Document:

EXECUTIVE EMPLOYMENT AGREEMENT

EXHIBIT 10.6 TO FORM 10

EXECUTIVE EMPLOYMENT AGREEMENT

     This EXECUTIVE EMPLOYMENT AGREEMENT is made and entered into this the_8th_ day of _February,_. 2008__by and between Clean Coal Technologies, Inc., a Nevada corporation (the "Company"), and Doug Hague (the "Executive"). 

     WHEREAS, the Company desires to employ the Executive and the Executive desires to be so employed by the Company from and after the date of this Agreement, it being specifically acknowledged by each party hereto that upon execution and delivery of this Agreement, any and all previous agreements whether in writing or oral between the Executive and Company shall be terminated and superseded by this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein,

the parties agree as follows:

ARTICLE I

EMPLOYMENT DUTIES AND BENEFITS

     SECTION 1.1 EMPLOYMENT. The Company hereby employs the Executive as President and Chief Executive Officer of the Company. The Executive accepts such employment and agrees to perform the duties and responsibilities assigned to him under this Agreement.

     SECTION 1.2 DUTIES AND RESPONSIBILITIES. During the period of employment, Executive agrees to exclusively serve the Company as President and Chief Executive Officer and in such other offices and directorships of the Company and of its subsidiaries and related companies (collectively, "Affiliates") to which he may be elected or appointed, and to perform the duties commensurate with such positions and such other reasonable and appropriate duties as may be requested of him by the board of directors of the Company (the "Board of Directors") and of the Affiliates, as applicable, in accordance with this Agreement and in compliance with all applicable laws and regulations. Excluding periods of vacation and sick leave to which the Executive is entitled, Executive shall devote such time, energy, and skill exclusively to the business and affairs of the Company and its Affiliates and to the promotion of their interests as is necessary to perform the duties required of him by this Agreement.

     SECTION 1.3 WORKING FACILITIES; LOCATION. The Executive shall be furnished with facilities and services suitable to his position and adequate for the performance of his duties under this Agreement. The principal place of performance by the Executive of his duties hereunder shall be in Broward County, Florida, or at such other location as he may reasonably be required to travel in the performance of his responsibilities.

     SECTION 1.4 VACATIONS. The Executive shall be entitled each year during the Term, as defined below, to a vacation with full salary and benefits, for the number of weeks established by the Board of Directors, however not less than thirty (30) days.

     SECTION 1.5 EXPENSES. The Executive is authorized to incur reasonable expenses for promoting the business of the Company, as directed by the Board of Directors, including expenses for entertainment, travel and similar items. The Company will promptly reimburse the Executive for all such expenses upon the presentation by the Executive, from time to time, of an itemized account of such expenditures.  Expenses to be incurred shall be congruent with the budget.  Unforeseen expenses shall be preapproved by the Board of Directors or any executive committee created by the board prior to incurring the expenses.

     SECTION 1.6 VEHICLE ALLOWANCE. The Executive shall be paid a vehicle allowance of $750 per month or, at his election, the Company shall lease for not more than $750 per month a vehicle for the use of the Executive, the make and model of which shall be mutually agreeable to the Company and the Executive.

     SECTION 1.7 BENEFIT PLANS. From the effective date of this Agreement, the Executive shall be entitled to participate in benefit plans provided to employees of the Company or Affiliates. Such participation shall be based upon the policies established by the Board of Directors as applicable to the Executive.

SECTION 1.8 INDEMNIFICATION.  It is understood that the Company has merged with Clean Coal Systems, Inc. a Florida corporation, which had previously merged with SAMI, a Florida corporation. It is understood and agreed that the Company shall defend, hold harmless and indemnify the Executive for any action brought in a Court of competent jurisdiction as a result of those mergers. The Company will also aggressively pursue Director and Executive insurance on behalf of its Board of Directors and Officers.  

ARTICLE II

COMPENSATION

     SECTION 2.1 BASE SALARY. During the Term, the Company shall pay to the Executive a base salary at the rate of $250,000 per annum for the period January 1, 2008 through December 31, 2010 and upon extension each year thereafter Executive shall receive a cost of living

increase.  The pay schedule shall be the same as other company employees. It is acknowledged and agreed that at the signing of this agreement the Company is seriously under funded and as a result thereof the parties agree that the Company shall pay monthly ten Thousand Dollars ($10,000.00) with the balance accruing until such time and the Company is financially able to pay the balance due.

 

     SECTION 2.2 BONUS AND BONUS PLAN PARTICIPATION. The Executive may be entitled to an annual bonus for each year during the Term of this Agreement.  The amount of the percentage within that limit shall be determined in the sole discretion of the Board of Directors and shall be based on the achievements of written objectives defined by the Board of Directors.

The Executive will be eligible to participate in the Management Incentive Plan.

SECTION 2.3  STOCK BONUS .

 In consideration of executives employment with the Company, and subject to executives full and faithful performance of his duties and obligations as more specifically set forth herein during the term hereof, Executive shall be entitled to an irrevocable  stock bonus program in the following manner based upon the company’s stock valuations prior to the Company’s stock split on January 28, 2008:

Executive shall be entitled to an award of company stock equivalent to 5% of the total of issued shares of the company, apportioned equally over a three year period, (less 1 Million irrevocable shares previously awarded), in accordance with the following bonus award dates, provided he  continues to be employed by the Company on that date:

i.

33%  exercisable after December 31, 2008.

ii.

33% exercisable after December 31 2009,

iii.

33% exercisable after December 31, 2010.

In the event that Executive terminates his employment for any reason whatsoever prior to full completion with the Company prior to the vesting of that bonus  period as set forth herein above, then any such bonus  rights not yet completed and accrued shall be terminated. By way of example, in the event that Executive terminates his employment with the Company in February of 2009, then he would be ineligible to exercise the bonus for  (ii) and (iii) herein above and would only be entitled to earn his bonus in (i) herein above. 

ARTICLE III

TERM OF EMPLOYMENT AND TERMINATION

     SECTION 3.1 TERM. This Agreement shall be for a period of three years commencing on January 01, 2008; subject, however, to termination during such period as provided in this Article (the "Term").  This Agreement shall automatically extend for two (2) terms of one (1) year each except and unless the Company shall have notified the Executive by giving sixty days prior notice that the term will not be extended.

     SECTION 3.2 TERMINATION BY THE COMPANY WITH CAUSE. The Company may terminate the Executive's employment, at any time, for cause upon ten days' written notice and opportunity for the Executive to remedy any non-compliance with the terms of this Agreement (if such non-compliance can be remedied). Grounds for termination "for cause" shall be any of the following: (i)   intentional and material breach of his duty of loyalty or care to the Company,   (ii)   gross negligence or willful misconduct in performance of his duties during the course of his employment, (iii)   persistent failure to abide by the corporate policies and procedures established by the Board of Directors;   (iv)   persistent failure to execute the reasonable and lawful instructions of the Board of Directors relating to the operation of the Company's business, and   (v)   conviction of any felony. Upon the date of termination of the Executive's employment pursuant to this Section 3.2, the Company's obligation to pay any compensation (including bonuses) shall terminate, at which time the Company shall be responsible for compensating the Executive for any unpaid salary and vacation time not taken. Subject to this exception and the obligation of the Company to compensate the Executive through the notice period, no other compensation shall be payable to the Executive should this Agreement be terminated pursuant to this Section 3.2.

     SECTION 3.3 TERMINATION OR CESSATION OF EMPLOYMENT WITHOUT CAUSE. If the Executive's employment is terminated or ceased without cause, all compensation shall cease, but the Company shall be obligated to compensate the Executive with a lump sum severance payment equal to six months of the present value of his annual salary otherwise payable during the remaining Term of this Agreement

.. To insure the severance pay, the Company, upon funding in the amount of Fifteen Million dollars or greater,  will escrow one hundred twenty five thousand dollars ($125,000.00) to be held in reserve, pursuant to an escrow agreement, to run with the term of this employment agreement. In the event the Executive's employment is terminated pursuant to this section 3.3, the

 Executive shall be entitled to participate in the bonus payable pursuant to SECTION 2.2, with respect to the year in which his employment is terminated, prorated for the year based on the number of full months employed during such year compared to 12 months. In addition, the non-competition covenant in SECTION 4.1(c) below shall be automatically terminated on the effective date of any termination of Executive's employment without cause

..  In the event Executive's employment is terminated, Executive shall be entitled to receive the shares in the  bonus plan in SECTION 2.3 proportioned for the full month in which the termination  occurs but any distribution of the remaining bonus shares shall cease and the Stock Bonus  Plan would be canceled.

     SECTION 3.4 TERMINATION UPON DEATH OF THE EXECUTIVE. In addition to any other provision relating to termination, this Agreement shall terminate upon the Executive's death. In such event, all unpaid compensation, compensation for vacation time not taken by the Executive and all expense reimbursements due to the Executive shall be paid to the Executive's estate. In the event the Executive's employment is terminated pursuant to this Section 3.4, the Executive's estate also shall be entitled to a death benefit equal to six months' salary and to participate, in the bonus payable pursuant to SECTION 2.2 with respect to the year in which his employment is terminated, prorated for the year based on the number of full months worked during such year compared to 12 months.

The Company agrees to purchase a Term life insurance policy in the amount of Five Hundred Thousand Dollars ($500,000.00) to run concurrently with the term and any extended terms of this agreement.  The beneficiary or beneficiaries shall be at the sole discretion of the Executive.  Prior to any cancellation by the Company, for any reason, the Company shall give Executive a minimum of sixty (60) days written  notice whereupon, if he so chooses, the Executive may assume the premium liability.

     SECTION 3.5 TERMINATION UPON SALE. 

