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.
 
 
 

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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.
 
 
 

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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]
 
 
 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
 
THE COMPANY
 
Kun Run Biotechnology, Inc.,
a Nevada corporation

By:  /s/ Xueyun Cui                                            
Name: Xueyun Cui
Title: Chairman of the Board
 
 
 

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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/ Nancy T. Chang                                     
Name: Dr. Nancy T. Chang
Title: Chairman and Senior Managing Director
 
 
 

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