Exhibit 10.1


 





 


November 21, 2014


 


[Shareholder name]


[Shareholder address]


[Shareholder email]


 


		Re:	Registration Damages Settlement Agreement



 


Dear Investor:


 


You (“Purchaser”) purchased
securities of Li3 Energy, Inc. (“we,” “us” or the “Company”) in a private placement offering
that closed between April 7, 2011 and May 19, 2011 (the “2011 PPO”).All capitalized terms used in this settlement agreement
(the “Agreement”) and not otherwise defined shall have the respective meanings ascribed to such terms in the Registration
Rights Agreement, dated as of April 7, 2011, by and among Li3 Energy, Inc. and the Purchasers party thereto.


 


Under the terms of the Registration Rights
Agreement we entered into with you in connection with the offering, if we fail to file the Registration Statement by June 21, 2011,
or fail to cause the Registration Statement to be declared effective by November 28, 2011, then, for each month that the Event
is not cured, we are required to pay each investor an amount in cash, as liquidated damages, equal to 2% of the purchase price
paid by you in the 2011 PPO, or $[X] (the “Penalty”).


 


Due to the need to focus Company resources
and management’s attention during April and May 2011 on concluding the 2011 PPO, the strategic financing by POSCO, and completing
our acquisition of a 60% ownership interest in the Maricunga Project, the registration statement (the “Registration Statement”)
required by the Registration Rights Agreement we entered into with you in connection with the 2011 PPO was filed on July 1, 2011,
ten (10) days after the Filing Date, and the Registration Statement was not declared effective until March 19, 2012, one hundred
twelve (112) days after the Effectiveness Date.


 


On September 23, 2014, the Company ́s
Board of Directors determined to issue shares of common stock in lieu of cash, in an amount up to $250,000 in aggregate, in order
to fully settle the Penalty. The number of shares to be issued to each 2011 PPO Purchaser will be calculated based on the volume
weighted average price of the Company ́s common stock for the thirty days prior to, and including, the date upon which the
Company obtains approval for the Agreement from shareholders representing 67% or more of the 2011 PPO Purchasers.


 




    	 



    	 



    

 


For the following reasons, we are requesting
that you accept this settlement in lieu of the Penalty:


 


		(a)	The delay was caused in large part by the Company’s efforts to finalize its acquisition of
Maricunga and the strategic financing deal with POSCO;



 


		(b)	The foregoing transactions were likely of greater long-term value to the Holders than more expeditious
effectiveness of the Registration Statement would have been;



 


		(c)	It is in the best interests of the Company, and all of its stockholders to retain all of its capital
resources in order to execute its business plan;



 


		(d)	At all times since the Effectiveness Date, all the Shares have been eligible for public sale immediately
under the Securities Act pursuant to Rule 144;



 


		(e)	At all times since the Effectiveness Date, the Warrants have been significantly out-of-the-money,
so no Purchaser would have had any immediate need to transfer Warrant Shares; and



 


		(f)	The Registration Statement was ultimately declared effective on March 19, 2012.



 


We ask you to sign the Agreement below
as evidence of your agreement to settle1, for and on behalf of all Holders2, the right to receive liquidated
damages and all other related or similar rights under Section 2(d) of the Registration Rights Agreement with respect to the failure
of the Company to file the Registration Statement by the Filing Date or to cause the Registration Statement to become effective
by the Effectiveness Date.


 


By signing below, you are agreeing to the
Agreement. The Agreement shall become effective once the persons who have executed them (the “Consenting Investors”)
constitute the Supermajority Purchasers and the Supermajority Holders, respectively.


 


1.            Concurrently
with the execution hereof, and in full and complete satisfaction of any and all claims by the Purchasers or any Purchaser relating
to the Penalty, the Company shall issue to the Purchasers, pro rata in accordance with their respective investment amounts in the
Company in connection with the 2011 PPO, an aggregate of $[Y] in shares (the “Penalty Shares”) of restricted
common stock, par value $0.001 (“Common Stock”) of the Company.


 


 






1Particular provisions of the
Registration Rights Agreement may be waived with and only with an agreement or consent in writing signed by the Company and the
Holders of 67% or more of the then outstanding Registrable Securities (“Supermajority Holders”), pursuant to Section
6(f) of the Registration Rights Agreement. This Agreement is dated and shall be effective upon execution by Holders constituting
the Supermajority Holders.


 


2This Agreement is being signed
by each undersigned Holder with respect to all Registrable Securities held by all Holders, as stockholders of the Company and for
all other purposes with respect to this Registration Damages Waiver. This Registration Damages Waiver is irrevocable and shall
be effective with respect to each of the undersigned Supermajority Holders and all other Holders and all affiliates, successors,
heirs, personal representatives, and assigns of such Holders.


 




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2.            Each Purchaser,
as RELEASOR, in consideration of the agreement contained herein and for other good and valuable consideration received from the
Company, as RELEASEES, the receipt of which is hereby acknowledged, does hereby fully, finally and unconditionally release and
forever discharge the RELEASEES, their former, present, and future partners, officers, employees, representatives, stockholders,
directors, agents, predecessors, former and present subsidiaries, parent entities, affiliates, divisions, licensees, receivers,
distributors, successors and assigns, heirs, executors, administrators, attorneys, associates, and anyone affiliated with or acting
on behalf of any of them (collectively, the “RELEASED PARTIES”) from all actions, causes of action, suits, debts, dues,
sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances,
trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity, which against
the RELEASED PARTIES, such RELEASOR, such RELEASOR’S attorneys, associates, agents, successors, assigns, heirs, parent or
subsidiary corporations, and anyone affiliated with or acting on behalf of any of them, ever had, now have or hereafter can, shall
or may have, from the beginning of the world to the day of the date of this Agreement which arise out of or relate to the 2011
PPO.


