Document:

bpac_ex102.htm

EXHIBIT 10.2

 

MARKETING AND DEVELOPMENT SERVICES AGREEMENT

 

This Marketing and Development Services Agreement (“Agreement”) is made this 11th day of July, 2012, (“Effective Date”) by and between InterCore Energy, Inc., a Delaware corporation (“ICE”), and Bio-pack Environmental Solutions, Inc., dba/TriStar Wellness Solutions, a Nevada corporation ("TWS").  Each of the Company and ICE shall be referred to herein as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, ICE owns certain assets, which are referred to as the Soft & Smooth Assets;

WHEREAS, TWS has experience in developing and marketing health and wellness products;

WHEREAS, ICE wishes to retain TWS to market and develop the Soft & Smooth Assets;

WHEREAS, ICE and TWS also wish to set forth the terms under which TWS could potentially purchase the Soft & Smooth Assets from ICE;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, ICE and TWS, intending to be legally bound, hereby agree as follows:

 

AGREEMENT

1.    Soft & Smooth Assets.  Soft & Smooth Assets are defined as all rights, interests, and legal claims to that certain invention entitled "Delivery Device with Invertible Diaphragm", including all information and intellectual property related to said invention.  Such assets, include, but are not limited to, all patent applications that have been filed regarding this invention. See Exhibit A.

2.    Development and Marketing Rights.  ICE grants TWS the sole, exclusive rights to develop the Soft & Smooth Assets and market and sell the resulting products (the “Transaction”) in its sole discretion for the next twelve (12) months (the “Rights”).  Any revenue derived from the Soft & Smooth Assets during the twelve (12) months of this arrangement shall be split 20% to ICE and 80% to TWS, unless and until the Soft & Smooth Assets are purchased by TWS as set forth herein.  While TWS can use its sole discretion in developing the Soft & Smooth Assets and in marketing and selling any resulting products, it is the intent of the Parties that TWS will use its best efforts to develop the Soft & Smooth Assets and in marketing and selling any resulting products, and TWS agrees to use its best efforts to do so.

 

  

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3.    Purchase Price.  The purchase price for the Rights shall be:

In exchange for receiving the Rights, TWS shall be responsible for the following (together, the “Purchase Price”):

	
a.  

	
TWS will pay ICE Ten Thousand Dollars in cash ($10,000);

 

	
b.  

	
TWS will be responsible for all obligations related to the development and marketing of the Soft & Smooth Assets, including the assumption of the following obligations that are currently due by ICE to certain third parties:

	
  

	
a)

	
Accounts payable for legal patent work approximating

	
  

	
b)

	
Accounts payable to RWIP Consulting;

	
  

	
c)

	
Accounts payable for clinical study services;

 

	
  

	
d)

	
Account payable for out of pocket to RWIP for clinical study; and

 

	
  

	
e)

	
Royalty Payments consisting of future contingent payments due to RWIP, LLC, an Oregon limited liability company ("RWIP") (see, "Royalty Payments" below)

"Royalty Payments" represent the future contingent payments due from ICE to RWIP as defined in the Asset Purchase Agreement between ICE and RWIP dated December 10, 2010.  Section II - 2.1 defines that term as follows:

"Royalty Payments - Royalties equal to Twenty Percent (20%) of all net income (revenue minus expenses) received by the Purchaser in connection with the Assets (the revenue and expenses related to the Assets necessary to calculate the net income from the Assets shall be calculated separately from the Purchaser’s other business segments, and, if necessary, notwithstanding the other provisions of this Agreement, the Purchaser shall be permitted to form a wholly-owned subsidiary to operate the portion of the Purchaser’s business related to the Assets)."

4.    Purchase/Sale Option. In addition to the foregoing rights and agreement, ICE shall have the right to sell to TWS the Soft & Smooth Assets, in its sole discretion, at any time in the eight (8) months following the execution of this Agreement.  In the event ICE exercises this right the Purchase Price, including the assumption of all existing and future obligations related to the Soft & Smooth Assets, will be the only consideration paid by TWS for the Soft & Smooth Assets.  If ICE has not exercised this option within the next eight (8) months the right of ICE to sell under the conditions provided for herein shall expire.

