Exhibit 10.1
 
Exclusive Manufacturing Agreement

This Agreement is entered into on June 30, 2004.

The Parties to this Agreement are：

（1）
Greatmat Technology (HK) Ltd, (a limited liability company incorporated and
existing in accordance with the laws of Hong Kong), and its registered address
is: Unit 2102-03, 21/F Kingsfield Centre, 18-20 Shell Street, North Point, Hong
Kong (hereinafter referred to as “Party A”).

（2）
Yunfu Changyi Stone Factory, (a company incorporated and existing in accordance
with the laws of the People’s Republic of China), and its registered address is:
Hekou Stone Industrial Park in Yuncheng District, Yunfu City, Guangdong
Province, People’s Republic of China (hereinafter referred to as “Party B”).

Whereas Party B is an enterprise specializing in the processing of stone
materials, is able to provide manufacturing and processing services to Party A
for Party A’s stone products with appropriate technology, equipment, personnel,
and other resources.

Party A agrees to appoint Party B as Party A’s exclusive processing factory to
process Party A’s GM brand artificial quartzite. Party B agrees to accept Party
A’s appointment to become Party A’s exclusive processing factory and undertakes
to provide manufacturing and processing services to Party A’s products
only.  Through negotiation and consultation, the Parties have agreed to enter
into this Agreement to stipulate the Parties’ rights and obligations.

1.
Interpretation

1.1
In this Agreement, unless the context otherwise requires, the following terms
shall have the following meanings:

“China” means the People’s Republic of China (for the purposes of this
Agreement, excluding Hong Kong, Macao and Taiwan).

“Processing Business” means the business in which Party B processes Party A’s
Products.

“Party A’s Products” means the products which Party A requires Party B to
process from time to time and Party B is able to process under current
conditions, including but not limited to the products of GM brand artificial
quartzite.

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“Party A’s Articles” means machines, equipment, tools, molds, installments, raw
materials, spare parts, packaging materials, semi-finished products provided by
Party A to Party B and finished products, defective products, remainders, and
scraps which have been processed by Party B and whose prices have been paid,
etc.

“Processing Period” means the period from the date of appointment of processing
by Party A as stipulated in the orders issued by Party A to Party B to the date
when Party B has completed the processing and delivers the finished products to
Party A.

“Processing Place” means the place where Party B manufactures and processes
Party A’s Products.

“Specific Warehouse” means the warehouse which Party B specifically provides to
store Party A’s Products.

“Party A’s Property” means Party A’s Articles, and any patents, trademarks,
copyright, designs, know-how and other intellectual property rights which are
related to the Processing Business and belong to Party A.

“Records of Products” means the accurate and detailed written records which are
made by Party B to record the names and quantities of the products and articles
transferred between the Specific Warehouse and the Processing Place, and the
names and quantities of the products and articles sent out and delivered between
the Specific Warehouse and Party A.

“Agreement Period” means this Agreement will terminate at the end of five years
from the date on which it is executed.

2.
Processing and Manufacturing Business Appointed

2.1
The machines and equipment which Party B shall use for processing Party A’s
Products: Party A shall provide machines, equipment, raw materials, trademarks ,
logos, and packaging designs used on the products, and packaging materials, etc.
Notwithstanding the above stipulation, Party B shall arrange and prepare any
other necessary accessory materials, consumables, tools, and materials which
needed for processing and manufacturing Party A’s Products.

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2.2
Party A shall place written orders and provide samples to Party B when Party B’s
processing services are needed by Party A. The orders shall list the product’s
name, quantity, specification, nature, price, technology required for
processing, processing period, liability for breach of contract, raw materials,
spare parts, packaging materials, and other necessary materials and their
quantity which Party A will provide to Party B, allowed maximum consumed
quantity of materials, cost for use of one more spare part if Party B exceeds
the allowed maximum consumed quantity of materials, and processing fee,
etc.  The orders shall become part of this Agreement and shall have the same
legal effect as this Agreement.

