TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT (the "Agreement") is made and entered into
effective as of March 31, 2006, by and between KIWA BIO-TECH PRODUCTS GROUP
CORPORATION, a Delaware corporation (the "Company"), CORNELL CAPITAL PARTNERS,
LP, a Delaware limited partnership (the "Investor"), Xxxxxx Xxxxxxxx LLP or its
successor (the "Escrow Agent") and Newbridge Securities Corporation
("Newbridge").
Recitals:
--------
WHEREAS, the Company and the Investor entered into a standby equity
distribution agreement dated as of July 6, 2004 (the "Standby Equity
Distribution Agreement"), a registration rights agreement dated as of July 6,
2004 (the "Registration Rights Agreement"), an escrow agreement dated as of July
6, 2004 (the "Escrow Agreement"), and a promissory note in the principal amount
of Four Hundred Thousand Dollars ($400,000) dated December 29, 2004 (the
"Promissory Note") pursuant to which the outstanding principal amount is
$87,134.59 plus $23,041.51 accrued and outstanding interest (for a total of
$110,176.10) and letter agreements from the Company to the Investor dated March
21, 2005 and April 5, 2005 respectively. (Collectively, all of the foregoing
documents and the transactions contemplated thereby are referred to as the
"Transaction Documents").
NOW, THEREFORE, in consideration of the promises and the mutual promises,
conditions and covenants contained herein and in the Transaction Documents and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree as follows:
1. Satisfaction of Promissory Note. Each of the parties hereto acknowledges that
the Investor has received from the Company $110,176.10 as full and final payment
for all principal amounts and accrued interest due and outstanding under the
Promissory Note. The Investor represents to the Company that it holds good and
marketable title to the Promissory Note and that it is not subject to any
mortgage, pledge, lien, assignment for security, conditional sale, or other
title retention agreement, lease, encumbrance, charge, security interest, or
other interest or claim of any kind or character.
2. Escrowed Shares. In order to secure the obligations of the Company under the
Promissory Note the Company has escrowed an aggregate of twenty four million two
hundred twenty six thousand five hundred seventy-seven (24,226,577) shares of
the Company's Common Stock with the Investor's counsel as Escrow Agent (the
"Escrowed Shares"). The Company sold eighteen million nine hundred seventy seven
thousand two hundred seventy one (18,977,271) to the Investor pursuant to
Advances Notices under the Standby Equity Distribution Agreement (the "Advanced
Shares"). Of the Escrowed Shares, five million two hundred forty nine thousand
three hundred six (5,249,306) remain in escrow with the Escrow Agent (the
"Remaining Escrow Shares"), and six hundred fifteen thousand fifty one (615,051)
Advanced Shares remain in the possession of the Investor (the "Restricted
Advanced Shares"). The attached table at Exhibit A summarizes the number of
Escrowed Shares deposited with the Investor, the number of Remaining Escrowed
Shares held by the Investor, Advances effected under the Standby Equity
Distribution Agreement, the transfer of Escrowed Shares to the Investor as
Advanced Shares, the number of Advanced Shares still held by the Investor due to
restriction on resale, and number of Advance Notices held by the Investor which
remain escrowed. The Escrow Agent hereby releases and the Investor hereby
assigns back to the Company the Remaining Escrow Shares and the Restricted
Advanced Shares free and clear of all liens, charges, security interests, or
other encumbrances. The Investor and the Escrow Agent agree to deliver
appropriately executed documents to effect the transfer of the Remaining Escrow
Shares and the Restricted Advanced Shares to the Company, including transfer
instructions to the Company's transfer agent.
3. Fees. Each of the parties hereto acknowledges that the Investor received fees
under the Transaction Documents and specifically Section 12.4 of the Standby
Equity Distribution Agreement. Notwithstanding this Agreement the Investor shall
retain such fees as earned under the Transaction Documents. NewBridge
acknowledges that it has received all fees and remuneration that it is entitled
to under the Placement Agent Agreement.
4. Termination. Each of the parties to this Agreement hereby terminate the
Transaction Documents and the respective rights and obligations contained
therein. As a result of this provision, none of the parties shall have any
rights or obligations under or with respect to the Transaction Documents.
5. Mutual Release and Waiver. Each party hereby releases, cancels, forgives and
forever discharges the other party, each of its predecessors, parent
corporations, holding companies, subsidiaries, affiliates, successors and
assigns, and all of their officers, directors and employees from all actions,
claims, demands, damages, obligations, liabilities, controversies and
executions, of any kind or nature whatsoever, whether known or unknown, whether
suspected or not, which have arisen, or may have arisen, or shall arise by
reason of the Promissory Notes and the other Transaction Documents and the
indebtedness, rights, obligations or claims underlying the same, at any point in
time, and each party does specifically waive any claim or right to assert any
cause of action or alleged case of action or claim or demand which has, through
oversight or error intentionally or unintentionally or through a mutual mistake,
been omitted from this release.
