VOTING AGREEMENT
This
VOTING AGREEMENT (this “Agreement”)
is entered into as of April 28, 2010, by and among Kun Run Biotechnology, Inc.,
a Nevada corporation (the “Company”),
the holders of capital stock of the Company listed on Exhibit A hereto
(each, a “Stockholder”
and collectively, the “Stockholders”)
and the Investors listed on the signature pages hereto (each, an “Investor”,
and collectively, the “Investors”).
WHEREAS,
as of the date hereof, each Stockholder owns (i) the shares of capital stock of
the Company listed opposite such Stockholder’s name on Exhibit A and (ii)
the stock options, warrants or other rights to acquire shares of capital stock
of the Company listed opposite such Stockholder’s name on Exhibit A (“Convertible
Securities”).
WHEREAS,
as a condition to the willingness of the Investors to enter into the Purchase
Agreement and to consummate the transactions contemplated thereby (collectively,
the “Transaction”),
the Investors have required that the Stockholders agree, and in order to induce
the Investors to enter into the Purchase Agreement, the Stockholders have
agreed, to enter into this Agreement with respect to all Shares now owned and
which may hereafter be acquired by the Stockholders.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
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1.
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1.1 Purchase
Agreement. Prior to the earlier of the Closing (as defined in
the Purchase Agreement) or the valid termination of the Purchase Agreement
pursuant to Section 6.1 thereto, the Stockholders hereby agree that at any
meeting of the stockholders of the Company, however called, and in any action by
written consent of the Company’s stockholders, the Stockholders shall vote all
shares of capital stock of the Company registered in their respective names or
beneficially owned by them as of the date hereof and any and all other
securities of the Company legally or beneficially acquired by each of the
Stockholders after the date hereof, whether by conversion or exercise of
Convertible Securities or otherwise (hereinafter collectively referred to as the
“Shares”):
(a) in
favor of the Stockholder Approval (as defined in the Purchase Agreement),
including without limitation the approval of (i) any amended and restated
articles of incorporation or certificate of designation of the Company to be
filed with the Secretary of State of the State of Nevada pursuant to the
Purchase Agreement and (ii) all other transactions contemplated by the Purchase
Agreement as to which the stockholders of the Company are called upon to vote in
favor of or consent to any matter necessary for the consummation of the
transactions contemplated by the Purchase Agreement; and
(b) against
(i) any proposal or any other action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or agreement
of the Company, any of its Affiliates or any Stockholders under the Transaction
Documents (as such terms are defined in the Purchase Agreement) or which could
result in any of the conditions to the obligations of the Company, any of its
Affiliates or any Stockholders under the Transaction Documents not being
fulfilled and (ii) any proposal or any other action or agreement, including
without limitation a Competing Transaction (as defined in the Purchase
Agreement) that is intended to, or would reasonably be expected to, impede,
interfere with, delay, postpone, discourage or adversely affect the consummation
of the Closing and all other transactions contemplated by the Purchase
Agreement.
The
Stockholders shall not take or commit or agree to take any action inconsistent
with the foregoing. The Stockholders acknowledge receipt and review
of a copy of the Purchase Agreement and the other Transaction
Documents.
1.2 Election of
Directors.
(a) On
and after the Closing (as defined in the Purchase Agreement), on all matters
relating to the election and removal of directors of the Company, the
Stockholders and the Investors hereby agree that at any meeting of the
stockholders of the Company, however called, and in any action by written
consent of the Company’s stockholders, the Stockholders shall vote all Shares
and the Investors shall vote all shares of capital stock of the Company held by
such Investors (“Investor
Shares”) so as to elect members of the Company’s Board of Directors (the
“Board”) as
follows:
(i) one
member of the Board designated by Caduceus Asia Partners, LP and its Affiliates
(“OrbiMed”)
so long as OrbiMed beneficially owns at least 5% of the Company’s outstanding
shares of Common Stock on an as-converted basis, who shall initially be Xxxxx
Xxxxx;
(ii) one
member of the Board that has no prior affiliation with the Company or any holder
of shares of the Company’s capital stock as of the Closing, which individual
shall be acceptable to OrbiMed, so long as OrbiMed beneficially owns at least 5%
of the Company’s outstanding shares of Common Stock on an as-converted basis;
and
(iii) one
member of the Board designated by Xxxxxx Xxx, so long as Xxxxxx Xxx beneficially
owns at least 10% of the Company’s outstanding shares of Common Stock on an
as-converted basis, who shall initially be Xxxxxx Xxx.
