
forced to respond legally and economically, releasing BBL from this point to all
responsibility and obligation.

 

11.4.2. For the purpose of what is indicated in No. 11.4.1 above, Li3 grants
faculties and authorizes BBL in an irrevocable manner so that, in case that Li3
does not solve any of the referred to contingencies, within a time period that
cannot be longer than one-hundred and eighty (180) days starting from the date
in which the Internal Revenue Service or other competent authority settles the
tax, the company owes as the result of such contingency, can pay or solve such
contingencies under its name and representation, mandating and empowering it in
an irrevocable manner, to exercise the corresponding collection actions over the
shares Li3 owns in the company, or in any other good of its patrimony,
additionally being released from the obligation of granting loans due to capital
increase or shareholder credits, or of any other nature referred to in this
instrument, up to the full and total payment of the sums BBL pays on Li3’s
behalf for the causes already referred to.

 

 

17

 

TWELVE: Communications and Calculation of Limits

The shares sales offers as well as its acceptance and other communications that
must be carried out according to this agreement must be made in writing
delivering such communication personally to the shareholder’ legal
representative with the reception evidence, or rather by registered letter
addressed to the residence that the shareholder has registered in the company.
Notifications made by fax, e-mail or other telecommunications system will also
be valid if the communication receiver confirms in writing that it has received
it. The deadlines stipulated in this Shareholders’ Agreement are in consecutive
days and will start to run from the time in which there is written evidence or
confirmation of the reception of the communication or identification, or once
three consecutive days have elapsed starting from the forwarding date of the
registered letter.

 

THIRTEEN: Prohibition to Participate in a Similar Business

Each one of the Shareholders, on its own and on behalf of its respective
affiliates and related companies according to what is defined in the law, agree,
assure and guarantee, as a continuous and permanent obligation through time,
that from this date on and within a time period of three (3) years starting from
the sale or transfer at any title of the overall number of their respective
shares that they are title holders of in the company, none of them, whether
directly or indirectly, can participate or actively intervene in the trade
activity of the company in the Republic of Chile (hereinafter the “Territory”),
or carry out directly or indirectly capital investments or acquire, own, and
keep shares or rights in any company that operates in the Territory and whose
trade activity is the extraction and exploitation of Lithium and Potassium.
Company trade activity, for the purposes of what has been previously foreseen in
this clause will be understood to be Lithium and Potassium extraction and
exploitation operations and that of other substances contained in the current
properties the company owns.

 

The shareholder who sells its shares in the company, on its own, or on behalf of
its respective affiliates and related companies, agrees, assures and guarantees
to the other shareholders, as a continuous and permanent obligation through time
and for the same time period of three (3) years stated in the paragraph above,
that: (a) they will fully protect the company’s confidential information and
that of its affiliates, under the terms and time periods foreseen in this
Shareholders’ Agreement, (b) they will abstain from carrying out any action that
directly attempts or interferes with the businesses, customers, and the
company’s and its affiliates’ right to commercial use within the Territory; and
(c) they will not compete in a disloyal manner with the company’s, and/or its
affiliates’ business in the Territory. Thus, the company’s and/or affiliates’
clients that have been incorporated as such by a shareholder will be the
company’s and/or its affiliates’ property, not having any right currently or in
the future over such clients in the Territory, under the terms and for the time
periods foreseen in this clause.

 

 

18

 

FOURTEEN: Extension of the Shareholders’ Agreement, Authorized Successors and
Assignees

The stipulations of this Shareholders’ Agreement will be extended in an
automatic manner and without the need to have any clarification or stipulation
whatsoever, to all the shares that Li SpA issues, that the shareholders,
directly or indirectly, come to acquire in the future, at any title and whether
these are cash or non-paying shares.

 

Similarly, this Shareholders’ Agreement will be compulsory and will be assigned
in benefit of the shareholders and its respective successors, and allowed and
compulsory assignees. Thus, every time that reference is made to the
shareholders in this Shareholders’ Agreement, it will be understood to
extensively refer to its successors and allowed and compulsory assignees in
conformance with this Shareholders’ Agreement. “Compulsory assignees” for the
purpose of this Shareholders’ Agreement will mean any person or entity that
acquires and interest or title over the company shares through any transference
or disposition of such shares in compliance of a judicial order, legal
procedure, execution, embargo or execution of a pledge or any other guarantee.

