Exhibit 10.42
Joint Venture Agreement
Between
[Shanxi Hua Ze Nickle Smelting Co.,]
and
[China Global Mining Resources Limited]
for the establishment of
[Sino-American
Hua Ze Nickel & Cobalt Metal Co., Ltd.]
Dated
14 April 2007
THIS Joint Venture Agreement (the
“Agreement”) is entered into by and between the
following parties in Xian, China. on [April 14, 2007],
[
Shanxi Hua Ze Nickle Smelting Co., ],
a company duly incorporated and existing under the laws of PRC.
(“Party A”)
Address:
[High-Tech Zone in Xi’an, Shanxi Province,
PRC]
[China Global Mining Resources Limited]
, a company duly incorporated and existing under the laws of
British Virgin Islands (“ Party B”), a wholly-owned
subsidiary of Wits Basin Precious Metal Inc, a company duly
incorporated and existing under the laws of USA;
(Party
A and Party B are hereafter collectively referred to as
“Parties”, and individually as a
“Party”)
Whereas
(1)
The Parties agree to establish Sino-foreign equity joint
venture called [Sino-American Hua Ze Nickel & Cobalt Metal
Co., Ltd.] (the “Company” or the “Joint
Venture”) in the city of Xi’an, PRC with Party A
to contribute [assets and equity interests] it held
representing seventy five percent (75%) of the equity interest
in the Company, Party B to contribute cash representing twenty
five percent (25%) of the equity interest in the Company,
based on this Agreement as well as the joint venture contract
(“JV Contract”) and articles of association
(“Articles of Association”) which shall be signed
on the basis of this Agreement for the establishment of the
Company;
(2)
As of the date of this Agreement, the equity interests which
Party A proposes to inject into the Company are held directly
by Party A’ shareholders. Both Parties agree that Party
A may contribute the equity interests to the Company after
Party A has made agreements with its shareholders for the
acquiring of the equity interests;
(3)
Party B acknowledge that the total value of the assets to be
contributed and the assets relating to the equity interest to
be contributed by Party A is above RMB 1 billion. Party B
wishes to negotiate with Party on the establishment of the
Company.
NOW THEREFORE, it
is agreed as follows:
PART A.
JOINT VENTURE ARRANGEMENT
Article 1 – Parties to the Joint
Venture
The
Parties to the joint venture are:
|
(1) |
PARTY A,[ Shanxi Hua Ze Nickle Smelting Co.,
]
|
|
Legal
Representative:
|
[
Wang Yinghu]
|
| |
|
|
|
[Chairman
of Board]
|
| |
|
|
Nationality:
|
[
Chinese ]
|
|
(2) |
PARTY B, China Global Mining Resources
Limited.,
|
|
Legal
Representative:
|
[William
Green]
|
|
Position:
|
[President]
|
| |
|
|
Nationality:
|
[U.S.A.]
|
Article 2 – Establishment of the
Company
| |
(a)
|
The
name of the Company shall include “Hua Ze” and be
registered with the company registration authority.
|
| |
(b)
|
The
name of the Company in Chinese is:
[
]
|
|
|
The
name of the Company in English is: “[Sino-American Hua Ze
Nickel & Cobalt Metal Co., Ltd.]”
|
| |
(c)
|
The
registered address of the Company shall be at: [High-Tech Zone in
Xi’an Shanxi Province, PRC]
|
| 2.2 |
Local Government Approval
|
The
establishment of the Company shall be subject to the approval
by appropriate government authorities. Party A shall apply, on
behalf of the Parties and JV Company, to such government
authorities for the approval of any and all relevant documents
legally required for the establishment of the Company,
including the issuance of the Approval Letter, Approval
Certificate and Business License of the Company.
| 2.3 |
Hong Kong & U.S. Approvals
|
Party
B should apply for both government authorities for the
approvals when it is required by the relevant laws and
regulations.
Article 3 – Purpose and Scope of
Business
The
purpose of the Company shall be to adopt advanced technology
and such other management methods in order to achieve
favourable economic results and an acceptable rate of return
for the Parties on their respective capital contributions as
well as to make a contribution to PRC.
The
scope of the business of the Company shall be Nickel and
Cobalt smelting, mines development and other metal’s
development and producing. And it subjects to any legally
required government approvals and/or
registrations.
| 3.3 |
Production and Operation Scale
|
After
the further financing and development of the Company’s
business, the annual production capacity of electric nickels
products of the Company expected for the year of 2010 is
10,000 tons and with the annual profit no less than RMB780
million.
Article 4 – Total Investment and Registered
Capital
The
Company’s total investment shall be RMB two and one half
billion (RMB2,500,000,000].
The
Company’s registered capital shall be RMB one billion
four hundred and forty nine million three hundred and seventy
five thousand (RMB1,449,375,000).
| 4.3 |
Capital Contribution and Equity Ratio
|
| |
(a)
|
Party
A’s contribution to the registered capital of the Company
shall be in the form of assets and equity interest of its
controlling subsidiary, in the amount of RMB1,087,031,250,
representing seventy five percent (75%) of the equity interest of
the Company. (The value of related assets and interest contributed
should include the unsecured liabilities of RMB a hundred and sixty
million (RMB 160,000,000) recorded as accounts payable or
shareholders’ loans specified in the Appendix 1 of this
Agreement.)
|
The
equity interest that Party A will contribute to the Company is
detailed in Appendix 1 attached hereto.
| |
(b)
|
Party
B’s contribution to the registered capital of the Company
shall be in the form of cash in the amount of RMB362,343,750,
representing twenty five percent (25%) of the equity interest of
the Company. Purpose of use of such contribution and use of the
loans specified in Article 4.4 and Article 4.6 is detailed in
Appendix 2 attached hereto.
|
| 4.4 |
Contribution and Loan Arrangement Schedule
|
| 4.4.1 |
Subject
to the satisfaction of the conditions set forth in Article 4.5
below, Party A shall:
|
| |
(a)
|
contribute
40% of its contribution in the amount of RMB434,812,500 within 30
days after the date of issuance of the Company’s Business
License (the “Establishment Date”); and
|
| |
(b)
|
contribute
the balance of its contribution of the registered capital of the
Company before 31
st December,
2007.
|
|
4.4.2
|
Subject
to the satisfaction of the conditions set forth in Article 4.5
below, Party B shall make the following contribution and loan
arrangement:
|
| |
(a)
|
RMB
154,648,313 is equity contribution by cash within 90 days of
signing of the Agreement;
|
| |
(b)
|
The
remaining RMB 347,850,000 will be equity contribution and
shareholder’s loan before December 31 2007. The equity
contribution shall be 59.71 % of this part of payment and the
shareholder’s loan shall be 40.29%.
|
| 