(a) If during the Term, the Company:

               (i)   is merged into another company;

               (ii)  sells all or substantially all of its assets to another

          

company or person;

               (iii) experiences a change in ownership of 50% or more of its common 

stock; or

               (iv)  issues shares in excess of 50% of its then outstanding stock to another company or person and the Executive is not offered, by the acquiring company or person, an employment position, or not offered an employment position satisfactory to him, he shall be deemed Terminated Without Cause and shall be entitled to a severance payment in an amount equal to one year's Base Salary, which shall be in addition to amounts payable to the Executive under Section 3.3 above. Additionally, the outstanding balance of the 5%  of the bonus shares, as provided under Section 2.3, would be considered as fully vested and payable to the Executive.

          (b) The foregoing subsection 3.5(a) shall not apply if the Executive is an equity participant in any of the transactions described in subsection 3.5(a)(i)-(iv) above.

                  

ARTICLE IV

CONFIDENTIALITY AND COMPETITION

SECTION 4.1 FURTHER OBLIGATIONS OF THE EXECUTIVE DURING AND AFTER EMPLOYMENT.

          (a) The Executive agrees that during the term of his employment under this Agreement and for an additional period of one year, he will engage in no business activities which are or may be competitive with, or which might place him in a competing position to that of, the Company or any Affiliate except as authorized by the Company's Board of Directors.  The Executive further agrees that he shall not reveal any drawings, designs, patent filings prior to filing, or other information relating to any object, or project which The Company has not made available to the general public.

          (b) The Executive realizes that during the course of his employment, the Executive will have produced and/or have access to confidential plans, information, business opportunity records, notebooks, data, specifications, trade secrets, customer lists and account lists of the Company and its Affiliates ("Confidential Information"). Therefore, during and subsequent to his employment by the Company, or by an Affiliate, the Executive agrees to hold in confidence and not to directly or indirectly disclose or use or copy or make lists of any such Confidential Information, except to the extent authorized by the Company in writing. All records, files, business plans, documents, equipment and the like, or copies thereof, relating to Company's business, or the business of an Affiliate, which the Executive shall prepare, or use, or come into contact with, shall remain the sole property of the Company, or of the Affiliate, and shall not be removed from the Company's or the Affiliate's premises without its written consent, and shall be promptly returned to the Company upon termination or resignation of employment with the Company or its Affiliates.

          (c) Because of his employment by the Company, the Executive will have access to trade secrets and confidential information about the Company, its business plans, its business accounts, its business opportunities, its expansion plans into other geographic areas and its methods of doing business. The Executive agrees that for the Term of this Agreement and an additional period of one year he will not take any actions which are calculated to persuade any employee, vendor or supplier of the Company to

terminate or modify in any adverse manner his or its association with the Company.

          (d) In the event a court of competent jurisdiction finds any provision of this Section 4.1 to be so overbroad as to be unenforceable, then such provision shall be reduced in scope by the court, to the extent deemed necessary by the court to render the provision reasonable and enforceable. The Executive acknowledges and agrees that any breach of this Agreement by the Executive would cause immediate irreparable harm to the Company. The Executive agrees that should he violate any of the terms and conditions of this Agreement, the Company, at its sole discretion, shall be entitled to seek and obtain immediate injunctive relief and enjoin further and future violations of this Agreement.

(e)  In the event Executive knowingly and willingly violates either or all of SECTION 4.1 to the economic detriment of Company, Executive will hold harmless, defend and forthwith indemnify company of any and all loss sustained.

ARTICLE V

DISABILITY AND ILLNESS

SECTION 5.1 DISABILITY AND SALARY CONTINUATION.

          (a) Definition of Total Disability. For purposes of this Agreement, the terms "totally disabled" and "total disability" shall mean disability as defined in any total disability insurance policy or policies, if any, in effect with respect to the Executive. If no insurance policy is in effect, "total disability" shall mean a medically determinable physical or mental condition which, in the opinion of two physicians chosen by the mutual consent of the parties, renders the Executive unable to perform substantially all of the duties required pursuant to this Agreement. Total disability shall be deemed to have occurred on the date of the disabling injury or onset of the disabling illness, as determined by the two independent physicians. In the event that the two independent physicians are unable to agree as to the date of the disabling injury or onset of the disabling illness, such date shall be deemed to be the later of the two dates determined by the physicians chosen pursuant to this Section 5.1(a).

          (b) Salary Continuation. If the Executive becomes totally disabled during the term of this Agreement, his full salary shall be continued for 90 days from the date of the disabling injury or onset of the disabling illness as determined in accordance with the provisions of SECTION 5.1(a) above, and thereafter the Executive's employment may be terminated in accordance with the provisions of SECTION 3.3.

     SECTION 5.2 Illness. If the Executive is unable to perform the services required under this Agreement by reason of illness or physical injury not amounting to total disability, also as determined in this Article, the compensation otherwise payable to the Executive under this Agreement shall be continued for a period of 90 days and he shall be entitled to participate in the bonus payable in Section 2.2 with respect to the year in which the illness occurred, prorated for the year based on the number of months worked during such year compared to 12, after which the Executive's employment may be terminated and the Company shall have no further obligation to the Executive.

ARTICLE VI

GENERAL MATTERS

     SECTION 6.1 GOVERNING LAW. This Agreement shall be governed by the laws of the State of  Florida and shall be construed in accordance therewith.

                        

     SECTION 6.2 NO WAIVER. No provision of this Agreement may be waived except by an agreement in writing signed by the waiving party. A waiver of any term or provision shall not be construed as a waiver of any other term or provision.

     SECTION 6.3 AMENDMENT. This Agreement may be amended, altered or revoked at any time, in whole or in part, by filing with this Agreement a written instrument setting forth such changes, signed by each of the parties.

     SECTION 6.4 BENEFIT. This Agreement shall be binding upon the Executive and the Company, and shall not be assignable by either party without the other party's written consent.

     SECTION 6.5 SEVERABILITY. If any provision of this Agreement is declared by any court of competent jurisdiction to be invalid for any reason, such invalidity shall not affect the remaining provisions. On the contrary, such remaining provisions shall be fully severable, and this Agreement shall be construed and enforced as if such invalid provisions had not been included in the Agreement.

     SECTION 6.6 EFFECTIVE DATE. The effective date of this Agreement shall be January 1, 2008

     SECTION 6.7 ARBITRATION. The Company and the Executive expressly agree that except for matters arising under Article IV of this Agreement, all disputes arising out of this Agreement shall be resolved by arbitration in accordance with the following provisions. Either party must demand in writing such arbitration within ten days after the controversy arises by sending a notice to arbitrate to both the other party and to the American Arbitration Association (hereinafter referred to as "AAA"). The controversy shall then be arbitrated pursuant to the rules promulgated by the AAA at the AAA's offices located in Denver, Colorado. The parties will select by mutual agreement the arbitrator or arbitrators (hereinafter collectively referred to as "arbitrator") to hear and resolve the controversy. The arbitrator shall be governed by the express terms of this Agreement and the laws of the State of Florida. The arbitrator's decision shall be final and binding on the parties and shall bar any suit, action, or proceeding instituted in any federal, state, or local court or administrative tribunal. Notwithstanding the preceding sentence, the arbitrator's judgment may be entered in any court of competent jurisdiction. These arbitration provisions shall survive the termination of this Agreement.

SECTION 6.8 NOTICES  All notices shall be given by the Executive to the Board of Directors shall be in writing and given to the Chairman of the board and if he is not available, to the Vice-Chairman.

All notices given to the Executive by the Board of Directors shall be given in writing by the Chairman of Vice-Chairman delivered to the Executive at his office.

SECTION 6.9  COUNTER PARTS  This agreement maybe executed in any number of counterparts and by the separate parties hereto in separate counterparts, each of which shall be deemed to be one and the same instrument.

SECTION 6.10 ENTIRE AGREEMENT  This writing constitutes the entire agreement between the parties here to with respect to the subject matter contained herein and supersedes any and all prior negotiations, representations and understanding, whether oral or in writing, between the parties hereto.

Signed this the date above.

                                 

Clean Coal Technologies, Inc.

                               

By:__________________________

         

            _________________________

                                 

Edward Jennings, 

  

Chairman of the Board

                           

_______________________________________

Doug Hague

ATTEST:

1Converted by EDGARwiz

EXHIBIT 10.7 TO FORM 10       

COOPERATIVE JOINT VENTURE 

 CONTRACT

BETWEEN

SINO-MOGOLIAN INTERNATIONAL 

 RAILROAD SYSTEMS CO., LTD.

AND

CLEAN COAL TECHNOLOGIES, INC., 

 FOR THE ESTABLISHMENT OF

SINO-MONGOLIAN INTERNATIONAL

INVESTMENT CO., LTD.

