Unassociated Document


    


    


    


    MODIFICATION
      AND AMENDMENT AGREEMENT

    


    THIS
      MODIFICATION AND AMENDMENT AGREEMENT (“Agreement”) is made effective this 5th
      day of April, 2007 (the “Effective Date”), by and among Benda Pharmaceutical,
      Inc., a Delaware corporation (the “Company”), Ever Leader Holdings Limited, a
      company incorporated under the laws of Hong Kong SAR ("Ever Leader") and the
      investors listed on the Schedule of Buyers attached hereto (individually, a
      "Buyer" and collectively, the "Buyers").

    


    RECITALS

    


     

    WHEREAS,
      the
      Company, formerly known as Applied Spectrum Technologies, Inc., Ever Leader
      KI
      Equity Partners III, LLC and each of the stockholders of Ever Leader, entered
      into an Exchange Agreement, dated as of September 7, 2006 pursuant to which
      Ever
      Leader became a wholly-owned subsidiary of the Company (the "Acquisition")
      at
      the close of the Acquisition on November 15,
      2006;


     

    WHEREAS,
      the
      Company, Ever Leader Holdings Limited, a company incorporated under the laws
      of
      Hong Kong SAR ("Ever Leader"), and the Buyers entered into a Securities Purchase
      Agreement dated November 15, 2006 (the "Securities Purchase Agreement"),
      pursuant to which the Buyers purchase Units of the Company’s securities for a
      total of $12,000,000 consisting of (i) 25,961,760 shares of Benda common stock,
      par value $0.001 per share (the "Common
      Stock"),
      and
      (ii) warrants (the "Warrants")
      which
      will be exercisable to purchase up to 25,961,760 shares of Common Stock in
      accordance with the terms of the Warrants; and

    


    WHEREAS,
      in
      connection with the Securities Purchase Agreement, the Company entered into
      a
      Registration Rights Agreement with the Buyers (“Registration
      Rights Agreement"),
      wherein Benda agreed to provide certain registration rights under the Securities
      Act of 1933, as amended, and the rules and regulations thereunder, or any
      similar successor statute, and applicable state securities laws;

     

    WHEREAS,
      in
      connection with the Securities Purchase Agreement, the Company entered into
      a
      Make Good Agreement ("Make
      Good Agreement")
      by and
      among the Company, Ever Leader, Mr. Yiqing Wan and Ms. Wei Xu, Moveup
      Investments Limited and Computershare Trust Company, Inc. in order to place
      the
      Escrow Shares (as defined in the Make Good Escrow Agreement) into an escrow
      for
      the benefit of the Buyers in the event that Benda fails to satisfy certain
      performance thresholds as specified in the Make Good Agreement (collectively,
      the Securities Purchase Agreement, Warrants, Registration Rights Agreement,
      and
      Make Good Agreement are known as the “Transaction Documents”);

     

    WHEREAS,
      the
      Company, Ever Leader, and the Buyers desire to enter into this Agreement
      amending the Transaction Documents to allow for certain issuances of the
      Company’s securities, including additional purchases of the Company’s equity
      securities by the Buyers pursuant to the Investment Agreement between the
      Company and certain Buyers dated April __, 2007 (the “Investment Agreement”);
      issuances required under the Equity Transfer Agreements entered into with
      certain shareholders of Shenzhen Sibiono Gene Tech Co., Ltd, effective April
      __,
      2007 (“Equity Transfer Agreements”); and issuances of options pursuant to an
      approved Qualified Employment Stock Option Plan. 

     


    
      
         

      

      
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    NOW
      THEREFORE,
      for
      good and valuable consideration, the receipt of which is hereby acknowledged,
      the parties identified below hereby agree as follows:

    


    1. The
      Securities Purchase Agreement is hereby amended and modified as
      follows:

     

    (a) The
      parties wish to exclude subsequent purchases of the Company’s equity securities
      by Buyers pursuant to the Investment Agreement; issuances of securities required
      under the Equity Transfer Agreements; and issuances of options pursuant to
      an
      approved Qualified Employment Stock Option Plan from what constitutes a Dilutive
      Issuance. Accordingly, Section 4(j) of the Securities Purchase Agreement is
      hereby amended by adding a new sentence at the end of said Section 4(j) which
      shall read as follows:

    


    “This
      Section 4(j) shall not apply to additional purchases of the Company’s equity
      securities by certain Buyers, pursuant to the Investment Agreement between
      the
      Company and such Buyers dated April 5, 2007 (the “Investment Agreement”);
      issuances of securities required under the Equity Transfer Agreements entered
      into with certain shareholders of Shenzhen Sibiono Gene Tech Co., Ltd, effective
      April 1, 2007 (“Equity Transfer Agreements”); and issuances of options pursuant
      to an approved Qualified Employment Stock Option Plan, nor shall such issuances
      be included in the definition of a Dilutive Issuance.”

