Joint Venture Contract

Exhibit 10.8


JOINT VENTURE CONTRACT
OF
PACIFIC DRAGON FERTILIZERS LTD.
June 2004


Chapter 1 General provisions


Article 1 In January 1994, in accordance with "Law of the People's Republic of China on Economic Contract Involving Foreign Interest ", "Law of the People's Republic of China on Chinese-Foreign Contractual Joint Venture", "The Law of the People's Republic of China on Patent" and other relevant PRC laws and regulations, and based on the principle of equality and mutual benefit and mutual negotiation, Harbing Yin Long Industry Ltd. hereinafter referred to as Party A(pound)(C), Beijing Taiming Applied Technology Institute, and Cathay-Pacific Enterprises Ltd. of Canada entered into the Contractual Joint Venture Contract for the Pacific Dragon Fertilizers Ltd. and Articles of Association of Pacific Dragon Fertilizers Ltd. upon sufficient and friendly negotiation. The parties agreed to invest and establish the Pacific Dragon Fertilizers Ltd. (hereinafter referred as to JV) to produce and operate "LvLingBao" a highly concentrated combined fertilizer in Harbin City, Heilongjiang Province, China. Then, the JV obtained Approval Certificate for Foreign-funded Enterprise on May 3, 1994 and completed registration with the administration for industrial and commerce as well.


On June 8, 2004, "the Agreement on Transfer of Capital Contributions and Profit Sharing Rights" was entered into by and among China Tailong Holding Co., Ltd. (hereinafter referred as to Party B); Party A; and Beijing Taiming Applied Technology Institute, Cathay--Pacific Enterprises Ltd. According to this "Agreement", Cathay--Pacific Enterprises Ltd. transfers all the capital contribution it invested in the JV (30%), and the profit sharing right (49%) of the JV to Party B; Beijing Taiming Applied Technology Institute transfers all the capital contribution it invested (27%) in JV and profit sharing right (10%) of the JV to Party B; Party A transfers its 33% capital and 31% profit sharing right of the JV to Party B; Party B accepts these transferred contributions and profit sharing right.


After the said transfer, Neither Cathay--Pacific Enterprises Ltd. nor Beijing Taiming Applied Technology Institute have any capital contribution or any right or interest in the JV. Party A owns 10% capital contribution and profit sharing right of the JV, Party B owns 90% capital contribution and profit sharing right of the JV. At the same time, the JV's former Joint Venture Contract and Articles of Association should be terminated.


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In accordance with the "Law of the People's Republic of China on Equity Joint Ventures", and its "Implementing Regulations" and other relevant PRC laws and regulations on the other hand, Party A and Party B, adhering to the principles of equality and mutual benefit and through friendly negotiations, therefore agree to formulate this Joint Venture Contract and both parties shall continue to operate the JV as an equity joint venture.


Chapter 2 Parties


Article 2 Parties Party A: Harbin Yin Long Industry Ltd., Legal address: 192 Changchun Street, Harbin, Heilongjiang Province, China. Legal representative: Yu Chang Position: Board Chairman Post code: 150020 Tel: (0451)82627769 Fax: (0451)82627769


Party B: China Tailong Holdings JV Limtied Legal address: Flat/RM 808, 8/F Tung Ying Bldg 100 Nathan Rd Tsim Sha Tsui, KL Legal representative: Yu Chang Position: Board Chairman Nationality: China Tel: (00852)65252022 Fax: (00852)65252022


Chapter 3 Establishment of the Joint Venture Company


Article 3 In accordance with the Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures, its Rules for Implementation, and other relevant Chinese laws and regulations, both parties of the JV agree to continue the operation of Pacific Dragon Fertilizers Ltd. The legal address of the JV is at Yifayuan, Haping Road, Harbin, Heilongjiang province. The Postcode is 150069 and the telephone number is (0451) 86664289.


Article 4 All activities of the JV shall comply with the laws, decrees and pertinent rules and regulations of the People's Republic of China.


Article 5 The Organization form of the JV is a limited liability company. The profits, risks and losses of the JV shall be shared by the two parties in line with the proportion specified in Article 12 of Chapter 5 of this contract.


Chapter 4 The Purpose, Scope and Scale of Production and Business


Article 6 The goals of the parties to the JV are to introduce foreign investment and scientific management methods, adopt advanced and appropriate technology available in China for the production of Lvlingbao, a highly-condensed organic compound fertilizer, so as to tap the potential in Chinese and overseas markets and bring satisfactory economic and social benefits.


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Article 7 The business scope of the JV is to produce and sell liquid fertilizers.


Article 8 The annual production and sales volume of the JV is 2,500 tons. The JV may extend its production to other regions in the Heilongjiang province and China when conditions are mature.


Chapter 5 Total Investment, Registered Capital, Each Party's Contributions and
Portion of Profit Distribution


Article 9 The total investment of the JV is US$ 500,000 (approximately RMB 4.35 million).


Article 10 The registered capital of the JV is US$ 500,000 (approximately RMB 4.35 million).


Article 11 Each party's contributions


Party A: US$ 50,000 (approximately RMB 435,00), accounting for 10% of the registered capital.


Party B: US$ 450,000 (approximately RMB 3.915 million), accounting for 90% of the registered capital.


Article 12 Portion of profit distribution


90% of the after-tax profit of the JV shall be distributed to Party B and the remaining 10% shall go to Party A.


Article 13 Any changes in the registered capital or transfer of the investment of either party shall be subject to the approval of the board of directors. Without the approval of the board of directors, neither party to the JV shall assign part or all of his investment subscribed to the other party or/and a third party or dispose of part or all of his investment subscribed in any other way. When one party to the JV assigns all or part of his investment, it shall apply to the original examination and approval authority for approval and change its registration with the company registration authority. The other party shall have the preemptive right to buy the investment to be assigned.


Chapter 6 Responsibilities of Each Party to the JV


Article 14 Party A and Party B shall be respectively responsible for the following matters:


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Responsibilities of Party A:


(1) Applying to relevant authorities of C ...