EXHIBIT 10.5
PATENT TRANSFER AGREEMENT
TRANSFEROR: China Agricultural University
TRANSFEREE: Kiwa Bio-Tech Products (Shandong) Co., Ltd.
(The subsidiary of Kiwa Bio-Tech Products Group Corporation -
OTCBB: KWBT)
NAME OF PATENT: High effective composite bacteria for enhancing yield and
the related methodology for manufacturing
NO. OF PATENT: ZL 93101635.5
DATE OF APPLICATION: February 19, 1993
DATE OF GRANTING THE PATENT RIGHT: July 12, 1996
PATENT RIGHT HOLDER: China Agricultural University
Both parties agree to cooperate in the field of agricultural biotechnology
research in multiple ways including cooperation in research for certain topics,
setting up together the research center/institution and model facilities for
product application, exchange of ideas and thoughts between technical personnel,
etc.
Agreement Signing Date: April 12, 2004
PATENT TRANSFER AGREEMENT
CONSIDERATION FOR THE PATENT TRANSFER
Both parties agree that the total consideration for the transfer of the
above-mentioned patent right is RMB 10,430,000 (approximately US$1.26 million
based on exchange rate as of March 31, 2004, i.e., US$1 = RMB 8.2771). Such
consideration includes:
CASH
RMB 500,000 (approximately US$60,407.63 @ 8.2771)
WAY OF PAYMENT
The transferee shall pay the transferor the first installment of the cash
consideration, i.e., RMB 250,000 (approximately US$ 30,203.82) upon the signing
of the Agreement, i.e., April 12, 2004.
The second installment, i.e., RMB 250,000 (approximately US$ 30,203.82), shall
be paid to the transferor within 5 days upon the completion of the issuance of
the notice regarding patent right holder alternation registration by the Patent
Bureau.
STOCK
1,000,000 shares of common stocks of Kiwa Bio-Tech Products Group Corporation
(OTCBB: KWBT, the parent company of Kiwa Bio-Tech Products (Shandong) Co.,
Ltd.). The value of such stocks is RMB 3,310,000 (approximately US$ 400,000 @
8.2771).
WAY OF PAYMENT
The transferee shall complete the formalities regarding the issuance of the
above-mentioned 1,000,000 common stocks to the transferor within 2 months upon
the issuance of the notice regarding the patent right holder alternation
registration by the National Intellectual Property Bureau. The transferor agrees
that such portion of the consideration in relation to the transfer of the
patented technology will be the capital contribution by the transferor to KWBT.
MEASURES IF THE PATENT RIGHT IS REVOKED OR ANNOUNCED INVALID
After the Agreement comes into effect, if when the Patent Right of the
transferor is revoked or announced invalid, such situations in which the
fairness principle is obviously violated as that the transferee is hard to
obtain the benefits as expected occur, the transferor shall return the cash
portion of the transfer fee and the stocks obtained in relation thereto or any
other corresponding benefits to the transferee except that it is not all but
only partial patent right claim is revoked or announced to be invalid. If the
afore-
said situations occur, the transferee does not need to return the documents and
materials relating to the transferred technology to the transferor.
If the other party submits the request for the revocation or announcement of
invalidity to the Patent Evaluation Committee or appeal to the court regarding
the decision of the Patent Evaluation Committee after the Agreement is
effective, the transferee will be responsible for responding and bear the costs
in relation thereto. The transferor shall proactively assist in defending.
IMPLEMENTATION OF THE PATENTED TECHNOLOGY AND R&D COOPERATION
The transferor shall provide the complete set of documents and materials
relating the patented technology, technical documents and those relating to the
manufacturing process, and be responsive for training the personnel of the
transferee, provides instruction and technical support relating to the
implementation of the patented technology until the commercialized production is
realized, i.e., starting to produce the quality products according to the
NY-335-1998 standards for manufacturing process relating to the bacteria for
yield enhancement and other relevant standards. The transferor will bear the
traveling expenses of the personnel of the transferor to assist in the
implementation process.
The bacteria consist of the core part of the afore-said patented technology. For
the purpose of continuous commercialized production, the transferor shall
provide the transferee continuously with the sources of the bacteria and new
series of bacteria. The transferee promises not to provide any third party with
such bacteria.
The transferor shall assist the transferee in designing the feasible
manufacturing process and charts for manufacturing equipment and provide such
information in written form with signature to the transferee.
The transferor shall provide the transferee with the existing field test reports
and other materials that can be used for promotion and advertisement. The
transferor shall assist the transferee in completing the product registration.
This amendment to the Patent Transfer Agreement is effective on April 12, 2004
upon signing by both parties.
