Exhibit 10.1
AGREEMENT
This Agreement is dated for reference this 8th day of July,
2008
BETWEEN
Zhong Chuan International Mining Holding Co.,Ltd.
(hereinafter “ Zhong Chuan ”)
AND
Sterling Group Ventures, Inc.
(hereinafter “ Sterling ”)
AND
Ximing Sun and Charles Yan
(collectively hereinafter “ Mont Sea Shareholders
”)
WHEREAS:
| A. |
Zhong Chuan is a Chinese mining company with
connections and resources in the mining industry in China. Zhong
Chuan is interested in expanding into lithium business.
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| B. |
Sterling is a Nevada, US company specializing
in lithium exploration and development and with its shares traded
on the United States OTC Bulletin Board.
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| C. |
Zhong Chuan, with consent from Sterling, has
completed a transaction to acquire from Beijing Mianping Salt Lake
Research Institute ( "Mianping" ) certain interest in
Mianping's proprietary technology and know-how in lithium, and in
exploration license No. 5400000730283 (the " Exploration
License ") covering Dangxiongcuo Salt Lake in Tibet, China (the
" Property "). Zhong Chuan has acquired interests in certain
other salt lake in Tibet.("Other Interests")
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| D. |
Mont Sea shareholders are the shareholders
holding all the issued and outstanding shares in the stock of Mont
Sea Holdings Ltd. (" Mont Sea "), a company incorporated in
Hong Kong.
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| E. |
Mianping and Micro Express Holdings Inc. ("
MEH ") , a wholly owned subsidiary of Sterling, entered into
an agreement dated September 16, 2005 (the " Initial
Agreement "), to jointly explore and develop the Property. The
application to establish a joint venture company in Tibet to
explore and develop the Property was submitted to, but has not been
approved by, regulators in Tibet, China.
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| F. |
The Parties wish to restructure the
transactions contemplated under the Initial Agreement, and to
jointly develop the Property and lithium resources in Tibet and
elsewhere, by way of a cooperative joint venture to be established
pursuant to the terms of this Agreement.
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NOW THEREFORE THIS AGREEMENT WITNESSES
that in consideration of the premises and the covenants and
agreements contained in this Agreement, the Parties covenant and
agree with each other as follows:
1. Transition Arrangement.
1.1 Upon this Agreement being effective, the
Initial Agreement will expire, and Zhong Chuan shall cause Mianping
to repay to MEH RMB 6,000,000 by depositing the said amount into an
account designated by MEH.
1.2 Zhong Chuan and Mont Sea Shareholders
acknowledge and agree that until a Sino-foreign cooperative joint
venture company (the " CJV ") is established to hold and own
the Exploration License, they shall hold (or cause Mianping to
hold) the Exploration License in trust for Sterling and for the CJV
to be established, and shall keep the Exploration License valid and
effective, free from any encumbrance or liability.
1.3 Zhong Chuan agrees that it shall not enter
into any agreement or conduct any business in competition or
conflict with any transactions contemplated hereunder, and any of
such agreement or business shall be acceptable to Sterling and Mont
Sea Shareholders.
1.4 The Parties shall work together to ensure
that the termination of the Initial Agreement and the entering of
this Agreement shall comply with Chinese regulations applicable to
those agreements and to the Exploration License.
1.5 The Parties agree that an operating company
(the " Opco ") may need to be established prior to the
establishment of the CJV, for the purpose of applying for and
holding required approvals, permits and licenses with respect to
the development of the Property. The Parties agree that the Opco
shall hold all such approvals, permits and licenses in trust for
the CJV, and pursuant to the letters and spirit of this
Agreement.
2. The CJV
2.1 Mont Sea Shareholders and Zhong Chuan shall
make best efforts to cause the CJV to be established within ninety
(90) days from the date of this Agreement, subject to required
regulatory approval and based on a joint venture agreement or an
acquisition agreement (the " JV Agreement "), which shall
contain all key terms of this section 2.
2.2 The CJV may be established by way of
acquisition of interest in the Opco by Mont Sea, or by way of
incorporation under the Chinese laws, such that subject to Chinese
regulatory approvals, Mont Sea shall hold up to sixty-five percent
(65%) but no less than fifty-one percent (51%) of shares in the
CJV, and Zhong Chuan (or its affiliate) shall hold the balance of
the shares in the CJV.
2.3 The registered capital of the CJV shall be
RMB 100,000,000. Zhong Chuan and Mont Sea shall cause all the
registered capital of the CJV to be timely advanced to the accounts
of the CJV, pursuant to the terms of the CJV agreement to be
entered into between Mont Sea and Zhong Chuan, and pursuant to
applicable Chinese regulations.
2.4 Zhong Chuan shall cause to be transferred to
the CJV, and the CJV shall own and hold all Mianping's (and/or
Opco's) title to and interest in any exploration or mining licenses
in lithium resources in China, including the Exploration
License,and Other Interests.
2.5 The Parties shall cause the CJV to adopt a
business plan expeditiously for the exploration and development of
the Property, and construction of related facilities.
2.6 If for any Chinese regulatory or policy
reasons, Mont Sea is not permitted to have more than fifty-one
percent (51%) interest in the CJV, then Mont Sea and Zhong Chuan
shall revise the JV Agreement such that:
(a) Mont Sea shall have a forty-nine percent (49%) interest in the
CJV;
(b) Mont Sea shall be entitled to receive returns on its investment
in the CJV on a priority and accelerated basis until its investment
in the CJV and the Property is fully recovered; and
(c) Mont Sea shall be permitted to manage the daily operation of
the CJV pursuant to a management agreement to be entered into
between Mont Sea and Zhong Chuan, on terms and conditions
satisfactory to Sterling.
2.7 The Parties shall cause all necessary
corporate actions to be taken to
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