(b) Any
vote taken to remove any director elected pursuant to Sections 1.2(a)(i),
1.2(a)(ii) or 1.2(a)(iii), as applicable, or to fill any vacancy created by the
resignation, removal or death of a director elected pursuant to
Sections 1.2(a)(i), 1.2(a)(ii) or 1.2(a)(iii), as applicable, shall also be
subject to the provisions of Sections 1.2(a)(i), 1.2(a)(ii) or 1.2(a)(iii),
as applicable. Upon the request of any party entitled to designate a
director as provided in Sections 1.2(a)(i), 1.2(a)(ii) or 1.2(a)(iii), as
applicable, each Stockholder and Investor agrees to vote its Shares and Investor
Shares, as applicable, for the removal of such director.
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1.3 No Liability for Election of
Recommended Director. None of the parties
hereto and no officer, director, stockholder, partner, employee or agent of any
party makes any representation or warranty as to the fitness or competence of
the nominee of any party hereunder to serve on the Board of Directors by virtue
of such party’s execution of this Agreement or by the act of such party in
voting for such nominee pursuant to this Agreement.
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2.
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Representations and
Warranties of the
Stockholders.
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Each Stockholder hereby represents and
warrants, severally but not jointly to the Company and each of the Investors as
follows:
2.1 Authority Relative to this
Agreement. Such Stockholder has all necessary power (if such
Stockholder is an entity), capacity (if such Stockholder is an individual) and
authority to execute and deliver this Agreement, to perform his or its
obligations hereunder and to consummate the transactions contemplated
hereby. This Agreement has been duly executed and delivered by such
Stockholder and constitutes a legal, valid and binding obligation of such
Stockholder, enforceable against such Stockholder in accordance with its terms,
except (a) as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws
now or hereafter in effect relating to, or affecting generally, the enforcement
of creditors’ and other obligees’ rights and (b) where the remedy of specific
performance or other forms of equitable relief may be subject to certain
equitable defenses and principles and to the discretion of the court before
which the proceeding may be brought.
2.2 No
Conflicts.
(a) The
execution and delivery of this Agreement by such Stockholder does not, and the
performance of this Agreement by such Stockholder shall not, (i) conflict with
or violate any federal, state, local or foreign law, statute, ordinance, rule,
regulation, order, judgment or decree applicable to such Stockholder or by which
the Shares, owned by such Stockholder are bound or affected or (ii) result in
any breach of or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the Shares owned by such Stockholder
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which such
Stockholder is a party or by which such Stockholder is bound.
(b) The
execution and delivery of this Agreement by such Stockholder does not, and the
performance of this Agreement by such Stockholder shall not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental entity by such Stockholder, except for applicable
requirements, if any, of the Securities Exchange Act of 1934, as
amended.
2.3 Title to
Shares. As of the date hereof, each Stockholder owns the
Shares and Convertible Securities listed on Exhibit A hereto, and
each Stockholder is entitled to vote, without restriction, on all matters
brought before holders of capital stock of the Company. Such Shares
are all the securities of the Company owned, either of record or beneficially,
by each Stockholder. Such Shares are owned free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on such Stockholder’s voting rights, charges and other
encumbrances of any nature whatsoever (“Encumbrances”). Except
as set forth in this Agreement, no Stockholder has deposited into a voting trust
or entered into a voting agreement or similar arrangement with respect to any
Shares or appointed or granted any proxy, which appointment or grant is still
effective, with respect to the Shares owned by such Stockholder.
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3.
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Covenants.
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3.1 No Disposition or
Encumbrance of Stock. Prior to the earlier of the Closing or
the valid termination of the Purchase Agreement pursuant to Section 6.1 thereto,
each Stockholder hereby covenants and agrees that except as set forth in this
Agreement, such Stockholder shall not (a) sell, transfer, tender, assign,
hypothecate or otherwise dispose of any Shares, deposit into a voting trust or
enter into a voting agreement or similar arrangement with respect to any Shares,
grant a proxy or power of attorney with respect to any Shares, or create or
permit to exist any Encumbrance with respect to the Shares, (b) commit or agree
to take any of the foregoing actions, (c) directly or indirectly, or initiate,
solicit or encourage any person to take actions which could reasonably be
expected to lead to the occurrence of any of the foregoing actions or (d) take
any action that would make any representation or warranty of such Stockholder
contained herein untrue or incorrect or have the effect of preventing or
disabling such Stockholder from performing its obligations under this
Agreement.
3.2 Company
Cooperation. The Company hereby covenants and agrees that it
will not, and each Stockholder irrevocably and unconditionally acknowledges and
agrees that the Company will not (and waives any rights against the Company in
relation thereto), recognize any Encumbrance or agreement on any of the Shares
subject to this Agreement.
3.3 Disclosure. Stockholder
hereby agrees that the Company may publish and disclose in any registration
statement (including all documents and schedules filed with the United States
Securities and Exchange Commission (the “SEC”)),
proxy statement, or prospectus filed with any regulatory authority in connection
with the Transaction and any related documents filed with such regulatory
authority and as otherwise required by applicable law, such Stockholder’s
identity and ownership of Shares and the nature of such Stockholder’s
commitments, arrangements and understandings under this Agreement and may
further file this Agreement as an exhibit to a registration statement or
prospectus or in any other filing made by the Company as required by applicable
law or the terms of the Transaction Documents, including with the SEC or other
regulatory authority, relating to the Transaction.