 

FIFTEEN: Sanctions

If any shareholder sells, assigns, transfers or swaps all or a part of one or
more Li SpA’s shares violating the obligations established in Clause Four of
this Shareholders’ Agreement, the violating shareholder will be forced to pay to
the other shareholders, pro rata of their share percentages, excluding those of
the violating shareholder, a fine or compensatory criminal clause that the
shareholders assess in advance in a sum, amounting in total, to double the price
agreed to for the sale, transference, assignment or swap carried out violating
this Shareholders’ Agreement. The minimum transference price for the purpose of
this contract will be considered to be the equity value or book value of the
shares as of the date of the transference carried out violating this
Shareholders’ Agreement. The fine or compensatory criminal clause above is
without detriment of the shareholders’ right to demand other compensations that
correspond in law, for the direct detriment effectively caused. In all other
cases of non-compliance of the obligations stated in this Shareholders’
Agreement, compensation will be established in a prudent manner by the
arbitrator appointed according to this document.

 

SIXTEEN: Confidentiality

Whoever subscribe this Shareholders’ Agreement are forced not to disclose to
third parties the information and knowledge of commercial, technical or other
confidential-type data (hereinafter the "Confidential Information") and that are
known as the result of their participation in the company or in its affiliates,
or use or exploit them for any purpose. This obligation will be kept in force
even after they are not shareholders, for a time period of three (3) years.

 

 

19

 

All and any Confidential Information that any of the shareholders (a) has
communicated or must communicate, totally or partially, to the Superintendence
of Securities and Insurance (Superintendencia de Valores y Seguros of Chile), to
the Securities & Exchange Commission (SEC) of the United States of America, to a
stock exchange or any other government or judicial competent entity, whether
Chilean or foreign, in conformance to what is provided for in applicable
legislation and regulations or (b) authorizes prior to communicating and in
writing to the other Shareholder, events in which they must adopt necessary
safeguards to comply in the best manner possible with the confidentiality
information established between the parties, is considered an exception of what
is provided for, in the paragraph above.

 

SEVENTEEN: Lack of Exercising Rights

If at any time any of the shareholders abstain from demanding compliance of any
of the provisions stated in Shareholders’ Agreement, it will not be interpreted
as if they are waiving their rights, or will it affect in any way whatsoever the
validity of this Shareholders’ Agreement.

 

EIGHTEEN: Miscellaneous

a) Inscription of the Shareholders’ Agreement. According to what is foreseen in
Article 14 of Law 18,046, this Shareholders’ Agreement will be filed in the
company, at the availability of its shareholders and interested third parties
and reference will be made to the same in the company’s Shareholders’ Register,
for which purpose the bearer of a copy of this document is granted to faculty to
carry out such filing and require the relevant annotations.

b) Modifications to the Shareholders’ Agreement. The Shareholders hereby declare
that no part of this Shareholders’ Agreement, or its supplementary or modifying
documents, in their case, can be modified without the unanimous consent and in
writing of all the shareholders that subscribe it or that have adhered to it or
to them, according to what corresponds.

c) Duration and Termination of the Shareholders’ Agreement. This Shareholders’
Agreement will have an indefinite duration and will end by the company’s
shareholders’ written unanimous mutual agreement, which represent 100% of the
issued shares, or due to legal causes. The company dissolution will not produce
the end of the Shareholders’ Agreement, during the duration of its settlement;
once the settlement is finished, the Shareholders’ Agreement will lose all its
force. Absorption or merger by incorporating the company by another company will
make this Shareholders’ Agreement binding between the shareholders who were
governed by the same, who will have the obligation to subscribe it as a
Shareholders’ Agreement of the new company. In case that the associates of the
absorbed company associate themselves with those of the absorbing or legally
continuing company, or in its absence, they will have the obligation to
stipulate it as a sub-Shareholders’ Agreement in case that the shareholders of
the absorbing company already have an agreed to Shareholders’ Agreement.

d) Divisibility. If a competent court of law establishes that any term,
provision or agreement considered in this Shareholders’ Agreement, or its
application to any person, place or circumstance is considered invalid, not
executable or null, the rest of the provisions of this Shareholders’ Agreement,
as well as those same provisions as they are applied to other people, places or
circumstances will keep their full enforcement and effectiveness.

