Shandong Terra Nostra
– Jinpeng Metallurgical Co., Ltd.
Joint Venture
Contract
December
2004
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
Technology Ltd. (hereinafter referred to as the
“Parties”), in accordance with the principles of
equality and mutual benefit, and through friendly consultations,
agree 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 Agreement (“Contract”) 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 Technology
Ltd., (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 TNRL, and having an office address of Suite 2818, 1 Place
Ville Marie, Montreal, Quebec, Canada.
Legal
representative:
Name:
Richard St
Julien
Position:
Vice President &
Secretary
Nationality:
Canadian
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 Shandong Terra Nostra – Jinpeng
Metallurgical Co., Ltd.
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:
•
180,000 metric tonnes
per annum of Stainless Steel products, upon completion of the
plant.
•
80,000 metric tonnes per
annum of electrolytic copper
•
40,000 metric tonnes per
annum of Oxygen-free copper rods
•
20,000 metric tonnes per
annum of Electromagnetic wire
•
2,150 kg of Gold,
and 50,000 kg of Silver products
•
Other production
capabilities or capacity, for which asset acquisition and/or
construction will have commenced and/or have been completed as at
the date of the issuance of the Business Licence for the Joint
Venture.
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:
a)
Firstly to improve the
current operations of the Joint Venture , and;
b)
Secondly, to improve and
upgrade production facilities to produce more product of a higher
quality products, and;
c)
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
100,000,000.
Article
5.2
The registered capital
of the Joint Venture shall be $US 80,000,000, of which:
Party A has $US
39,200,000, accounting for 49%;
Party B has $US
40,800,000, 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
Party A will fulfill its
investment in the Joint Venture by contributing existing fixed
assets from the companies as identified in Article 5.5 herein,
which represent all the fixed assets required for the business
scope as identified in Article 4.2 herein, and include:
Party A:
Equipment:
US$33,000,000
Buildings:
US$10,800,000
Property Use:
US$2,100,000
Others:
US$3,100,000
Total:
US$49,000,000
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., Shandong Jinwang Copper Co., Shandong Quanxin Stainless Steel
Co., Zouping Jinwang Copper Co., and Zouping Regenerated Resources
Co. Ltd.
Article
5.6
Party B will fulfill 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”), which shall be provided to the Joint Venture
within 10 days of, but no earlier than January 15, 2005, the
issuance of the Joint Venture business licence and completion by
Party A, and approval of, by Party B, the fixed asset transfer as
identified in Article 5.3. If this Initial Investment is not
received by the Joint Venture within this period, the Parties will
jointly submit an application to the approval authority for a 15
day extension of the time within which Party B must provide the
Initial Investment. If for any reason, the 15 day extension is not
granted, then both Parties will seek a solution that will allow the
Joint Venture to remain intact.
Article
5.7
There shall be a further
capital contribution to the Joint Venture of US$50,000,000, 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.
Pro
