Document:

Unassociated Document

    Exhibit
      10.5

    

    

    

    

    

    

    Equity
      Transfer Agreement of Jiangsu

    Cold-Rolled
      Technology Co., Ltd.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Content

    

    

    

    Article
      1. Definition

    Article
      2. Equity Transfer 

    Article
      3. Conditions Precedent to Transfer

    Article
      4. Price of Equity Transfer

    Article
      5. Representations, Warranties and Undertakings 

    Article
      6. Liabilities for Breach of Agreement

    Article
      7. Force Majeure

    Article
      8. Miscellaneous 

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EQUITY
      TRANSFER AGREEMENT

    

    The
      Equity Transfer Agreement (the “Agreement”) was signed by representatives from
      all the parties involved in Changshu City, Jiangsu Province on August 18,
      2006.

    

    Transferor:

    
      	
            	·	
              Shanghai
                Huaye Iron & Steel Group Co., Ltd. 
                Legal
                  Address: No.198, Gongyue Road, Yang Hang Industrial Park, Baoshan
                  District, 

                Shanghai.

                Legal
                  Representative: Feng Gao

              

            

    

    
    

    
      	
            	·	
              Huaye
                (Hong Kong) International Group Co., Ltd. 
                Legal
                  Address: Unit A, 20/F, Empire Land Commercial Center, 81-85 Lockhart
                  Road,

                Wanchai,
                  Hong Kong.

                Legal
                  Representative: Feng Gao

              

            

    

    
    

    Transferee:

    
      	
            	·	
              Sutor
                Steel Technology Co., Ltd

              Registered
                Address: P.O. Box 957, Offshore Incorporations Center, Road
                Town,

              Tcirtola
                , British Virgin Islands.

              Legal
                Representative: Lifang Chen

            

    

    
       

       

      Whereas:

    

    

    
      	
              1.

            	
               

            	
              The
                Transferor, Shanghai Huaye Iron & Steel Group Co., Ltd., is a limited
                liability company established and validly existing under the laws
                of
                People’s Republic of China (“PRC”), and has the necessary corporate power
                to sign the Agreement.

            

    

    

    
      	
              2.

            	
               

            	
              The
                Transferor, Huaye (Hong Kong) International Group Co., Ltd., is a
                limited
                liability company established and validly existing under the laws
                of Hong
                Kong Special Administrative Region of PRC, and has the necessary
                corporate
                power to sign the Agreement.

            

    

    

    
      	
              3.

            	
               

            	
              The
                Transferee is a limited liability company established under the laws
                of
                British Virgin Islands and has the corporate power to sign the
                Agreement.

            

    

    

    
      	
              4.

            	
               

            	
              Jiangsu
                Cold-Rolled Technology Co., Ltd. is a Sino-Foreign Equity Joint Venture
                established in PRC by the Transferor according to the Law of PRC
                on
                Chinese-foreign Equity Joint Venture Enterprises and other relevant
                laws.
                Jiangsu Cold-Rolled Technology Co., Ltd. has registered capital of
                US
                $36,000,000, with the Shanghai Huaye Iron & Steel Group Co., Ltd. and
                Huaye (Hong Kong) International Group Co., Ltd. holding 75% and 25%,
                respectively. 

            

    

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
 

    
      	
              5.

            	
               

            	
              The
                Transferor agrees to transfer all its equity in Jiangsu Cold-Rolled
                Technology Co., Ltd. to the Transferee, and the Transferee agrees
                to
                purchase such equity transferred by the
                Transferor.

            

    

    

    Therefore,
      both parties agree as follows:

    

    Article
      1. Definition

    

    1.1
      Unless otherwise specified in the context, the following terms shall have the
      meanings listed below:

    

    Transferor:
      Shanghai Huaye Iron & Steel Group Co., Ltd. and Huaye (Hong Kong)
      International Group Co., Ltd.

    

    Transferee:
      Sutor Steel Technology Co., Ltd. established and existing under the laws of
      British Virgin Islands.

    

    Cold-Rolled
      Technology: Jiangsu Cold-Rolled Technology Co., Ltd. legally established under
      the PRC laws.

    

    Original
      Articles of Association: Articles of Association of Jiangsu Cold-Rolled
      Technology Co., Ltd. and amendments thereof executed by the Transferor before
      the signature of the Agreement.

    

    Articles
      of Association: Articles of Association of Jiangsu Cold-Rolled Technology Co.,
      Ltd to be executed by the Transferee for the completion of the equity transfer
      under the Agreement.

    

    Change
      of
      Business Form: The Change of Cold-Rolled Technology from a sino-foreign equity
      joint venture company to a wholly foreign owned enterprise when the Transferor
      transfer to the Transferee all of the equity in Cold-Rolled
      Technology.