 

  

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Starting with the sixth (6th) month following the execution of this Agreement and continuing until the end of the eleventh (11th) month following the execution of this Agreement, TWS shall have the exclusive option, in its sole discretion, to purchase the Soft & Smooth Assets from ICE provided, however, that the right of TWS to purchase the Soft & Smooth Assets during the period starting with the sixth (6th) month until the end of the eight (8th) month shall be subject to ICE’s agreement to sell.  During the period starting with the ninth (9th) month and ending with the eleventh (11th) month, ICE shall be obligated to sell if TWS exercises its right to purchase.  In the event TWS exercises this option, TWS shall issue to ICE, in addition to the Purchase Price, warrants enabling ICE to purchase One Hundred Fifty Thousand (150,000) shares of TWS common stock at $1.00 per share, with a four (4) year expiration period.

During this eleventh-month period, ICE may not sell the Soft & Smooth Assets to any party other than TWS without the written consent of TWS.  In the event the Soft & Smooth Assets are sold to a third party during this eleventh (11th) month period, and the Soft & Smooth Assets have not be previously sold to TWS, then the 20% to ICE and 80% to TWS revenue split discussed in Section 3, above, shall cease and ICE will be entitled to 15% of any down payment (COB or stock) received for the Soft & Smooth Assets, with TWS entitled to 85% of any down payment, and TWS shall be entitled to receive 100% of any future payments made by the purchaser for the Soft & Smooth Assets. In the event neither ICE nor TWS exercise their sale/purchase option in the eleven-month period, any amounts paid by TWS as repayments or payments of obligations owed relating to the Soft & Smooth Assets will become the obligation of ICE to repay to TWS within the next Twenty Four (24) months, which repayment may be made in cash or shares of ICE common stock, in ICE’s sole discretion, with the other repayment terms to be determined by the Parties in good faith.  In the event ICE elects to repay some or all of the obligations in common stock the common stock shall have a value equal to the fair market value of ICE’s common stock on the date the shares are issued.

5.    Termination.

5.1  This Agreement may be terminated prior to completion by: (a) the written agreement of both Parties; (b) by either Party in the event that other Party shall be in default of its material obligations under this Agreement and shall fail to remedy such default within fifteen (15) days after receipt of written notice thereof, in which case, this Agreement shall terminate upon expiration of the fifteen (15) day period; or (c) immediately, by either Party if the other Party ceases to do business or is dissolved or becomes bankrupt or insolvent or makes any assignment for the benefit of its creditors or if a receiver is appointed to direct its business.

5.2  In the event of termination of this Agreement by mutual agreement of the Parties, under Section 5.1(a) above, the Parties will determine who will own the Soft & Smooth Assets at the time of termination.  In the event of termination by an uncured default under Section 5.1(b) above, or by a Party becoming insolvent, dissolving or filing bankruptcy under Section 5.1(c), above, the Party that is not in default or does not become insolvent, dissolve or file for bankruptcy will immediately receive the Soft & Smooth Assets at termination.  In such an event, the other Party will deliver to the Party receiving the Soft & Assets, all information and/or materials relevant to the Soft & Smooth Assets to the point of termination.

6.    Warranties and Representations of ICE.

ICE represents and warranties the following:

6.1  Corporate Good Standing.  ICE is a corporation, duly organized, validly existing, and in good standing under the laws of Delaware, and has all requisite corporate power and authority to carry on its business as now conducted by it and to own and operate its assets as now owned and operated by it.

 

  

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6.2   Authority; Enforceability.

(a)   ICE has the right, power, and authority to execute and deliver this Agreement, and to perform its obligations hereunder.  This Agreement constitutes (or will, when executed and delivered as contemplated herein, constitute) the legally binding obligations of ICE, enforceable in accordance with their respective terms.

