TERM SHEET FOR REDEMPTION OF CONVERTIBLE NOTES
TERM
SHEET
FOR REDEMPTION OF
CONVERTIBLE
NOTES
This
Term
Sheet is entered into by and among Kiwa
Bio-Tech Products Group Corporation (the
“Company”) and FirsTrust
Group, Inc.
(the
“FirsTrust Group.”) as of October 7, 2008.
WHEREAS,
the Company issued to Nite Capital LP Callable Secured Convertible Notes (the
“6% Notes”), pursuant to a Securities Purchase Agreement dated as of June 29,
2006 (the “Purchase Agreement”);
WHEREAS,
Nite Capital LP has transferred 6% Notes to FirsTrust Group and the Company
has
reissued FirsTrust Group 6% Notes on March 25, 2008;
WHEREAS,
pursuant to Section 4(e) of the Purchase Agreement, as the current holder of
6%
Notes, FirsTrust Group has certain rights of participation with respect to
new
equity financings (or debt financings with an equity component) (the
“Participation Right”); and
WHEREAS,
the Company is seeking to obtain new financing and desires to prepay all amounts
outstanding under the 6% Notes, including principal and accumulated
interest.
NOW
THEREFORE, both parties agree on the following terms and
conditions:
| l |
FirsTrust
Group waives its participation right with respect to any new financing
that closes before October 31, 2008;
|
| l |
FirsTrust
Group hereby agrees to suspend conversions of principal and accrued
interest under the 6% Notes from October 7, 2008 until October 31,
2008;
|
| l |
The
Company agrees that if a new financing is completed, all of the 6%
Notes
held by FirsTrust Group shall be redeemed for an aggregate payment
of
$200,000 (the “Payment Amount”), which, when paid will constitute final
settlement and satisfaction of all outstanding claims amounts due to
FirsTrust Group under 6% Notes.
|
| l |
The
Company shall pay FirsTrust Group the Payment Amount within thirty
(30)
days of the closing of new financing, but no later than October 31,
2008.
|
| l |
The
Company hereby agrees that if payment of the Payment Amount is not
made to
FirsTrust Group by October 31, 2008, the 6% Notes shall automatically
be
amended to remove any and all limitations on FirsTrust Group’s right to
convert the 6% Notes pursuant to Section 1.2(a) of the 6% Notes or
the
Acknowledgement and Agreement Regarding Terms of 6% Secured Convertible
Notes, by and among the signatories thereto, and all rights and consents
hereby granted by FirsTrust Group to the Company to raise new financing
shall be null and void as if never
granted.
|
|
FIRSTRUST
GROUP, INC.
/s/
XXXXXXX XX
|
/s/
XXX XX
|
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| ___________________ | ___________________ | |
|
By:
Xxxxxxx
Xx
Chief
Executive Officer
|
By:
Xxx
Xx
Chief
Executive Officer
|
