EXHIBIT 10.3
SHANGXI GU COUNTRY JINWEI MAGNESIUM CORP., LTD.
INVESTMENT AGREEMENT SUPPLEMENT
MAY 30, 2007
Party A: Taiyuan Yiwei Magnesium Co. Ltd., a Chinese limited liability company.
Party B: Asia Magnesium Co., Ltd., a Chinese limited liability company.
Party C: Shanxi Senrun Coal Chemistry Co. Ltd., a Chinese limited liability
company.
This agreement is a supplement to the previous Shangxi Gu Country Jinwei
Magnesium Corp., Ltd. ("Jinwei Magnesium") agreement on December 12, 2006
between the parties.
A. INVESTMENT TO JINWEI MAGNESIUM.
1. It is agreed upon that the Parties will acquire ownership of Jinwei
Magnesium on the following interests;
Party A: Taiyuan Yiwei Magnesium Co. Ltd., 28%
Party B: Asia Magnesium Co., Ltd., 52%
Party C: Shanxi Senrun Coal Chemistry Co. Ltd. 20%
2. The total initial investment to Jinwei Magnesium will be $6.42 mm with
initial annual expected production capacity of 12,000 tons of magnesium.
Further investment from reinvested profits of the venture will increase
production capacity to 20,000 tons per year. The registration capital of
Jinwei Magnesium is will be $6.42 mm by the end of December 2008.
3. Timeline of Capital Contribution to Jinwei Magnesium by each shareholder:
Timeline of Capital Contribution
---------------------------------------------------------
Shareholder Ownership 07/2007 08/2007 09/2007 12/2007
----------------------- --------- ------------ ------------ ------------ ------------
Asia Magnesium Co. Ltd. 52% No less than No less than 1 mm USD 338 K USD
1 mm USD 1 mm USD
Taiyuan Yiwei Magnesium 28% No less than 448.71 K USD 448.71 K USD 512.82 K USD
Co. Ltd. 396K USD
Shanxi Senrun Coal 20% No less than 384.62 K USD 384.62 K USD 256.41 K USD
Chemistry Co. Ltd. 256.41 K
The initial investment by each shareholder should be made no later than the end
of December 2007.
4. Party B may make changes or adjustments regarding corporate rules, legal
representative, directors and management through Asia Magnesium. Jinwei
Magnesium will set up Board of Directors consisted of 5 directors; Party A
will assign Xx. Xxxxx Dong as Chairman and legal representative, and Xx.
Xxxxxx Xxxxx will be assigned as vice Chairman; Party B will assign Xx.
Xxxxxxx Xxxxxx as vice Chairman; Mr. Wuliang (Xxxxx) Zhang will be
assigned as director by both parties; Shanxi Senrun Coal Chemistry Co.
Ltd. will assign one director and the tenure is three years;
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5. Party A will take full responsibility for the daily operations of Jinwei
Magnesium; the major decisions will be made by BOD;
6. Excel Rise Technology Co., Ltd., an indirect wholly owned subsidiary of
Party B will be the only distribution channel of Jinwei Magnesium product.
Details of this arrangement will be negotiated in good faith subsequent to
the execution of this Agreement;
7. Party A should make written report to Party B on the 15th of every month
with previous month financial statements and major operations issues;
B. PROFIT DISTRIBUTION AND PRODUCTION DEVELOPMENT
Both parties have agreed that the profit in the first year will be used as
company working capital; Shanxi Senrun Coal Chemistry Co. Ltd will get
fixed return on the second year (the return rate to be negotiated
subsequent to the execution of this Agreement), Asia Magnesium and Party A
do not take part in the dividend distribution;
8. Jinwei Magnesium will primarily use its accumulated profit for production
expansion or acquire other quality companies;
9. Party A will propose a capital increment timetable to each shareholder as
soon as the annual production capability of Jinwei increases to 20,000
tons; the accumulated profit will be used as increased capital primarily,
and each shareholder will make additional investment for any deficiency
based on initial investment percentage, supplementary agreement will be
signed;
C. OTHER ISSUES
10. Jinwei Magnesium will be responsible for US annual auditing fee of
approximately $35,000 USD;
11. Party B may assign personnel to work for Jinwei Magnesium, and Joint
Venture will be responsible for related expenses;
12. Party B will propose a plan and get approval from BOD for possibly merger
involving Jinwei Magnesium and Xxxxx Magnesium in the beginning of 2009 to
list publicly in United States.
Party A: Taiyuan Yiwei Magnesium Co. Ltd.
/s/ Xxxxx Xxxxx
---------------
Xxxxx Xxxxx
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Party B: Asia Magnesium Co., Ltd.
/s/ Xxxxxxx Xxxxxx
------------------
Xxxxxxx Xxxxxx
Party C: Shanxi Senrun Coal Chemistry Co., Ltd.
/s/ Yu Yuesheng
---------------
Yu Yuesheng
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