(b)  The execution, delivery, and performance of this Agreement by ICE, and the consummation of the transactions contemplated hereby, do not and will not: (i) require the consent, waiver, approval, license, or other authorization of any person, except as provided for herein; (ii) violate any of provision of applicable law; (iii) contravene, conflict with, or result in a violation of any provision of ICE’s organizational documents; (iv) conflict with, require a consent or waiver under, result in the termination of any provisions of, constitute a default under, accelerate any obligations arising under, trigger any payment under, result in the creation of any lien pursuant to, or otherwise adversely affect, any contract to which ICE is a party or by which any of its assets are bound, in each such case whether with or without the giving of notice, the passage of time, or both.

(c)  All requisite corporate action has been taken by ICE to authorize and approve the execution and delivery of this Agreement, the performance by ICE of its obligations hereunder, and of all other acts necessary or appropriate for the consummation of the transactions contemplated by this Agreement.

 

6.3   ICE is the owner of the Soft & Smooth Assets and as such has the authority to authorize TWS to transfer the Rights.

7.    Warranties and Representations of TWS.

TWS represents and warranties the following:

7.1  Corporate Good Standing.  TWS is a corporation, duly organized, validly existing, and in good standing under the laws of Nevada, and has all requisite corporate power and authority to carry on its business as now conducted by it and to own and operate its assets as now owned and operated by it.

7.2   Authority; Enforceability.

(a)  TWS has the right, power, and authority to execute and deliver this Agreement, and to perform its obligations hereunder.  This Agreement constitutes (or will, when executed and delivered as contemplated herein, constitute) the legally binding obligations of TWS, enforceable in accordance with their respective terms.

(b)  The execution, delivery, and performance of this Agreement by TWS, and the consummation of the transactions contemplated hereby, do not and will not: (i) require the consent, waiver, approval, license, or other authorization of any person, except as provided for herein; (ii) violate any of provision of applicable law; (iii) contravene, conflict with, or result in a violation of any provision of TWS’s organizational documents; (iv) conflict with, require a consent or waiver under, result in the termination of any provisions of, constitute a default under, accelerate any obligations arising under, trigger any payment under, result in the creation of any lien pursuant to, or otherwise adversely affect, any contract to which TWS is a party or by which any of its assets are bound, in each such case whether with or without the giving of notice, the passage of time, or both.

 

  

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(c)   All requisite corporate action has been taken by TWS to authorize and approve the execution and delivery of this Agreement, the performance by TWS of its obligations hereunder, and of all other acts necessary or appropriate for the consummation of the transactions contemplated by this Agreement.

 

7.3  Professional Services.  The services to be performed by TWS hereunder shall be performed in a timely and professional manner by qualified personnel familiar with development and marketing services for assets and devices like the Soft & Smooth Assets.  All services performed shall meet or exceed industry standards for such services.  The performance by TWS of its obligations hereunder shall at all times be in compliance with all applicable laws, rules, and regulations.

8.    Confidential Information

8.1  TWS shall keep in strictest confidence and shall not, without the prior written consent of ICE, disclose to any third party, or use for any purpose other than in the performance of this Agreement, any information regarding the business affairs of ICE or ICE’s clients that TWS may acquire or develop in connection with its performance of this Agreement.  Notwithstanding the foregoing, TWS shall have no obligation of confidentiality with respect to information which: (a) is or becomes public domain, through no fault of TWS; (b) TWS can establish was in its possession at the time of disclosure hereunder; (c) was lawfully received from a third party that had a right to disclose such information; or (d) is required to be disclosed by TWS as a fully-reporting, publicly-traded company.

8.2  TWS acknowledges that unauthorized disclosure or use of any ICE confidential material may result in irreparable harm to ICE and TWS agrees that ICE may, in addition to any other remedies available to it, seek and obtain injunctive relief against the breach or threatened breach of the Company’s confidentiality obligations hereunder.

