EXHIBIT 10.55
 
CONSULTING AGREEMENT
 

 
THIS CONSULTING AGREEMENT (“Agreement”) is made effective as of August 11, 2008
by and between
 
(1)
China Global Mining Resources Limited (“Company”), a corporation duly
established in British Virgin Island; and

 
(2)
Mr. LU Benzhao address: No. 204, Builidng 17, Liyuan Village, Huashuan District,
Maanshan, Anhui Province ID No.340505195112240018 (“Consultant”).

 
 
WHEREAS,

 
(A)
The Company has entered into certain equity transfer transactions in relation to
XNS, Sudan and Zhaoyuan (“Equity Transfers”) with the Consultant through one of
its subsidiaries in China (“Subsidiary”) to acquire certain businesses of iron
ore mining, processing and sale of ironstone and iron ore powder (“Businesses”).

 
(B)
The Company is willing to engage the Consultant and the Consultant is willing to
provide the Company with consulting services for the operation and further
development of the Businesses.

 
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:
 
1.           Appointment
 
The Company hereby agrees to appoint the Consultant, and the Consultant hereby
agrees to serve, as Consultant providing consulting services (“Services”) for
the Company on the terms and conditions set forth in this Agreement.  The scope
of the Services to be provided by the Consultant is defined in Schedule A
attached hereto.
 
The relationship between the Company and the Consultant shall be respectively
that of principal and independent contractor and in no circumstances shall the
Consultant be deemed to be employee, agent or representative of the Company.
 
2.           Service Term
 
The service term under this Agreement, shall be 2 years, commencing from the
date on which the Equity Transfers have been approved and registered by the
relevant Chinese authorities (“Registration Date”).
 
3.           Compensation
 
Subject to the performance by the Consultants of the obligations set out in
Schedule A, the Company shall grant to the Consultant as full compensation for
its Services in a total amount of USD 53.95 million (or RMB equivalent to as of
the date of signing of this Agreement) as specified in Schedule B
(“Compensation”) in accordance with this Clause 3.
 
 
 

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3.1           Upfront payment
 
The Surety Deposit (the amount is subject to valid receipt) paid by the Company
to the Consultant under an Equity and Asset Transfer Heads of Agreement dated 4
May, 2007 shall automatically be converted as the upfront payment to the
Consultant, and shall be deducted from the First Payment.
 
3.2           Payment in installments
 
The Company shall make Payments in installments to the Consultant during the
Service Term according to Schedule B.
 
3.3           Payment of WB shares
 
The Company shall procure that the Consultant receives up to 50 million WB
Shares in consideration of and subject to his fulfillment of obligations set out
under item 8 of Schedule A, but subject to Schedule B.
 
3.4           Offset
 
The Consultant guarantees the representation and warranties expressed in the
Equity Transfers to be fully performed in good faith.  Had any disputes,
including but not limited to tax issues challenged by authorities, arising from
the defective or imperfect satisfaction of the representation and warranties
after the closing of Equity Transfers, any costs or expenses caused by settling
these disputes by the Company or its subsidiaries shall be setoff from the
annual payment to the Consultant, from the nearest due installment until totally
setoff.
 
The Consultant guarantees that the target companies in the Equity Transfers do
not conduct any payment beyond the common business line after the execution of
the agreements and before the closing (“Period”).  Except for the liabilities
disclosed to the purchaser of the Equity Transfers before the signing of the
agreements, any new liabilities arising in the period, including but not limited
to the purchase agreement with prepaid price, should be recorded and inform the
purchaser properly and timely.  Any income associated with the new liabilities
(if any) should stay in the target companies and transfer to the purchaser at
the closing date as assets.  If there is no income associated with the
liabilities, the amount of the liabilities should be deducted from the purchase
price of the equity transfer agreements on the closing date.  The Consultant
agrees that, any new liabilities happened and disclosed in the period, or any
new liabilities not disclosed in the period, but later proved to happen the
period, with no income associated with, or income not transferred to the
purchaser as assets, not deducted from the purchase price of the equity purchase
agreements, including but not limited to delivering goods or payment after the
closing date, shall be afforded by the Consultant.  The costs, expenses or
losses caused with such liabilities to the Company or its subsidiaries shall be
offset from annual payment to the Consultant, from the nearest due installment
until totally setoff.  The costs, expenses or losses shall be calculated with
the actual amount of payment, or of goods, with the market value of the date of
delivery.
 
