HUBEI XINGFA CHEMICALS GROUP CO. LTO., A 807, SANXIASHANGCHENG, 52-1 JIEFANG ROAD, YICHANG ~ XiNGFA HUBEI 443000, CHINA

Tel: ~86(717)6760283 Fax: +86(717)6760308

mt:l~~~ftI.I?flDi'ffi'~PH1}=s=.I*T~~ri~~~iffl

~~~~~I~~~~~~*~~§~@I~

Hubei Xingfa Chemicals Group Co., Ltd The Reply Letter to

Effingham County Industrial Development Authority About Our

Investment Projects

From: Hubei Xingfa Chemicals Group Co., Ltd.

To : Georgia Department of Economic Development and Effingham County

Industrial Development Authority

81 IB]: 2013 iF 12 .FI 29 E3

Time: December 29, 2013

Dear Ms. Xu and distinguished Effingham County Industrial Development

Authority officials,

~**~M*~n~.FI~~~~~~m~§~~ffi~M~o~~§~~Mfi

~,~m~W.~fl~~am~~~m~§~m~~~h~M,~~~~m~

First of all, we would like to expresse our deep gratitude for your support

HUBEI XINGFA CHEMICALS GROUP CO. LTO., A 807, SANXIASHANGCHENG, 52-1 JIEFANG ROAD, YICHANG ~! XiNGFA

HUBEI 443000, CHII\JA kl: ~86 (717) 6760283 Fa,: r86 (717) 6760308

and help of our investment project at your county. Thank you for giving us

fully enthusiastic help in the past few months. During the course of project

negotiations, we deeply feel the attention from local government and strong

support for our project, which makes us very confident for the investment

environment at Effingham County.

~~**ffi~m~,~m~~§~~-*~OO~~~~~~-~.M~o

*§~~~80.~±~$~30.~±~~~~~~~~*.~~*~.~

As you know, our project is in collaboration with a U.S. company to

produce a phosphate product. We prepare to buy 80 acres of land with 30 acres of land will be purchased by that company for the construction of

related facilities. Moreover, in accordance with the consensus reached with

that company, 60% of the finished products of our facility will be sold to

them for the production of downstream products. It is not difficult to see our

partners will have a decisive impact for our project and decisions.

~M*~n~~~~m,~~~~~ft~~~~-~~~.mm~~§,

~~~~~7§*~~ho~~~m~~••~7~~~-*~~~~~*A

~*.§N.~~~~.~~§,*.~7~~M~o~~ili~~~~.~~

~m~~~.*.ilio~~~~m~~~~#~~~~m~.~~~~±~.

HUBEI XINGFA CHEMICALS GROUP CO. LTD., A 807 SANXIASHANGCHENG, 52-1 ,IIEFANG ROAD, YICHANG ~ XiNGFA HUBEI 443000, CHINA

Td: -86 (717) 676028J Fa.'\.: +86 (717) 6760J08

In the past few months, Mr zhong on behalf of our company has been

negotiating on the project and paid a great deal of effort. We also hired a

Danish design company with technicians to Effinham County fieldwork of the

project and make a blueprint. While The situation in recent months were far

way from our expectations. The first is that our partner not willing to continue

to talk about the purchase of land matters, on the other hand we have sold

100 tons product to them and still not receive the payment. Our initial

determine is that the problems is the financial situation of the company.

Based on this, the Board considers that the project does not have the

conditions to be discussed.

As previously we expressed our wishes during our communication, The

internationalization strategy and investment projects in United States is one

of the important strategic of XINGFA Group development, and it is also a

long-term and unchanged policy of us. The company has also recognized

HUBEI XINGFA CHEMICALS GROUP CO. LTO., A 807, SANXIASHANGCHENG, 52-1 JIEFANG ROAD, YICHANG ·fAXiNGFA HUBEI 443000, CHINA

lei: ~86 (717) 6760283 Fax: +86 (717) 6760308

that Georgia Effingham County already has a good investment environment.

We believe that finding a suitable alternative investment program, we will be

successful in investment projects at Effingham county.

~it~IJ ,ft~~~~~F*,~~o {B ~ft1Iltt~~~~ft91~/L,\~mffi17J~)~~~ J'J

~ l!£:;1tfr.rm~3l:o ft ~#~tt~5t5)(m~ft9~~r.m§ ~-l'1m~rm~~$ fJft9

~••~ft9*M~~~~ft9~M,~m~~ft9~~~§o

Since the original partners have a decisive adverse impact in the project,

It forcing us to abandon the original investment plan .which makes us feel

very sorry. But the confidence and enthusiasm of our investment in your

county still does not change. We hope that our investment projects in

Effingham County is a healthy and vibrant project which can not only

promote the local economic development but also carry on the job

opportunity at Effingham.

Taking into account the preparation and timing of related work, we hope

to visit the Effingham County Industrial Development Authority, after the

Chinese New Year in February, to discuss about the following cooperation.

HUBEI XINGFA CHEMICALS GROUP CO. LTO., A 807, SANXIASHANGCHENG. 52-1 JIEFANG ROAD, YICHANG ~ XiNGFA HUBEI 443000, CHINA

Tel: -86 (717) 6760283 Fa:--: +86 (717) 6760308

Finally sincerely hope that we can get your maximum understanding and

support, we hope our cooperation will be successful. we wish you all a

Happy New Year!

Yours,

Hubei Xingfa Chemicals Group Co., Ltd.

2013.12.30