A SINO-FOREIGN COOPERATIVE JOINT VENTURE

2008 

TABLE OF CONTENTS 

		
	CHAPTER 1 GENERAL PROVISIONS 

	1

	CHAPTER 2 PARTIES TO THE JOINT VENTURE

	3

	CHAPTER 3 REPRESENTATIONS AND WARRANTIES

	4

	CHAPTER 4 ESTABLISHMENT OF THE JOINT VENTURE COMPANY

	5

	CHAPTER 5 PURPOSE AND SCOPE OF BUSINESS

	6

	CHAPTER 6 TOTAL AMOUNT OF INVESTMENT AND REGISTERED CAPITAL

	7

	CHAPTER 7 RESPONSIBILITIES OF THE PARTIES

	10

	CHAPTER 8 BOARD OF DIRECTORS

	13

	CHAPTER 9 SUPERVISOR

	15

	CHAPTER 10 MANAGEMENT

	15

	CHAPTER 11 SALES

	16

	CHAPTER 12 PROCUREMENT

	17

	CHAPTER 13 PROFIT DISTRIBUTION

	17

	CHAPTER 14 PAYMENT TO CONTRACTORS

	17

	CHAPTER 15 FOREIGN EXCHANGE

	18

	CHAPTER 16 FINANCE, AUDIT, TAXES, ETC

	18

	CHAPTER 17 INSURANCE

	19

	CHAPTER 18 COMPLIANCE

	19

	CHAPTER 19 LABOR MANAGEMENT

	20

	CHAPTER 20 DURATION OF THE COMPANY

	20

	CHAPTER 21 TERMINATION

	21

	CHAPTER 22 DISSOLUTION AND LIQUIDATION

	22

	CHAPTER 23 FORCE MAJEURE

	24

	CHAPTER 24 CONFIDENTIALITY AND NON COMPETITION

	24

	CHAPTER 25 EXCLUSIVITY

	25

	CHAPTER 26 APPLICABLE LAW

	26

	CHAPTER 27 SETTLEMENT OF DISPUTES

	26

	CHAPTER 28 AMENDMENT, ALTERATION AND DISCHARGE OF THE CONTRACT

	26

	CHAPTER 29 MISCELLANEOUS

	27

SCHEDULES

SCHEDULE 1: MAP OF THE LAND

SCHEDULE 2: MEMBERS OF THE INITIAL BOARD OF DIRECTORS OF THE COMPANY 

EXHIBITS 

EXHIBIT A: SUPPLY AGREEMENT

EXHIBIT B: TECHNOLOGY LICENSE AGREEMENT 

i 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

COOPERATIVE JOINT VENTURE CONTRACT

CHAPTER 1 

GENERAL PROVISIONS 

In accordance with the Law of the People 's Republic of China on Chinese foreign 

Cooperative Joint Ventures, its detailed implementing rules (collectively the "CJV Law") 

and other relevant Chinese laws and regulations, Sino-Mongolian International Railroad 

Systems Co., Ltd. ("Party A") and Clean Coal Technologies, Inc. ("Party B"), adhering to the 

principle of equality and mutual benefit and through friendly consultations, agree to jointly 

invest and establish a cooperative joint venture company (the "Company") in Xing' an League, 

Inner Mongolia Autonomous Region, the People's Republic of China (the "PRC") and to that 

end hereby sign this Cooperative Joint Venture Contract (the "Contract'") this

day

of

,

2008.

Article 1.1

Definitions.

The following terms used herein shall have the meanings as set forth below: 

"Approval Authority" shall mean the Ministry of Commerce of the PRC, and/or its authorized agent or its successor authority. 

"Articles of Association" shall mean the Articles of Association of the Company of even 

date herewith. 

"Affiliate" shall mean a legal entity or natural person that, directly or indirectly, owns 5% or 

more of the equity capital of a Party ("Parent Entity") or any subsidiary of a Party or a Parent 

Entity in which such Party or a Parent Entity owns 10% or more of the equity capital of such 

subsidiary. 

"Board" or "Board of Directors" shall mean the board of directors of the Company. 

"Change in Law" shall have the meaning ascribed thereto in Article 28.3. 

"Clean Coal" shall mean clean coal products manufactured by using the proprietary 

technologies , patents, or intellectual property owned by Party B. 

"Company" shall mean Sino-Mongolian International Investment Co., Ltd., a Sino-foreign cooperative joint venture limited liability company to be established hereunder. 

"Confidential Information" shall have the meaning ascribed thereto in Article 24. 1. 

"Contract" shall mean this Cooperative Joint Venture Contract and the Schedules and Exhibits attached hereto. 

"Contractors" shall mean companies and individuals which will be contracted by the 

Company to provide construction materials, technology components, consulting and 

oversight services, and Project Management services. 

1 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

"Customs Duties" shall mean such duties, surcharges or taxes as are levied by the 

Government of the PRC for such equipment, assets, products or raw materials imported or 

exported by the Company or its authorized contractors or levied by any other government in 

respect thereof. 

"Effective Date" shall have the meaning ascribed thereto in Article 29.1. 

"Establishment Date" shall mean the date on which the original business license of the 

Company is issued by SAIC. 

"FSR" shall mean the feasibility study report jointly prepared by the Parties relating to the 

establishment and operation of the Company. 

"Force Majeure" shall have the meaning ascribed thereto in Article 23.1. 

"Gasification Company" shall mean the entity wholly or partially owned by Party A or one 

of its Affiliates which owns and operates gasification projects in the Industrial Park and other 

places. 

"Industrial Park" shall mean the specific area designated to Party A by Xing'an League 

Government for specific gasification and other related projects in which the Company is 

located. 

"Joint Venture Products" shall mean Clean Coal and by-products such as chemicals, water and ashes, gasification derivatives, and other products as designated from time to time by the Board to be manufactured by the Company. 

"Land" shall mean the land located within the Industrial Park with an area of 2.2 Km` (3300 Mu or approximate 544 acres) for the construction and operation of the first facility of the Company. A map of the Land is attached hereto as Schedule 1. 

"Party" shall mean each of Party A and Party B, which are sometimes collectively referred to as the "Parties". 

"Project Management/Manager" refers to both a function and/or an individual, who may be contracted to direct the overall project, or sub-sections of the project plan in accordance with established project management standards, practices, and controls. 

"PRC'" or "China" shall mean the People's Republic of China. 

"Related Contracts" shall include the Supply Agreement and the Technology License Agreement. 

"RMB" or "Renminbi" shall mean the currency of the PRC. 

"SAFE" shall mean the State Administration of Foreign Exchange, and/or its authorized 

agent or its successor authority. 

2 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

"SAIC" shall mean the State Administration for Industry and Commerce, and/or its authorized agent or its successor authority. 

"Supply Agreement" shall mean a supply agreement entered into by and between the 

Company, Gasification Company and Party B on or about the date hereof and attached hereto 

as Exhibit A, pursuant to which the Company shall supply Clean Coal to Gasification 

Company. 

"Technology License Agreement" shall mean a technology license agreement entered into 

by and between Party B and the Company on or about the date hereof and attached hereto as Exhibit B, pursuant to which the Company shall be authorized to use certain advanced technologies, either patented or not, legally owned or used by Party B in the manufacture of the Joint Venture Products. 

"Three Funds" shall mean collectively the Reserve Fund, the Venture Expansion Fund, and the Staff and Workers Bonus and Welfare Fund to be established by the Company in accordance with relevant PRC laws and regulations. 

"U.S." shall mean the United States of America. 

"U.S. Dollars", "USS" or "S" shall mean the currency of the United States of America. 

"VAT" shall mean Value Added Tax as levied from time to time by the governments of the PRC or any other government. 

Article 1.2 

Construction of Certain Terms and Phrases. 

Unless the context of this Contract otherwise requires, (i) words of any gender include each 

other gender; (ii) words using the singular or plural number also include the plural or singular 

number, respectively; (iii) the terms "hereof," "herein," "hereby" and derivative or similar 

words refer to this entire Contract; and 

(iv) the terms "Article" or "Clause" refer to the 

specified Article or Clause of this Contract. 

CHAPTER 2 

PARTIES TO THE JOINT VENTURE 

Article 2.1

Parties to the Joint Venture.

The Parties to this Contract are: 

(1) 

"Party A", SINO-MONGOLIAN INTERNATIONAL RAILROAD SYSTEMS CO., 

LTD., a limited liability company duly organized and existing under the laws of the 

PRC and registered in Hulun Buir, Inner Mongolia Autonomous Region, the PRC. 

Registered Address:

Bayantuohai Road, Hulun Buir 021000, Inner Mongolia

Autonomous Region, the PRC

Legal Representative:

Wu Li Ji Mu Ren

Position:

Chairman of the Board

Nationality:

Chinese

n 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

Phone:

(86-482) 841-2200

Fax:

(86-482) 841-3311

Email:

wulijimurenI @163.com

(2)

"Party B",CLEAN COAL TECHNOLOGIES, INC., a company duly organized and

existing under the laws of the State of Nevada, the United States of America and

registered in the State of Nevada, U.S.

Principle Address:

12518

West Atlantic Boulevard, Coral Springs, Florida

33071, the USA

Legal Representative:

Douglas Hague

Position:

President & Chief Executive Officer

Nationality:

U.S.

Phone:

(1-954) 344-2727

Fax:

(1-954) 757-1765

Email:

doug.hague@att.net

CHAPTER 3 

REPRESENTATIONS AND WARRANTIES 

Article 3.1

Each Party's Representations and Warranties.

Each Party hereby represents and warrants to the other Party that as of the date of execution

hereof:

(1)

it is a company duly organized, validly existing and in good standing with the status

of an enterprise legal person under the laws of the PRC or of the State of Nevada,

U.S.A.;

(2) 

the execution and performance by it of this Contract (i) are within its corporate power 

and scope of business, (ii) have been duly authorized by all necessary and appropriate 

corporate action, (iii) do not contravene its articles of association, (iv) do not 

contravene any law or contractual restriction binding on or affecting it and that it has 

full legal right, power and authority to perform and observe its obligations hereunder; 

(3) 

all authorizations, consents, licenses or approvals or other actions by, and all notices 

to or filings with, any governmental authority required for the due execution and 

performance by it of this Contract to which it will be a party have been obtained; and 

(4) 

this Contract once it has become effective, shall constitute the legal, valid and binding 

obligation of it, enforceable against it in accordance with its terms. 

Article 3.2 

Further Representations and Warranties of Party A 

Party A hereby further represents and warrants to Party B that as of the date of execution hereof and during the Term of the Company: 

(1) 

it has sufficient funds to finance and shall make such funds available for the 

projects to be constructed by the Company hereunder; 

4 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

(2) 

it has been assigned 80 billion metric tons of coal reserves in Inner Mongolia by 

relevant government authority of Inner Mongolia which it has committed as feed stock for the exclusive use by the Company. 

Article 3.3 

Further Representations and Warranties of Party B 

Party B hereby further represents and warrants to Party A that 

(1) 

the technologies of Party B is able to improve the calorific value of any raw coals 

with the same characteristics as the sample coal supplied by Party A to a minimum of 5000 KC (approximately 10,000 BTU). 

(2) 

the equipment purchased in accordance with the technical specifications and 

requirements provided by Party B will meet the requirements for Party B's technologies to improve the calorific value of any raw coals with the same characteristics as the sample coal supplied by Party A to a minimum of 5000 KC (approximately 10,000 BTU). 