    

    Equity
      Transfer: Transferor transfers all the equity to the Transferee, and Transferee
      becomes the shareholder of Jiangsu Cold-Rolled Technology with legally holding
      100% of the equity in Jiangsu Cold-Rolled Technology.

    

    Transfer
      Equity: Transferor transfers to Transferee 100% of the equity in Jiangsu
      Cold-Rolled Technology legally held by the Transferor.

     

    Price
      of
      Transfer: Hong Kong dollar/US dollar/ British pound equivalent to RMB 1.204457
      million Yuan. This price is determined by the net capital value verified in
      Capital Verification Report with the number of 93rd
      Jingyongtuosu verified on 30th,
      June
      2006 issued by Beijing Yongtuo C.P.A. Co., Ltd.

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      Working
        days: From Monday to Friday in each week, except for the statutory holidays
        in
        People’s Republic of China as well as Hong Kong Special Administrative Region of
        People’s Republic of China.

       

    

    Transfer
      Effective Date: The date when the Agreement is executed by Transferor and
      Transferee and the Agreement is approved by the concerned governmental authority
      of foreign trade and cooperation.

    

    Transfer
      Completion Date: The date when the Transferee pays off all the transfer price
      to
      the Transferor and carries out the registration procedure for the establishment
      of the new wholly owned foreign enterprise.

    

    PRC
      refers to People’s Republic of China, excluding the following areas of People’s
      Republic of China: Hong Kong Special Administrative Region of People’s Republic
      of China, Marco Special Administrative Region of People’s Republic of China and
      Taiwan Province for the purpose of the Agreement.

    

    1.2
      Unless otherwise specified, explanation of the Agreement is conducted as
      follows:

    

    
      	
              (1)

            	
              Title
                of agreement is only for reference; it neither constitutes part of
                the
                Agreement nor demonstrates any meaning of
                agreement.

            

      	 	 

    

    
      	
              (2)

            	
              Annexes
                to the Agreement are an integral part of the Agreement, having equal
                legal
                effectiveness of the Agreement.

            

      	 	 

    

    
      	
              (3)

            	
              If
                the deadline of the period defined in the Agreement is in non-working
                days, then the deadline will be automatically postponed to working
                days
                following statutory holidays.

            

    

    

    Article
      2. Equity Transfer

    

    2.1
      Subject to satisfaction of conditions precedent to transfer provided in Article
      3, the Transferor hereby transfers 100% of equity in Cold-Rolled Technology
      to
      Transferee. This Transfer will take effect upon the date when the Agreement
      is
      approved by the concerned governmental authority of foreign trade and
      cooperation.

    

    2.2
      As of
      the date for the Agreement taking effectiveness, Transferor will no longer
      hold
      any equity in Cold-Rolled Technology.

     

    2.3
      Transferor shall submit the following documents to Transferee prior to the
      Transfer Effective Date:

     

    (1)
      Board
      resolution on the consent of Equity Transfer adopted by the Board of Cold-Rolled
      Technology.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (2)
      All
      the original and duplicate documents of Cold-Rolled Technology held by the
      Transferor.

    

    Transferor
      shall fully comply with the above provisions and Article 3, or otherwise
      Transferee shall not be obliged to complete the Agreement or perform the
      obligation under Article 4.

    

    Article
      3. Conditions Precedent to Transfer

    

    3.1
      Transferor and Transferee should cause the following conditions precedent to
      Transfer to be met on the day of _______, 2006 or the date agreed by both
      parties:

     

    
      	
              (1)

            	
              Checklist
                of documents to be verified has been submitted to Transferee upon
                the
                requirement of Transferee and the consultant of Transferee for the
                conduct
                of due
                diligence, and Transferor has obtained confirmation of the satisfaction
                to
                the result of due diligence from Transferee in
                writing.

            

      	 	 

    

    
      	
              (2)

            	
              Both
                parties have signed the Agreement and Transferee has formulated and
                signed
                articles of association.

            

      	 	 

    

    
      	
              (3)

            	
              Board
                of Cold-Rolled Technology has adopted the decisions on approval of
                equity
                transfer and change of business form of Cold-Rolled
                Technology.

            

      	 	 

    

    
      	
              (4)

            	
              The
                concerned governmental authority of foreign trade and cooperation
                has
                issued approval certificate on equity transfer and change of business
                form
                of Cold-Rolled Technology.

            

      	 	 

    

    
      	
              (5)

            	
              New
                Business License has been issued by competent administration department
                of
                industry and commerce.