     

    (b) The
      parties further wish to include shares of Common Stock issued and issuable
      to
      certain Buyers pursuant to the Investment Agreement, not including any such
      shares issued pursuant to warrants granted under the Investment Agreement,
      in
      determining the Buyers’ respective pro rata portions (referred to as “Basic
      Amount”) of any Offered Securities to which they will have the right to
      subscribe and purchase pursuant to Section 4(n)(i) of the Securities Purchase
      Agreement. Accordingly, Section 4(n)(i)(1) is hereby amended and replaced with
      the following section:

    


    “(1) The
      Company shall deliver to each Buyer an irrevocable written notice
      (the "Offer
      Notice")
      of any
      proposed or intended issuance or sale or exchange (the "Offer")
      of the
      securities being offered (the "Offered
      Securities")
      in a
      Subsequent Placement, which Offer Notice shall (w) identify and describe the
      Offered Securities, (x) describe the price and other terms upon which they
      are to be issued, sold or exchanged, and the number or amount of the Offered
      Securities to be issued, sold or exchanged, (y) identify the persons or
      entities (if known) to which or with which the Offered Securities are to be
      offered, issued, sold or exchanged and (z) offer to issue and sell to or
      exchange with such Buyers the Offered Securities, allocated among such Buyers
      (a) based on such Buyer's pro rata portion of the
      sum of (1)
      the
      number of Common Shares purchased hereunder plus
      (2) the number of Common Shares issued and issuable to certain Buyers in
      connection with the Investment Agreement (other than Warrant Shares, as defined
      therein)
      (the
      "Basic
      Amount"),
      and
      (b) with respect to each Buyer that elects to purchase its Basic Amount, any
      additional portion of the Offered Securities attributable to the Basic Amounts
      of other Buyers as such Buyer shall indicate it will purchase or acquire should
      the other Buyers subscribe for less than their Basic Amounts (the "Undersubscription
      Amount"),
      which
      process shall be repeated until the Buyers shall have an opportunity to
      subscribe for any remaining Undersubscription Amount.”


    
      
         

      

      
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    (c) The
      parties further wish to exclude subsequent purchases of the Company’s equity
      securities by certain Buyers pursuant to the Investment Agreement; issuances
      of
      securities required under the Equity Transfer Agreements; and issuances of
      options pursuant to an approved Qualified Employment Stock Option Plan from
      the
      restrictions on Additional Issuance of Securities set forth in Section 4(n)
      of
      the Securities Purchase Agreement. Accordingly, Section 4(n)(iv) is hereby
      amended and replaced with the following section:

    


    “(iv) The
      restrictions contained in subsections (ii) and (iii) of this Section 4(n) shall
      not apply in connection with the issuance of any Excluded Securities (as defined
      in the Warrants), nor shall such restrictions apply to any subsequent purchases
      of the Company’s equity securities by certain Buyers pursuant to the Investment
      Agreement; issuances of securities required under the Equity Transfer
      Agreements; and issuances of options pursuant to an approved Qualified
      Employment Stock Option Plan.”

    


    (d) The
      parties further wish to amend Section 4(r) of the Securities Purchase Agreement
      to negate the requirement that the Company provide financial statements for
      the
      year ending December 31, 2004 audited by Rotenberg & Company, LP, and to
      specify that the financial statements for the year ending December 31, 2005
      be
      audited by Kempisty and Company Certified Public Accountants, P.C. Accordingly,
      Section 4(r) is hereby amended and replaced with the following
      section:

    


    “(r) Audited
      Financial Statements.
      On or
      prior to the date which is sixty (60) days after the Closing Date (the
      "Audited
      Financial Statement Delivery Deadline"),
      the
      Company shall deliver to the Buyers its financial statements for the year ending
      December 31, 2005, audited by Kempisty and Company Certified Public Accountants,
      P.C., prepared in accordance with generally accepted accounting principles,
      consistently applied, during each year involved (except as may be otherwise
      indicated in such financial statements or the notes thereto) and fairly
      presenting in all material respects the financial position of the Company as
      of
      the dates thereof and the results of its operations and cash flows for each
      such
      year then ended (subject, in the case of unaudited statements, to normal
      year-end audit adjustments).” 

