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EXHIBIT 10.3
TERMINATION OF OPTION AGREEMENT
THIS TERMINATION OF OPTION AGREEMENT (this
“Agreement”), dated as of December 12, 2007
(the
“Effective Date”), by and among SSC Mandarin Group
Limited (“SSC”), China Global Mining Resources Limited,
a British Virgin Islands company (“CGMR BVI”), China
Global Mining Resources Limited, a Hong Kong company (“CGMR
HK,” and together with CGMR BVI, “CGMR”), SSC
Mandarin Financial Services Limited (“SSCM FS”),
SSC
- Sino Gold Consulting Co. Ltd. (“SINO”), and
Wits
Basin Precious Minerals, Inc. (“WITS”), is made with
respect to the relinquishment of WITS rights conferred by an Option
Agreement, executed in March 2007, by and among WITS, SSCM FS
and SINO
(the
“Option Agreement”).
WHEREAS ,
the parties hereto (the “Parties”) wish to terminate
the Option Agreement.
NOW, THEREFORE ,
in consideration of the mutual undertakings expressed in this
Agreement and
f or
good and valuable consideration
, the
receipt and sufficiency are hereby acknowledged, the Parties hereby
agree that the Option Agreement shall be superseded and replaced in
its entirety by this Agreement, and the Parties further agree as
follows:
1.
As
of the Effective Date, the Option Agreement shall be
terminated and WITS shall relinquish its option to buy shares
in SINO (representing a 60% ownership interest in
SINO).
2.
As
of the Effective Date, WITS shall be deemed to have
100%
legal ownership and control of CGMR as set forth in the Sale
of Shares and Claims Agreement, executed in March 2007, by and
between WITS, SSC and CGMR BVI ("BVI Agreement") and the Sale
of Shares and Claims Agreement, executed in March 2007, by and
between WITS, SSC and CGMR HK ("HK Agreement," and together
with BVI Agreement, "CGMR Agreements"); and the Maanshan WFOE
and the Hubei WFOE. In connection therewith, SSC shall
transfer to WITS free from any debt or incumberance the
applicable share certificates, constituting 100% of the
outstanding shares of CGMR, corporate documents, company
seals, company chops, due diligence documents of such entities
and reasonably assist WITS in taking all applicable steps to
effect the necessary resignation from, and appointment of,
directors and managers to such entities.
3.
WITS
shall pay SSC (via wire transfer to the bank account to be
designated by SSC) within 60 days from the Effective
Date:
3.1
(i)
HKD 925,000 on account of fees paid to Mr. Qin of China Sun
Fund Management Limited for the Maanshan WFOE financing and
(ii) HKD 925,000 on account of fees as a fee for establishing
the Maanshan WFOE; and
3.2
HKD
2,000,000 on account of fees paid for the Hubei WFOE
capitalization in connection with CGMR on behalf of
WITS.
4.
WITS
shall further
pay SSC within 90 days from the later of (i) the Effective
Date and (ii) the completion of final due diligence of title
and permits relating to the Maanshan WFOE and the Hubei WFOE
USD $2,250,000 that SSC has contributed to the Maanshan WFOE
in connection with CGMR on behalf of WITS;
provided that
WITS may offset such payment against the expenses (limited to
direct expenses for third party professionals) incurred by WITS and
SINO on behalf of SSCM FS in connec
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