Management AND Operations Agreement

 

THIS MANAGEMENT AND OPERATIONS AGREEMENT (“Agreement”) is entered into as of the
date last written below, yet is effective for all purposes as of October 24,
2014 between BIOPOWER OPERATIONS CORPORATION, a Nevada corporation (“BioPower”),
on the one hand, and GREEN3POWER HOLDINGS COMPANY., a Delaware corporation (“G3P
Holdings”), GREEN3POWER OPERATIONS, INC., a Delaware corporation (“G3P
Operations”), GREEN3POWER INTERNATIONAL COMPANY, LTD., an international business
corporation existing under the laws of the Federation of Nevis (“G3P
International”; along with G3P Holdings and G3P Operations, collectively, the
“G3P Entities”). This Agreement is entered into incident to the consummation by
BioPower and G3P Holding, and certain of their affiliates, of the transactions
documented under that certain SHARE EXCHANGE AGREEMENT of even date hereof (the
“SEA”); consequently, any capitalized term herein that is not independently
defined shall be ascribed its meaning under the SEA.

 

Recitals:

 

1. Incident to the closing of the SEA, the persons previously holding 100% of
the equity interests in G3P Holdings exchanged all their equity interests in G3P
Holdings for common and preferred capital stock in BioPower, and, thereupon, G3P
Holdings became a 100% owned subsidiary of BioPower;

 

2. G3P Operations and G3P International were and continue to be 100% owned
subsidiaries of G3P Holdings; hence, they, become sub-subsidiaries of BioPower;

 

3. Notwithstanding the parent-subsidiary relationship of BioPower as to G3P
Holdings resulting through the consummation of the SEA, part of the basis for
the parties’ bargain thereunder was post-closing there would be available
certain degrees of earned independence in the management of the G3P Entities
upon the realization of certain financial benchmarks, as well as the possibility
of engaging in certain joint venture undertakings as between BioPower and one or
more the G3P Entities designed to result in a priority financial benefit them
through the articulated departure from certain elements of the conventional
subsidiary-to-parent pass-through, effectuated through those joint ventures; and

 

4. The parties desire to further memorialize the aforesaid arrangements in this
Agreement.

 

NOW, THEREFORE, in consideration of the agreements contained herein, and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:

 

Article I

Agreements of the Parties

 

1.1 G3P Entities’ Conditional Managerial Independence. The board of directors of
G3P Holdings and the other G3P Entities’ boards of directors shall be authorized
to expend and invest, on a consolidated basis, net GAAP income as such amounts
are required for the growth of the business to produce greater profits, after
tax and interest and reduced by any dividends or interest paid on the intended
Convertible Preferred Stock or Debenture financing in the event that the said
amount exceeds TWENTY-FIVE MILLION DOLLARS ($25,000,000) during the EIGHTEEN
(18) months subsequent to the Effective Date, with the G3P Entities’ boards or
directors reserving the discretion to reasonably modify or amend said amount.

 

1

 

 

1.2 Restriction on Acquisitive Corporate Transactions. The G3P Entities shall be
required to obtain authorization by the BioPower board of directors to engage in
any acquisitive corporate transaction of any nature whatsoever. The G3P Entities
Agree that in any case in which the BioPower board of directors has authorized
any acquisitive corporate transaction it will comply with such due diligence
processes as may be specified by that body.

 

1.3 Limit on G3P Entity Expenditures and Investment. The G3P Entities shall not
expend amounts or incur debt in excess of the $25 million amount budgeted for
the first EIGHTEEN (18) months from the Effective Date, unless expenditures or
investments in excess of said amount are out of organically generated GAAP net
operating income, as reduced by federal income tax, interest and any dividends
paid for the intended Convertible Preferred Stock financing.

 

1.4 Prohibition on Affiliation with Felons and Disqualified Parties. The G3P
Entities shall not enter into any joint venture or contract with any party
comprised of persons who are known felons or persons who have been disqualified
by the engineering board.

 

1.5 Compliance with Laws. The G3P Entities shall comply with all applicable law,
including the Foreign Corrupt Practices Act and any analogues thereto.

 

1.6 Reserve for Convertible Preferred Stock Dividends. G3P will place a reserve
with BioPower equaling no less than two (2) years of dividends or interest for
any capital financing of up to $25,000,000 before any expenditures from such
financing or from GAAP profits earned.

 

1.7 Accounting and Treasury Functions Vested in BioPower. BioPower hereby
reserves sole authority, and the G3P Entities hereby expressly acknowledge and
agree to comply, to perform all accounting and treasury functions respective to
the G3P Entities.