9.    Ownership

9.1  Unless and until ICE sells the Soft & Smooth Assets to TWS, ICE shall exclusively own and have all right, title and interest (including but not limited to, all copyrights, patents, trademarks, and trade secrets) in and to all information related to ICE and the Soft & Smooth Assets derived from the performance of TWS services hereunder, related documentation, and any other deliverables prepared in the performance of this Agreement and any inventions conceived or created by TWS in the performance of this Agreement (the “Results”).  TWS agrees not to disclose or reproduce the Results, except as may be expressly agreed by ICE in writing.  TWS agrees to execute such documents as may be necessary to vest sole ownership of the Results in ICE.

9.2  To the extent that the deliverables contain the pre-existing intellectual property of TWS or a third party, TWS hereby warrants that it owns or has legal rights to such intellectual property with full right to license same to ICE, and hereby grants to ICE and its affiliates a paid-up non-exclusive, worldwide license to use with rights to sublicense and display such intellectual property in connection with the use of the Results created by TWS’s services and the deliverables.

10.  Assignment. TWS may not delegate its duties, assign, or otherwise transfer its rights or obligations under this Agreement, in whole or in part, without the prior written consent of ICE.  Any attempted assignment without ICE’s prior written consent shall be void.

 

  

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11.  Insurance Requirements.TWS will provide appropriate insurance coverage for the performance of its services hereunder.

12.  Applicable Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Connecticut without effect of the conflicts of law rules.  TWS and ICE hereby consent to the exclusive jurisdiction in the state and federal courts sitting in and for the County of Fairfield, State of Connecticut.

13.  Independent Contractor.  In performing this Agreement, TWS and ICE shall operate as and have the status of independent contractors and neither shall act as an agent or employee of the other.  Neither Party shall have any power or authority to bind or obligate the other Party in any manner to any third party.

 

14.  Notices.  Any notice, request, demand, or other communication given pursuant to the terms of this Agreement shall be deemed given upon delivery, and may only be delivered or sent via hand delivery, facsimile, electronic mail (with confirmation of receipt), or by overnight courier, correctly addressed to the addresses of the parties indicated below or at such other address as such Party shall in writing have advised the other Party.

If to ICE:                James F. Groelinger

Chief Executive Officer

InterCore Energy, Inc.

1 International Boulevard, Suite 400

Mahwah, NJ  07495

E-mail: jgroelinger@hbcapital.com

Fax:  (518) 252-3917

 

With a copy to:            Craig V. Butler, Esq.

The Lebrecht Group, APLC

9900 Research Drive

Irvine, CA  92628

Facsimile: (949) 635-1244

E-mail:  cbutler@thelebrechtgroup.com

 

  

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If to TWS:                     Biopack Environmental Solutions, Inc.

10 Saugatuck Ave.

Westport, Connecticut 06880

Attn: Harry Pond, President

Facsimile: [_______]

E-mail:  hpond1@msn.com

 

With a copy to:            Craig V. Butler, Esq.

The Lebrecht Group, APLC

9900 Research Drive

Irvine, CA  92628

Facsimile: (949) 635-1244

E-mail:  cbutler@thelebrechtgroup.com

15.  Severability. If any provision of this Agreement shall be held illegal, unenforceable, or in conflict with any law, the validity of the remaining portions or provisions hereof shall not be affected thereby, and the offending provision shall be given effect to the greatest extent allowed by law.

16.  Waiver.  The failure of either party to exercise any right provided for herein or to enforce any breach of this Agreement shall not be deemed to be a waiver of any right hereunder or a waiver of any rights that arise from a subsequent breach of this Agreement.

17.  Entire Agreement. The Parties agree that this Agreement, including any referenced exhibits and attachments, is the entire, complete, and exclusive statement of agreement and supersedes all proposals, understandings, representations, conditions, warranties, covenants, and all other communications between the Parties, oral or written, relating to the subject matter hereof.  This Agreement replaces, in all respects, the Letter of Intent entered into by and between the Parties dated June 6, 2012.  This Agreement may only be amended or modified pursuant to a written instrument signed by a duly authorized representative of each Party.  This Agreement may be executed in multiple counterparts, and by electronic means, each counterpart constituting an original.