     

    2. The
      Warrants issued in connection with the Transaction Documents on November 15,
      2006 are hereby amended and modified as follows:

     

    (a) The
      parties wish to exclude subsequent purchases of the Company’s equity securities
      by certain Buyers pursuant to the Investment Agreement; issuances of securities
      required under the Equity Transfer Agreements; and issuances of options pursuant
      to an approved Bonafide Employment Stock Option Plan from what constitutes
      a
      Dilutive Issuance under the Warrants. Accordingly, Section 2(a) of the Warrants
      is hereby amended by adding a new subsection Section 2(a)(vi) which shall read
      as follows:


    
      
         

      

      
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    “(vi)
      This Section 2(a) shall not apply to additional purchases of the Company’s
      equity securities by certain Buyers pursuant to the Investment Agreement between
      the Company and such Buyers dated April __, 2007 (the “Investment Agreement”);
      issuances of securities required under the Equity Transfer Agreements entered
      into with certain shareholders of Shenzhen Sibiono Gene Tech Co., Ltd, effective
      April 1, 2007 (“Equity Transfer Agreements”); and issuances of options pursuant
      to an approved Qualified Employment Stock Option Plan, nor shall such issuances
      be included in the definition of a Dilutive Issuance.”

     

    3. The
      Registration Rights Agreement is hereby amended and modified as
      follows:

     

    (a) The
      parties wish to allow subsequent purchases of the Company’s equity securities by
      certain Buyers pursuant to the Investment Agreement, including any such shares
      issued pursuant to warrants granted under the Investment Agreement, to be
      included in the Initial Registration Statement and any Additional Registration
      Statements, as defined in the Registration Rights Agreement. Accordingly, the
      last sentence of Section 2(c) of the Registration Rights Agreement is hereby
      amended and replaced as follows:

     

    “In
      no
      event shall the Company include any securities other than Registrable Securities
      on any Registration Statement without the prior written consent of the Required
      Holders except for (1) up to 2,597,424 shares of Common Stock issuable by the
      Company upon exercise of warrants issued by the Company to the Placement Agent
      (as defined in the Securities Purchase Agreement) on the Closing Date and (2)
      additional purchases of the Company’s equity securities by certain Buyers
      pursuant to the Investment Agreement between the Company and such Buyers dated
      April __, 2007 (the “Investment Agreement”).”

     

    (b) The
      Buyers hereby waive any and all rights to Registration Delay Payments resulting
      from the Filing Failure whether currently due and owing or hereinafter accrued
      pursuant to Section 2(g) of the Registration Rights Agreement, except for the
      February Registration Delay Payment in the amount of $120,000 to be distributed
      pro rata according to each Buyers initial investment amount. 

     

    (c) The
      parties wish to extend the date that the Company is required to have the Initial
      Registration Statement declared effective to August 15, 2007. Registration
      Delay
      Payments shall only accrue after August 15, 2007. Accordingly, Section 1(n)
      of
      the Registration Rights Agreement is hereby amended and replaced as
      follows:

     

    “(n) “Initial
      Effectiveness Deadline”
means
      August 15, 2007.”

     

    4. The
      Make
      Good Agreement is hereby amended and modified as follows:

     

    (a) The
      parties wish to negate the requirement that the Company provide financial
      statements for the year ending December 31, 2004 audited by Rotenberg &
Company, to specify that the financial statements for the year ending December
      31, 2005 be audited by Kempisty and Company Certified Public Accountants, P.C.,
      and to exclude the financial statements for the year ending December 31, 2004
      from the calculation of any and all performance thresholds included in the
      Make
      Good Agreement. Accordingly, Recital G of the Make Good Agreement is hereby
      amended and replaced with the following section:


    
      
         

      

      
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    “G. On
      or
      prior to sixty (60) days from the Closing Date of the Securities Purchase
      Agreement, as defined therein, (the "Audited
      Financial Statement Delivery Deadline"),
      the
      Company is required under the Securities Purchase Agreement to deliver to the
      Buyers its financial statements for the year ending December 31, 2005, audited
      by Kempisty and Company Certified Public Accountants, P.C. (the "New
      Audit Financial Statements"),
      prepared in accordance with generally accepted accounting principles,
      consistently applied, during each year involved (except as may be otherwise
      indicated in such financial statements or the notes thereto) and fairly
      presenting in all material respects the financial position of the Company as
      of
      the dates thereof and the results of its operations and cash flows for each
      such
      year then ended (subject, in the case of unaudited statements, to normal
      year-end audit adjustments).”

