Party A(pound)(0)China Star Investment Management Co. LTd. Party B(pound)(0)Kiwa Bio-Tech Products
(Shandong) CO. Ltd.
The Advance Agreement is signed on March 31, 2006 by both parties, to clarify the following advance
1. During January to March 2006, Party A advanced an aggregate sum of RMB309,900 to Party B in China.
The details of date and amounts are as followed:
2. Both parties agreed the abovementioned advances (RMB309,900 (i.e. $38,655.36) in total) bear interest at
12% per annum starting from date of draw down. 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
3. Both parties agreed that Party B will issue to Party A warrants that entitle Party A to purchase up to 193,276
shares of common stock based on the conversion price specified in Clause 4. Party A shall have the right to
exercise the warrants within next 24 months.
4. 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 holding company, Kiwa Bio-Tech Products Group
Corporation ("KWBT"). Party A shall have the right to exercise the warrants based on a conversion price equal
to the closing quote of the shares of KWBT, listed on the Over-the-counter Bulletin Board (the "Shares") on the
date of drawing down the fund. A list of the closing quotes of KWBT during the dates of the draw down is
attached in the APPENDIX A. 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 or KWBT's expense. Party A shall have unlimited
(2) Party B or KWBT shall procure that all taxes and capital, stamp, issue and registration duties (if any) arising
in connection with the Exercise.