 

 

	

“TWS”

	 	

“ICE”

	 
	  	 	  	 
	

Biopack Environmental Solutions, Inc.

	 	

InterCore Energy, Inc.,

	 
	

a Nevada corporation

	 	

a Delaware corporation

	 
	  	 	  	 
	By:	

/s/ Harry Pond 

	 	By:	

/s/ James F. Groelinger 

	 
	 	
Harry Pond

	 	 	
James F. Groelinger

	 
	 	

President

	 	 	
Chief Executive Officer

	 

 

  

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Exhibit A

Soft & Smooth Assets

Assets

Intellectual Property:

The Assets are defined as the Patent Assignment and all rights, interests, and legal claims to that certain invention entitled DELIVERY DEVICE WITH INVERTIBLE DIAPHRAGM, including all information and intellectual property related to said invention.

The Assets, include, but are not limited to, the following patent applications that have been filed regarding the invention:

U.S. Provisional Application No. 61/071,766, filed May 16, 2008

PCT Patent Application No. PCT/US2009/044400, filed May 18, 2009

U.S. Continuation-in-Part Application No. 12/946,671,  filed November 15, 2010;

Canada Application No. 2,724,504, filed May 18, 2009

EPC Patent Application No. 09747774.9, filed May 18, 2009

Contracts:

RWIP, LLC Consulting Agreement Executed 12/13/2010

International Regulatory Consultants, LC, Executed 10/21/11

Other Assets:

Potential Ownership and Use of Concept Test results completed by North Star Partners, LLC

Potential Ownership and Use of Clinical Trial results in process by IRC, LC

 

 8bpac_ex103.htm

EXHIBIT 10.3

 

SUBSIDIARY ACQUISITION OPTION AGREEMENT

This SUBSIDIARY ACQUISITION OPTION AGREEMENT (the “Agreement”) is dated as of April 25, 2012 (the “Effective Date”), by and between Biopack Environmental Solutions, Inc., a Nevada corporation (the “Company” or “BPAC”), on the one hand, and Xinghui Ltd., a Chinese entity (“Purchaser“), on the other hand.  Each of the Company and Purchaser shall be referred to herein as a “Party” and collectively as the “Parties.”

WITNESSETH

WHEREAS, the Company owns 100% of the issued and outstanding shares (the “Subsidiary Shares”) of Roots Biopack (Intellectual Property) Limited, incorporated in Hong Kong, Roots Biopark Limited, incorporated in Hong Kong, Jiangmen Roots Biopack Ltd., incorporated in the People’s Republic of China, Starmetro Group Limited, incorporated in the British Virgin Islands and Biopack Environmental Limited (fka E-ware Corporation Limited), incorporated in Hong Kong (together the “BPAC Subsidiaries”);

WHEREAS, Purchaser and BPAC are parties to that certain Agreement for the Purchase of Preferred Stock dated April 25, 2012 (the “Stock Purchase Agreement”), wherein the holders of the outstanding preferred stock of the Company (the “Preferred Shares”), which represents the voting control of the Company, is selling the Preferred Shares to that certain purchaser named in the Stock Purchase Agreement (the “Preferred Stock Purchaser”);

WHEREAS, as a condition to the Preferred Stock Purchaser acquiring the Preferred Shares, they want to have the option of requiring the Company to sell the Subsidiary Shares at its sole discretion;

WHEREAS, the Purchaser wishes to acquire the Subsidiary Shares and the BPAC Subsidiaries if the Company, at the request of the Preferred Stock Purchaser, exercises its right to sell the Subsidiary Shares pursuant to this Agreement;

WHEREAS, the Parties wish to enter into an agreement under which BPAC has the option, in its sole discretion when approved by the Preferred Shares Purchaser, to sell the Subsidiary Shares to Purchaser in exchange for certain outstanding liabilities of the Company that exist at Closing under the Stock Purchase Agreement;

NOW THEREFORE, in consideration of the premises and respective mutual agreements, covenants, representations and warranties herein contained, it is agreed between the Parties hereto as follows:

 

  