CHAPTER 4 

ESTABLISHMENT OF THE JOINT VENTURE COMPANY 

Article 4.1

Establishment of the Company.

In accordance with the CJV Law and other relevant PRC laws and regulations, Party A and

Party B agree to jointly establish the Company as a limited liability company in Xing'an

League, Inner Mongolia Autonomous Region, the PRC.

Article 4.2

Name and Address, Branches.

(1)

The name of the Company in Chinese is:

'W N RAT

The name of the Company in English is: Sino-Mongolian International Investment Co., Ltd. 

(2) 

The registered address of the Company shall be at: No. 67, Xing'an Bei Road, Wuyi 

Street, Ulanhot 137400, Inner Mongolia Autonomous Region, the PRC. 

(3) 

To the extent permitted by the PRC law, the Company may establish branches or 

business offices or subsidiaries only inside Inner Mongolia Autonomous Region, the PRC and the Republic of Mongolia with the consent of the Board of Directors and approval from the relevant PRC governmental authorities. 

Article 4.3

Limited Liability.

The Company shall take the form of a limited liability company. The legal representative of Party A, Mr. Wu Li Ji Mu Ren, shall be the legal representative of the Company. The Company shall be liable for its debts to the extent of all its assets. The liability of each Party with respect to the Company shall be limited to the amount of its respective subscribed capital contributions required under this Contract. 

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SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

Article 4.3 

Company Shall Enjoy Protection of PRC Law. 

The Company shall be an enterprise legal person under the laws of the PRC. The activities of the Company shall be governed by, and its legal rights and operational autonomy shall be fully protected in accordance with, the laws and regulations of the PRC. 

CHAPTER 5 

PURPOSE AND SCOPE OF BUSINESS 

Article 5.1

Purpose.

The purpose of the Company will be to manufacture the Joint Venture Products by utilising advanced technology, either patented or not, licensed to the Company by Party B to supply Clean Coal to Gasification Company and sell the Joint Venture Products to such third parties as may be determined by the Board of the Company, in order to achieve favourable economic results and an acceptable rate of return for the Parties. 

Article 5.2

Scope of Business.

The scope of the business of the Company shall include the following: 

"The production, marketing and sale of products including but not limited to clean coal, chemical by-products, coal-to-oil or coal-to-gas derivatives, or other related products as the Board shall in its capacity designate from time to time and as approved by the relevant administration for industry and commerce, and related aftersale services." 

The scope of the business of the Company shall be adjusted to accommodate any other 

business activities as approved by the Board from time to time, subject to any legally required 

governmental approvals and/or registrations. 

Article 5.3

Phases of Construction of the Company

(1)

The first phase of the Company is to construct a facility inside the Industrial Park with

an initial annual production capacity of 1.5 million metric tons. The initial plant will 

be completed within approximately 18 months starting from the commencement of 

the construction. The Company may, as it deems appropriate, plan to construct a 

second plant with 

1.5 

million metric tons of annual capacity in another county of 

Xing'an League which will be subject to the resolution of the Board of the Company. 

Thereafter the annual production capacity will be expanded to 5.0 million metric tons. 

(2) 

The second phase of the Company is to increase the total annual capacity of all the 

facilities located in Xing'an League to 80 million metric tons. 

(3)

The third phase of the Company is to construct a second facility with the annual

production capacity of 1

billion tons at the site of the coal mine in Nomenhan of

Hulun Buir with reserves of 80 billion metric tons. 

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SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

(4) 

To the extent feasible, all future projects between the Parties shall follow the same 

pattern of cooperation set up in this Contract and shall be subject to the terms and 

conditions herein. 

CHAPTER 6 

TOTAL AMOUNT OF INVESTMENT AND REGISTERED CAPITAL 

Article 6.1

Total Investment and Registered Capital.

(1)

The total investment in the Company shall be Ninety Nine Million Nine Hundred

Ninety Thousand U.S. Dollars (US$99,990,000).

(2)

The registered capital of the Company shall be Thirty Three Million Three Hundred

Thirty Thousand U.S. Dollars (US$33,330,000).

(3) 

The unit of currency for measuring, among other things, the total investment, 

registered capital and contributions thereof for purposes of this Contract shall be U.S. Dollars and Renminbi. The exchange rate used for all contributions shall be the average of the buying and selling exchange rates published by the People's Bank of China for U.S. Dollars and Renminbi on the date on which the respective capital contributions are made. 

Article 6.2

Cooperation Conditions.

(1)

Party A shall provide the following cooperation conditions:

a)

Cash: Twenty Four Million Nine Hundred Ninety Seven Thousand Five

Hundred U.S. Dollars ($24,997,500 US), representing 75% of the registered

capital of the Company;

b)

Land use right to the Land of the Company;

c)

Readiness of the Land for the construction and installation of the Company's

machinery and equipment, including but not limited to, railroad spurs, roads, 

water, electricity, telecommunication and sewage associated with the 

transportation and production by the Company; 

d) 

Commitment of 80 billion metric tons of coal reserves in Inner Mongolia 

assigned to Party A by the government of Xing'an League as feed stock for the exclusive use by the Company. 

e)

Commitment to cause Gasification Company to purchase all its feed stock

from the Company unless the capacity of the Company is unable to satisfy its

needs;

f) 

Delivery to the plants of the Company all raw materials, and subsequent 

distribution of finished goods not intended for consumption within the coal gasification process. 

(2)

Party B:

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SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

a)

Cash: Eight Million Three Hundred Thirty Two Thousand Five Hundred U.S.

Dollars ($8,332,500 US), representing 25 % of the registered capital of the

Company;

b)

License to use the patented clean coal technology of Party B subject to the

terms and conditions of the Technology License Agreement;

c)

Technical supervision and support for the construction, installation and

operation of the plants of the Company.

Article 6.3 

Schedule of Capital Contributions. 

Each Party shall contribute twenty percent (20%) of its share of the registered capital of the 

Company within ninety (90) days after the Establishment Date and shall make the remaining 

capital contributions within two (2) years after the Establishment Date in accordance with the 

progress of the projects. 

Article 6.4 

Verification of Capital Contributions. 

A certified public accountant registered in China shall be engaged by the Company to verify 

the respective capital contributions of each Party and provide a capital verification report. 

The Company, upon the receipt of a satisfactory capital verification report, shall issue a 

capital contribution certificate signed by the Chairman of the Board to each Party. The 

capital contribution certificate shall include the following items: name of the Company; the 

Establishment Date; the registered capital of the Company; the names of the Parties and their 

respective capital contributions; the date on which the capital contributions were made; and 

the date of issuance of the capital contribution certificate. The capital contribution certificate 

shall be conclusive evidence of the respective Party's capital contribution to the Company. 

The capital contribution certificate shall be effective once signed by the Chairman of the 

Board and affixed with the seal of the Company, and shall be filed with the Approval 

Authority and SAIC. 

Article 6.5 

Change in Registered Capital. 

The registered capital of the Company may be adjusted, provided that any such adjustment is 

unanimously approved by the Board of Directors and submitted to the Approval Authority for 

examination and approval in accordance with the PRC law. Upon the approval of the 

Approval Authority, the Company shall register the change in registered capital with SAIC. 

Article 6.6 

Change in Cooperation Conditions 

The cooperation conditions offered by the Parties may be changed upon mutual agreement, 

and in which event, the parties shall renegotiate the profit distribution between the Parties on 

an equitable basis. Changes in the cooperation conditions and the profit distribution of the 

Parties shall be reflected in a written amendment to this Contract and related documents. 

Article 6.7

Loans.

The difference between the amount of total investment and the amount of registered capital of

the Company may be raised by the Company by way of loans or other means of debt

i fnancing.

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SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

Article 6.8

Transfer of Interest in Registered Capital.

(1)

Except as hereinafter provided, no Party may transfer all or any part of its equity

interest in the Company in any manner whatsoever without the prior consent of the other Party (such consent not to be unreasonably withheld), the unanimous approval of the Board of Directors, and the approval of the Approval Authority. 

(2) 

If either Party shall desire to transfer all or any part of its equity interest in the 

Company to any third party, such Party (the "Transferring Party") shall secure a 

binding written offer from such third party (the "Third Party Offer") to purchase some 

or all of its equity interest in the Company (the "Transferring Party's Interest"). The 

other Party (the "Non-Transferring Party") shall have a first right of refusal, 

exercisable within sixty (60) days of receiving notification of the Third Party Offer 

together with details of the identity and financial condition of such third party and 

identity of the controlling shareholder or shareholders of such third party, to purchase 

the Transferring Party's Interest in the Company as specified in this Article, on the 

same terms and conditions as stated in the Third Party Offer. Such first right of 

refusal shall be exercised by the Non-Transferring Party giving written notice to the 

Transferring Party of its exercise of such option. If the Non-Transferring Party 

exercises its first right of refusal within such sixty (60) day period to purchase the 

Transferring Party's Interest in the Company, then the Transferring Party's Interest 

shall be sold to such Non-Transferring Party on the same terms and conditions as 

stated in the Third Party Offer subject to approval by the Approval Authority. 

(3) 

If the Non-Transferring Party does not exercise its first right of refusal within such 

sixty 

(60) day period, the Transferring Party may, subject to obtaining the prior 

written consent of the Non-Transferring Party (which consent shall not be 

unreasonably withheld) and the unanimous approval of the Board of Directors (and the Non-Transferring Party hereby agrees to cause the members of the Board of Directors designated by it to approve such transfer), transfer the Transferring Party's Interest to such third party provided that the third party shall be bound by all the provisions of this Contract as if it was an original party to this Contract and on such terms and conditions as stated in the Third Party Offer. 

(4) 

Following the transfer of the Transferring Party's Interest, the Transferring Party shall 

continue to observe and perform any obligations and liabilities under this Contract or 

the Articles of Association which have accrued prior to completion of the said transfer 

or which are expressed to survive the said transfer pursuant to this Contract unless 

such obligations and liabilities have been expressly accepted by the third party in 

writing and the said acceptance thereof has been approved unanimously by the Board 

of Directors. 

