Memorandum of Understanding
This
Memorandum of Understanding is executed by and among the following
parties:
| Party A: |
C3
Capital, Limited,
a
commercial company registered and established under the BVI Business
Companies Xxx 0000 on October 25th
2007. Its registration number is
1439706.
|
| Party B: |
Xxx
Xxxxxxx,
citizen of People’s Republic of China, whose domicile is Renmin Street
No.138, Changchun City, Jilin Province. ID Number: 000000000000000000.
|
| Party C: |
Li
Ping,
citizen of People’s Republic of China, whose domicile is Xx. 000, Xxxx 0,
Xxx Xxxxxxxxx Xxxx No.57, Buck Sand District, Urumqi City. ID Number:
000000000000000000.
|
Whereas:
| 1. |
According
to the laws of People’s Republic of China, Party B and Party C propose to
establish Xinjiang Paragon Master Mining Co., Ltd (hereinafter referred
to
as “the Object Company”). The Object Company plans to register with the
Administration Bureau for Industry and Commerce of Xinjiang Uygur
Autonomous Region. Up until the execution date of this memorandum
of
understanding (hereinafter referred to as this MOU), Party B and
Party C
have completed the company’s name pre-approval procedure with
Administration Bureau for Industry and Commerce of Xinjiang Uygur
Autonomous Region. Other procedures for the incorporation of the
company
are in process.
|
| 2. |
Party
B and Party C have confirmed that the registered capital for the
Object
Company is RMB 3.2 Million Yuan, among which, the investment by Party
B is
RMB 2.88 Million Yuan, taking up 90 %, and the investment by Party
C is
RMB 0.32 Million Yuan, taking up
10%.
|
| 3. |
Party
B and Party C have confirmed that, after the completion of registration
and incorporation procedure for the Object Company, they will transfer
the
shares of the Object Company held respectively by them to Party A,
and
Party A will make the payment of the equity interest transfer
price.
|
1
Through
friendly consultation among Party A, Party B and Party C, regarding the equity
interest transfer of the Object Company, the following agreement has been
reached:
|
Article
1
|
Party
B and Party C, respectively, grant Party A the irrevocable right
to
purchase the equity interest of the Object Company (“the purchase right”).
The purchase right becomes effective upon the completion of industrial
and
commercial registration for the Object company (taking the date
on which
the Corporate Business License is issued as final) until the date
when
Party A makes it clear to abandon the purchase right (referred
to as “the
purchase right exercise period”). However, if, within eighteen months upon
all the conditions as agreed in Article 2 of this MOU have been
satisfied,
Party A does not conduct the procedure for initiating the purchase
right,
the purchase right becomes void automatically.
|
|
Article
2
|
After
the establishment of the Object Company, Party B and Party C shall
conduct
relevant procedures in time in order to obtain the permissions,
approvals
or filing documents for the Object Company’s operation. In addition, Party
B and Party C shall obtain the quartz mine exploration and mining
right as
described in Article 3 of this MOU according to Chinese laws and
regulations.
|
|
Article
3
|
Party
B and Party C shall make the Object Company legally obtain the
exploration
and mining right for the quartz mine of the mining area in Wenquan
County
Xinjiang. Party B and Party C confirm that: the reconnaissance
geological
survey procedure for the before mentioned quartz mine and the procedure
of
defining the limits of the mining areas shall be conducted by Wenquan
County Branch for Xing Tao Da Bei Mining Co. Ltd, Xinjiang. The
mining
area is situated 14 KM southeast of Wenquan County and its geographical
coordinates are east longitude 80 56 36, north latitude 44 56 06.
Through
geology examination, the standard of the quartzite is 333 + 334
and the
geological reserves are 1.1 million tons. The applied mining depth
is from
1450 meters to 1420 meters. The defined mining area applying for
is 0.266
square kilometers.
|
|
Article
4
|
As
confirmed by Party A, Party B and Party C, Party A will purchase
the
equity interest of the Object Company and shall pay the equity
interest
purchase price, in aggregate, USD $50,000. The foregoing equity
interest
transfer price shall be paid to Party B and Party C respectively
according
to the ratio of investments of the Object Company by Party B and
Party
C.
|
|
Article
5
|
Within
the purchase right exercise period as agreed in Article 1, Party
B and
Party C shall not transfer their equity interest of the Object
Company to
any party other than Party A or the third party appointed by Party
A.