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4.
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Miscellaneous.
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4.1 Further
Assurances. Each Stockholder and Investor shall execute and
deliver such further documents and instruments and take all further action as
may be reasonably necessary in order to consummate the transactions contemplated
hereby.
4.2 Specific
Performance. The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that any Investor (without being joined by
any other Investor) shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or in equity. Any
Investor shall be entitled to its reasonable attorneys’ fees in any action
brought to enforce this Agreement in which it is the prevailing
party.
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4.3 Entire
Agreement. This Agreement constitutes the entire agreement
among the Company, Investors and Stockholders (other than the Purchase Agreement
and the other Transaction Documents to which the Investors and Stockholders are
parties) with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, among the Company,
Investors and Stockholders with respect to the subject matter
hereof.
4.4 Amendment. This
Agreement may be amended or modified (or provisions of this Agreement waived)
only upon the written consent of the Company, OrbiMed, and the Stockholders
holding a majority of the Shares.
4.5 Severability. If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
4.6 Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York,
without regard to the principles of conflicts of law thereof. Each
party agrees that all Proceedings (as defined in the Purchase Agreement)
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether
brought against a party hereto or its respective Affiliates, employees or
agents) shall be commenced exclusively in the courts of the State of New York
sitting in New York County or in the United States of America for the Southern
District of New York (the “New York
Courts”). Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of
the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto
hereby irrevocably waives personal service of process and consents to process
being served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HEREBY ACKNOWLEDGES THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PURCHASERS ENTERING INTO THIS
AGREEMENT.
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4.7 Termination. This
Agreement shall continue in full force and effect from the date hereof through
the earliest of the following dates, on which date it shall terminate in its
entirety:
(a) ten
(10) years from the date of this Agreement;
(b) the
date of the closing of an Acquisition or Asset Transfer, as defined in the
Company’s Certificate of Designation, as amended from time to time;
(c) the
date as of which the parties hereto terminate this Agreement by written consent
of the Company, OrbiMed, and the Stockholders holding a majority of the Shares;
or
(d) the
date of the valid termination of the Purchase Agreement pursuant to Section 6.1
thereto.
4.8 Successors and
Assigns. The provisions hereof shall inure to the benefit of,
and be binding upon, the parties hereto and their respective successors,
assigns, heirs, executors and administrators and other legal
representatives.
4.9 Additional
Shares. In the event that subsequent to the date of this
Agreement any shares or other securities are issued on, or in exchange for, any
of the Shares or Investor Shares by reason of any stock dividend, stock split,
combination of shares, reclassification or the like, such shares or securities
shall be deemed to be Shares or Investor Shares, as the case may be, for
purposes of this Agreement.
4.10 Counterparts. This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original, but all of which together shall constitute one
instrument.
4.11 Waiver. No
waivers of any breach of this Agreement extended by any party hereto to any
other party shall be construed as a waiver of any rights or remedies of any
other party hereto or with respect to any subsequent breach.
4.12 Delays or
Omissions. It is agreed that no delay or omission to exercise
any right, power or remedy accruing to any party, upon any breach, default or
noncompliance by another party under this Agreement shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of or in
any similar breach, default or noncompliance thereafter occurring. It
is further agreed that any waiver, permit, consent or approval of any kind or
character on any party’s part of any breach, default or noncompliance under this
Agreement or any waiver on such party’s part of any provisions or conditions of
the Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under
this Agreement by law, or otherwise afforded to any party, shall be cumulative
and not alternative.
4.13 Notices. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be delivered as set forth in the Purchase
Agreement.
[Signature
Pages Follow]
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IN
WITNESS WHEREOF, the parties have duly executed this Voting Agreement as of the
first date written above.
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THE
COMPANY:
By: /s/ Xiaoqun
Ye
Name: Xiaoqun
Ye
Title: Chief
Executive Officer
Address:
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IN WITNESS WHEREOF, the parties have
duly executed this Voting Agreement as of the first date written
above.
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STOCKHOLDERS:
Xxxxxx
Xxx
/s/ Xxxxxx Xxx
Address:
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IN WITNESS WHEREOF, the parties have
duly executed this Voting Agreement as of the first date written
above.
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INVESTORS:
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Caduceus
Asia Partners, LP
By: /s/ Xxxxx
Xxxxx
Name: Xxxxx
Xxxxx
Title: Chairman and Senior
Managing Director
Address:
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Exhibit
A
List
of Stockholders
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Name
and Address of Stockholder
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No.
of Shares
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No.
of Options
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No.
of Warrants
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Xxxxxx
Xxx
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22,522,500
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N/A
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N/A
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