            

      	 	 

    

    
      	
              (6)

            	
              Board
                of Transferee has adopted a consent approving the Agreement ( if
                required
                by applicable laws)

            

    

    

    3.2
      Should conditions precedent to the transfer provided in Article 3.1 not
      satisfied prior to the deadline, the Agreement will be automatically terminated
      (except for the failure of satisfaction resulting from Force Majeure or approval
      delay by the approving authorities) unless Transferee issues a written exemption
      of such conditions. Once the Agreement is terminated, obligations and rights
      of
      both parties (excluding the liabilities for breach of the Agreement) will be
      terminated and Transferor should not ask for price of equity
      transfer.

    

    3.3
      Once
      the Agreement is automatically terminated according to Article 3.2, both parties
      should cooperate with each other to go through all the procedures required
      for
      the return of the equity from Transferee to Transferor (if necessary), in order
      for the equity structure of Cold-Rolled Technology to return to its original
      status.

    

    Article
      4.Price of Equity Transfer

    

    4.1
      If
      Transferor fully performs the liabilities and obligations defined in the
      Agreement and all the representations, warranties and undertakings are true
      and
      accurate, Transferee will pay off all the price of equity transfer as much
      as
      RMB 1.204457 million Yuan in Hong Kong dollar. This price is determined by
      the
      net capital value verified in Capital Verification Report with the number of
      93rd
      Jingyongtuo verified on 30th,
      June
      2006 issued by Beijing Yongtuo C.P.A. Co., Ltd. Transferee should pay RMB
      90,334,275.00 Yuan to Shanghai Huaye Iron & Steel Group Co., Ltd and RMB
      30,111,425.00 Yuan to Huaye (Hong Kong) International Group Co.,
      Ltd.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    4.2
      If
      all the precedent conditions specified in Article 3.1 are satisfied within
      the
      period, Transferee should pay off all the price of equity transfer within 3
      months after the issuance of new business license or the earlier date agreed
      by
      both parties.

    

    4.3
      The
      date when Transferee pays the price to Transferor is equity transfer completion
      date. As of the transfer completion date, Transferee finishes its obligation
      of
      payment of equity transfer price and Transferor should not ask for other
      payment.

    

    Article
      5. Representations, Warranties and Undertakings

    

    5.1
      Transferor hereby represents, warrants and undertakes to Transferee
      unconditionally and irrevocably as follows:

     

    
      	(1)	 	
              All
                the representations, warranties and undertakings and the documents
                concerning Transferor and Cold-Rolled Technology given and provided
                by
                Transferor are true, accurate, integral, complete and
                unconditional;

            

    

     

    
      
        	(2)	 	
                Transferor
                  shall have all the legally required authorization and approval
                  to sign the
                  Agreement, perform the obligation and execute rights according
                  to the
                  Agreement, and would not violate the applicable laws;
                  

              

      

      
         

        
          	(3)	 	
                  Cold-Rolled
                    Technology is a Sino-foreign equity joint venture established
                    and existing
                    under the PRC laws and has the right to own its assets and to
                    operate
                    business within the registered business
                    scope;

                

        

         

      

    

    
       

      
        	(4)	 	
                There
                  exists no pending or unsettled litigation, arbitration, administrative
                  procedure, or claims concerning Cold-Rolled Technology, except
                  for those
                  (executed and confirmed by the Transferee) disclosed by Transferor
                  to
                  Transferee in writing before the execution date of the
                  Agreement;

              

      

      
         

        
          	(5)	 	
                  No
                    outstanding payment obligations exist in Cold-Rolled Technology
                    except for
                    the accounting items informed to Transferee (Those items should
                    be
                    confirmed by the signature of
                    Transferee);

                

        

         

      

    

    
      
        	(6)	 	
                Operation
                  of Cold-Rolled Technology goes on as usual and no significant change
                  arises during the period from the signature of the Agreement and
                  the date
                  when equity transfer is finished;

              

      

      
         

        
          	(7)	 	
                  Transferor
                    legally holds the equity to be transferred and free of pledge,
                    mortgage,
                    charges or claims;

                

        

         

      

    

    
      
        	(8)	 	
                Cold-Rolled
                  Technology is registered according to the rules of taxation laws
                  in
                  People’s Republic of China without violation of any tax laws and
                  regulations or be subject to fines imposed by taxation
                  bureau.

              

      

       

       

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    5.2
      Transferee hereby represents, warrants and undertakes to Transferor
      unconditionally and irrevocably as follows:

     

    
      	
              (1)

            	
               

            	
              All
                the representations, warranties and undertakings and the documents
                given
                and provided to Transferor are true, accurate, integrate, complete
                and
                unconditional.

            

      	 	 

    

    
      	
              (2)

            	
               

            	
              Transferee
                shall have all the legally required authorization and approval to
                sign the
                Agreement, perform the obligation and execute rights according to
                the
                Agreement, and would not violate the applicable
                laws.

