Sino Foreign Joint Venture Agreement

Exhibit 10.9


Certain portions of this Exhibit have been omitted pursuant to a request for "Confidential Treatment" under Rule 24b-2 of the Securities and Exchange Commission. Such portions have been redacted and bracketed in the request and appear as [ ] in the text of this Exhibit. The omitted confidential information has been filed with the Securities and Exchange Commission.


SINO FOREIGN JOINT VENTURE AGREEMENT


February 2000


FOREIGN JOINT VENTURE AGREEMENT


ARTICLE 1: GENERAL PRINCIPLES


This agreement is made between the Shandong Huang Tai Industrial Group of China with the American Pacific Aviation Technology Company (AMPAC) of the United States, according to the "People's Republic of China Sino-Foreign Joint Venture Laws" and other related Chinese laws, and based on the principle of mutual benefits and through friendly negotiations to establish in Shanghai, China, a joint venture.


ARTICLE 2: PARTIES


Provision 1: Parties of this Agreement are:


The Shandong Huang Tai Industrial Group of China (hereinafter as Party A), registered at Jinan, Shandong, China. Address: 172 Industry Road North, Jinan, Shandong, China Legal Representative: Lu Shou Shan Title: General Manager Nationality: The People's Republic of China


American Pacific Aviation Technology Company (hereinafter as Party B), registered at California, the United States of America. Address: 1 Sansome Street, 19th Floor, San Francisco, CA 94104, USA Legal Representative: Eric Gravell Title: Chairman Nationality: US


ARTICLE 3: FORMATION OF THE JOINT VENTURE


Provision 2: According to the "People's Republic of China Sino-foreign Joint Venture Laws" and other


related Chinese laws, both parties agree to establish in China the China Card.Com, Limited (hereinafter as joint venture).


Provision 3: The name of the joint venture shall be: China Card.Com, Limited. Name in English: China Card.Com, Limited Address: 230, Xin Jin Qiao Road, T17-5-1, Jin Qiao Export Processing Industrial Region, Shanghai


Provision 4: All activities conducted by the joint venture shall observe the laws, rules and regulations of the People's Republic of China.


Provision 5: The joint venture shall be registered as a company of limited liability. Both parties shall assume the debts of the joint venture based on the ratio of investment contribution. Both parties shall distribute profits and assume risk and loss based on the ratio of investment contribution.


ARTICLE 4: SCOPE OF PRODUCTION


Provision 6: The goal of the joint venture is, based on the enhancement of economic cooperation and technology exchange, to adopt state-of-art technology and scientific management to promote the quality of product, to develop new products that are competitive in quality and price in the world market, thus to generate economic gains to create profits for the investors.


Provision 7: Scope of Operation: Production of contactless smartcards, double interface cards, counterfeit protection cards and related products, reading and writing devices and system integration, marketing of self-produced products, after-sale services, and research and development of related new products.


Provision 8: Production Scope:


1. The joint venture shall be able to produce 1500 cards/hour after
production. Annual production shall be 8000 hours, which shall produce
12,000,000 cards.


2. With the growth the production, double interface cards, counterfeit
protection cards, three-in-one card and reader/writer shall also be
produced.


ARTICLE 5: THE INVESTMENT TOTAL AND REGISTERED CAPITAL


Provision 9: The total investment of the joint venture shall be RMB$[ ].


Provision 10: Each party shall contribute an investment amount of RMB$[ ], which is 50% of


the total investment, for the registered capital of the joint venture. Each shall contribute 50% of its investment.


Provision 11: The parties shall contribute their investment in the following formats: Party A: Shall contribute RMB$[ ], in form of cash. Party B: Shall contribute RMB$[ ], in form of equipment (if conversion to US currency is needed, shall be based on the foreign exchange rate announced by the Foreign Exchange Administration of the People's Republic of China of the date when conversion is made).


Provision 12: The registered capital shall be contributed by both parties based on their ratio of contribution, by two installments, at 50% of the contributed amount per installment, that is, with Parties A and B each making a contribution of RMB$[ ] per installment (Party B shall make its contribution in form of equipment).


Provision 13: In the event any party assigns all or portions of its investment to a third party, it shall obtain the agreement of the other party and shall be submitted for approval by reviewing agency. In the event any party intends to assign all or portions of its investment, the other party shall have the priority to buy.


ARTICLE 6: RESPONSIBILITIES OF PARTIES


Provision 14: Parties A and B shall each fulfill the following responsibilities: Party A Shall obtain approval by appropriate departments in China, registration, and license for operation.


ARTICLE 7: MARKETING OF PRODUCTS


Provision 15: Products produced by the joint venture shall be marketed both at home and abroad, 75% of which shall be sold abroad, and 25% shall be sold at home.


The joint venture shall authorize Party B to market the products of the joint venture outside China.


Provision 16: Marketing of the products of the joint venture in China can be arranged with appropriate material departments or business departments in Chin ...