     

    (b) Additionally,
      Section 2(d)(i) of the Make Good Agreement is hereby amended and replaced with
      the following section:

     

    “(i) Applied
      Spectrum shall provide the Investor Agent and the Investors with the New Audited
      Financial Statements on or before the Audited Financial Statement Delivery
      Deadline. Concurrently with the release of the New Audited Financial Statements
      to the Investor Agent and the Investors, (I) the Company shall provide to the
      Investor Agent and the Investors a written certification as to the amount of
      (u)
      Revenue (as defined and calculated under US GAAP) of the Company and its
      Subsidiaries for the period ended December 31, 2005, as set forth in the New
      Audit Financial Statements (such Revenue for each such period, the "New
      Audited Revenue"),
      (v)
      Cash Flow from Operations (as defined and calculated under US GAAP) of the
      Company and its Subsidiaries for the period ended December 31, 2005, as set
      forth in the New Audit Financial Statements (such Cash Flow from Operations
      for
      each such period, the "New
      Audited Cash Flow from Operations"),
      (w)
      Revenue of the Company and its Subsidiaries for the period ended December 31,
      2005 as set forth in the financial statements of the Company audited by Moen
      & Company LLP delivered to the Investor Agent and the Investors on or prior
      to the Closing Date (such Revenue for each such period, the "Old
      Audited Revenue"),
      (x)
      Cash Flow from Operations of the Company and its Subsidiaries for the period
      ended December 31, 2005 as set forth in the financial statements of the Company
      audited by Moen & Company LLP delivered to the Investor Agent and the
      Investors on or prior to the Closing Date (such Cash Flow from Operations for
      each such period, the "Old
      Audited Cash Flow from Operations"),
      (y)
      whether (A) the New Audited Revenue is 10% less than the Old Audited Revenue
      for
      such corresponding period (the "New
      Audited Revenue Threshold")
      or (B)
      the New Audited Cash Flow from Operations is 10% less than the Old Audited
      Cash
      Flow from Operations for such corresponding period (the "New
      Audited Cash Flow from Operations Threshold")
      (collectively, the "New
      Financial Statement Thresholds")
      and
      (z) whether the New Financial Statement Thresholds have been met and (II) the
      Company shall make such New Financial Statements and certification publicly
      available (as part of an Annual Report on Form 10-KSB or on a Current Report
      on
      Form 8-K, or otherwise).” 

     

    (c) The
      parties further wish to include shares of Common Stock issued and issuable
      to
      certain Buyers pursuant to the Investment Agreement, not including any such
      shares issued pursuant to warrants granted under the Investment Agreement,
      in
      determining the Buyers’ respective pro rata portions (referred to as “Pro Rata
      Basis”) of the Escrow Shares pursuant to the terms of the Make Good Agreement.



    
      
         

      

      
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    Accordingly,
      Section 2(c)(i) is hereby amended and replaced with the following
      section:

     

    “(i) Investors
      holding at least 100 shares of Common Stock as of April 10, 2008 (the
      "Eligible
      Investors")
      shall
      be entitled to receive allocations of the Released Escrow Shares on a Pro Rata
      Basis. For the purpose of this Agreement, "Pro
      Rata Basis"
      means
      such portion of the Released Escrow Shares equal to the product of (i) the
      number of Released Escrow Shares (as calculated in accordance with Section
      2(b)
      above) and (ii) the quotient of (x) the number of shares of Common Stock
      acquired by such Eligible Investor in the Offering or
      by
      certain Investors, pursuant to the Investment Agreement between the Company
      and
      such Investors dated April __, 2007 (the “Investment
      Agreement”)
      and (y)
the
      sum of (1) the
      number of shares of Common Stock acquired by all Investors in the Offering
      and
      (2) the
      number of Common Shares issued and issuable to certain Investors in connection
      with the Investment Agreement (other than Warrant Shares, as defined
      therein).
      Any
      distribution of Released Escrow Shares hereunder shall also include a
      distribution to such Investor of any dividends or other distributions in the
      Escrow, which were issued or otherwise obtained or deposited with respect to
      such Released Escrow Shares distributed to such Investor hereunder.