4.           Non-Competition
 
The Consultant agrees that, during the term of this Agreement and for a period
of five (5) years following the expiration of this Agreement (“Non-Competition
Period”) and within the territory of Maanshan Municipality and Nanjing
Municipality, they shall not, directly or indirectly (through any affiliates,
relatives or otherwise), (i) engage in the business of, or own, manage, operate,
finance, join, control or participate in the ownership, management, operation,
financing, or control of, or be connected as an officer, director, employee,
employer, partner, principal, agent, representative, consultant or otherwise
with, or use or permit his name to be used in connection with, any business or
enterprise engaged in undertakings identical with or similar to the Businesses,
or (ii) cause or attempt to cause any client, customer or supplier of the
Company and/or the Subsidiary or any of their affiliates to terminate or reduce
its business with the Company and/or the Subsidiary or any of their affiliates,
to the extent that circumstances specified in relation to the Equity Transfers
are an exception to this Non-Competition clause.
 
 
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5.           Acknowledgement
 
The Consultant hereby acknowledges and agrees that the Compensation to be paid
by the Company hereunder for the Services is adequate to compensate the
Consultant for his obligation not to compete with the Company and/or the
Subsidiary or any of their affiliates, and will not be contested by the
Consultant in any dispute between the parties concerning the enforceability of
this Agreement.
 
6.           Non Solicitation of Personnel
 
During the Non-Competition Period, for whatever reason, the Consultant
undertakes not to directly or indirectly (through any affiliates, relatives or
otherwise) induce or seek to induce, persuade, hire or retain any executive
employee employed by Company, the Subsidiary and their affiliated companies at
the date of termination, to join or provide services to any other person, firm,
company or other organisation whether as director, principal, employee,
consultant, agent or in any other capacity.
 
7.           Confidentiality
 
7.1
During the Non-Competition Period, neither the Consultant nor the Company, shall
use, disclose, publish or otherwise disseminate any Confidential Information (as
defined herein) to any person, firm, company, association or other entity for
any reason or purpose whatsoever, except as necessary for the performance of his
duties for the Company, the Subsidiary and any of their affiliates.  For purpose
hereof, “Confidential Information” includes

 
 
(i)
any and all information that has been created, discovered, or developed by, or
otherwise become known to the Company, the Subsidiary and/or any of their
affiliates (including, without limitation, information created, discovered,
developed or made known to the Company, the Subsidiary and/or any of their
affiliates by the Consultant arising out of his Services to the Company, the
Subsidiary and/or any of their affiliates) or in which property rights have been
or may be assigned or otherwise conveyed to the Company, the Subsidiary and/or
any of their affiliates, which information has commercial value to the Company,
the Subsidiary and/or any of their affiliates and is treated by the Company, the
Subsidiary and/or any of their affiliates as confidential, is confidential and
proprietary information belonging solely to the Company, the Subsidiary and/or
any of their affiliates, their business or the business of any of their
customers, their business plans and projects, computer programs, know-how,
improvements, marketing plans, pricing, strategies, forecasts budgets,
projections, developments, manufacturing information, technical and engineering
information, information regarding procurement, sale activities, mining, site
selection, processing, credit and financial data, customer lists, trade secrets,
patents, copyrights and all other inventions, ideas, original works or
authorships and discoveries whether patentatable, copyrightable or not, which
are created and learned by or accessible to their employees in connection with
their provision of services to the Company, the Subsidiary and/or any of their
affiliates; and

 
 
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(ii)
any and all information relating to the existence of this Agreement and/or the
subject matter of this Agreement.

 
7.2
No Party shall disclose any Confidential Information to any third party without
the prior written approval of the other Party except if required by applicable
laws and to their professional advisors.