            

    

    

    Article
      6. Liability of Breach of Agreement

    

    6.1
      Any
      party not performing the obligation defined in the Agreement on time will be
      deemed as breach of agreement and is due to take all the liabilities as well
      as
      economic damage resulting herefrom.

    

    Article
      7. Force Majeure

    

    7.1
      Force
      Majeure refers to all the unpredictable, unavoidable or unconquerable events
      partly or fully preventing any party from performing the Agreement, such as
      earthquakes, typhoons, floods, fire and wars as well as other unpredictable,
      unavoidable or unconquerable events, including the force majeure events defined
      in the general international commercial customs.

    

    7.2
      Should force majeure happen, the party suffering the damage of force majeure
      should stop performing obligations temporarily, notify the other party with
      the
      written notice and provide the relevant evidence witnessing the force majeure
      event which shall be issued by a competent public notary. Otherwise it will
      not
      be deemed as force majeure event.

    

    7.3
      Should force majeure event happens, both parties should negotiate with each
      other for the solution of mitigating the damage caused by the force majeure
      event.

    

    7.4
      Should force majeure event happens, the party effected shall be exempted from
      the responsibility of not performing the obligations during the course of the
      force majeure event. 

    

    Article
      8. Miscellaneous 

    

    8.1
      Notice

    All
      the
      notices and documents in connection with the Agreement should be given in
      written form and delivered by the means specified in the Agreement. Notices
      and
      documents may be sent by personal delivery, faxed and mailed to the address
      designated by the recipient. Notifications and documents shall be deemed to
      have
      been given: if by personal delivery the date on the receiving; if sent by post,
      7 days after the postmark date; if by fax the date on confirmation report
      printed out by the facsimile machine. If any party changes the recipient
      information, written notification should be sent out 7 days in advance,
      otherwise the damage caused hereby shall be borne by the changing
      party.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    8.2
      Applicable Laws

    Laws,
      regulations and provisions in PRC shall govern the conclusion, validity,
      interpretation and performance of the Agreement. If any specific matters in
      connection with the Agreement are not provided by PRC laws, regulations and
      provisions, the general international commercial customs shall
      apply.

    

    8.3
      Dispute Settlement

    Both
      parties shall take efforts to settle any dispute arising from the interpretation
      or performance of or in connection with the Agreement through friendly
      consultations. In case no settlement can be reached through consultations,
      then
      such matter shall be submitted to the China International Economic and Trade
      Arbitration Commission (“CIETAC”) in Beijing for arbitration in accordance with
      CIETAC rules. The arbitral award shall be final and binding on both parties.
      

    

    8.4
      Waivers

    Failure
      or delay on the part of any party to exercise any right, authority or privilege
      under the Agreement or other contracts or agreements relevant to the Agreement
      shall not operate as a waiver thereof, nor shall any single or partial exercise
      of any right, authority or privilege preclude further exercise thereof.

    

    8.5.Transfer

    Unless
      agreed by both parties, any rights, obligations or liabilities under the
      Agreement shall not be transferred.

    

    8.6
      Amendment and Supplement

    The
      Agreement shall not be amended or supplemented orally and shall be amended
      or
      supplemented only if it is in writing and executed by both parties. The
      supplement to the Agreement shall be deemed as an integral part of the
      Agreement.

    

    8.7
      Words
      and Copies

    The
      Agreement is written and signed in Chinese with six original copies and several
      duplicate copies. Each party holds one original copy and the remaining copies
      will be submitted to the relevant government authorities for approval and
      registration. Each copy shall have equal legal validity.

    

    8.8
      Effectiveness

    The
      Agreement will take effect once signed by both parties and obtained the approval
      of the concerned governmental authority of foreign trade and
      cooperation.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    8.9
      Severance 

    If
      any
      provision of this Agreement is held invalid, the validity of the remaining
      provisions shall not be affected.

    

    8.10
      Entire Agreement

    The
      Agreement and its annexes shall be integral part of the Agreement, constituting
      the whole agreement executed by both parties in connection with the subject
      matters of the Agreement, and replacing all the prior memos, letters of intent,
      preliminary agreements (such documents shall become invalid as of the transfer
      completion date). 

    

    8.11
      Expense

    Both
      parties shall bear their respective expenses for the execution of the
      Agreement.

    

    Transferor:
      Shanghai Huaye Iron & Steel Group Co., Ltd 

    (Seal
      of
      Transferor)

    By:
      /s/
      Feng Gao

    Feng
      Gao;
      authorized representative

    

    Transferor:
      Huaye (Hong Kong)International Group Co., Ltd

    (Seal
      of
      Transferor)

    By:
      /s/
      Feng Gao

    Feng
      Gao;
      authorized representative

    

    Sutor
      Steel Technology Co., Ltd. 