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ARTICLE 1

OPTION FOR SALE OF THE SUBSIDIARY SHARES

1.1          Option to Sell the Subsidiary Shares.  The Parties hereby agree that the Company may, in its sole discretion and at any time after the close of the transaction contemplated by the Stock Purchase Agreement, sell the Subsidiary Shares to Purchaser.   If the Company elects to sell the Subsidiary Shares to Purchaser it will execute and submit to the Escrow Agent, as defined below, an executed copy of the Notice of Exercise of Option to Sell Subsidiary Shares, attached hereto as Exhibit A (“Notice of Exercise”).  Upon submission of the Notice of Exercise to the Escrow Agent, subject to the terms and conditions set forth herein, and on the basis of the representations, warranties and agreements herein contained, the Company shall sell to Purchaser and Purchaser shall purchase from the Company, all of the Subsidiary Shares.

1.2          Purchase Price.  If the Company exercises its option to sell the Subsidiary Shares as set forth in Section 1.1, then, as consideration for the Subsidiary Shares, Purchaser will assume all liabilities of the Company that existed at Closing (as defined in the Stock Purchase Agreement) (together, the “Purchase Price”). The liabilities to be assumed by the Purchaser will include, but are not limited to, Purchaser assuming and agreeing to fully perform and satisfy and be liable for all of the liabilities and obligations of the Company except for the $400,000 principal amount convertible note that was owed to Trilane Limited at Closing  (the “Assumed Liabilities”).

1.3

 

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF PURCHASER

2.1          Representations and Warranties of Purchaser.  To induce the Company to enter into this Agreement and to consummate the transactions contemplated hereby, Purchaser represents and warrants as of the date hereof and as of the Closing, as follows:

2.1.1          Authority of Purchaser; Acquisition of Subsidiary Shares/Assumption of Assumed Liabilities.  Purchaser has the full right, power and authority to enter into this Agreement and to carry out and consummate the transactions contemplated herein.  This Agreement, and all of the Exhibits attached hereto, constitutes the legal, valid and binding obligation of Purchaser.  If required under this Agreement, Purchaser shall acquire the Subsidiary Shares and assume the Assumed Liabilities as set forth herein.

 

  

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2.1.2          Subsidiary Shares to be Restricted Securities.  Purchaser acknowledges that the Subsidiary Shares will be “restricted securities” (as such term is defined in Rule 144 promulgated under the Securities Act of 1933, as amended (“Rule 144”)), will include the customary restrictive legend, and, except as otherwise set forth in this Agreement, that the Subsidiary Shares cannot be sold for a period of at least one year from the date of issuance unless registered with the United States Securities and Exchange Commission (the “SEC”) and qualified by appropriate state securities regulators, and otherwise complies with an exemption from such registration and qualification (including, without limitation, compliance with Rule 144).

2.1.3          BPAC Subsidiaries Acquired “As Is”.  If the Company exercises its option under this Agreement to transfer the Subsidiary Shares to Purchaser under this Agreement, the Company makes no representations or warranties regarding BPAC Subsidiaries, including, but not limited to, its business, its financial condition or statements, its prospects, its employment matters, and its regulatory matters.  Purchaser acknowledges that he is intimately familiar with BPAC Subsidiaries, its business operations, and its financial condition, and is receiving control of BPAC Subsidiaries on an “as is” basis.

2.1.4          Company Option.  The option to sell the Subsidiary Shares is in the sole discretion of the Company and if the Company submits the Notice of Exercise then Purchaser must accept the Subsidiary Shares in exchange for the Purchase Price.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

OF THE COMPANY

3.1          Representations and Warranties of the Company.  To induce Purchaser to enter into this Agreement and to consummate the transactions contemplated hereby, the Company represents and warrants, as of the date hereof and as of the Closing, as follows:

3.1.1          Authority of the Company/Transfer of Subsidiary Shares.  The Company has the full right, power and authority to enter into this Agreement and to carry out and consummate the transactions contemplated herein.  This Agreement, and all of the Exhibits attached hereto, constitutes the legal, valid and binding obligation of the Company.  If it opts to sell the Subsidiary Shares, the Company shall transfer title in and to the Subsidiary Shares to Purchaser free and clear of all liens, security interests, pledges, encumbrances, charges, restrictions, demands, and claims of any kind or nature whatsoever, whether direct or indirect or contingent, other than those imposed by the Securities Act of 1933.

