Exhibit
10.1             

    


    CHINA
SLP FILTRATION TECHNOLOGY, INC.

    AUDIT
COMMITTEE CHARTER

    


    Purpose

    


    China SLP
Filtration Technology, Inc. (the “Company”) established
an Audit Committee (the “Committee”) to assist
the Board of Directors (the “Board”) in carrying
out its oversight compliance with laws, regulations and ethics standards that
relate to the Company’s accounting and financial reporting processes, audits of
the Company’s financial statements and internal controls.

    


    The
function of the Committee is oversight in nature. The responsibility for
financial reporting, internal controls and compliance with laws, regulation and
ethics standards remains with Company management. The Company’s independent
auditors are responsible for auditing the Company’s financial
statements.

    


    The
Committee has direct responsibility for appointing, compensating and overseeing
the work of the Company’s independent auditors including resolution of
disagreements between management and the independent auditors regarding
financial reporting and related issues.  The Committee does not
provide any expert or special assurances as to the Company’s financial
statements or any professional certification as to the independent auditors’
work.

    


    Committee
Composition

    


    Number and Appointment. The
Committee shall be composed of three or more directors, who shall be appointed
annually and subject to removal at any time, by the Board of
Directors.

    


    Independence. Each Committee
member shall meet the independence requirements imposed by any stock exchange or
other marketplace on which the Company’s securities may be listed. No member of
this Committee is to receive any compensation from the Company other than the
established Directors’ fees, options, and expense reimbursement.

    


    Financial Literacy. Each
Committee member shall have a basic understanding and knowledge about financial
and auditing matters, financial controls and reporting, and must be able to read
and understand financial statements. At least one Committee member shall also
have accounting or related financial management expertise to qualify as a
“financial expert” (as defined by the Securities and Exchange Commission (SEC)
or applicable Stock Market requirements).


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    Authority

    


    By
majority vote of the Committee and Board approval, the Committee shall have
authority to appoint, determine funding for, and oversee the Company’s
independent auditors. The Committee has the power to conduct or authorize
investigations into any matter within its scope of responsibilities, and shall
have unrestricted access to members of management and all information relevant
to its responsibilities. The Committee is empowered to engage independent
counsel and other advisors as it determines necessary to carry out its duties;
and receive appropriate funds, as determined by the Committee, from the Company,
to compensate outside legal, accounting, or other advisors employed by the
Committee to assist it in the conduct of its duties.

    


    Specific
Responsibilities and Duties

    


    The
Committee shall perform the duties listed below and take such other action as it
determines reasonable, necessary or appropriate to carry out its
duties:

    


    Relationship with Independent
Auditors

    


    The
Committee shall have primary responsibility to oversee the Company’s
relationship with its independent auditors. The Committee shall:

    


    • with
Board approval, select, evaluate, retain and where appropriate, replace the
Company’s independent auditors;

    


    • review
the scope and extent of audit services to be provided, including the engagement
letter, prior to the annual audit, and review and pre-approve all audit fees to
be charged by the independent auditors;

    


    • review
the independent auditors’ annual written statement pursuant to Independence
Standards Board Standard No. 1, outlining any relationships that may impact
their independence or objectivity;

    


    • review
and pre-approve any additional or permitted non-audit services to be provided by
the independent auditors;

    


    • enable
direct communication at all times, between the independent auditors and the
Committee and require the independent auditors to report any serious
difficulties or disputes with management directly to the Committee;

    


    • review
with management and the independent auditors the financial statements and
disclosures to be included in the Company’s annual or quarterly reports to be
filed with the SEC prior to filing;



    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    • obtain
and review a report by the Company’s independent auditors describing the
independent auditor firm’s internal quality-control procedures, review any
material issues raised by the most recent internal quality-control review, or
peer review, of the firm, or by any inquiry or investigation by governmental or
professional authorities, and any steps taken to resolve such issues, and assess
(the auditors’ independence) all relationships between the independent auditors
and the Company;

    


    • discuss
with the Company's independent auditors the quality of accounting principles
applied in the Company's financial statements and the other matters required by
SAS 61 (including amendments or supplements}, such as management judgments and
accounting estimates that affect financial statements, significant new
accounting policies and disagreements with management;

    


    • review
the audit process with management and the independent auditors, upon completion
of their annual audit, to discuss, identify or evaluate: (i) the cooperation
received by the independent auditors from management, including access to all
requested information; (ii) any instances where management has obtained “second
opinions” from other external auditors; (iii) any disagreements with management
that, if not satisfactorily resolved, would have caused the auditors to modify
their report on the financial statements; (iv) management’s comments regarding
the audit; (v) any restrictions placed by management on the scope of the audit,
and (vi) any other matters the Committee deems appropriate;

    


    • inquire
of management and the Company’s independent auditors concerning any deficiencies
in the Company’s policies and procedures that could adversely affect the
adequacy of internal controls and the financial reporting process and review the
timeliness and reasonableness of proposed corrective actions and monitor such
action;

    


    • inquire
if the Company’s independent auditors face any litigation, disciplinary
actions or findings by the SEC, the Public Company Accounting Oversight Board
(PCAOB) or others;

    


    • meet
periodically with the independent auditors in private session (without
management participation); and

    


    • review
and approve the Committee’s report included in the proxy statement for the
Company’s annual meeting of shareholders, and such other reports as may from
time to time be necessary or appropriate.