(5) 

Any sale, assignment or transfer of a Party's interest in the Company under this 

Article shall not become effective until all necessary government approvals and 

registrations have been obtained or completed. With respect to any transfer under this 

Article, the Parties agree to cooperate to effect such transfer, including causing 

members of the Board of Directors designated by each Party to approve such transfer, 

applying to the Approval Authority for its approval and executing any required 

documents or doing any required things in connection with such transfer. Upon the 

9 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

receipt of such approvals, the Parties shall cause the Company to cancel the then outstanding capital contribution certificates and to issue new capital contribution certificates to reflect the new ownership interests and to register the change in ownership with SAIC and other relevant authorities. 

CHAPTER 7 

RESPONSIBILITIES OF THE PARTIES 

Article 7.1 

Responsibilities of the Parties. 

Each Party shall be responsible for performing the following respective obligations in a timely and effective manner: 

(1) 

assisting in the organizational and preparatory work for the Company prior to the 

establishment of the Board of Directors; 

(2) 

employing their respective best efforts in good faith to protect the trade names, 

trademarks and other intellectual property owned by the Company or the other Party (whether as proprietor or licensee) from infringement; 

(3) 

refraining from mortgaging, pledging, permitting any liens or otherwise disposing of 

any property of the Company or of a Party's equity interest in the Company without the prior approval of the Board of Directors; 

(4) 

cooperating to achieve the purpose and goals of the Company as set forth in this 

Contract and the Related Contracts by executing any and all documents and taking all actions necessary or advisable to effect the foregoing; 

(5) 

not permitting any borrowing or lending of money in the name of the Company, the 

issuance of any guarantee in the name of the Company or the establishment of any subsidiary, branch or business office of the Company without the prior approval of the Board of Directors; and 

(6) 

causing each of the Directors designated by the Parties to the Board to vote in favour 

of a resolution approving each of the Related Contracts, and authorizing the General 

Manager or another officer of the Company to execute or ratify each of the Related 

Contracts on behalf of the Company, as soon as possible after the Establishment Date, 

unless the execution of the same has been waived in writing by the Parties; and 

(7) 

assisting the Company in identifying, selecting and recommending qualified entities 

and individuals to be contracted by the Company to provide, but not limited to, raw materials, construction materials, mechanical and electrical components, software, software development, construction workers, and Project Management services for the coordination and oversight of the entire project. 

Article 7.2 

Further Responsibilities of Party A. 

In addition to its other obligations under this Contract, upon the request of the Company, Party A shall assume the following responsibilities: 

10 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. 

COOPERATIVE JOINT VENTURE CONTRACT 

(1)

Implement and maintain the policies, practices and controls with respect to patent and

trademark protection, including confidentiality agreements, non-disclosure

agreements, non-compete agreements and access to proprietary information.

(2)

engaging a qualified technical institute to conduct land survey on the Land;

(3)

arranging for environmental evaluation of the projects;

(4)

assisting the Company in opening both RMB and U.S. Dollars current and capital

accounts; 

(5) 

liaising with all appropriate authorities to cause the complete and timely 

implementation of this Contract and the Related Contracts and the transactions contemplated hereby and thereby; 

(6) 

assisting the Company in preparing, submitting and monitoring applications for, and 

obtaining all necessary approvals, permits, certificates and licenses required in connection with the conduct of the Company's business, including any required import licenses covering the import of technology, equipment, software, technical data or related materials into the PRC in connection with the transactions contemplated hereby; 

(7)

assigning the land use right to the Land to the Company and complete the required

formalities for such assignment within one hundred and eighty

(180) days upon

execution of this Contract;

(8) 

without violation of the PRC law, using its best efforts to assist the Company in 

causing relevant authorities to secure that the Company shall, to the extent possible, enjoy adequate, reliable and uninterrupted access to various utilities and services required for the operations of the Company, including but not limited to access roads to the Land, electricity, water, steam, telecommunication, effluent treatment, and any other required utilities and/or services, throughout the existence of the Company on the terms and conditions which shall be no less favourable than those available to any companies similarly situated in the Industrial Park; 

(9) 

assisting the Company in completing all import formalities and obtaining any 

Customs Duty and VAT exemption certificates for materials and equipment to be imported by the Company; 

(10) 

assisting the Company in arranging PRC entrance and exit formalities and work 

permit certificates for the expatriate personnel of the Company and assisting in providing accommodations compatible with the style and standard of living of such personnel in their respective home countries and assisting such employees in making all PRC domestic travel arrangements, if applicable; 

(11)

without violation of the PRC law, using its best efforts to assist the Company in

causing relevant authorities to secure that the Company shall be entitled to the taxes

and preferential benefits available and assisting the Company in applying for all

permitted reductions in, or rebates of, or exemptions from, PRC income taxes

1

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SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

(including withholding taxes), import duties, VAT, business and consumption taxes, 

local surcharges, real estate taxes, vehicle taxes or any other tax reductions, rebates or 

exemptions to which the Company is currently or may in the future become entitled 

so as to obtain the maximum benefit of such reductions, rebates or exemptions; 

(12) 

assisting the Company in applying for certification of the Company as a 

"technologically advanced enterprise", "high and new technology enterprise" and 

"environmental friendly enterprise" (if applicable), the appropriate confirmation 

certificates and associated benefits; 

(13) 

assisting the Company in obtaining from the appropriate PRC authorities all necessary 

licenses and foreign exchange approvals to permit the repatriation out of the PRC of 

all profits, dividends, return of capital and proceeds of liquidation and sale of equity 

interest payable to Party B, and the salaries and benefit payments of the expatriate 

personnel of the Company in foreign exchange, after the payment of applicable PRC 

income taxes, if any; 

(14)

providing information concerning technical and economic factors affecting the Joint

Venture Products;

(15) 

assisting the Company in identifying, evaluating, interviewing, and recommending 

management and staff for the Company (subject to the approval of the Board of 

Directors of the Company) for the initial start-up of the Company and on an as-needed basis following the commencement of operations of the Company; 

(16) 

providing training to the management and staff of the Company on relevant technical 

and business skills particularly in relation to the characteristics and considerations associated with the dedicated coal reserves.; 

(17) 

providing assistance to the Company management, as required, relating to technical or 

business skills that may arise in the operation of the Company; 

(18) 

assisting in discussions with local, provincial, and central government authorities, as 

required, to obtain support or assistance for any projects that the Company may 

engage in and to assist the Company maintain a good working relationship with 

relevant regulatory bodies; 

(19)

supplying of raw coal in quantities required to achieve the production capacities of the

Company;

(20) 

providing assistance to the Company in obtaining feed stock from third-party 

suppliers to support the operations of the Company; and 

(21) 

other matters referred to it by the Company for which Party A agrees to provide 

assistance. 

Article 7.3 

Further Responsibilities of Party B. 

In addition to its other obligations under this Contract, upon the request of the Company, 

Party B shall assume the following responsibilities: 

12 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

(1)

providing the feasibility study report for Party B's clean coal technologies;

(2)

providing site requirements and specifications for the clean coal facilities of the

Company: 

(3) 

assisting the Company in selecting, engaging and supervising the work of qualified 

contractors for the construction, erection and installation of the clean coal facilities of the Company; 

(4) 

providing technical support and supervision during the course of the preparation, 

construction and operation of the clean coal facilities of the Company; 

(5)

instructing and training selected Chinese technical personnel and staff of the

Company;

(6)

assisting the Company to utilize advanced management systems;

(7)

preparing, submitting and monitoring applications to obtain all necessary USA

governmental approvals, including any required USA licenses covering the export of

technology, equipment, software, technical data or related materials from the USA to

the PRC in connection with the transactions contemplated hereby;

(8)

procuring equipment outside of the PRC;

(9)

relocating expatriate staff, nominated and appointed by Party B, to their home

countries upon completion of their assignment with the Company, if applicable; 

(10) 

providing information concerning technical and economic factors affecting the Joint 

Venture Products; 

(11) 

preparing and submitting a proposal regarding the operation and management of the 

Premises; and 

(12) 

other matters referred to it by the Company for which Party B agrees to provide 

assistance. 

Article 7.4

Expenses.

The costs and expenses incurred by the Parties for fulfilling the above responsibilities will be reimbursed by the Company with satisfactory documents evidencing such costs and expenses and subject to the approval by the Board of Directors. 

CHAPTER 8 

BOARD OF DIRECTORS 

Article 8.1

Formation.

The date of the issuance of the business license of the Company shall be the date of the 

establishment of the Company and the Board of Directors. 

13 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

Article 8.2 

Board Composition and Term of Office. 

The Board of Directors of the Company shall consist of five (5) persons. Party A shall appoint three (3) persons and Party B shall appoint two (2) persons. The Chairman shall be nominated and appointed by Party A. The Chairman is the legal representative of the Company. The term of office of the Directors and the Chairman shall be three (3) years, provided that any Party may replace any of their appointed Directors during the term of their office. Directors shall not receive any remuneration from the Company for their services. However, travel, accommodation and other expenses incurred by the Directors for the business of the Company shall be reimbursed by the Company upon its examination and approval. Directors are eligible to serve consecutive terms if they are re-appointed by the Parties. The names of the members of the initial Board of Directors appointed by the Parties are set forth in Schedule 2 attached hereto. 

Article 8.3

Liability Insurance

The Company shall purchase and maintain at all times during the Tenn of the Company liability 

insurance and other appropriate insurance for all the Directors of the Board of the Company to 

be underwritten by companies authorized to underwrite such coverage in China. 

Article 8.4

Authority of the Board.

The Board of Directors is the highest authority of the Company and shall decide all major issues of the Company. The following matters shall require the unanimous vote of all Directors present at a duly convened meeting of the Board or unanimous written consent if adopted by a written resolution without a meeting: 

(1)

amendment of the Articles of Association;

(2)

increase or decrease in the registered capital of the Company;

(3)

dissolution of the Company;

(4)

any mortgage of the assets of the Company to any third party; and

(5)

merger with another organization, division or change of the form of the Company.

