REDEMPTION AGREEMENT
This
REDEMPTION AGREEMENT
(the “Agreement”) is
made as of September 3, 2010, by and between Kun Run Biotechnology, Inc., a
Nevada corporation (the “Company”), and Caduceus Asia
Partners, LP (the “Purchaser”).
WHEREAS, the Purchaser is the
holder of 5,228,758 units of the Company (which units shall be collectively
referred to herein as the “Units”), with each Unit
consisting of (A) one share of the Series A Preferred Stock of the Company, par
value $0.001 per share (the “Series A Preferred”) and (B)
one warrant (as amended, modified, restated or supplemented from time to time,
each, a “Warrant,” and
collectively, the “Warrants”) to purchase 0.30 of
a share of Series A Preferred;
WHEREAS, the Units represent
all of the Units acquired by the Purchaser pursuant to that Securities Purchase
Agreement dated as of April 17, 2010 between the Company and the Purchaser (the
“Securities Purchase
Agreement”; capitalized terms used but not defined in this Agreement
shall have the meanings ascribed to them in the Securities Purchase
Agreement); and
WHEREAS, the parties desire to
enter into this Agreement for the redemption in whole of all the Series A
Preferred and Warrants represented by the Units pursuant to the terms and
conditions of this Agreement.
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Redemption of Series A
Preferred. Subject to the terms and conditions of this
Agreement, the Purchaser agrees to sell, assign, transfer, convey and deliver to
the Company, and the Company shall purchase, redeem, accept and take delivery
of, all Series A Preferred represented by the Units, upon full payment of the
Redemption Price. Upon redemption of the Series A Preferred, the
Series A Preferred shall be cancelled and shall not be issuable by the
Company.
2. Redemption of
Warrants. Subject to the terms and conditions of this
Agreement, the Purchaser shall sell, tender for cancellation, transfer and
deliver to the Company, and the Company shall redeem, purchase and accept
delivery of, all Warrants represented by the Units, upon full payment of the
Redemption Price. Upon surrender of the Warrants to the Company, all
of the Purchaser’s right, title and interest in and to the Warrants shall be
extinguished.
3. Payment of Redemption
Price. In consideration for such sale, assignment, transfer,
conveyance and delivery to the Company of the Units , the Company shall pay in
cash an aggregate amount of US$9 million (the “Redemption Price”), which Redemption Price
shall be paid by the Company to the Purchaser by wire transfer of immediately
available fund to a bank account designated by the Purchaser in
writing.
4. Representations and
Warranties.
4.1 Each
party represents and warrants to the other party that: (i) it has all requisite
power and authority to execute and deliver this Agreement and to carry out and
perform its obligations hereunder; (ii) all action on the part of such party
(and, as applicable, its officers, directors and shareholders) necessary for the
authorization, execution and delivery of this Agreement, and the performance of
all obligations of such party hereunder, has been taken; and (iii) this
Agreement has been duly executed and delivered by such party and constitutes
valid and legally binding obligations of such party, enforceable against such
party in accordance with its terms.
4.2 The
Company further represents and warrants to the Purchaser that it has funds
legally sufficient for the redemption of all Series A Preferred and Warrants
hereunder and the execution, delivery, and performance by the Company of this
Agreement (i) does not require consent of any third party, and (ii)
will not result in any violation of, be in conflict with, or constitute a
default under, with or without the passage of time or the giving of notice, any
provision of its constitutional documents, any applicable law, or any contract
or obligation to which it is a party or by which it is bound, or accelerate or
constitute an event entitling holder of any indebtedness of the Company to
accelerate the maturity of any such indebtedness.
5. Indemnity. The
Company agrees to indemnify and hold the Purchaser and each Purchaser Party
harmless from any and all Losses such Purchaser or Purchaser Party may suffer or
incur whether direct, indirect or consequential, as a result of or arising from
or relating to or in connection with any breach of any of the representations,
warranties, covenants or agreements made by the Company in this
Agreement.
6. Cost and
Expense. Each party shall pay its costs and expenses incurred
in connection with the negotiation, execution, delivery and performance of this
Agreement and the transactions contemplated hereby.
7. Further
Assurances. Each party agrees to execute and deliver all such
other agreements, documents and instruments and perform all such further actions
as may be reasonably necessary from time to time to effectuate the terms of this
Agreement.
8. Public
Disclosure. The Company agrees not to make any public
disclosure regarding the transactions contemplated by this Agreement without the
prior written consent of the Purchaser, except as required by U.S. federal
securities law.
9. Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns.
10. Governing
Law. This Agreement shall be governed by, interpreted under,
and construed and enforced in accordance with the laws of the State of New
York.
11. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which shall constitute collectively one and the
same instrument.
12. Amendments;
Waivers. This Agreement and any schedule or exhibit attached
hereto may be amended only by agreement in writing of all parties. No
waiver of any provision nor consent to any exception to the terms of this
Agreement will be effective unless in writing and signed by the party to be
bound and then only to the specific purpose, extent and instance so
provided.
13. Entire
Agreement. This Agreement constitutes and contains the entire
agreement and final understanding between the parties concerning the redemption
of the Series A Preferred and Warrants and all other subject matters addressed
herein or pertaining thereto. This Agreement is intended by the
parties as a final expression of their agreement with respect to such terms as
are included herein and, further, is intended by the parties as a complete and
exclusive statement of the terms of their agreement. This Agreement
supersedes and replaces all prior negotiations and all prior or contemporaneous
representations, promises or agreements, proposed or otherwise, whether written
or oral, concerning the redemption of the Series A Preferred and the Warrants
and all other subject matters addressed herein or pertaining
thereto. This is a fully integrated agreement.
14. Attorneys’ Fees and
Costs. In the event of any controversy or litigation arising
out of or in connection with this Agreement, the prevailing party in any such
actions or proceeding shall be entitled to recover from the other party all its
costs and expenses of the action or suit, including reasonable attorneys’ fees,
in addition to any other relief to which it may be entitled.
[Signature
Page Follows]
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above
written.
THE
COMPANY
a Nevada
corporation
By: /s/ Xxxxxx
Xxx
Name:
Xxxxxx Xxx
Title:
Chairman of the Board
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above
written.
PURCHASER
Caduceus
Asia Partners, LP
By: /s/ Xxxxx X.
Xxxxx
Name: Xx.
Xxxxx X. Xxxxx
Title:
Chairman and Senior Managing Director