2.3
Party A shall provide Party B all the raw materials, spare parts, packaging
materials and other necessary materials in accordance with the list indicated in
the orders. Unless with a written consent from Party A, Party B shall not
substitute the raw materials and spare parts which Party A provides with any raw
materials and spare parts from its own or any other factories. The accessary
materials and consumables which are needed to complete the processing of the
products in the orders shall be provided by Party B and their quality and
quantity shall be guaranteed by Party B.

2.4
Party B shall not at any time move Party A’s Articles, which under Party B’s
control, to places other than the designated Specific Warehouse and Processing
Place without Party A’s consent.

2.5
Party B agrees that Party A shall have the right to inspect Party B’s processing
procedures and methods with Party B’s consent at reasonable time before or
during Party B’s processing. Party B guarantees that it will not deviate
significantly the processing procedures and methods which the Parties have
agreed and accepted. Party B should bear all the costs and expenses due to its
deviation of the above mentioned processing procedures or methods without Party
A’s consent during processing, including but not limited to rework, customer’s
claims if Party A is not able to deliver on time or fails to deliver, direct
losses claimed by customers, etc.

2.6
Party B agrees that Party A shall have the right to assign its employees or
representatives to station in Party B’s factory. Party A’s employees or
representatives shall have the right to inspect the Specific Warehouse, Records
of Products, semi-finished products, processing procedures and methods,
processing technology, equipment, and quality control which Party B adopts, and
to request Party B to do corrections, amendments, and remedies as to matters
which the Parties consider inappropriate, incorrect or incompliant, and Party B
shall do such corrections, amendments, and remedies on a timely basis upon the
request from Party A’s employees or representatives.

2.7
Party B shall retain and recycle the packaging materials provided by Party A
based on the principle of economy. Party B shall try to avoid unnecessary waste
of packaging materials.

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2.8
Party B shall ensure that there are enough Specific Warehouses, Processing
Places, and workers to complete the Processing Business assigned by Party A on
time with required quality.

2.9
The processing fee shall be determined by both the Parties when Party A places
orders to Party B. Party A shall pay to Party B 30% of the processing fee in the
orders as deposit when Party A places orders to Party B. The remaining amount of
the processing fee shall be paid after Party A’s each satisfied inspection of
Products and before delivery.

2.10
Processing Quantity. Party A shall guarantee to provide not less than 100,000
square meters’ Processing Business to Party B each year (the processing fee
shall be determined and agreed by the Parties), or Party A will compensate Party
B RMB5,000,000.

3.
Obligations

3.1
Apart from other obligations hereunder, Party A shall,

 
i).
provide Party B necessary management and technology support upon Party B’s
requirement;

ii).
provide machines, equipment, raw materials, spare parts, packaging materials,
and other required materials free of charge;

iii).
deliver machines, equipment, raw materials, spare parts, packaging materials,
and other required materials to the Specific Warehouse or Processing Place Party
B designates;

3.2
Apart from other obligations hereunder, Party B shall,

 
i).
  ensure that the Specific Warehouse, Processing Place are in good condition and
suitable for processing during the Processing Period;

ii).
guarantee that the Specific Warehouse and Processing Place will have consistent
communication, electricity, water supply and other facilities;

iii).
provide comprehensive security services to the Specific Warehouse and Processing
Place;

iv).
guarantee to provide enough workers to complete the Processing Business assigned
by Party A, and examine, approve, and handle within reasonable time any workers
and management personnel whose performance is not acceptable to Party A upon
Party A’s request, and guarantee the quality and quantity of the Processing
Business;

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v).
Party B shall pay salaries to its workers and management personnel, and provide
social insurances, benefits, subsidies, compensations, allowances, bonuses, etc
in accordance with the actual situation and needs.

vi).
bear any and all the water, electricity, communication expenses and taxes in
connection with the use of the Specific Warehouse and Processing Place.

vii).
respect and protect the Parties’ patents, trademarks, copyright, designs,
know-how, and other intellectual property rights, and keep Party A’s patents,
trademarks, copyright, designs, know-how, other intellectual property rights and
business secrets which are involved in the Processing Business confidential.

4.
Transportation and Insurance

4.1
Party A shall provide raw materials, spare parts, packaging materials, and other
required materials in accordance with the stipulations hereof, and bear the
costs incurred in transportation and expenses on the purchase of insurances.