    (Seal
      of
      Transferee)

    By:
      /s/
      Lifang Chen

    Lifang
      Chen; authorized representative 

     

     

    
      
        
        

      

      
        8Unassociated Document

    

    

    

    Exhibit
      10.6

    

    

    

    Equity
      Transfer Agreement of Changshu

    Huaye
      Steel Strip Co., Ltd.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Content

    

    

    

    Article
      1. Definition

    Article
      2. Equity Transfer

    Article
      3. Conditions Precedent to Transfer

    Article
      4. Price of Equity Transfer

    Article
      5. Representations, Warranties and Undertakings

    Article
      6. Liability for Breach of Agreement

    Article
      7. Force Majeure

    Article
      8. Miscellaneous

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    EQUITY
      TRANSFER AGREEMENT

    

    The
      Equity Transfer Agreement (the “Agreement”) was signed by representatives from
      all the parties involved in Changshu City, Jiangsu Province on August 18,
      2006.

    

    Transferor:

    
      	
            	·	
              Shanghai
                Huaye Iron & Steel Group Co., Ltd. 
                Legal
                  Address: No. 198, Gongyue Road, Yang Hang Industrial Park, Baoshan
                  District, 

                Shanghai.
                  

                Legal
                  Representative: Feng Gao

              

            

    

    

    
      	
            	·	
              Huaye
                (Hong Kong) International Group Co., Ltd. 
                Legal
                  Address: Unit A, 20/F, Empire Land Commercial Center, 81-85 Lockhart
                  Road,
                  

                Wanchai,
                  Hong Kong.

                Legal
                  Representative: Feng Gao

              

            

    

    

    Transferee:

    
      	
            	·	
              Sutor
                Steel Technology Co., Ltd. 
                Registered
                  Address: P.O. Box 957, Offshore Incorporations Center, Road Town,
                  

                Tcirtola
                  , British Virgin Islands.

                Legal
                  Representative: Lifang Chen

              

            

    

    

    Whereas:

    

    
      	
              1.

            	
               

            	
              The
                Transferor, Shanghai Huaye Iron & Steel Group Co., Ltd., is a limited
                liability company established and validly existing under the laws
                of
                People’s Republic of China (“PRC”), and has the necessary corporate power
                to sign the Agreement.

            

    

    

    
      	
              2.

            	
               

            	
              The
                Transferor, Huaye (Hong Kong) International Group Co., Ltd., is a
                limited
                liability company established and validly existing under the laws
                of Hong
                Kong Special Administrative Region of PRC, and has the necessary
                corporate
                power to sign the Agreement.

            

    

    

    
      	
              3.

            	
               

            	
              The
                Transferee is a limited liability company established under the laws
                of
                British Virgin Islands and has the corporate power to sign the
                Agreement.

            

    

    

    
      	
              4.

            	
               

            	
              Changshu
                Huaye Steel Strip Co., Ltd., is a Sino-foreign Equity Joint Venture
                established in PRC by the Transferor according to the Law of PRC
                on
                Chinese-foreign Equity Joint Venture Enterprises and other relevant
                laws.
                Changshu Huaye Steel Strip Co., Ltd., has registered capital of US
                $10
                million, with the Shanghai Huaye Iron & Steel Group Co., Ltd. and
                Huaye (Hong Kong) International Group Co., Ltd. holding 75% and 25%,
                respectively.

            

    

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
              5.

            	
               

            	
              The
                Transferor agrees to transfer all its equity in Changshu Huaye Steel
                Strip
                Co., Ltd. to the Transferee, and the Transferee agrees to purchase
                such
                equity transferred by the
                Transferor.

            

    

    

    Therefore,
      both parties agree as follows:

    

    

    Article
      1. Definition

    

    1.1
      Unless otherwise specified in the context, the following terms shall have the
      meanings listed below:

    

    Transferor:
      Shanghai Huaye Iron & Steel Group Co., Ltd. and Huaye (Hong Kong)
      International Group Co., Ltd.

    

    Transferee:
      Sutor Steel Technology Co., Ltd. established and existing under the laws of
      British Virgin Islands.

    

    Huaye
      Steel Strip: Changshu Huaye Steel Strip Co., Ltd. legally established under
      the
      PRC laws.

    

    Original
      Articles of Association: Articles of Association of Changshu Huaye Steel Strip
      Co., Ltd. and amendments thereof executed by the Transferor before the signature
      of the Agreement. 

    

    Articles
      of Association: Articles of Association of Changshu Huaye Steel Strip Co.,
      Ltd.
      to be executed by the Transferee for the completion of the equity transfer
      under
      the Agreement.

    

    Change
      of
      Business Form: The Change of Huaye Steel Strip from a sino-foreign equity joint
      venture company to a wholly foreign owned enterprise when the Transferors
      transfer to the Transferee all of the equity in Huaye Steel Strip.

