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EXHIBIT 10.1
THE CONTRACT FOR SINO-FOREIGN EQUITY JOINT VENTURE
Chapter 1 General Provisions
In accordance with the Law 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, Asia Magnesium Co.,
Ltd., Shanxi
Senrun Coal Chemistry Co., Ltd., and Taiyuan Yiwei Magnesium
Co., Ltd., in
accordance with the principle of equality and mutual benefit and
through
friendly consultations, agree to jointly invest to set up a
joint venture
enterprise, Shangxi Gu Country Jinwei Magnesium Corp., Ltd. in
Gu Country,
Shanxi province of the People s Republic of China.
Chapter 2 Parties of the Joint Venture
Article 1
Parties to this contract are as follows: Asia Magnesium Co.,
Ltd., (hereinafter
referred to as Party A), registered in Hongkong.
Legal representative: Dong Jiang
Position: Chairman
Nationality: Hongkong, P.R.C.
Shanxi Senrun Coal Chemistry Co., Ltd. (hereinafter referred to
as Party B),
registered with Shanxi Gu Country. Its legal address at Gu
Country, Shanxi
Province
Legal representative: Yu, Yuesheng
Position: ChairmanNationality: P.R.C.
Taiyuan Yiwei Magnesium Co., Ltd. (hereinafter referred to as
Party C),
registered with Shanxi Ysaiyuan City. Its legal address at
Fujiayao Village,
Nitun Town, Yangqu Country, Taiyuan City, Shanxi Province
Legal representative: Huang, Yuwei
Position: Chairman
Nationality: P.R.C.
Chapter 3 Establishment of the Joint Venture Company
Article 2
In accordance with the Joint Venture Law and other relevant
Chinese laws and
regulations, all the parties of the joint venture agree to set
up joint venture,
Shangxi Gu Country Jinwei Magnesium Corp., Ltd., (hereinafter
referred to as the
joint venture company).
Article 3
The name of the joint venture company is Shangxi Gu Country
Jinwei Magnesium
Corp., Ltd.. The legal address of the joint venture company is
at Yueyang Town,
Gu Country, Shanxi Province.
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Article 4
All activities of the joint venture company shall be governed by
the laws,
decrees and pertinent rules and regulations of the People s
Republic of China.
Article 5
The Organization form of the joint venture company is a limited
liability
company. Each party to the joint venture company is liable to
the joint venture
company within the limit of the capital subscribed by it. The
profits, risks and
losses of the joint venture company 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 6
The goals of the parties to the joint venture are to fully use
the rich dolomite
resource advantages of Gu County of Shanxi's, and exert Party
B's existing
600,000 tons of Coke COG resources, use foreign capital to
upgrade technology
and the productivity of enterprises, optimize the allocation of
resources,
extended enterprise production chain, and economic development,
adopt advanced
and appropriate technology and scientific management methods, so
as to raise
economic results and ensure satisfactory economic benefits for
each investor.
Article 7
The productive and business scope of the joint venture company
is to produce and
sell magnesium and magnesium alloy products; The production
scale of the joint
venture company is 20000 tons of magnesium products annually
Chapter 5 Total Amount of Investment and the Registered
Capital
Article 8
The total amount of investment of the joint venture company is
RMB 75,000,000
yuan, the registered capital is RMB 37,500,000 yuan.
Article 9
Investment contributed by the parties is Renminbi 37,500,000
yuan, which will be
the registered capital of the joint venture company. Of which:
Party A shall pay
RMB 19,500,000 Yuan, accounting for 52 %; Party B shall pay RMB
7,500,000 Yuan,
accounting for 20%; Party C shall pay RMB 10,500,000 Yuan,
accounting for 28%.
Article 10
Party A, Party B and Party C will contribute RMB 25,000,000
within 3 months
after the joint venture obtain the business license. The rest
fund should be
contributed within a year after the joint venture obtain the
business license.
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Chapter 6 Responsibilities of Each Party to the Joint
Venture
Article 12
Party A , Party B and Party C shall be respectively responsible
for the
following matters:
Responsibilities of Party A: Assisting the joint venture to
Joint venture firm
to obtain import and export formalities, introduce foreign
technology, develop
overseas market, and distribute the joint venture's
products.
Responsibilities of Party B and Party C Handling of applications
for approval,
registration, business license and other matters concerning the
establishment of
the joint venture company from relevant departments in charge of
China;Assisting
the joint venture company in purchasing or leasing equipment,
materials, raw
materials, articles for office use, means of transportation and
communication
facilities etc.; Assisting the joint venture company in
contacting and settling
the fundamental facilities such as water, electricity,
transportation etc.;
Chapter 7 Selling of Products
Article 13
The products of joint venture company will be sold both by Party
A and Party C.
Chapter 8 Profits
Article 14
After the payment oof income tax according to "Sino-Foreign
Joint Venture
Enterprise Income Tax Law" and after deductions for reserve
funds, staff
incentives and welfare fund, and enterprise development fund,
the profit shall
be distributed to each Party in accordance with the investment
proportion at the
end of each year.
Article 15
The proportion of the above three funds and the annual profit
allocation should
be determined by the board of directors
Chapter 9 The Board of Directors
Article 16
The board of directors is composed of 5 directors, of which 3
shall be appointed
by Party A, 1 by Party B, and 1 by Party C. The chairman of the
board shall be
appointed by Party A, and its vice-chairman by Party C. The term
of office for
the directors, chairman and vice-chairman is four years, their
term of office
may be renewed if continuously appointed by the relevant
party.
Article 17
The highest authority of the joint venture company shall be its
board of
directors. It shall decide all major issues concerning the joint
venture
company. Unanimous approval shall be required for any decisions
concerning major
issues. As for other matters, approval by majority or a
two-third majority shall
be required.
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Article 18
The chairman of the board is the legal representative of the
joint venture
company. Should the chairman be unable to exercise his
responsibilities for any
reason, he shall authorize the vice- chairman or any other
directors to
represent the joint venture company temporarily.
Article 19
The board of directors shall convene at least one meeting every
year. The
meeting shall be called and presided over by the chairman of the
board. The
chairman may convene an interim meeting based on a proposal made
by more than
one third of the total number of directors. Minutes of the
meetings shall be
placed
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