4.2
Party B may purchase insurances for raw materials, spare parts, packaging
materials, and other required materials, semi-finished products, and finished
products stored in the Specific Warehouse and Processing Place in accordance
with the actual situation and needs.

5.
Representations, Warranties and Undertakings

5.1
Party A’s Representations, Warranties and Undertakings to Party B

 
i).
Party A is a limited liability company incorporated and existing under the laws
of British Virgin Islands;

ii).
Party A’s entering into this Agreement will not violate any applicable
laws、regulations、limitations、undertakings、conditions or agreements biding upon
it;

iii).
During the term of this Agreement, Party A shall exclusively appoint Party B to
process and manufacture artificial stone products. Party A undertakes that it
will not appoint any other third party to process and manufacture artificial
stone products in any way until the termination of its cooperation with Party B;

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iv).
Party A shall pay all the prices for the processed products before taking
delivery;

v).
Respect and protect Party B’s patents, trademarks, copyright, designs, know-how,
and other intellectual property rights, and keep Party B’s patents, trademarks,
copyright, designs, know-how, other intellectual property rights, and business
secrets which are involved in the Processing Business confidential.

5.2
Party B’s Representations, Warranties and Undertakings to Party A

 
i).
Party B is an enterprise incorporated and existing under the laws of the
People’s Republic of China, and has the full powers and legitimate right to
engage in the Processing Business for Party A’s Products;

ii).
The Specific Warehouse, Processing Place and the attached facilities have met
the standards of fire protection, security, and environmental protection enacted
by relevant governmental authorities;

iii).
If Party B fails to complete the Processing Business in the Specific Warehouse
and Processing Place on time due to external intervention, Party B guarantees to
compensate Party A any direct losses caused by the above-mentioned intervention
in accordance with the compensation clause as stipulated in the orders (except
for force majeure);

iv).
Party B shall notify Party A in writing if any variation of Party B’s operation,
business, finance, plants, employees may affect the Processing Business, or
Party B’s plants, warehouses, machines, stocks, articles will be in the danger
of seizure or detained by any governmental administrative authorities,
institutions, judicial authorities;

v).
Party B shall deliver the Processed Products with good quality to Party A on
time in accordance with the quantity as required herein and the quantity in the
orders which Party B may manufacture as negotiated by the Parties from time to
time;

vi).
Party B shall not use Party A’s equipment to process any other third party’s
products without Party A’s written consent during the term of this Agreement;

6.
Inspection Standards, Delivery Time, Delivery Place

6.1
Party A shall do the products’ quality inspection and acceptance before taking
delivery of the products. The product standards in the Stone Board Materials
shall be made reference in inspection standards and in the meantime, the
products shall meet the following requirements:

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i).
be basically consistent with the agreed samples;

ii).
the colors of the products which are in the same batch should basically the
same;

iii).
there should be no black dots on stone surface;

6.2
Party A may reject to accept or return the products if the products are found
defective or exceed order quantity during inspection;

6.3
Party B shall deliver to Party A the finished products as required in the orders
before the end of the Processing Period.  If Party B is late in the delivery of
the products, Party B shall compensate Party A for the losses so caused in
accordance with the compensation clause as stipulated in the orders; If Party
B’s delay is caused by Party A’s or the company designated by Party A’s not
providing the raw materials, spare parts, packaging materials, or any other
materials listed on relevant orders or not paying the processing fee on time,
Party B shall be exempted from compensating Party A’s losses.

6.4
Delivery place: Party B’s plant or the Specific Warehouse.

7.
Property Title

7.1
Party A is the sole and absolute legitimate owner of Party A’s Property during
the term of this Agreement. Party B shall take all the necessary measures to
ensure that Party A’s Property title is clear and will not be infringed.  If
Party A’s Articles in the Specific Warehouse and Processing Place are seized or
detained by any governmental department due to any reason caused by Party B,
Party B shall be responsible for any explanation, certification or proof to
relevant governmental department that the title of the Party A’s Articles
belongs to Party A, and shall make every effort to make the seizure or
detainment released.

