Exhibit 10.1

 

AGREEMENT

 

This Agreement is entered into on August 30, 2016 by and between:

 

MINERA SALAR BLANCO SpA ("MSB"), a stock company duly incorporated under the
laws of Chile; and

 

LI3 ENERGY INC. (“LI3” and together with MSB, the “Parties”), a company duly
incorporated under the laws of the State of Nevada, United States of America.

 

WHEREAS:

 

A. The Parties are the sole shareholders of comentario Minera LI Energy SpA (the
“Company”) and in such capacity are parties to that certain Shareholders
Agreement dated as of January 27, 2014, as amended (the “Shareholders
Agreement”).

 

B. MSB and LITHIUM POWER INTERNATIONAL LIMITED (“LPI”) have entered into a term
sheet on July 14th 2016 (the “Term Sheet”) for the funding and development of
the Maricunga Salar Project.

 

NOW, THEREFORE, the Parties agree as follows:

 

1)The Parties will attend the shareholders meeting of the Company summoned for
August 30, 2016 at 10:00 and in such meeting will unanimously approve:

 

(a)the Technical Memorandum called "Ranking and valuation of Salar de Maricunga
Mining Concessions, III Region - Chile", delivered by the expert Mr. Frits
Reidel of August 15,2016 that was delivered on August 24, 2016;

(b)the incorporation of a private corporation (sociedad anonima cerrada) under
the laws of Chile, under the name of Minera Salar Blanco S.A., with MSB
(“Newco”);

(c)the contribution by the Company to Newco of all its assets and the
contribution by MSB to Newco of the assets set forth in Annex A hereto. As a
consequence of such contributions, the Company will hold 72.11% of Newco and MSB
27.89% of Newco;

(d)a capital increase of Newco so that LPI, directly or through a wholly owned
subsidiary, becomes a shareholder of Newco, holding 50% of the shares of Newco,
along the lines of the transaction described in the Term Sheet. As a consequence
of this capital increase the participation of the Company and MSB in Newco will
be reduced to 36.05% and 13.95%, respectively; and

(e)the performance of the attorneys-in-fact appointed by the Parties as
shareholders of the Company and which resulted in the execution of the Term
Sheet and the transactions which will be approved at the shareholders meeting
mentioned in this paragraph 1).

 

2)The Parties will cause the Company to transfer to each of the Parties (pro
rata to their participation in the Company) its shares in Newco, whether by
sale, dissolution of the Company or otherwise as promptly and as tax efficiently
as possible after Newco’s incorporation and closing of the transaction with LPI.
Upon such a transfer, MSB and LI3 will receive shares of Newco representing
18.39% and 17.67% of Newco, respectively, and will become parties to the
Documentation (as defined below). The shares of MSB as a consequence of this
transfer are in addition to those referred to in 1(d) above.

 

3)In the shareholders meeting, the Parties shall grant a power of attorney to
Mr. Cristobal Garcia-Huidobro so that any of them may represent the Company in
the negotiation of an investment agreement and a shareholders agreement among
the Company, MSB and LPI along the lines of the terms and conditions set forth
in the Term Sheet, as well as those provisions which the attorneys may deem
necessary or convenient for these purposes (the “Documentation”).

 

 

 

 

4)For the avoidance of doubt, the shareholders agreement shall grant LI3 the
right to appoint 1 director of Newco as long as it holds no less than 10% of the
shares of the Newco; and the right to be informed by the management of the
operations and businesses of Newco.

 

The Parties acknowledge that even though the Term Sheet does not currently
include it, the shareholders agreement may (i) include a drag along; (ii)
include provisions regarding change of control to be agreed by all parties
(including Li3 Energy, Inc.); and (iii) provide quorums to pass resolutions with
the affirmative vote of 5 directors at the board and 75% of the issued and
outstanding shares at the shareholders level.

 

5)Each of the Parties shall comply with all the obligations and commitments
contained in the Documentation, including the non-compete obligation described
in the Term Sheet, provided that such non-compete will only apply to the direct
shareholders of Newco and not to their respective controlling entities
(notwithstanding the change of control provisions mentioned in 4(ii) above).

 

6)MSB will grant to LI3 a new non-revolving facility for an amount of USD
300,000 for two years (with a maximum drawing of USD 150,000 per year) due and
payable in one instalment 24 months after the first disbursement. All other
terms and conditions agreed between the Parties to the previous loans shall
apply to this new facility (including annual interest rate of 8.5% and a pledge
of shares of Newco instead of shares of the Company).

 

7)Each Party for itself, its officers, directors, employees, agents,
subsidiaries, affiliates, successors and assigns (collectively, its
“Affiliates”), declares that it has no pending claims or rights against the
other Party or its Affiliates with respect, among others, to the by-laws and
resolutions of the Company, the Shareholders Agreement and the Term Sheet
(including, but not limited to, the sale by MSB to LPI of its options to acquire
certain mining concessions in exchange for 16,000,000 shares of LPI) and, hereby
irrevocably and unconditionally (i) waives any right it may have or which may
acquire in the future against such Party or its Affiliates and (ii) release such
Party and its Affiliates from any and all liabilities, in each case arising from
or in connection with the by-laws and resolutions of the Company, the
Shareholders Agreement, the Term Sheet and otherwise.

 

8)Each of the Parties represents and warrants that (i) it has the power and
authority to enter into this Agreement and take the actions contemplated
hereunder, (ii) it has not transferred or assigned any of its rights under the
Shareholders Agreement and the Term Sheet, and (iii) the consent of no other
party is required to effectuate the transactions contemplated hereby.

 

9)This Agreement shall be construed in accordance with and governed by the laws
of the Republic of Chile.

 

10)This Agreement is executed in four original counterparts, two for each Party.

 

 

Minera Salar Blanco SpA:   /s/ Cristóbal Garcia-Huidobro       Cristóbal
Garcia-Huidobro       Chief Executive Officer  

 

  

Li3 Energy Inc:   /s/ Luis Saenz       Luis Saenz     Chief Executive Officer  
       

  

 

 

 

ANNEX

 

1.36% of Sociedades Legales Mineras Litio 1 a 6 (SLM Lithium 1-6).

2.100% of the Blanco Mining Concessions of 1,800 has. (plus the ones in
process).

3.100% of the Camp 1 Mining Concessions plus the leasing contract with Bienes
Nacionales which is currently under renewal process.

4.The trade mark Minera Salar Blanco (registered) plus its logo. The Internet
domain www.msblanco.com.