    


    Financial
Reporting Process

    


    The
Committee shall monitor the preparation by management of the Company’s quarterly
and annual external financial reports. In carrying out this responsibility, the
Committee shall:


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    • review
periodically, with management, the Company’s internal accountants and the
independent auditors, the adequacy of the Company’s accounting and financial
personnel and any relevant recommendations concerning internal controls,
accounting principles, and accounting/reporting systems;

    


    • review
the effect of any important new practices of the accounting profession and other
regulatory bodies on the Company’s accounting and reporting policies, and
consider and approve, if appropriate, changes to the Company’s accounting
principles and practices proposed by management;

    


    • review
the accounting and reporting of any significant transactions outside the
Company’s ordinary operations;

    


    • discuss
with the independent auditors any significant changes in auditing standards or
their audit scope;

    


    • see
that any concerns or complaints received by the Company regarding its
accounting, internal control, or auditing matters are addressed;

    


    • review
the internal accounting department’s staffing, budget and responsibilities;
and

    


    • enable
direct communication at any time, as needed, between the Committee and the Chief
Financial Officer and any member of the internal accounting department to
address concerns.

    


    Risk Management

    


    The
Committee shall also:

     

    • obtain an
understanding of the Company’s internal and external key areas of risk exposure
including its internal control structure;

     

    • in conjunction
with management, assess the processes relating to the determination and
mitigation of risks and the maintenance of an effective control environment;
and

     

    • monitor, and
review quarterly or as needs arise, the Company’s insurance program including
those uninsurable risks.

    


    Legal
Compliance/General

    


    The
Committee shall also:

    


    • review
reports and other information, and discuss with legal counsel and such other
persons including the CFO and independent auditors to gain reasonable assurance
that the Company is in compliance with pertinent laws and regulations, is
conducting its affairs ethically, and is maintaining effective controls against
conflict of interest and fraud;


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    •
establish a procedure for the confidential and anonymous submission of
complaints and concerns by Company employees to the Committee relating to
accounting, internal controls or auditing matters, so that any complaints
received by the Company or the Committee regarding accounting, internal control
or auditing matters are addressed by management; 

    • review
periodically with management, legal counsel and the Board any legal and
regulatory matters that may have a material impact on the Company’s financial
statements, compliance policies, and compliance programs;

    


    • review
with management the Company’s systems to monitor compliance with applicable
legal requirements;

    


    • review
and approve or ratify all significant related party transactions and potential
conflict of interests;

    


    • review
cases of misconduct or fraud; and

    


    • review
any inquiries related to accounting or financial reporting matters received from
the SEC or other agencies, and management’s response thereto.


    


    Meetings

    


    The
Committee shall meet four times per year, and may hold additional meetings as
often as may be necessary or appropriate, at the discretion of the Committee
Chair. The Committee Chair may communicate with the independent auditors and
management to review the agenda and solicit input on any additional topics that
should be covered. The Committee shall receive from the independent auditors and
management the draft financial statements at least 5 business days before the
filing due date as required by laws and regulations. Meetings may be held in
person or by conference calls.

    


    The
Committee should meet at least annually with the CEO, CFO, Director of Internal
Audit, and independent auditors separately to discuss any matter the Committee
or each of these groups believe should be discussed privately.

    


    Conduct
of Business

    


    All
meetings require the presence of a majority of the members of the Committee to
conduct business.  Each Committee member shall have one
vote.  All actions or determinations by the Committee must be by
majority vote of the members present.



    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    Attendance

    


    Members
of the Committee are expected to use reasonable efforts to attend each meeting.
As necessary or desirable, the Committee Chair may request that members of
management, the internal audit, or representatives of the independent auditors
be present at meetings of the Committee.

    


    Minutes

    


    Minutes
of each meeting shall be prepared under the direction of the Chairperson of the
Committee and circulated to Committee members for review and approval and then
circulated to the directors who are not members of the Committee. Copies are to
be made available to the Company’s independent auditors and lawyers upon
request.

    


    This
Charter is intended to provide a set of guidelines for the effective functioning
of the Committee. Accordingly, the Committee will review and reassess the
adequacy of this Charter. The Committee may modify or amend this Charter and the
authority and responsibilities of the Committee as necessary at any time,
subject to Board approval.