    

    Equity
      Transfer: Transferor transfers all the equity to the Transferee, and Transferee
      becomes the shareholder of Huaye Steel Strip with legally holding 100% of the
      equity in Huaye Steel Strip.

    

    Transfer
      Equity: Transferor transfers to Transferee 100% of the equity in Huaye Steel
      Strip legally held by the Transferor.

    

    Price
      of
      Transfer: Hong Kong dollar/US dollar/ British pound equivalent to RMB 1.004939
      million Yuan. This price is determined by the net capital value verified in
      Capital Verification Report with the number of 94th Jingyongtuoshu verified
      on
      30th,
      June
      2006 issued by Beijing Yongtuo C.P.A. Co., Ltd.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    Working
      days: From Monday to Friday in each week, except for the statutory holidays
      in
      People’s Republic of China as well as Hong Kong Special Administrative Region of
      People’s Republic of China.

    

    Transfer
      Effective Date: The date when the Agreement is executed by Transferor and
      Transferee and the Agreement is approved by the concerned governmental authority
      of foreign trade and cooperation. 

    

    Transfer
      Completion Date: The date when the Transferee pays off all the transfer price
      to
      the Transferors and carries out the registration procedure for the establishment
      of the new wholly foreign owned enterprise.

    

    PRC
      refers to People’s republic of China, excluding the following areas of People’s
      republic of China: Hong Kong Special Administrative Region of People’s Republic
      of China, Marco Special Administrative Region of People’s Republic of China and
      Taiwan Province for the purpose of the Agreement.

    

    1.2
      Unless otherwise specified, explanation of the Agreement is conducted as
      follows:

    

    
      	
              (1)

            	
              Title
                of agreement is only for reference; it neither constitutes part of
                the
                Agreement nor demonstrates any meaning of
                agreement.

            

      	 	 

    

    
      	
              (2)

            	
              Annexes
                to the Agreement are an integral part of agreement, having equal
                legal
                effectiveness of the Agreement.

            

      	 	 

    

    
      	
              (3)

            	
              If
                the deadline of the period defined in the Agreement is in non-working
                days, then the deadline will be automatically postponed to working
                days
                following statutory holidays.

            

    

    

    Article
      2. Equity Transfer

    

    2.1
      Subject to satisfaction of conditions precedent to transfer provided in Article
      3, the Transferor hereby transfers 100% of equity in Huaye Steel Strip to
      Transferee. This Transfer will take effect upon the date when the Agreement
      is
      approved by the concerned governmental authority of foreign trade and
      cooperation.

    

    2.2
      As of
      the date for the Agreement taking effectiveness, Transferor will no longer
      hold
      any equity in Huaye Steel Strip.

    

    2.3
      Transferor shall submit the following documents to Transferee prior to the
      Transfer Effective Date:

     

    
      	(1)	
            	
              Board
                resolution on the consent of Equity Transfer adopted by the Board
                of Huaye
                Steel Strip.

            

    

     

    
      	(2)	 	
              All
                the original and duplicate documents of Huaye Steel Strip held by
                the
                Transferor.

            

    

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    Transferor
      shall fully comply with the above provisions and Article 3, or otherwise
      Transferee shall not be obliged to complete the Agreement or perform the
      obligation under Article 4.

    

    Article
      3. Conditions Precedent to Transfer

    

    3.1
      Transferor and Transferee should cause the following conditions precedent to
      Transfer to be met on the day of _______, 2006 or the date agreed by both
      parties:

     

    
      	
              (1)

            	
              Checklist
                of documents to be verified has been submitted to Transferee upon
                the
                requirement of Transferee and the consultant of Transferee for the
                conduct
                of due
                diligence, and Transferor has obtained confirmation of the satisfaction
                to
                the result of due diligence from Transferee in
                writing.

            

      	 	 

    

    
      	
              (2)

            	
              Both
                parties have signed the Agreement and Transferee has formulated and
                signed
                articles of association.

            

      	 	 

    

    
      	
              (3)

            	
              Board
                of Huaye
                Steel Strip has
                adopted the decisions on approval of equity transfer and change of
                business form of Huaye
                Steel Strip.

            

      	 	 

    

    
      	
              (4)

            	
              The
                concerned governmental authority of foreign trade and cooperation
                has
                issued approval certificate on equity transfer and change of business
                form
                of Huaye
                Steel Strip.

            

      	 	 

    

    
      	
              (5)

            	
              New
                Business License has been issued by competent administration department
                of
                industry and commerce.

