Exhibit 10.2
Advance Agreement
Party A(pound)(0)Xx. Xxx, Li
Party B(pound)(0)Kiwa Bio-Tech Products Group Corporation
The Advance Agreement is signed on May 23, 2005 by both parties, to
clarify the following advance transactions:
1. On April 11, 2005, Party A lent US$50,000 to Party B through Party A's
bank account in HSBC Causeway Bay branch (account no. 593-339120-833). The
amount has been transmitted to the Party B's designated bank account.
2. During April 2005, Party A paid the following amounts to a third party
for the repayment of Party B's convertible loan entered on September 23,
2004, on behalf of Party B. The aggregate amount of US$81,684.50 has been
transmitted from Party A's bank account in HSBC Causeway Bay branch
(account no. 593-339120-833), including:
(1) On April 11, 2005 Party A paid US$11,428 to Mr. Song N. Bang on
behalf of Party B;
(2) On April 20, 2005 Party A paid US$1,684.50 to Mr. Song N. Bang on
behalf of Party B; and
(3) On April 11, 2005(pound)<172>Party A paid US$68,572 to Xx. Xxxxx San
Xxx on behalf of Party B.
3. On April 20, 2005, Party A paid the consulting fee of US$25,000 to
Xxxxxx Capital LLC on behalf of Party B. The amount has been transmitted
from Party A's bank account in HSBC Causeway Bay branch (account no.
593-339120-833).
4. Both parties agreed the abovementioned advances ($156,684.50 in total)
bear interest at 12% per annum starting from April 21, 2005. Party B
agreed to settle the advances within 180 days since the date of draw down.
It is agreed that Party B has the option to repay or settle the advances
on or before the expiry.
5. Both parties agreed that Party B will issue to Party A warrants that
entitle Party A to purchase up to 783,423 of common stock based on the
conversion price specified in Clause 6. Party A shall have the right to
exercise the warrants within next 24 months.
6. Conversion: At the option and instruction of Party A, Party A shall at
any time make an application to exercise any warrants for the issuance of
shares of Party B's common stock. Party A shall have the right to exercise
the warrants based on a conversion price equal to the closing quote of
Party B's shares listed on the Over-the-counter Bulletin Board on the date
of drawing down the fund. The mechanics of the conversion are as follows:
(1) Shares issued upon Exercise will be registered within six months or
as soon as practicable on behalf of such Person or Persons as Party
A shall direct at Party B's expense. Party A shall have unlimited
piggyback right.
(2) Party B shall procure that all taxes and capital, stamp, issue and
registration duties (if any) arising in connection with the
Exercise.
(3) Party B shall procure that on or as soon as possible after
conversion evidence satisfactory to Party A shall be delivered to
Party A in respect of its legal title to the Shares and that
definitive certificates are delivered to Party A in respect of the
Shares as soon as practicable.
(4) Fractions of shares will not be made available and any cash
adjustment to be made shall be paid to Party A.
(5) Party B shall promptly notify Party A in written form of any
potential changes in majority holding or events that would have a
substantial impact on Party B's asset structure or business control
(which are collectively called "changes in majority holding"). This
notification and other proper assistance shall be promptly delivered
to Party A so as to allow it to make decisions as to whether to
exercise its right of converting the loan according to clause 6. In
case of failure to promptly deliver the notification to Party A,
Party A reserves the right to request a proper adjustment on the
conversion price so as to keep consistent with the result of
conversion prior to the changes in majority holding.
Party A: Mr. Xxx Xx
Signature: /s/ Xxx Xx
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Xxx Xx
Party B: Kiwa Bio-Tech Products Group Corporation
Signature: /s/ Xxxxxxx Xxx
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Lian xxx Xxx
Date: May 23, 2005