Decisions with respect to all other matters shall be adopted if they receive the affirmative 

votes of four (4) members of the Board, present and voting in person or by proxy, or in the 

case of a written resolution, by four (4) members of the Board, unless as otherwise specified elsewhere herein. 

Article 8.5 

Further Powers and Procedures. 

The detailed powers and procedures of the Board shall be as set forth in the Articles of 

Association. 

14 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

CHAPTER 9 

SUPERVISOR 

Article 9.1

Appointment.

The Company shall have one (1) Supervisor, which shall be appointed by Party B. Directors and senior management personnel shall not hold the post of Supervisor concurrently. The term of office of the Supervisor shall be three (3) years and a Supervisor can serve consecutive terms if reappointed. 

Article 9.2

Duties and Powers.

The Supervisor shall exercise the following duties and powers:

(a)

inspect the finances of the Company;

(b)

supervise the performance of duties by directors and senior management

personnel and propose to remove a director or senior management personnel 

who violates the provision of the laws and administrative regulations and the 

Articles of Association of the Company or the resolutions of the Board of 

Directors; 

(c)

require a director or senior management personnel who acts against the interests

of the Company to make correction;

(d)

propose to convene a special Board meeting, convene and chair a Board meeting

when the Board of Directors fails to convene and chair a meeting in accordance

with the provisions herein;

(e)

make proposals at the Board meetings;

(f)

file a lawsuit against a Director or senior management personnel in accordance

with relevant laws; and 

(g) 

other duties and powers stipulated in the Articles of Association of the Company. 

The Supervisor may attend meetings of the Board of Directors and query resolutions of the 

Board of Directors or give suggestions. The Supervisor may conduct investigation upon 

discovering irregularities in the business operations and may appoint an accounting fine to assist 

in the investigation if necessary and expenses therefore shall be borne by the Company. 

CHAPTER 10 

MANAGEMENT 

Article 10.1

Management.

The Company shall operate under the system of responsibility by the General Manager under 

the leadership of the Chairman of the Board of Directors. The Company shall have one 

General Manager, who shall be nominated by Party A or, at the Company's absolute 

15 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

discretion, recruited from the open market and officially appointed by the Board. The Company shall also have one Chief Financial Officer, who shall be nominated by Party B and appointed by the Board. The responsibilities of the General Manager shall be to carry out various decisions of the Board of Directors and to conduct routine activities of the Company. The General Manager and the Chief Financial Officer shall report directly to the Chairman and the Board of Directors. 

The General Manager may appoint Vice General Managers subject to the approval of the 

Board of Directors and they shall handle matters assigned by the General Manager and shall 

be responsible to him. 

The construction and commissioning of the individual plants contemplated under this 

Contract will be the responsibility of a Project Manager who will either be an individual, or a 

company recommended by either Party and contracted by Company upon approval by the 

Board of Directors, and who will report to the General Manager. The Project Manager's responsibilities will include, but not limited to the coordination and management of all vendor and sub-contractor relationships, construction schedules, licensing, permitting, plant testing and final commissioning. 

Department managers may be appointed by the General Manager in light of the Company's needs, provided that the Board has no objection to such appointment. They shall be responsible for the work in various departments of the Company, shall handle matters assigned by the General Manager and shall be responsible to him. 

Article 10.2 

Power of the Board to Dismiss Officers. 

The Board of Directors may. by a resolution adopted by a four (4) affirmative votes of the Board of Directors, at any time remove the General Manager, Chief Financial Officer, Vice General Managers, Project Manager, department managers or other senior officers. 

Article 10.3 

Responsibilities of Senior Officers, etc. 

The detailed responsibilities of the General Manager and other senior officers as well as other 

matters concerning the management of the Company are set forth in the Articles of 

Association. 

CHAPTER 11 

SALES 

Article 11.1

Sales

The Clean Coal produced by the Company will be primarily designated for the gasification projects of the Gasification Company; however, the Company may sell clean coal as a fuel for power plants and other industrial applications in addition to the sale of chemical products and other by-products to third parties. 

16 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

CHAPTER 12 

PROCUREMENT 

Article 12.1 

Procurement of Equipment 

The materials and components for the Company's clean coal plants will be provided through 

a combination of US, foreign, and Chinese domestic suppliers. The final determination of the 

sourcing of these items will be determined after evaluation and qualification by Party B. 

Article 12.2 

Procurement of Feed Stock 

Party A has agreed that the 80 billion metric tons of coal reserves assigned to Party A by 

relevant government authority in Inner Mongolia shall be used as feed stock for the exclusive use by the Company. The Company may also purchase feed stock from other sources as 

determined by the Board of Directors. 

CHAPTER 13 

PROFIT DISTRIBUTION 

Article 13.1

Profit Distribution.

(1)

After payment of income taxes in accordance with law and allocation to the Three

Funds, the net profits of the Company made through the sales of the Joint Venture 

Products to parties other than Gasification Company shall be distributed to the parties 

at follows: 

Party A: 75%; Party B: 25% 

(2) 

Party B is also entitled to 

2.5% on the revenue generated by the Gasification 

Company by using the Clean Coal supplied by the Company as raw materials. 

Article 13.2

Risk Sharing.

Each Party shall share the risks and losses of the Company according to their respective share of the registered capital of the Company as set forth in Article 6.2 herein. 

CHAPTER 14 

PAYMENT TO CONTRACTORS 

Article 14.1 

Payment to Contractors. 

The company will be responsible for the payment of all goods, materials and services 

provided as part of the construction of the clean coal plant by its various contractors. These 

include, but are not limited to, raw materials, construction materials, mechanical and 

electrical components, software, software development, construction workers, and Project 

Management services for the coordination and oversight of the entire project. 

17 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

CHAPTER 15 

FOREIGN EXCHANGE 

Article 15.1 

Foreign Exchange Administration 

All foreign exchange matters of the Company shall be handled in accordance with the 

relevant provisions of the PRC Foreign Exchange Administration Regulations and other 

relevant PRC laws and regulations as well as with the provisions of the Articles of 

Association. 

Article 15.2 

Foreign Exchange Transactions 

All transactions of the Company's foreign exchange shall be handled through the Bank of China or other banks authorized by the SAFE. 

CHAPTER 16 

FINANCE, AUDIT, TAXES, ETC. 

Article 16.1 

Accounting System. 

The financial affairs and accounting of the Company shall be handled in accordance with relevant PRC laws and regulations including in particular the Accounting System for Enterprises and other relevant laws and regulations. 

Article 16.2

Audit.

The Company shall keep true and accurate accounting records of all operations of the 

Company and shall submit monthly statements to each Party within 30 days after the end of 

the month to which they relate. An appropriate independent accounting firm registered in 

China and approved by the Board of Directors shall be engaged by the Company. as its 

outside auditor, to examine and verify the year end statements, and such accounting firm shall 

submit its report to the Board of Directors. The Company shall submit to each Party the year end statements no later than 90 days from the end of the fiscal year, together with the audit report of the independent auditor. Internal auditing may be conducted as deemed necessary by the Board of Directors of the Company. 

Article 16.3

Three Funds.

The Company shall establish and contribute annually from its after-tax profits to the Three Funds. The amount to be contributed to the Three Funds will be determined by the Board of Directors in accordance with the PRC law. 

Article 16.4 

Personal Income Tax. 

All employees of the Company shall pay personal income taxes in accordance with applicable PRC law which shall be withheld and paid by the Company. 

18 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

Article 16.5

Tax Preferences.

With the assistance of Party A, the Company shall apply for and obtain all permitted 

reductions in, or exemptions from, PRC income taxes, withholding taxes, import duties, VAT, 

business and consumption taxes, local surcharges, real estate taxes (including land value 

appreciation taxes, if any), vehicle taxes or any other tax reductions, rebates or exemptions to which the Company is currently, or may in the future become, entitled. Without limiting the generality of the foregoing, the Parties and/or the Company shall: 

(1) 

submit an application to the relevant authority for the certification of the Company as 

a State encouraged foreign investment project and for the exemption of Customs 

Duties and VAT for the import of the equipment based on the FSR, and 

(2) 

apply to the relevant authority for confirmation of the Company as a "technologically 

advanced enterprise", "high and new technology enterprise" and "environmental 

friendly enteprise". 

Article 16.6 

U.S. Tax Elections. 

Party A and Party B agree to allow Party B to make any U.S. tax elections that are favorable to the U.S. tax treatment of this Contract without prejudice to the rights and tax liability of the Company and Party A under the PRC law and without violation of the PRC law. 

CHAPTER 17 

INSURANCE 

Article 17.1

Insurance.

The Parties shall cause the Company to be covered by appropriate insurance policies underwritten by an insurance company that is permitted to underwrite insurance policies in the PRC and approved by the Board of Directors. 

CHAPTER 18 

COMPLIANCE 

Article 18.1

Compliance.

Party A hereby acknowledges that Party B is subject to the laws and regulations of the United 

States of America, including without limitation, the Foreign Corruption Practices Act ("FCPA") 

which prohibits the bribing of any foreign official, any foreign political party, or any candidate 

for foreign political office by any company for the purpose of obtaining or retaining business. It 

is the Party B's strict policy and intentions at all times to be in compliance with the FCPA. Party A acknowledges that Party B's entering of this Contract is conditioned upon Party A's pledge that he will not violate the FCPA. Any action by Party A determined in good faith by Party B to be in contravention of FCPA shall result in immediate termination of this Contract and any other business relationship with the Company. 

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SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

CHAPTER 19 

LABOR MANAGEMENT 

Article 19.1

Recruitment.

