PBC PROJECT INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (the "AGREEMENT") is made and entered
into as of the
25th of June, 2002, by and between Zoucheng Municipal Government (the
"GOVERNMENT") and KIWA BIO-TECH PRODUCTS GROUP Ltd., On PBC (Photosynthesis
Biological Catalyst)
project.
PBC, the main
bio-agricultural product of the COMPANY, is a breakthrough
product
that helps crops and plants
to grow more healthily and increase yield. PBC as a
new product has received the approval for commercialization from Chinese
Ministry of Agriculture. PBC
project has also been listed in "2001 Major science
and Technology Innovative
Projects in China" by Chinese State Economic and Trade
Commission. In order to
commercialize and mass-produce PBC product and market it
in both domestically in China and internationally, the GOVERNMENT and the
COMPANY through sincere and friendly negotiation have entered into this
AGREEMENT on the terms and
conditions hereinafter set forth:
I. The GOVERNMENT
agrees to guarantee
that the PBC project will receive more
practical
and preferential support from the GOVERNMENT than those of
other
provincial
or municipal
development zones when PBC mass-produced base is
established in
Zoucheng Economic Development Zone. To receive and
reciprocate the
support from the
Government,
a decision
has been
made
through
the meetings of the shareholders and the board of directors of
the
COMPANY
that the COMPANY will invest and build the PBC mass-produced
base
in
Zoucheng Economic
Development
Zone. The total
investment of the
PBC
project by
the COMPANY will reach RMB150 to 200 million when all phases
of
the
investment and
commercialization
of the product are
completed.
The
projected
production
capacity will be 1500
metric tons and when the full
production
capacity is reached
and it is estimated
that the annual sales
revenue
will be around RMB 750 million and the gross profit will be
around
RMB 200
million when all 1500 metric tons of the product are
sold.
II. The GOVERNMENT will undertake to support the PBC project fully by
providing
high grade and high
efficiency services
and more
preferential
policies,
The following preferential policies will be specifically
applied
to PBC
project:
a.
Because of
the production
materials nature of the PBC product, the
PBC project will receive the national tax preferential policies and
treatment for
production
material
products
used
for farm
productions;
b.
As a new
and high-tech product, PBC project will receive the
national preferential tax policies for high-tech
products;
c.
As
high-tech company,
the COMPANY
will receive both
national
and
provincial/municipal
preferential tax
policies and treatment
for
high-tech companies;
d.
As a major
investment and production project of Zoucheng Municipal
Government, the PBC
project will
receive the entity
preferential
policies and
treatment for the project recognized by Zoucheng
Municipal Government.
e.
Besides
the above preferential
policies and treatments, the PBC
project will also be given an additional preferential tax holiday
of
fifty-percent (50%) for the local income tax for another three
years
after the first national tax holidays of five-years are
exhaus