6. Governing Law. This Agreement is governed in all respects by the laws of the
State of Delaware without giving effect to conflict of law principles that would
cause the substantive law of another jurisdiction to apply.
7. Entire Agreement. This Agreement and any other documents delivered pursuant
to it constitute the full and entire understanding and agreement between the
parties with regard to the subject matter. This Agreement may only be amended by
a writing executed by the parties.
8. Counterparts. This Agreement may be executed in any number of counterparts,
each of which will be enforceable against the parties that execute a
counterpart, and all of which together constitute one instrument.
9. Facsimile Execution and Delivery. A facsimile, PDF scan or other reproduction
of this Agreement may be executed by one or more parties and delivered by
facsimile, PDF email or any similar electronic transmission pursuant to which
the signature of or on behalf of the party can be seen. Such execution and
delivery will be considered valid, binding and effective for all purposes.
10. Further Assurances. Each party agrees to execute and deliver all such other
and additional instruments and documents and do all such other acts and things
as may be necessary to more fully effectuate this Agreement.
11. Litigation Expenses. In any action to enforce this Agreement the prevailing
party will be entitled to recover its reasonable litigation fees and expenses
from the other party or parties.
12. Successors and Assigns. This Agreement is binding upon and inures to the
benefit of the parties and their respective successors and assigns.
IN WITNESS WHEREOF, the parties have signed and delivered this Termination
Agreement on the date first set forth above.
KIWA BIO-TECH PRODUCTS GROUP CORPORATION
By:
---------------------------------------
Name:
Title:
CORNELL CAPITAL PARTNERS, LP.
By: Yorkville Advisors, LLC
Its: General Partner
By:
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Portfolio Manager
NEWBRIDGE SECURITIES CORPORATION
By:
---------------------------------------
Name:
Title:
FOR THE ESCROW AGENT
------------------------------------------
Xxxxx Xxxxxxxx
EHXIBIT A
SHARES
SHARES JOURNALED SHARES
DATE DEPOSITED OUT (BALANCE) TRANSACTION INFO.
---------------------------------- ------------ ------------ ---------------- ------------------------
---------------------------------- ------------ ------------ ---------------- ------------------------
Certificate No. K01132;
Issued to DGPC Escrow 33,000,000 33,000,000 December 30, 2004
---------------------------------- ------------ ------------ ---------------- ------------------------
January 18, 2005 315,457 32,684,543
---------------------------------- ------------ ------------ ---------------- ------------------------
January 24, 2005 333,333 32,351,210 Advance dated 1/17/05
---------------------------------- ------------ ------------ ---------------- ------------------------
January 31, 2005 403,226 31,947,984 Advance dated 1/24/05
---------------------------------- ------------ ------------ ---------------- ------------------------
February 7, 2005 400,000 31,547,984 Advance dated 1/31/05
---------------------------------- ------------ ------------ ---------------- ------------------------
February 14, 2005 510,204 31,037,780 Advance dated 2/7/05
---------------------------------- ------------ ------------ ---------------- ------------------------
February 22, 2005 495,049 30,542,731 Advance dated /2/14/05
---------------------------------- ------------ ------------ ---------------- ------------------------
February 28, 2005 342,466 30,200,265 Advance dated 2/21/05
---------------------------------- ------------ ------------ ---------------- ------------------------
30,200,265
---------------------------------- ------------ ------------ ---------------- ------------------------
Returned to Company 30,200,265
---------------------------------- ------------ ------------ ---------------- ------------------------
(share issue w/street name and
free-tradability) 33,000,000 -2,799,735
---------------------------------- ------------ ------------ ---------------- ------------------------
Issued to DGPC Escrow 7,300,000 4,500,265
---------------------------------- ------------ ------------ ---------------- ------------------------
4,500,265
---------------------------------- ------------ ------------ ---------------- ------------------------
March 7, 2005 523,560 3,976,705 Advance dated 2/28/05
---------------------------------- ------------ ------------ ---------------- ------------------------
March 14, 2005 716,332 3,260,373 Advance dated 3/7/05
---------------------------------- ------------ ------------ ---------------- ------------------------
March 21, 2005 510,204 2,750,169 Advance dated 3/14/05
---------------------------------- ------------ ------------ ---------------- ------------------------
Returned to Company 2,750,169
---------------------------------- ------------ ------------ ---------------- ------------------------
(share issue w/street name and
free-tradability) 3,037,780 -287,611
---------------------------------- ------------ ------------ ---------------- ------------------------
Issued to DGPC Escrow 4,468,000 4,180,389
---------------------------------- ------------ ------------ ---------------- ------------------------
Returned to Company 468,000 3,712,389
---------------------------------- ------------ ------------ ---------------- ------------------------
May 2, 2005 393,701 3,318,688 Advance dated 4/25/05
---------------------------------- ------------ ------------ ---------------- ------------------------
May 9, 2005 512,821 2,805,867 Advance dated 5/2/05
---------------------------------- ------------ ------------ ---------------- ------------------------
May 16, 2005 370,370 2,435,497 Advance dated 5/9/05
---------------------------------- ------------ ------------ ---------------- ------------------------
May 23, 2005 374,532 2,060,965 Advance dated 5/16/05
----------------
---------------------------------- ------------ ------------ ------------------------
May 31, 2005 420,168 1,640,797 Advance dated 5/23/05
---------------------------------- ------------ ------------ ---------------- ------------------------
June 6, 2005 456,621 1,184,176 Advance dated 5/30/05
---------------------------------- ------------ ------------ ---------------- ------------------------
Advance dated 6/6/05
June 13, 2005 221,956 962,220 (partial)
---------------------------------- ------------ ------------ ---------------- ------------------------
Certificate No.