 
8.
Notice

 
All notices and other communications provided for herein shall be in writing and
shall be deemed to have been duly given, delivered and received (a) if delivered
personally or (b) if sent by courier, in each case to the party to whom it is
directed at the following addresses (or at such other address for any party as
shall be specified by notice given in accordance with the provisions hereof,
provided that notices of a change of address shall be effective only upon
receipt thereof).  Notices delivered personally shall be effective on the day so
delivered; notices sent by courier shall be effective on the earlier of the
second business day after timely delivery to the courier or the day of actual
delivery by the courier:
 
If to the Consultant:
Mr. LU Benzhao

 
 
Address:  No. 204, Builidng 17, Liyuan Village, Huashuan District, Maanshan,
Anhui Province /phone 86-555-3123063 /fax

 
If to the Company:
King, Stephen D.

 
 
4243 Dunwoody Club Drive, Suite 103, Atlanta, GA, 30350 USA/Phone +1 (678) 222
0291/Fax +1 (678) 222 0475

 
 
Attn:  Mr. King, Stephen D

 
 
And:

 
 
William B. Green

 
 
Four Seasons Place, 8 Finance Street Central, Hong Kong / Phone (852) 9339 8557
/ Fax (852) 3196 8609

 
 
Attn:  Mr. William B, Green

 
9.
Prior Agreement

 
All prior agreements between the Company and the Consultant with respect to the
said consultancy, are hereby superseded and terminated effective as of the date
hereof and shall be without further force or effect.
 
10.           No Representations
 
No agreements or representations, or al or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which is not
set forth expressly in this Agreement.
 
11.           Severability
 
The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.  In furtherance
and not in limitation of the foregoing, should the duration of, geographical
extent of, or business activities covered by any provision of this Agreement be
in excess of that which is valid and enforceable under applicable law, then such
provision shall be construed to cover only that duration, extent or activities
which may validly and enforceability covered.
 
 
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12.           Counterparts
 
This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument.
 
13.           Governing Law
 
This Agreement shall be construed and enforced in accordance with the procedural
and substantive laws of Hong Kong.
 
14.           Arbitration
 
The Parties shall attempt to settle any dispute, controversy or claim arising
out of or in connection with this Agreement exclusively through friendly
consultation, or if this fails, shall refer any such dispute, controversy or
claim to arbitration in Hong Kong by the Honk Kong International Arbitration
Centre in accordance with the UNCITRAL Arbitration Rules.  The proceedings shall
be conducted in the English language.
 
Any arbitration award resulting from such proceedings shall be final and binding
on the parties and shall not be subject to appeal to any court.  Any party in
whose favour an award is made may apply to any court with jurisdiction to
enforce the arbitration award.
 
15.           Assignment
 
The Company may assign, transfer, or subcontract its obligations as set forth
therein, or any claim or right hereunder, without the prior written consent of
the Consultant.  This Agreement is for the provision of personal services and
may not be assigned or subcontracted by Consultant without the written consent
of the Company.
 
16.           Headings
 
The headings and subheadings of the sections herein are used for convenience and
ease of reference and are not to be construed as limiting the scope or intent of
any section herein.  The use hereon of the masculine, feminine or neuter forms
shall also denote the other forms, as in each case the context may require.
 
17.           No Waiver
 
No waiver of any term, provision or condition of this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be or be
construed as further or continuing waiver of any such term, provision or
condition or as a waiver of any other term, provision or condition herein.
 
18.           Amendments
 
This Agreement may be amended, modified, renewed, superseded or canceled, and
any of the terms, covenants or conditions hereof may be waived only by a written
instrument executed by all parties hereto.  The failure of any party at any time
to require performance of any provision herein by any other party hereto shall
in no manner affect the right of such party at a later time to enforce same.
 
 
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19.           Miscellaneous
 
18.1
The parties shall comply with any and all applicable laws, rules and regulations
of the governmental authorities of both the Peoples Republic of China and Hong
Kong concerned for performing the said services in this Agreement.

 
18.2
The parties shall not issue any press releases or make any other similar
publications with respect to this Agreement without first consulting with, and
obtaining the prior written approval of the other party.