 

 

20

 

e) Waivers. Unless there is a provision to the contrary contained in this
Shareholders’ Agreement, any non-compliance of the parties of any obligation,
the Shareholders’ Agreement, agreement or condition of the same could be the
object of a waiver provided by the party granted the faculties to their benefits
only in virtue of the written instrument subscribed by the Party that grants
such waiver, but failure or delay of any of the shareholders to exercise any
right, power or recourse under this Shareholders’ Agreement will not operate in
any case whatsoever, as waiving them, or their individual or partial exercise
will preclude the future exercise of such rights, powers or recourses.

f) Complete Agreement. The provisions of this Shareholders’ Agreement constitute
the complete agreement and understanding between the Shareholders and will
prevail over any agreements above, whether they are oral or written and any
other prior communications between them relative to the object of this
Shareholders’ Agreement, which are different from those written agreements
subscribed and executed contemporaneously with the same, unless it is stipulated
differently in this Shareholders’ Agreement.

g) Absence of Beneficiary Third Parties. This Shareholders’ Agreement has been
agreed in the sole benefit of the shareholders and their successors and allowed
assignees and nothing of what is stated herein, in an express or implicit manner
will grant or be understood to grant to any person, different from the
shareholders and such successors and assignees, any type of legal right or in
equity under this Shareholders’ Agreement.

h) Advertising. With the exception of the communications that the parties have
sent or must send to the Chilean Superintendence of Securities and Insurance, to
the Securities & Exchange Commission (SEC) of the United States of America, to a
stock exchange or any other government or judicial competent entity, whether
Chilean or foreign, in conformance to what is provided for, in applicable
legislation and regulations, none of the parties can issue any press release or
carry out any other public announcement relative to the existence of this
Shareholders’ Agreement or of the transactions considered herein without the
prior approval in writing of the other shareholders.

i) Absence of an Agency. Except in case of the provisions of this Shareholders’
Agreement that expressly authorize a shareholder to act on behalf of the other,
this Shareholders’ Agreement will not turn any shareholder or the company into
the legal representative or agent of another shareholder, its affiliates or the
company, according to what corresponds and none of the shareholders or the
company will have the right or authority to assume, give place or incur in
responsibility or obligation of any type, whether explicit or implicit, against,
on behalf of or in representation of a shareholder or any of its affiliates or
the company, according to what corresponds.

j) Additional Instruments and Shares. The shareholders agree to subscribe all
additional instruments and adopt all other measures that can be reasonably
necessary to make effective this Shareholders’ Agreement. Each shareholder
agrees to actively cooperate with all others in a reasonable measure required,
for the purpose of executing and exercising the rights and obligations
considered herein.

k) Interpretation Standards. This Shareholders’ Agreement will be interpreted
jointly with the Li SpA’s by-laws. Notwithstanding the above, for the purpose of
regulating the relations between the shareholders, and in case that disputes
arise between them, the parties agree that the provisions contained in this
agreement will prevail over what is provided in the Li SpA’s by-laws.

 

 

21

 

l) Conventional Residence. The shareholders establish their conventional
residence in the district and city of Santiago Chile for all legal purposes that
could be derived from this Shareholders’ Agreement and specifically in the
residence of each one registered in the company and will submit to the
competence and jurisdiction of the arbitrational court of law instituted in this
Shareholders’ Agreement and, for all aspects that are relevant, to the Regular
Courts of Law sitting in the district of Santiago.

m) Applicable Legislation. Stipulations that are evident in this Shareholders’
Agreement will be regulated and interpreted in all by the legislation in force
of the Republic of Chile.

n) Declarations. The Shareholders declare and guarantee that: (i) they have
sufficient legal and statutory faculties to enter into this Shareholders’
Agreement; and (ii) this Shareholders’ Agreement has been due and validly agreed
to and granted and is the source of legally valid and demandable obligations
against the respective shareholder in conformance with its stipulations.