Party B and Party C also shall not hypothecate or enact other restrictive
right upon the equity interest of the Object
Company.
|
2
|
Article
6
|
When
Party A exercises the purchase right, it shall send to Party B
and Party C
written notices respectively. Within thirty days upon Party B and
Party C
receive the written notices, they shall complete the execution
of the
equity interest transfer contract of the Object Company with Party
A
according to the material conditions as agreed in this MOU (hereinafter
referred to as “equity interest transfer contract”).
|
|
Article
7
|
Party
A, Party B and Party C shall, after the execution of the equity
interest
transfer contract, cooperate promptly in order to complete all
the
approval procedures as required by the equity interest transfer
of the
Object Company.
|
|
Article
8
|
As
the substantial incentive for Party B and Party C to execute this
MOU,
Party A promises that, Party A will, at the time as agreed in the
equity
interest transfer contract, make the payment to Party B and Party
C of the
transfer price of the equity interest held by Party B and Party
C.
|
|
Article
9
|
As
the substantial incentive for Party A to execute this MOU, Party
B and
Party C promise to Party A that:
|
|
(1)
|
By
November 30th,
2008, Party B and Party C will complete the company incorporation
procedure for the Object Company and make the Object Company obtain
all
the permissions, approvals or filing documents for legal
operation;
|
|
(2)
|
By
December 31st
2008, Party B and Party C will, on behalf of the Object Company,
obtain
the exploration right for quartz mine as defined in Article 3 of
this MOU.
They also guarantee to obtain the mining license for the Object
Company;
|
|
(3)
|
When
Party A decides to purchase the equity interest of the Object Company,
conduct the Due Diligence Investigation, Party B and Party C shall
cooperate fully and settle in time all the problems of the Object
company
as required by Party A according to
laws.
|
|
Article
10
|
Within
three days upon Party A makes the payment of the equity transfer
price
according to the equity interest transfer contract, Party B and
Party C
shall make payment, without any consideration, to the Object Company
of
RMB of equal value of US $50,000, for the purpose of daily operation
of
the Object Company.
|
3
|
Article
11
|
Party
A, Party B and Party C shall bear all the costs and taxes as required
by
laws for the purpose of completion of the issues as agreed in this
MOU.
|
|
Article
12
|
Party
A, Party B and Party C confirm that Party B shall be responsible
for the
performance arrangement of the obligations and related liabilities
of
Party B and Party C under the equity interest transfer contract.
Party B
shall also take joint liability for the obligations and related
liabilities of Party C.
|
|
Article
13
|
If
any party to this MOU violates the obligations under this MOU,
or its
representation, statement or warranty is untrue, it will constitute
a
breach of this MOU. The party in breach shall compensate the non-breaching
party all the losses resulting from the execution and performance
of this
MOU.
|
|
Article
14
|
Any
disputes arising from construing, performing or relating to this
MOU shall
be settled by means of friendly negotiation. In case that the disputes
cannot be settled through negotiation, any party has the right
to submit
the disputes to China International Economic and Trade Arbitration
Commission (“CIETAC”) arbitration in Beijing subject to the prevailing
arbitration rules of CIETAC. The arbitration award is final and
legally
binding on the parties.
|
|
Article
15
|
This
MOU is written in Chinese and English and the two versions equally
valid.
In case of any discrepancy between the two versions, the Chinese
version
will prevail.
|
|
Article
16
|
Party
A, Party B and Party C will execute this MOU in six originals and
each
party shall keep two originals.
|
|
Article
17
|
The
effectiveness, construction, and performance of this MOU shall
be governed
by the prevailing laws and regulations of People’s Republic of China.
|
|
Article
18
|
This
MOU shall become effective upon the signatures and seals by Party
A, Party
B and Party C.
|
(no
text
and execution page follows)
4
(no
text,
for signatures only)
Party
A:
C3 Capital, Limited
Authorized
Representative:
Date:
Party
B:
Date:
Party
C:
Date:
5