3.1.2          Corporate Existence and Authority of the Company.  The Company is a corporation duly organized, validly existing and in good standing under the laws of Nevada.  It has all requisite corporate power, franchises, licenses, permits and authority to own its properties and assets and to carry on its business as it has been and is being conducted.  It is in good standing in each state, nation or other jurisdiction in each state, nation or other jurisdiction wherein the character of the business transacted by it makes such qualification necessary.

3.1.3          Execution of Agreement.  The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not: (a) violate, conflict with, modify or cause any default under or acceleration of (or give any Party any right to declare any default or acceleration upon notice or passage of time or both), in whole or in part, any charter, article of incorporation, bylaw, mortgage, lien, deed of trust, indenture, lease, agreement, instrument, order, injunction, decree, judgment, law or any other restriction of any kind to which the Company is a party or by which it or any of its properties are bound; (b) result in the creation of any security interest, lien, encumbrance, adverse claim, proscription or restriction on any property or asset (whether real, personal, mixed, tangible or intangible), right, contract, agreement or business of the Company; (c) violate any law, rule or regulation of any federal or state regulatory agency; or (d) permit any federal or state regulatory agency to impose any restrictions or limitations of any nature on the Company or any of its actions.

 

  

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3.1.4          Subsidiary Shares.  The Subsidiary Shares, as of the Effective Date of this Agreement, are free and clear of all liens, security interests, pledges, encumbrances, charges, restrictions, demands, and claims of any kind or nature whatsoever, whether direct or indirect or contingent, other than those imposed by the Securities Act of 1933.

ARTICLE 4

CLOSING AND DELIVERY OF DOCUMENTS

4.1          Closing.  The Closing (the “Closing”) shall take place on April 25, 2012, or at such other place, date and time as the Parties may agree in writing (the “Closing Date”).

4.2          Deliveries by BPAC.  At the Closing, BPAC shall deliver the following:

4.2.1          BPAC shall deliver to the Escrow Agent to be held in the Escrow Account and governed by this Subsidiary Acquisition Option Agreement:

 

	
(a)   

	
a signed copy of this Agreement;

	
(b)   

	
written confirmation of the approval of this Agreement and the herein described transactions by BPAC’s Board of Directors; and

	
(c)   

	
stock certificate(s) evidencing the Subsidiary Shares subject to no liens, security interests, pledges, encumbrances, charges, restrictions, demands or claims in any other party whatsoever, other than those imposed by federal and state securities laws.

4.3          Delivery by Purchaser:  At the Closing, Purchaser shall deliver the following:

4.3.1          Purchaser shall deliver to the Escrow Agent to be held in the Escrow Account and governed by the Subsidiary Acquisition Option Agreement:

	
(a)   

	
a signed copy of this Agreement;

	
(b)   

	
written confirmation of the approval of this Agreement and the herein described transactions by Purchaser’s Board of Directors, if a corporation; and

	
(c)   

	
a signed copy of the Assumption of Liabilities in the form attached hereto as Exhibit B.

 

  

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ARTICLE 5

TERMINATION, AMENDMENT AND WAIVER

5.1          Termination.  Notwithstanding anything to the contrary contained in this Agreement, this Agreement may be terminated and the transactions contemplated hereby may be abandoned prior to the Closing Date only by the mutual consent of all of the Parties.

5.2          Waiver and Amendment.  Any term, provision, covenant, representation, warranty or condition of this Agreement may be waived, but only by a written instrument signed by the Party entitled to the benefits thereof.  The failure or delay of any Party at any time or times to require performance of any provision hereof or to exercise its rights with respect to any provision hereof shall in no manner operate as a waiver of or affect such Party’s right at a later time to enforce the same.  No waiver by any Party of any condition, or of the breach of any term, provision, covenant, representation or warranty contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or waiver of any other condition or of the breach of any other term, provision, covenant, representation or warranty.  No modification or amendment of this Agreement shall be valid and binding unless it be in writing and signed by all Parties hereto.