     

    Additionally,
      Section 2(d)(ii) is hereby amended and replaced with the following
      section:

     

    “(ii) If
      either
      the New Audited Revenue Threshold or the New Audited Cash Flow from Operations
      Threshold has not
      been
      met as determined in accordance with Section 2(d)(i) above, then Applied
      Spectrum and the Investor Agent shall promptly provide a joint written
      instruction to the Escrow Agent (the "New
      Financial Statement Investor Joint Instructions")
      to
      deliver as promptly as practicable (such date, the "New
      Financial Statement Release Date")
      to
      each Investor such number of Escrow Shares equal to the product of (x) the
      New
      Financial Statement Escrow Shares (as defined below) and (y) the quotient of
      (A)
      the number of shares of Common Stock acquired by such Investor in the Offering
      or
      by
      certain Investors pursuant to the Investment Agreement
      and (B)
the
      sum of (1) the
      number of shares of Common Stock acquired by all Investors in the
      Offering
      and
      (2) the
      number of Common Shares issued and issuable to certain Buyers in connection
      with
      the Investment Agreement (other than Warrant Shares, as defined
      therein)..
      For
      purposes of this Agreement, "New
      Financial Statement Escrow Shares")
      means
      such number of Escrow Shares equal to the product of (x) one million and (y)
      the
      greater of the number of percentage points in excess of 10% in which (A) the
      Old
      Audited Revenues exceeds the New Audited Revenues and (B) the Old Audited Cash
      Flow from Operations exceeds the New Cash Flow From Operations; provided, that
      such number of New Financial Statement Escrow Shares shall be capped at the
      total number of Escrow Shares deposited with the Escrow Agent in accordance
      with
      Section 1(a).

    


    5. Conflict.
      When the
      terms and provisions contained in the Transaction Documents in any way conflict
      with the terms and provisions contained in this Agreement, the terms and
      provisions herein contained shall prevail.

    


    6. Except
      as
      amended and modified by this Agreement, all of the terms, representations,
      warranties, covenants, indemnifications, agreements and all other provisions
      of
      the Transaction Documents shall continue to remain in full force and
      effect.


    
      
         

      

      
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    7. Capitalized
      terms and phrases used in this Agreement without definition shall have the
      respective meanings set forth in the Securities Purchase Agreement, unless
      otherwise specified.

    


    8. Counterparts.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other party;
      provided that a facsimile signature shall be considered due execution and shall
      be binding upon the signatory thereto with the same force and effect as if
      the
      signature were an original, not a facsimile signature.

    


    9. Headings.
      The
      headings of this Agreement are for convenience of reference and shall not form
      part of, or affect the interpretation of, this Agreement.

    


    10. Severability.
      If any
      provision of this Agreement shall be invalid or unenforceable in any
      jurisdiction, such invalidity or unenforceability shall not affect the validity
      or enforceability of the remainder of this Agreement in that jurisdiction or
      the
      validity or enforceability of any provision of this Agreement in any other
      jurisdiction.

    


    11. Further
      Assurances.
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as any other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

    


    12. Effectiveness
      Upon Majority Approval.
      This
      Agreement will become effective at the time that it is joined into by the
      Company and the holders of at least a majority of the aggregate number of
      Registrable Securities issued and issuable under the Securities Purchase
      Agreement, and the amendments and modifications made hereunder shall be binding
      on all Buyers and holders of Securities as applicable.

    


    


    


    [Signature
      Page Follows]

    


    


    



    
      
         

      

      
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    IN
      WITNESS WHEREOF,
      each
      Buyer, Ever Leader and the Company have caused their respective signature page
      to this Modification and Amendment Agreement to be duly executed as of the
      date
      first written above.

     

    
      	
               

            	COMPANY:
	 	
              BENDA PHARMACEUTICAL, INC.

               

            
	
               

            	
              By:

            	
               

            
	 	
              Name:
                Yiqing Wan

              Title:
                President

            
	 	
               

            	 
	
               

            	
              EVER
                LEADER:

               

            
	 	
              EVER
                LEADER HOLDINGS LIMITED

               

            
	
               

            	
              By:

            	
               

            
	 	
              Name:
                Yiqing Wan

              Title:
                Chief Executive Officer

            


    

    



    
      
         

      

      
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    IN
      WITNESS WHEREOF,
      each
      Buyer, Ever Leader, and the Company have caused their respective signature
      page
      to this Modification and Amendment Agreement to be duly executed as of the
      date
      first written above.

     

    
      
        	
                 

              	
                BUYERS:

              
	
                 

              	
                 

              	 
	
                 

              	 
	
                 

              	
                Print
                  Name of Investor(s)

              
	
                 

              	
                 

              	 
	
                 

              	
                By

              	
                                    

              
	 	
                
                  Name: 

                

              
	
                 

              	
                 

              	 


      



    
      
         

      

      
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