            

      	 	 

    

    
      	
              (6)

            	
              Board
                of Transferee has adopted a consent approving the Agreement ( if
                required
                by applicable laws)

            

    

    

    3.2
      Should conditions precedent to the transfer provided in Article 3.1 not
      satisfied prior to the deadline, the Agreement will be automatically terminated
      (except for the failure of satisfaction resulting from Force Majeure or approval
      delay by the approving authorities) unless Transferee issues a written exemption
      of such conditions. Once the Agreement is terminated, obligations and rights
      of
      both parties (excluding the liabilities for breach of the Agreement) will be
      terminated and Transferor should not ask for price of equity
      transfer.

    

    3.3
      Once
      the Agreement is automatically terminated according to Article 3.2, both parties
      should cooperate with each other to go through all the procedures required
      for
      the return of the equity from Transferee to Transferor (if necessary), in order
      for the equity structure of Huaye Steel Strip to return to its original
      status.

    

    Article
      4.Price of Equity Transfer

    

    4.1
      If
      Transferor fully performs the liabilities and obligations defined in the
      Agreement and all the representations, warranties and undertakings are true
      and
      accurate, Transferee will pay off all the price of equity transfer as much
      as
      RMB 1.004939 million Yuan in Hong Kong dollar. This price is determined by
      the
      net capital value verified in Capital Verification Report with the number of
      94th
      Jingyongtuo
      verified on 30th,
      June
      2006 issued by Beijing Yongtuo C.P.A. Co., Ltd. Transferee should pay RMB
      75,370,425.00 Yuan to Shanghai Huaye Iron & Steel Group Co., Ltd. and RMB
      25,123,475.00 Yuan to Huaye (Hong Kong) International Group Co.,
      Ltd.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    4.2
      If
      all the precedent conditions specified in Article 3.1 are satisfied within
      the
      period, Transferee should pay off all the price of equity transfer within 3
      months after the issuance of new business license or the earlier date agreed
      by
      both parties.

    

    4.3
      The
      date when Transferee pays the price to Transferor is equity transfer completion
      date. As of the transfer completion date, Transferee finishes its obligation
      of
      payment of equity transfer price and Transferor should not ask for other
      payment.

    

    Article
      5. Representations, Warranties and Undertakings

    

    5.1
      Transferor hereby represents, warrants and undertakes to Transferee
      unconditionally and irrevocably as follows:

    
       

      
        	
                (1)

              	
                
                  All
                    the representations, warranties and undertakings and the documents
                    concerning Transferor and Huaye Steel Strip given and provided
                    by
                    Transferor are true, accurate, integral, complete and
                    unconditional;

                

              

        	 	 

      

      
        	
                (2)

              	
                Transferor
                  shall have all the legally required authorization and approval
                  to sign the
                  Agreement, perform the obligation and execute rights according
                  to the
                  Agreement, and would not violate the applicable laws;
                  

              

        	 	 

      

      
        	
                (3)

              	
                Huaye
                  Steel Strip is a Sino-foreign equity joint venture established
                  and
                  existing under the PRC laws and has the right to own its assets
                  and to
                  operate business within the registered business
                  scope;

              

        	 	 

      

      
        	
                (4)

              	
                There
                  exists no pending or unsettled litigation, arbitration, administrative
                  procedure, or claims concerning Huaye Steel Strip, except for those
                  (executed and confirmed by the Transferee) disclosed by Transferor
                  to
                  Transferee in writing before the execution date of the
                  Agreement;

              

        	 	 

      

      
        	
                (5)

              	
                No
                  outstanding payment obligations exist in Huaye Steel Strip except
                  for the
                  accounting items informed to Transferee (Those items should be
                  confirmed
                  by the signature of Transferee);

              

        	 	 

      

      
        	
                (6)

              	
                Operation
                  of Huaye Steel Strip goes on as usual and no significant change
                  arises
                  during the period from the signature of the Agreement and the date
                  when
                  equity transfer is finished;

              

        	 	 

        	(7) 	Transferor legally holds the equity to be transferred
                and
                free of pledge, mortgage, charges or claims;

        	 	 

        	(8)	Huaye Steel Strip is registered according to the
                rules of
                taxation laws in People’s Republic of China without violation of any tax
                laws and regulations or be subject to fines imposed by taxation
                bureau.

      

      
5.2
        Transferee hereby represents, warrants and undertakes to Transferor
        unconditionally and irrevocably as follows:

    

    
       

      
        	
                (1)

              	
                All
                  the representations, warranties and undertakings and the documents
                  given
                  and provided to Transferor are true, accurate, integrate, complete
                  and
                  unconditional.

              

      

       

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

    

    
      	
              (2)

            	
              Transferee
                shall have all the legally required authorization and approval to
                sign the
                Agreement, perform the obligation and execute rights according to
                the
                Agreement, and would not violate the applicable
                laws.

            

    

    

    Article
      6. Liability of Breach of Agreement

    

    6.1
      Any
      party not performing the obligation defined in the Agreement on time will be
      deemed as breach of agreement and is due to take all the liabilities as well
      as
      economic damage resulting herefrom.