The Company will have the full autonomy to make all decisions and recruit any number of employees required for the construction, commissioning, and operation of the Company according to the Company's needs and criterion. Party A will recommend the most appropriate candidates and provide any other assistance to facilitate the Company's efforts in the recruitment of all Chinese employees. Employees employed by the Company shall sign a separate labour contract with the Company. 

Labour plans and contracts covering the recruitment, qualifications and testing, employment, dismissal and resignation, wages, labour insurance, welfare, bonuses, labour discipline, retirement insurance and other matters concerning the staff and workers of the Company shall be handled in accordance with the PRC Labour Law, the PRC Labour Contract Law and relevant laws and regulations of the PRC and the local government. 

Article 19.2 

Management Personnel. 

The Board of Directors shall decide on the salaries, subsidies, social insurance, welfare and standard of travel expenses for the General Manager, Vice General Managers and other employees. 

Article 19.3

Trade Union.

To the extent required by law, the Company shall pay sufficient amount to the Company's trade union for such trade union's use in accordance with the applicable laws of the PRC on the management of trade unions. 

CHAPTER 20 

DURATION OF THE COMPANY 

Article 20.1

Duration.

The duration of the Company shall be thirty (30) years from the Establishment Date, subject 

to the terms of CHAPTER 21. The duration of the Company may be extended at the end of 

its term if an application for the extension of the duration, proposed by one Party and 

unanimously approved by the Board of Directors, shall be submitted to the Approval 

Authority one hundred and eighty (180) days prior to the expiry date of the Company. 

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SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

CHAPTER 21 

TERMINATION 

Article 21.1

Tennination Events.

Any one or more of the following events or conditions shall constitute a "Termination Event":

(1)

if the Company's duration expires without extension; or

(2)

if the Company suffers heavy losses and is unable to continue its operations, as

determined by the Board of Directors; or 

(3) 

if the Company is unable to continue operations for ninety (90) consecutive days or 

more because of an event of Force Majeure, unless otherwise agreed in writing by the 

Parties; or 

(4) 

if a Party commits a material breach of this Contract or the Articles of Association, 

causing a material adverse effect on the financial condition or business operations of 

the Company, and such breach is irremediable, or if such breach shall be remediable, 

fails to remedy such material breach within a period of sixty (60) days after notice in 

writing from the other Party or the Board of Directors to remedy such breach; or 

if any Party has breached its representations and warranties contained herein; or if the Parties agree in writing to terminate this Contract; or 

if bankruptcy proceedings are filed by or against any Party; or 

if the Board of Directors is unable to make a determination on any matter material to the operation of the Company and such matter fails to be resolved to the satisfaction of the Parties; or 

(9) 

if a Change in Law occurs and the Parties are unable to agree upon necessary 

adjustments within a ninety (90) day period after the occurrence of the Change in Law or are unable to implement any such adjustments to give effect to the provisions of Article 28.3 within a one hundred and eighty (180) day period after the occurrence of the Change in Law; or 

(10)

if Party A breaches its obligations under Article 18.1.

(11)

if any Related Contract is not executed within three

(3) months after the

Establishment Date or is terminated for any reason, unless otherwise agreed by the

Board of Directors; or

(12)

if the Company is lawfully liquidated or its business license is lawfully revoked.

(13)

if Party A breaches its obligations of confidentiality, or infringes the intellectual

property of Party B. 

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SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

Article 21.2

Notification Procedure.

Upon the occurrence of a Termination Event described in Article 21.1

(1),

(2),

(3),

(6),

(8),

(9),

(1

1) or (12), any Party may notify in writing the other Party and the Board of Directors

that a Termination Event has occurred. Upon the occurrence of a Termination Event

described in Article 21.1

(4),

(5),

(7),

(9) or

(13), the non-defaulting/bankrupt Party may

notify in writing the defaulting/bankrupt Party and the Board of Directors that a Termination

Event has occurred. Within thirty

(30) days of any such notification, the Parties shall

commence negotiations and endeavour to resolve the reason for the Termination Event. In

the event matters are not resolved to the satisfaction of all Parties within thirty (30) days after

commencement of negotiations, this Contract shall be terminated and the Company be

dissolved.

Article 21.3

Each Party's Rights and Obligation on Termination.

If a Termination Event occurs due to any breach of this Contract or the Articles of Association by a Party, the non-breaching Party shall have the right to claim damages against the breaching Party for the reasonable losses incurred by it. The termination shall not affect a Party's accrued rights and obligation at the date of termination and any rights which specifically or by its nature survive the termination of this Contract. 

Article 21.4 

Approval Procedures. 

Termination of this Contract based on any termination events in Article 21.1 shall be subject to the approval of the Approval Authority based on the application of the Board of the Company or the non-defaulting Party. 

CHAPTER 22 

DISSOLUTION AND LIQUIDATION 

Article 22.1

Dissolution.

Upon termination of this Contract pursuant to provisions of this Contract, without prejudice to each non-defaulting Party's unilateral right to seek approval for dissolution of the Company, the Board of Directors shall adopt a resolution for the liquidation and dissolution of the Company and submit such resolution together with other necessary documents to the Approval Authority for its approval. Each Party shall cause the members of the Board of Directors designated by it to vote in favour of such resolution if such an action is legally required for dissolution and liquidation. 

Article 22.2 

Liquidation Committee. 

Within fifteen (15) days of the approval of the dissolution of the Company by the Approval 

Authority, the Board of Directors shall establish a four (4) person Liquidation Committee. The Board of Directors shall appoint two (2) nominees of Party B, one of whom shall serve as chairman of the Liquidation Committee, and two (2) nominee of Party A. The Liquidation Committee shall establish procedures for liquidation of the assets of the Company and settling the liabilities thereof as described below and in compliance with the relevant PRC laws and regulations. 

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SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

Article 22.3

Duties of the Liquidation Committee.

In addition to other obligations set out in this Contract and under PRC law, the Liquidation

Committee shall, subject to confirmation by the Board of Directors, perform the following:

(1)

prepare a balance sheet and detailed list of the Company's assets;

(2)

prepare a liquidation plan for settling the Company's outstanding liabilities;

(3)

publish an announcement for the benefit of unknown creditors and notify known

creditors in writing concerning the liquidation of the Company in accordance with

relevant PRC law;

(4)

handle all unfinished matters of the Company;

(5)

pay in full any outstanding taxes of the Company;

(6)

settle claims and debts of the Company;

(7)

dispose of property/proceeds;

(8)

represent the Company in bringing or defending any legal actions on behalf of the

Company; and 

(9) 

return, or satisfactorily dispose of all materials protected under the Technology 

License Agreement. 

The Liquidation Committee may. with the approval of the Board of Directors, engage 

accountants, appraisers, lawyers and other third parties, to assist with the liquidation process. The Liquidation Committee shall submit the Company's balance sheet, a detailed list of its assets, a description of the basis of evaluation of the Company's assets and a plan of liquidation prepared by it to the Board of Directors for confirmation, and the Board of Directors shall submit such to the Approval Authority for the record. 

Article 22.4 

Priority Disbursements. 

Liquidation expenses and expenses of the Liquidation Committee (including fees payable to 

third party service providers) shall be paid out of the remaining assets of the Company (if any) 

by according such expenses a first priority in the distribution of such assets. Liquidation 

expenses include: 

(1)

fees required for the management, sale and distribution of the Company's assets;

(2)

public announcement and litigation fees; and

(3)

other fees incurred in the course of liquidation.

Article 22.5

Residual Assets.

After the Liquidation Committee has settled all the legitimate debts of the Company 

23 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

(including, if applicable, the expenses of the Liquidation Committee in accordance with 

Article 22.4), all remaining assets of the Company, if any, shall be distributed to the Parties in 

proportion to their equity ratio. 

Article 22.6

Publication.

After all accounts have been settled, the Company shall present a report to the Approval 

Authority and shall complete formalities with SAIC to cancel the Company's business 

registration and surrender its business license. In addition, a public announcement 

concerning the winding up of the Company shall be made. 

CHAPTER 23 

FORCE MAJEURE 

Article 23.1

Force Maie ure.

Either Party shall be excused from its obligations hereunder when and to the extent that 

performance is delayed or prevented by any event of Force Majeure. "Force Majeure" shall 

mean any circumstance or event which is unforeseen and beyond the reasonable control of a 

Party, and which is unavoidable notwithstanding the reasonable care of such Party, and shall 

include, without limitation, force of nature, fire, explosion, geological change, storm, flood, 

earthquake, lightning, act of war or public enemy, change of prices of raw material or energy, 

or total or partial failure of the sources of supply of materials or energy or of means of 

transportation, governmental restraint, strikes, lockout, work stoppage or other industrial 

action or disturbance by workers or employees. 

The Party affected by Force Majeure which seeks to excuse its performance under this 

Contract shall promptly notify the other Party advising of the excuse and the steps it will take 

to complete such performance. Each Party seeking to excuse its performance will be excused 

from such performance to the extent such performance is delayed or prevented provided that 

the Party so affected shall use its best efforts to complete such performance. The Parties 

agree to resume performance hereunder promptly whenever the causes of such excuse are 

cured or remedied. 

Article 23.2 

Termination because of An Event of Force Majeure. 

Notwithstanding Article 21.1(3), if an event of Force Majeure continues for an uninterrupted period of ninety (90) days or more, either Party may forthwith by notice in writing to the other Party terminate this Contract. 

CHAPTER 24 

CONFIDENTIALITY AND NON COMPETITION 

Article 24.1

Confidentiality.

