Shandong Terra Nostra
– Jinpeng Metallurgical Co., Ltd.
Amended and
Restated
Joint Venture
Contract
Amended
October
2005
Chapter 1: General
Provisions
In accordance with the
Laws of the People’s Republic of China on Joint Ventures
Using Chinese and Foreign Investment (the “Joint Venture
Law”) and other relevant Chinese laws and regulations,
Shandong Jinpeng Copper Co., Ltd. and Terra Nostra Resources Corp.,
previously known as Terra Nostra Technology Ltd. (hereinafter
referred to as the “Parties”), in accordance with the
principles of equality and mutual benefit, and through friendly
consultations, agree to enter into this Amended and Restated Joint
Venture Contract (referred to herein as this “Amended
Contract”), which amends and fully restates that certain
Joint Venture Contract entered into by the parties on December 11
th 2004 (referred to herein as the “Original
Contract”), which was amended on January 10 th ,
2005, for the purpose to jointly invest to set up a Chinese Foreign
Joint Venture (the “Joint Venture”) in Shandong
Province of the People’s Republic of China.
Chapter 2: Parties of
the Joint Venture
Article
2.1
Parties to this Joint
Venture are as follows:
Shandong Jinpeng Copper
Co., Ltd., (hereinafter referred to as Party A), registration
number 3723301800059, registered in Shandong province, China, and
its legal address is at Zouping, Shandong Province,
China.
Legal
representative:
Name:
Zhang Ke
Position:
Chairman
Nationality:
Chinese
Terra Nostra Resources
Corp. (hereinafter referred to as Party B), a Nevada corporation
with its common shares listed for trading on the United States Over
the Counter Bulletin Board (“OTC/BB”) under the trading
symbol TNRO, and having an office address of 1000-1166 Alberni St.,
Vancouver, British Columbia, V6E 3Z3 Canada.
Legal
representative:
Name:
Jeffery
Reynolds
Position:
Chief Financial
Officer
Nationality:
U.S.
Chapter 3:
Establishment of the Joint Venture
Article
3.1
In accordance with the
Joint Venture Law and other relevant Chinese laws and regulations,
both parties agree to set up one Chinese Foreign Joint Venture
limited liability company, the Joint Venture.
Article
3.2
The name of the Joint
Venture is:
In English:
Shandong Terra Nostra-
Jinpeng Metallurgical Co. Ltd.
In Chinese:
山東金鵬铜业有限公司
Registered office:
Zouping, Shandong Province, China.
Article
3.3
All activities of the
Joint Venture shall be governed by the laws, decrees and pertinent
rules and regulations of the People's Republic of China.
Article
3.4
The organizational form
of the Joint Venture is a limited liability company. Each party to
the Joint Venture is liable to the Joint Venture within the limit
of the capital subscribed by it. The profits, risks and
losses of the Joint Venture shall be shared by the parties in
proportion to their contributions to the registered
capital.
Chapter 4: The
Purpose, Scope and Scale of Production and Business
Article
4.1
The goals of the Parties
to the Joint Venture are to continue to improve the product
quality, expand production, develop new products, and gain a
greater position in world markets by adopting advanced and
appropriate technology, scientific management methods, and
international marketing efforts. The goal is to make
additional profit by marketing and selling products domestically
and internationally.
Article
4.2
The business scope of
the Joint Venture is as follows:
Copper products and
Copper Processing
Such production
capabilities or capacity shall be contributed by the acquisition of
the operating copper production assets of the following entities,
of which Party A is a controlling entity:
Shandong Jinpeng Copper
Co. Ltd.
Zouping Jinwang Copper
Co.
Zouping Regenerated
Resources Co. Ltd.
Furthermore, additional
products, processes and production capacity created from the funds
contributed by Party B, as well as in the ordinary course of
business, through achieved operational efficiencies, ongoing
expansion, and through continuous research and development, shall
be encompassed within the scope of business.
Article
4.3
The investment plan will
be to periodically invest funds as available, for the following
purposes, in order of priority:
1.