 
18.3
Consultant agrees to indemnify the Company for any violation by Consultant of
section 18.1 requirements in performing services pursuant to this Agreement.

 
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first above written.
 
COMPANY
 
By: 
/s/ Stephen D.
King                                                                                     
Name:
Mr.
Title:
CEO

  
                     

CONSULTANT
 
By: 
/s/ Mr. LU
Benzhao                                                                                 
Name:
Mr. LU Benzhao
 
 

  
                     
 
 
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SCHEDULE A
 
SCOPE OF CONSULTING SERVICES
 
1.
Provide strategic advice to the CEO and board of directors of the Company and
Subsidiary with respect to the operation and development of the Businesses;

 
2.
Carry out the decision made by the board of directors of the Company and the
Subsidiary in relation to the Businesses.

 
3.
Assist on the communication and consultation with the local Chinese authorities
to ensure that all the approvals, permits, renewals and extensions required by
law are obtained, maintained and in effect for the operation and development of
the Businesses;

 
4.
Report and provide information to the Board of Directors of the Company and
Subsidiary on a timely bases relating to each communication and consultation
(formally or informally) with the local Chinese authorities;

 
5.
Attend strategy meeting as requested by the CEO or Chairman of the board of
directors of the Company and subsidiary; and

 
6.
Achieve the following targets in relating to the Equity Transfers to receive the
Upfront Payment and retain the Surety Deposit under this Agreement:

 
·
The Equity Transfers are approved and registered by the relevant Chinese
authorities;
 
·
All the obligations of the Consultant under the Equity Transfers have been
fulfilled.

 
7.
To receive the Annual Payments in accordance with the provisions of Clauses 3.2,
3.3 and 3.4:

 
 
 
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SCHEDULE B
 
TOTAL COMPENSATION FOR THE SERVICES
 
The total compensation in the amount of US $53.95 million (or RMB equivalent to
as the middle rate issued by BOC as of the date of Aug 11, 2008) payable by the
Company for the Consultant’s Services during the Service Term consists of:
 
(i)
A Surety Deposit in HK dollars (which amount is subject to valid receipt) has
already been paid to the Consultant under an Equity and Asset Transfer Heads of
Agreement dated 4 May, 2007 (“Surety Deposit”);

 
(ii)
US$10.21 million shall be credit against the Surety Deposit (subject to valid
receipt) first, and the balance shall be paid on next business day after the
closing date of the Equity Transfers, (“First Payment”).  If the next business
day is bank holiday, the First Payment shall be made the next business day after
the bank holiday.

 
(iii)
The balance shall be paid by Dec 31, 2009. (“Second Payment”), conditional on
the Equity Transfers having been closed.

 
(iv)
Up to 50 million shares of Wits Basin Precious Minerals Ltd. (“WB Shares”) will
be delivered to the Consultant within 30 months following the closing date of
the Equity Transfers to the extent that, if, through his Services,

 
 
(a)
the Consultant has caused one of the Company’s subsidiaries, Sudan Co., to
produce 200,000 ton iron ore concentrate with Fe 62% ±1% (“Qualified Product”)
every 6 months (“6-month Period”), 10 million WB Shares, subject to the
guarantee that Sudan Co. produces 1 million ton Qualified Product during the
period from Jan 1, 2009 to Jun 30, 2011, will be delivered to the Consultant at
the end of every 6-month Period,; or

 
 
(b)
the Consultant has caused Sudan Co., to produce 1 million ton Qualified Product
during the period from Jan 1, 2009 to Jun 30, 2011, but without achieving
200,000 ton Qualified Product in one or more 6-month Period, the Company will
also deliver the rest undelivered WB Shares of the 50 million WB Shares to the
Consultant by Jun 30 2011.

 
Each of the 6-month Period is calculated from Jan 1, 2009 to Jun 30, 2009, Jul
1, 2009 to Dec 31, 2009, Jan 1, 2010 to Jun 30, 2010, Jul 1, 2010 to Dec 31,
2010, and Jan 1, 2011 to Jun 30, 2011.
 

 
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