Except in circumstances where the prior consent of the other Party has been obtained, during 

24 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

the continuance of the Company and for a period of five (5) years after its termination. no 

Party to this Contract shall, nor shall it permit any of its directors, officers, employees and 

agents or the directors, officers, employees and agents of the Company or an Affiliate to, 

divulge to any person any trade secret, or secret process, method or means, or any other 

confidential information concerning the business of the Company or the other Party (the 

"Confidential Information") that comes to the knowledge of such Party or employee or agent 

by reason of its being a Party to this Contract or employee or agent of the Company or any 

Party or the Affiliate of such Party. Each Party shall advise its directors, officers, employees 

and agents receiving such information of the existence of and the importance of complying 

with the obligations set forth in this Article, including by the inclusion of confidentiality 

provisions in the employment or other contracts entered into with such persons. This Article 

shall not apply to any Confidential Information which (i) is or becomes known publicly 

through no wrongful act or breach of this Contract by the disclosing Party or persons acting 

on its behalf; (ii) was already known to the receiving Party at the time of disclosure as shown 

by its internal records; (iii) is disclosed to the receiving Party by a third party under no 

obligation of secrecy to the other Party; (iv) is developed independently by an employee or 

agent of the receiving Party without knowledge of the Confidential Information; (v) is 

approved for release by written authorization of the other Party or the Company; or (vi) is disclosed as required by law. 

Article 24.2 

Public Announcements. 

At all times hereafter, no Party shall issue any press release or an announcement or other 

public statement with respect to this Contract, the Company or the transactions contemplated 

hereby which relates to (i) any dispute or difference of opinion between the Parties, (ii) any 

Confidential Information or proprietary information concerning or relating to the terms of this 

Contract or the other Party, and (iii) any information which could affect adversely the 

reputation of the Company or the other Party, without the prior approval of such other Party, which consent will be required to be given both as to fact of the announcement and as to the content thereof, unless otherwise, and to the extent, required by law. 

Article 24.3 

No Solicitation. 

Each Party undertakes that it shall not, for so long as it owns any interest in the Company and 

for a period of twenty four (24) months after it ceases to own any interest in the Company 

solicit or entice away or attempt to solicit or entice away from the Company any employees, 

customers or any person who is or has at any time within one (1) year prior to the date in 

question been or employee, customer, client, agent or correspondent of, or In the habit of dealing with, the Company. 

CHAPTER 25 

EXCLUSIVITY 

Article 25.1

Exclusivity.

Each Party agrees to hold the other Party as its exclusive partner for projects of the same or 

similar nature to the Company within the territory of Inner Mongolia Autonomous Region of 

the PRC and the Republic of Mongolia (the "Territory"). However, Party B shall have the 

option to choose other partners for projects in the Territory which Party A has expressly 

25 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

refused to participate. Outside the Territory, either Party has the option, within thirty (30) days upon receipt of written notice from the other Party, to participate in projects that the other Party intends to cooperate with any third party under the same conditions and terms as offered to such third party. 

CHAPTER 26 

APPLICABLE LAW 

Article 26.1 

Applicable Law. 

The formation of this Contract, its validity, interpretation, execution and settlement of any disputes arising hereunder shall be governed by, and construed in accordance with, the laws and regulations of the PRC. 

CHAPTER 27 

SETTLEMENT OF DISPUTES 

Article 27.1

Arbitration.

(1)

Should any dispute arise from the execution or implementation of this Contract or

otherwise relating thereto, both Parties shall resolve the dispute through friendly negotiations. If the dispute cannot be resolved by negotiations within thirty (30) days after one Party has issued a written notice to the other Party requesting the commencement of such negotiations, then either Party may submit it to the Hong Kong International Arbitration Centre ("HKIAC") for arbitration in accordance with its rules then in effect and the following provisions: 

(a)

the arbitration shall be conducted in English and Chinese and three

(3)

arbitrators

(one appointed by each Party and the third appointed by the

Chairman of HKIAC) may refer to both the English and Chinese text of the

Contract;

(b)

the arbitration award shall be final and binding on the Parties and shall be

enforced in accordance with its terms; and

(c)

the costs of arbitration shall be borne by the Party as designated in the

arbitration award.

(2)

During the process of negotiation and arbitration, the Parties shall continue to

implement this Contract without interruption, except for matters in dispute. 

CHAPTER 28 

AMENDMENT, ALTERATION AND DISCHARGE OF THE CONTRACT 

Article 28.1

Amendments.

Any amendment to this Contract and the Articles of Association of the Company must be 

approved unanimously by the Board of Directors and must be submitted to the Approval 

26 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

Authority for its approval, and must be recorded in a written document signed by the Parties.

Article 28.2

Improvement in Terms.

If, after the date hereof, the issuance, amendment, supplement or rescission by the PRC or any subdivision or agency thereof, of any tax, foreign exchange, customs or any other laws, rules, regulations or decrees, or the interpretation thereof permits terms and conditions more favourable to the Company or any Party than the terms of this Contract or the laws, rules, regulations and decrees applicable to the Company or such Party of the date of this Contract, the Company or such Party or both shall receive the benefits of such new conditions, and each Party shall exercise its best efforts to assist the Company to obtain the appropriate PRC approvals, if any, required to qualify for the benefit of such new laws, rules, regulations, decrees or interpretation thereof. 

Article 28.3 

Economic Adjustment and Change in Law. 

If any Party's economic benefits are adversely and materially affected by the promulgation of any new laws, rules or regulations of China or the amendment or interpretation of any existing laws, rules or regulations of China after the date of this Contract (a "Change in Law"), the Parties shall promptly consult with each other and use their best endeavours to implement any adjustments necessary to better protect each Party's benefits. 

CHAPTER 29 

MISCELLANEOUS 

Article 29.1

Effective Date.

Unless otherwise provided herein or in the Related Contracts, this Contract (including all its 

Schedules/Exhibits) shall become effective on the Effective Date which shall be the date 

when the FSR, this Contract (including its Schedules/Exhibits) and the Articles of 

Association have been signed by both Parties and approved by the Approval Authority. 

Article 29.2 

Prior Agreements. 

This Contract and its Schedules/Exhibits, which are hereby incorporated by reference as inseparable and integral parts of this Contract, constitute the whole and entire agreement between the Parties and shall supersede any other previous oral or written agreements or communications between the Parties relating to the Company or the joint venture relation between the Parties created hereby. 

Article 29.3

Notice.

All notices or other communications under this Contract shall be in writing and shall be 

delivered or sent to the correspondence addresses or facsimile numbers of the Parties set forth 

in Article 2.1 or to such other addresses or facsimile numbers as may be hereafter designated 

in writing on seven days' notice by the respective Parties. All such notices and 

communications shall be effective (i) on the date when delivered personally; (ii) on the date 

when sent by telex, facsimile or other electronic means with sending machine confirmation; 

27 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

(iii) ten 

(10) days after having been sent by registered or certified mail, return receipt 

requested, postage prepaid; or (iv) four (4) days after deposit with a commercial overnight 

courier, with written verification of receipt. 

Article 29.4

Headings.

The headings of the Articles of this Contract are for convenience of reference only and shall not be deemed or construed as in any way limiting or extending the language of the provisions to which such headings may refer. 

Article 29.5

Severability.

If any provision of this Contract should be or become fully or partially invalid, illegal or unenforceable in any respect for any reason whatsoever, the validity, legality and enforceability of the remaining provisions of this Contract shall not in any way be affected or impaired thereby. 

Article 29.6

No Immunity.

To the extent that any Party may be entitled in any jurisdiction to claim for itself or any of its 

property or assets immunity in respect of its obligations under this Contract from service of 

process, jurisdiction, suit, arbitration, judgment, execution, attachment (whether before 

judgment, in aid of execution or otherwise) or legal process or to the extent that in any jurisdiction there may be attributed to it or all or any of its property or assets immunity of that kind (whether or not claimed), each Party irrevocably agrees not to claim and irrevocably waives that immunity to the fullest extent permitted by the laws of that jurisdiction. 

Article 29.7 

Conflict with Articles of Association. 

To the extent that there are any conflicts between the provisions of this Contract and the Articles of Association, this Contract shall prevail. 

Article 29.8 

Cession or Assignment. 

Unless otherwise provided in this Contract, neither this Contract nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be ceded or assigned by any Party hereto without the written consent of the other Party. 

Article 29.9

Efficiency.

All transactions contemplated in this Contract will be effected on a basis that maximizes the commercial and tax efficiency of such transaction for all Parties. If, based on a Change in Law or for any other reason, a Party can show that such transaction be restructured or otherwise changed to maximize commercial and/or tax efficiency, the Parties shall negotiate such efficiency for all affected Parties pursuant to Article 28.3. 

Article 29.10 

Schedules/Exhibits. 

If there are any inconsistencies between the main body of this Contract and the 

Schedules/Exhibits attached hereto, the provisions stipulated in the main body of this 

28 

SINO-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

Contract shall prevail. 

Article 29.11 

Terms. 

Any terms used in the attached Exhibits/Schedules shall have the same meaning as those 

defined in this Contract, unless inconsistent with or otherwise expressly indicated by the 

context. 

Article 29.12 

Language of the Contract. 

This Contract is written in both Chinese and English languages. Both versions shall have equal validity and any inconsistency or conflict between the two versions shall be resolved according to the intention of the Parties and purpose of this Contract. 

Article 29.13 

Original Copies. 

This Contract is executed in eight (8) original counterparts in each of the English and Chinese 

versions, and each of which shall have equal effect in law. The Parties shall each retain one 

Chinese copy and one English copy. The remaining copies shall be submitted to the 

Approval Authority or other governmental authorities, or retained by the Company, as required. 

IN WITNESS WHEREOF, the Parties hereto have signed this Contract as of the day 

and year first above written. 

SINO-MOGOLIAN INTERNALTIONAL RAILROAD SYSTEMS CO., LTD. 

By: /s/Wu Li Ji Mu Reri

Name: Wu Li Ji Mu Reri 

Title: Chairman of the Board 

CLEAN COAL TECHNOLOGIES, INC., 

By: /s/Douglas Hague

Name: Douglas Hague

Title:

President & Chief Executive Officer

29

SING-MONGOLIAN INTENATIONAL INVESTMENT CO. LTD. COOPERATIVE JOINT VENTURE CONTRACT 

SCHEDULE I

MAP OF THE LAND

EXHIBIT A

SUPPLY AGREEMENT

EXHIBIT B

TECHNOLOGY LICENSE AGREEMENT

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