 


3.            The parties acknowledge
and agree that this Agreement embodies a compromise settlement which is not in any respect, nor for any purposes, to be deemed
or construed to be an admission or concession of any liability whatsoever on the part of any of the parties.


 


4.            Representations
and Warranties of the Purchasers. Each Purchaser, severally and not jointly, hereby represents, warrants and acknowledges as
to the following as of the date hereof:


 


(a)            Own Account.
Such Purchaser understands that the Penalty Shares are “restricted securities” and have not been registered under the
Securities Act of 1933 (“1933 Act”) or any applicable state securities law and is acquiring the Penalty Shares
as principal for its own account and not with a view to or for distributing or reselling such Penalty Shares or any part thereof
in violation of the 1933 Act or any applicable state securities law, has no present intention of distributing any of such Penalty
Shares in violation of the 1933 Act or any applicable state securities law and has no direct or indirect arrangement or understandings
with any other persons to distribute or regarding the distribution of such Penalty Shares in violation of the 1933 Act or any applicable
state securities law.


 


(b)            Purchaser Status.
At the time such Purchaser was offered the Penalty Shares, it was, and as of the date hereof it is, either: (i) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(5), (a)(6), (a)(7) or (a)(8) under the 1933 Act or (ii) a “qualified
institutional buyer” as defined in Rule 144A(a) under the 1933 Act. Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.


 


(c)            Experience
of Such Purchaser. Such Purchaser has such knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks associated with its acquisition of the Penalty Shares, and has so evaluated the
merits and risks of such acquisition. Such Purchaser is able to bear the economic risk associated with the acquisition of the Penalty
Shares and is able to afford a complete loss of the value of the Penalty Shares.


 




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(d)            No General
Solicitation. Such Purchaser is acquiring the Penalty Shares as part of a privately negotiated settlement with the Company
and not as a result of any advertisement, article, notice or other communication regarding the Penalty Shares or otherwise published
in any newspaper, magazine or similar media or broadcast over television, radio or the Internet, or presented at any seminar or
any other general solicitation or general advertisement.


 


(e)            Reliance on
Representations and Warranties. Each Purchaser understands that the Penalty Shares are being issued to such Purchaser in reliance
on exemptions contained in specific provisions of United States federal securities laws and that the Company is relying upon the
truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth
in this Agreement in order to determine the applicability of the exemptions contained in such provisions.


 


(f)            Legend.
Each Purchaser acknowledges and agrees that the certificates representing the Penalty Shares shall bear a restricted legend, in
the form and substance as set forth below, prohibiting the offer, sale, pledge, mortgage or transfer of the securities, except
(1) (i) pursuant to an effective registration statement filed under the 1933 Act, (ii) pursuant to an exemption from registration
provided by Rule 144 under the 1933 Act (if available), or (iii) pursuant to any other exemption from the registration requirements
of the Securities Act.


 


“THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL
FOR THIS CORPORATION, IS AVAILABLE.”


 


5.            This Agreement
shall be binding upon the parties hereto and their respective successors, assigns, heirs and representatives.


 


6.            This Agreement
shall be governed by and construed in accordance with the laws of the State of New York without regard to conflict of law principles.
The invalidity or unenforceability of any one or more phrases, clauses or sections of this Agreement shall not affect the validity
or enforceability of the remaining portions of it.


 


7.            Any dispute that
arises under this Agreement shall be adjudicated in the state or the federal courts located in New York, New York.


 


8.            This Agreement
may be executed in counterparts, in PDF format or by facsimile, each of which shall be deemed an original but when taken together
shall constitute one and the same agreement.


 




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9.            This Agreement
may not be modified or amended orally, and no alleged amendment, modification or waiver of this Agreement shall have any force
or effect, unless set forth in writing and signed by the party against whom enforcement is sought.


 


10.            This Agreement
contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or other negotiations,
arrangements, representations, agreements, including whether in writing or oral agreements.


 


Please let me know whether you have any
questions about this request or the Company’s progress. We appreciate your continued support in our efforts.


 


Li3 ENERGY, INC.


 


	By:	 	 
	Name:  Luis Saenz	 
	Title:  Chief Executive Officer	 


 


[Purchaser/Holder signature page follows
immediately]


 




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Consenting Investor Signature page to
Registration Damages Settlement Agreement


 


The undersigned Consenting Investor agrees to the above Registration
Damages Settlement Agreement:


 


	CONSENTING INVESTOR (individual)	 	CONSENTING INVESTOR (entity)
	 	 	 
	 	 	 
	Signature	 	Name of Entity
	 	 	 





	 	 	By:	 
	Print Name	 	 	Signature





	 	 	 
	 	 	Print Name:	 
	Signature (if Joint Tenants or Tenants in Common)	 	 





	 	 	Title:	 
	 	 	 	 
	Date:	 	 	 	 


 




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