    

    Article
      7. Force Majeure

    

    7.1
      Force
      Majeure refers to all the unpredictable, unavoidable or unconquerable events
      partly or fully preventing any party from performing the Agreement, such as
      earthquakes, typhoons, floods, fire and wars as well as other unpredictable,
      unavoidable or unconquerable events, including the force majeure events defined
      in the general international commercial customs.

    

    7.2
      Should force majeure happen, the party suffering the damage of force majeure
      should stop performing obligations temporarily, notify the other party with
      the
      written notice and provide the relevant evidence witnessing the force majeure
      event which shall be issued by a competent public notary. Otherwise it will
      not
      be deemed as force majeure event.

    

    7.3
      Should force majeure event happens, both parties should negotiate with each
      other for the solution of mitigating the damage caused by the force majeure
      event.

    

    7.4
      Should force majeure event happens, the party effected shall be exempted from
      the responsibility of not performing the obligations during the course of the
      force majeure event. 

    

    Article
      8. Miscellaneous 

    

    8.1
      Notice

    All
      the
      notices and documents in connection with the Agreement should be given in
      written form and delivered by the means specified in the Agreement. Notices
      and
      documents may be sent by personal delivery, faxed and mailed to the address
      designated by the recipient. Notifications and documents shall be deemed to
      have
      been given: if by personal delivery the date on the receiving; if sent by post,
      7 days after the postmark date; if by fax the date on confirmation report
      printed out by the facsimile machine. If any party changes the recipient
      information, written notification should be sent out 7 days in advance,
      otherwise the damage caused hereby shall be borne by the changing
      party.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    8.2
      Applicable Laws

    Laws,
      regulations and provisions in PRC shall govern the conclusion, validity,
      interpretation and performance of the Agreement. If any specific matters in
      connection with the Agreement are not provided by PRC laws, regulations and
      provisions, the general international commercial customs shall
      apply.

    

    8.3
      Dispute Settlement

    Both
      parties shall take efforts to settle any dispute arising from the interpretation
      or performance of or in connection with the Agreement through friendly
      consultations. In case no settlement can be reached through consultations,
      then
      such matter shall be submitted to the China International Economic and Trade
      Arbitration Commission (“CIETAC”) in Beijing for arbitration in accordance with
      CIETAC rules. The arbitral award shall be final and binding on both parties.
      

    

    8.4
      Waivers

    Failure
      or delay on the part of any party to exercise any right, authority or privilege
      under the Agreement or other contracts or agreements relevant to the Agreement
      shall not operate as a waiver thereof, nor shall any single or partial exercise
      of any right, authority or privilege preclude further exercise thereof.

    

    8.5
      Transfer

    Unless
      agreed by both parties, any rights, obligations or liabilities under the
      Agreement shall not be transferred.

    8.6
      Amendment and Supplement

    The
      Agreement shall not be amended or supplemented orally and shall be amended
      or
      supplemented only if it is in writing and executed by both parties. The
      supplement to the Agreement shall be deemed as an integral part of the
      Agreement.

    

    8.7
      Words
      and Copies

    The
      Agreement is written and signed in Chinese with six original copies and several
      duplicate copies. Each party holds one original copy and the remaining copies
      will be submitted to the relevant government authorities for approval and
      registration. Each copy shall have equal legal validity.

    

    8.8
      Effectiveness

    The
      Agreement will take effect once signed by both parties and obtained the approval
      of the concerned governmental authority of foreign trade and
      cooperation.

    

    8.9
      Severance 

    If
      any
      provision of this Agreement is held invalid, the validity of the remaining
      provisions shall not be affected.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    8.10
      Entire Agreement

    The
      Agreement and its annexes shall be integral part of the Agreement, constituting
      the whole agreement executed by both parties in connection with the subject
      matters of the Agreement, and replacing all the prior memos, letters of intent,
      preliminary agreements (such documents shall become invalid as of the transfer
      completion date). 

    

    8.11
      Expense

    Both
      parties shall bear their respective expenses for the execution of the
      Agreement.

    

    Transferor:
      Shanghai Huaye Iron & Steel Group Co., Ltd 

    (Seal
      of
      Transferor)

    By:
      /s/
      Feng Gao

    Feng
      Gao,
      authorized representative

    

    Transferor:
      Huaye (Hong Kong)International Group Co., Ltd

    (Seal
      of
      Transferor)

    By:
      /s/
      Feng Gao

    Feng
      Gao,
      authorized representative

    

    Sutor
      Steel Technology Co., Ltd. 

    (Seal
      of
      Transferee)

    By:
      /s/
      Lifang Chen

    Lifang
      Chen, authorized representative 

     

     

     

    
      
        
        

      

      
        8

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