7.2
In any circumstances, without Party A’s consent, Party B shall not offset any
expenses with Party A’s Articles, nor dispose of Party A’s Articles in any other
way. All Party A’s Articles shall be returned to Party A in case of termination
of this Agreement for whatever reasons.

8.
Renewal

8.1
This Agreement will automatically be renewed upon the expiration date unless
either one party raises objection to the renewal of the Agreement.

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9.
Termination

9.1
This Agreement shall be terminated when the term of this Agreement expires in
addition to the termination as stipulated under Clause 9.3 herein.

9.2
Unless the circumstances occurred as listed in Clause 9.3 herein, if any Party
proposes to terminate this Agreement during the term of this Agreement, the
proposing Party shall give the other Party a prior written notice of termination
no less than one month.

9.3
During the term of this Agreement, each Party shall have the right to notify the
other Party in writing to terminate this Agreement, when any one of following
occurs:

 
i).
if the breaching Party fails to make any remedy within 14 days after the
non-breaching Party sends a written notice to it requesting remedies for breach
of contract, which can be remedied, in case of breach of any stipulation of this
Agreement by the breaching Party;

ii).
if Party B is in liquidation, whether compulsory or voluntary ;

iii).
if Party A fails to provide Party B with the agreed amount of business for
processing as stipulated herein, make the payments and violate all the
stipulations herein, Party B shall have the right to terminate this Agreement;

10.
Breach of Contract

10.1
If any Party’s breach of this Agreement causes any losses to the other Party,
the breaching Party shall compensate the non-breaching Party for any losses so
caused; If both Parties are in breach, each Party shall be responsible for the
part of losses caused its breach in accordance with the actual situation;

11.
Settlement of Disputes

11.1
Should any dispute and claims relating to this Agreement arise, the Parties
shall seek to settle them through friendly negotiation. Each Party may submit
the dispute to a local court for settlement in case the dispute is not settled
in the manner accepted by the Parties within 30 days of receipt of the notice of
the disputes.

11.2
The Parties shall continue to exercise their rights and carry out their
responsibilities herein respectively except for the matters in dispute after the
dispute arises;

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12.
The Parties shall clear their payments when the term of this Agreement expires.

13.
The Parties shall refer to the written signed records during the term of this
Agreement.

14.
Others:

14.1
This Agreement is drafted in Chinese.

14.2
The formation, validity, interpretation, implementation of this Agreement and
any disputes arising out of this Agreement shall be governed by the laws of
China.

14.3
No failure on the part of any of the Parties to exercise, and no delay on each
of their part in exercising, any right or remedy under this Agreement will
operate as a waiver thereof, nor will any single or partial exercise of any
right or remedy preclude any other or further exercise thereof or the exercise
of any other right or remedy. Nevertheless, the laws of China shall be
applicable.

14.4
Unless otherwise stipulated herein, neither Party may assign partly or fully its
rights or obligations under this Agreement without the written consent of the
other party.

14.5
This Agreement constitutes the whole agreement related to the Processing
Business between the Parties, and substitutes all preceding discussions,
negotiations, and agreements between the Parties.

14.6
Any notice or demand that one Party sends to the other shall be written in
Chinese, and sent to relevant parties by mail or facsimile swiftly. In the case
of facsimile, the air registered mail shall be sent to confirm afterwards. Any
notice or mail sent under this Agreement shall be deemed served and arrived by
addressee in following conditions:

1) In the case of mail, the mail should be delivered to the right address;

2) In the case of facsimile, the fax machine shows fax completed or any other
signal that indicates the fax is completed.

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Party A:

Address: 
Unit 2102-03 21/F Kingsfield Centre 18-20 Shell Street North Point Hong Kong

Recipient: 
Chris So

 

Party B:

Address: 
Hekou Stone Industrial Park in Yuncheng District, Yunfu City, Guangdong
Province.

Recipient: 
Zeng Xian Yi

14.7
This Agreement shall come into effect after the authorized representatives from
both Parties sign and the company chops of each Party are affixed.

This Agreement is executed by the authorized representatives of the Parties on
the date as indicated on the first page of this Agreement.

Party A:
Greatmat Technology (HK) Limited

Authorized Representative:
 

Party B:
Yunfu Changyi Stone Factory

Authorized Representative:

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