 

NINETEEN: Arbitration

All doubts, conflict, difficulty or controversy that arises between the
shareholders of this Shareholders’ Agreement due to the same, whether referring
to its validity, interpretation, compliance, non-compliance, termination or any
other, of any nature, including issues relative to the validity of this same
clause and the appointment of the arbitrators that it contains will be submitted
to arbitration, according to the Procedural Arbitration Rules of the Center of
Arbitration and Mediation of Santiago, effective at the time of requesting such
process. The arbitration will be conducted by a joint arbitrator, who will act
as arbitrator in terms of procedure and right in terms of sentencing. No
recourse whatsoever will proceed against the resolutions of the arbitrator.
Further still, the shareholders waive from this point on and in an express
manner all resources that could be filed against the resolutions that the
arbitrator sentences.

 

The joint arbitrator will be appointed by the parties’ mutual agreement from
among the members of the arbitration entity of the Center of Arbitration and
Mediation of Santiago. If such mutual agreement is not reached by the parties
within the time period of 7 consecutive days starting from the written
requirement that is addressed from one party to the other regarding the matter,
the arbitrator will be appointed by the Commerce Chamber of Santiago (Cámara de
Comercio de Santiago A.G.), upon the sole written requirement of any of the
shareholders, from among the members of the arbitrational entity of the Center
of Arbitration and Mediation of Santiago (Centro de Arbitraje y Mediación de
Santiago). The Shareholders herein, for this purpose, grant special irrevocable
power of attorney to the Cámara de Comercio de Santiago A.G., so that it might
carry out such appointment. The arbitrators thus appointed will be able to take
on the position and perform their functions, as many times as they are required
for such effect by the shareholders. The arbitrator will be specially granted
the faculties to solve all matters related with their competence and/or
jurisdiction.

 

The arbitration will always take place in the city of Santiago, Chile.

 

 

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The arbitrator will always be granted the faculty to require from the contending
parties the allocation of funds that they deem in the case, in order to cover
legal and personal costs of the promoted lawsuit.

 

The shareholders confirm that, prior to the constitution of the arbitrational
court of law, the justice courts of law will be competent to decree prejudicial
measures that they require. The arbitrational court of law must later decree or
not maintain the prejudicial measures decreed by the regular justice, supplement
them or rather modify them, once the lawsuit has been filed. The parties hereto
agree from this point on that, the party that obtains the prejudicial measure
will have the time period of sixty (60) consecutive days from the date of
resolution that is granted to formally file the respective lawsuit before the
arbitrational court of law. After the arbitrational court of law has been
constituted the arbitrational court of law will have to precisely request all
precautionary measures.

 

TWENTY: Copies

This Shareholders’ Agreement is provided in 3 issues of an identical tenor and
date, leaving one in the hand of each one of the shareholders appearing and
another to be filed in the company in conformance with the Law.

 

FINAL CLAUSE: The bearer of an original or an authorized copy of this document
is granted the faculties to require and sign annotations, inscriptions and
sub-inscriptions that proceed in the corresponding registers. The legal capacity
of BBL’s representatives is evident in the public deed granted in Santiago
before the Notary Public Mr. Eduardo Avello Concha on September 5, 2013,
inscribed on page 77766 No. 51251 of the Trade Register of Santiago dated 2013;
and the legal capacity of Li3’s representative is evident in the private
document granted on January 27, 2014 in the city of Nueva York, United States of
America and authorized on an equal date before a notary public of New York,
which is currently going through the legalization process.

  

on behalf of Luis F. Saenz Rocha

Li3 ENERGY INC.

 

on behalf of Andrés Lafuente Domínguez /// Francisco Bartucevic Sánchez

BBL SpA