Firstly to improve the
current operations of the Joint Venture , and;
2.
Secondly, to improve and
upgrade production facilities to produce more product of a higher
quality products, and;
3.
Thirdly, to expand
domestic international marketing efforts.
Chapter 5: Total
Amount of Investment and the Registered Capital
Article
5.1
The total amount of
investment of the Joint Venture is $US 70,200,000.
Article
5.2
The registered capital
of the Joint Venture shall be $US 53,400,000, of which:
Party A has $US
26,166,000, accounting for 49%;
Party B has $US
27,234,000, accounting for 51%.
Increases to registered
capital are to be made in accordance with each Party’s
respective proportional interest in the Joint Venture, unless
agreed to otherwise by the Parties.
Article
5.3
Prior to the date
hereof, Party A fulfilled its investment obligations in the Joint
Venture by contributing existing fixed assets, which represent all
the fixed assets of the entities identified in Article 4.2 herein,
and include the minimum following values:
Party A:
Equipment:
US$17,622,000
Buildings:
US$5,767,200
Property Use:
US$1,121,400
Others:
US$1,655,400
Total:
US$26,166,000
Article
5.4
Party A shall provide
Party B with documentation satisfactory to Party B confirming that
all of Party A’s rights, titles and interest in the fixed
assets as identified in Article 5.3 have been validly and
effectively transferred to the Joint Venture, and are free and
clear of any encumbrances, liens, or other claims thereto, save and
except as may explicitly be agreed to by Party B.
Article
5.5
Party A represents and
warrants that it possesses the full power and authority to perform
its contribution as identified in Article 5.3, and that it has
obtained full and legally binding authorization to bind any related
parties thereby, including, as required, Shandong Jinpeng Copper
Co., Zouping Jinwang Copper Co., and Zouping Regenerated Resources
Co. Ltd.
Article
5.6
As of April 6, 2005,
Party B fulfilled its investment in the Joint Venture by
contributing in cash an initial investment in the amount of
US$1,000,000 cash (the “Initial
Investment”)..
Article
5.7
There shall be a further
capital contribution to the Joint Venture of US$26,234,000, to be
provided in cash or in kind, as approved by the Board of Directors
of the Joint Venture.
All subsequent capital
contributions are to be made in accordance with each Party’s
respective proportional interest in the Joint Venture, unless
agreed to otherwise by the Parties.
Article
5.8
Party A is hereby
granting to Party B the right to acquire its 49% of the Joint
Venture, subsequent to the capital contribution, or as at such time
as agreed upon. The consideration for this acquisition shall be
determined by Party A and Party B, acting in good faith, or based
upon a valuation performed by an independent valuator satisfactory
to the Parties.
Chapter 6:
Responsibilities of Each Party to the Joint Venture
Article
6.1
Party A and Party B
shall be respectively responsible for the following
matters:
Party A:
1.
Handling of applications
for approval, registration, business license and other matters
concerning the establishment of the Joint Venture from relevant
departments in China;
2.
Processing the
application for the right to the use of a site to the authority in
charge of the land;
3.
Organizing the design
and construction of the premises and other engineering facilities
of the Joint Venture;
4.
Providing cash,
machinery, equipment and premises as required under Article 5.3
herein;
5.
Assisting the Joint
Venture in purchasing or leasing equipment, material, raw
materials, article for office use, means of transportation and
communication facilities etc.;
6.
Assisting the Joint
Venture in contacting and settling the infrastructure facilities
such as water, electricity, transportation etc.;
7.
Assisting the Joint
Venture in recruiting Chinese management personnel, technical
personnel, workers and other personnel as needed:
8.
Assisting foreign
workers and staff in applying for entry visas, work licenses and
handling their travel procedures;
9.
Responsible for handling
other matters as requested by the Joint Venture.
Party B:
1.
Provide its cash
contribution as required under Article 5.6 herein;
2.
Provide financing and
investment;
3.
Source strategic
partners, services, and markets outside of China.
4.
Arrange all foreign
affairs, foreign contracts and other matter outside of
China.
5.
Responsible for handling
other matters a