Issued to DGPC Escrow 4,800,000 5,762,220 K01164; July 6, 2005
---------------------------------- ------------ ------------ ---------------- ------------------------
Advance dated 6/6/05
July 11, 2005 333,600 5,428,620 (partial - balance)
---------------------------------- ------------ ------------ ---------------- ------------------------
July 11, 2005 561,798 4,866,822 Advance dated 6/13/05
---------------------------------- ------------ ------------ ---------------- ------------------------
July 11, 2005 757,576 4,109,246 Advance dated 6/20/05
---------------------------------- ------------ ------------ ---------------- ------------------------
July 11, 2005 724,638 3,384,608 Advance dated 6/27/05
---------------------------------- ------------ ------------ ---------------- ------------------------
July 11, 2005 578,035 2,806,573 Advance dated 7/4/05
---------------------------------- ------------ ------------ ---------------- ------------------------
July 18, 2005 775,194 2,031,379 Advance dated 7/11/05
---------------------------------- ------------ ------------ ---------------- ------------------------
July 25, 2005 900,901 1,130,478 Advance dated 7/18/05
---------------------------------- ------------ ------------ ---------------- ------------------------
August 1, 2005 970,874 159,604 Advance dated 7/25/05
---------------------------------- ------------ ------------ ---------------- ------------------------
August 8, 2005 970,874 -811,270 Advance dated 8/1/05
---------------------------------- ------------ ------------ ---------------- ------------------------
August 15, 2005 943,396 -1,754,666 Advance dated 8/8/05
---------------------------------- ------------ ------------ ---------------- ------------------------
August 22, 2005 671,141 -2,425,807 Advance dated 8/15/05
---------------------------------- ------------ ------------ ---------------- ------------------------
August 29, 2005 558,659 -2,984,466 Advance dated 8/22/05
---------------------------------- ------------ ------------ ---------------- ------------------------
Certificate No.
Issued to DGPC Escrow 5,300,000 2,315,534 K01172; August 29, 2005
---------------------------------- ------------ ------------ ---------------- ------------------------
September 9, 2005 561,798 1,753,736 Advance dated 8/29/05
---------------------------------- ------------ ------------ ---------------- ------------------------
September 12, 2005 680,272 1,073,464 Advance dated 9/5/05
---------------------------------- ------------ ------------ ---------------- ------------------------
September 19, 2005 826,446 247,018 Advance dated 9/12/05
---------------------------------- ------------ ------------ ---------------- ------------------------
September 26, 2005 862,069 -615,051 Advance dated 9/19/05
---------------------------------- ------------ ------------ ---------------- ------------------------
-615,051
---------------------------------- ------------ ------------ ---------------- ------------------------
-615,051
---------------------------------- ------------ ------------ ---------------- ------------------------
Certificate No. K01181;
Issued to DGPC Escrow 5,864,357 5,249,306 October 25, 2005
---------------------------------- ------------ ------------ ---------------- ------------------------
---------------------------------- ------------
ADVANCES REMAINING IN ESCROW
---------------------------------- ------------
ADVANCE
ADVANCE DATE AMOUNT
---------------------------------- ------------
$
September 26, 2005 10,000.00
---------------------------------- ------------
$
October 3, 2005 10,000.00
---------------------------------- ------------
$
October 10, 2005 10,000.00
---------------------------------- ------------
$
October 17, 2005 10,000.00
---------------------------------- ------------
$
October 24, 2005 10,000.00
---------------------------------- ------------
$
October 31, 2005 10,000.00
---------------------------------- ------------
$
November 7, 2005 10,000.00
---------------------------------- ------------
$
November 14, 2005 29,589.04
---------------------------------- ------------