 

1.8 Agreement Regarding Overtures for Joint Ventures. The Parties agree that
BioPower may from time to time present future proposals to pursue projects with
one or more of the G3P Entities, and in any case in which any said one or more
G3P Entity will do business with BioPower in respect of such one or more
circumstances, the parties hereby agree that any of same would be conducted as
joint ventures in separate entities wherein profits derived therefrom would be
divided by the joint venture parties on a 50%/50% basis.

 

ARTICLE II

MISCELLANEOUS

 

2.1 Governing Law. This Agreement shall be governed by, enforced, and construed
under and in accordance with the laws of the State of Florida, without giving
effect to the principles of conflicts of law thereunder. Each of the parties
irrevocably consents and agrees that any controversy arising under and in
connection with this Agreement and the transactions documented herein are to be
submitted to mediation by the boards of directors of BioPower and G3P Holdings
which shall be conducted in good faith to a equitable settlement. Failing
resolution of any such controversy as aforesaid, doctrines of conventional
corporate governance under Chapter 607, Florida Statutes and BioPower’s
governing documents shall be invoked to bring about a final lawful resolution.

 

2

 

 

2.2 Notices. Any notice or other communications required or permitted hereunder
shall be in writing and shall be sufficiently given if personally delivered to
it or sent by overnight courier or registered mail or certified mail, addressed
as follows:

 

If to G3P Holdings, to:

 

Dr. Neil Williams, Chief Executive Officer

Designee of the G3P Shareholders

1000 Corporate Drive, Suite 200

Ft. Lauderdale, FL 33334

nwilliams@green3power.com

 

If to BioPower, to:

 

Robert Kohn, Chairman CEO

BioPower Operations Corporation

1000 Corporate Drive, Suite 200

Ft. Lauderdale, FL 33334

rkohn@biopowercorp.com

 

or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given (i) upon receipt, if personally delivered, (ii) on
the day after dispatch, if sent by overnight courier and signed for, and (iii)
three (3) days after mailing, if sent by registered or certified mail and signed
for.

 

2.3 Entire Agreement. This Agreement represents the entire agreement between the
parties relating to the subject matter thereof and supersedes all prior
agreements, understandings and negotiations, written or oral, with respect to
such subject matter.

 

2.4 Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original and all of which taken together shall be
but a single instrument.

 

2.5 Amendment or Waiver. Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred herein, at law,
or in equity, and may be enforced concurrently herewith, and no waiver by any
party of the performance of any obligation by the other shall be construed as a
waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement may
by amended by a writing signed by all parties hereto, with respect to any of the
terms contained herein, and any term or condition of this Agreement may be
waived or the time for performance may be extended by a writing signed by the
party or parties for whose benefit the provision is intended.

 

2.6 Best Efforts. Subject to the terms and conditions herein provided, each
party of the G3P Entities and BioPower shall use its best efforts to perform or
fulfill all conditions and obligations to be performed or fulfilled by it under
this Agreement so that the transactions contemplated in accordance with the
spirit hereof and consistent with the relevant sections of the SEA. Each party
of the G3P Entities and the Company also agrees that it shall use its best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective this Agreement and the transactions
contemplated herein.

 

3

 

 

2.7 Further Assurances. From time to time, as and when reasonably requested by
any party hereto after the Closing, the other Parties will (at the expense of
the requesting Party) execute and deliver, or cause to be executed and
delivered, all such documents, instruments and consents and will use reasonable
efforts to take all such action as may be reasonably requested or necessary to
carry out the intent and purposes of this Agreement.

 

2.8 Advice of Counsel. Each party to this Agreement represents and warrants to
each other party that such party has read and fully understands the terms and
provisions hereof, has had an opportunity to review this Agreement with legal
counsel, and has executed this Agreement based upon such party’s own judgment
and advice of independent legal counsel.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be as of
the date last below written.

 

  THE COMPANY:       BIOPOWER OPERATIONS CORPORATION,   a Nevada corporation    
    By: /s/ Robert Kohn     Robert Kohn, President         Date: ______________
        G3P ENTITIES:       GREEN3POWER HOLDINGS COMPANY,   a Delaware
corporation         By: /s/ Neil Williams     Neil Williams, President        
Date: ______________         GREEN3POWER OPERATIONS INC.,   a Delaware
corporation         By: /s/ Neil Williams     Neil Williams, President        
Date: ______________         GREEN3POWER INTERNATIONAL COMPANY, LTD,
an International business corporation organized under the laws of the Federation
of Nevis         By: /s/ Neil Williams     Neil Williams, President        
Date: ______________

 

4