ARTICLE 6

COVENANTS, INDEMNIFICATION

6.1          To induce the Company to enter into this Agreement and to consummate the transactions contemplated hereby, and without limiting any covenant, agreement, representation or warranty made, the Purchaser covenants and agrees as follows:

6.1.1          Notices and Approvals.  Purchaser agrees: (a) to give all notices to third parties which may be necessary or desired by the Company in connection with this Agreement and the consummation of the transactions contemplated hereby; (b) to use his best efforts to obtain all federal and state governmental regulatory agency approvals, consents, permit, authorizations, and orders required or requested by the Company in connection with this Agreement and the consummation of the transaction contemplated hereby; and (c) to use his best efforts to obtain all consents and authorizations of any other third parties necessary or requested by the Company in connection with this Agreement and the consummation of the transactions contemplated hereby.

6.1.2          Information for the Company’s Statements and Applications.  Purchaser, and his accountants and attorneys shall cooperate fully with the Company in the preparation of any filings, statements or applications made by the Company to any federal or state governmental regulatory agency in connection with this Agreement and the transactions contemplated hereby and to furnish the Company with all information concerning the Company and/or BPAC Subsidiaries necessary or deemed desirable by the Company for inclusion in such statements and applications, including, without limitation, all requisite financial statements and schedules.

 

  

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6.1.3          Access to Information.  The Company, together with its appropriate attorneys, agents and representatives, shall be permitted to make the full and complete investigation of Purchaser relative to the transaction contemplated by this Agreement and have full access to all of the books and records of Purchaser, relative to the transaction contemplated by this Agreement, and BPAC Subsidiaries during reasonable business hours.  Notwithstanding the foregoing, such parties shall treat all such information as confidential and shall not disclose such information without the prior consent of the other.

6.2          Indemnification.

6.2.1          Indemnity of the Company.  Purchaser agrees to indemnify, defend and hold the Company harmless from and against any and all Losses (as hereinafter defined) arising out of or resulting from the breach by Purchaser of any representation, warranty, covenant or agreement of Purchaser contained in this Agreement or the schedules and exhibits hereto.  For purposes of Section 6.3, the term “Losses” shall mean all damages, costs and expenses (including reasonable attorneys’ fees) of every kind, nature or description, it being the intent of the Parties that the amount of any such Loss shall be the amount necessary to restore the indemnified party to the position it would have been in (economically or otherwise), including any costs or expenses incident to such restoration, had the breach, event, occurrence or condition occasioning such Loss never occurred.  Notwithstanding the foregoing provisions of this section, no claim for indemnification shall be made by the Company under this Section unless and until the aggregate amount of all Losses of the Company in respect thereof shall exceed $5,000.

6.2.2          Indemnification Procedure.

          (a)        An indemnified party shall notify the indemnifying party of any claim of such indemnified party for indemnification under this Agreement within thirty days (30) of the date on which such indemnified party or an executive officer or representative of such indemnified party first becomes aware of the existence of such claim.  Such notice shall specify the nature of such claim in reasonable detail and the indemnifying party shall be given reasonable access to any documents or properties within the control of the indemnified party as may be useful in the investigation of the basis for such claim.  The failure to so notify the indemnifying party within such thirty-day (30) period shall not constitute a waiver of such claim but an indemnified party shall not be entitled to receive any indemnification with respect to any additional loss that occurred as a result of the failure of such person to give such notice.

 

In the event any indemnified party is entitled to indemnification hereunder based upon a claim asserted by a third party (including a claim arising from an assertion or potential assertion of a claim for Taxes), the indemnifying party shall be given prompt notice thereof, in reasonable detail. The failure to so notify the indemnifying party shall not constitute a waiver of such claim but an indemnified party shall not be entitled to receive any indemnification with respect to any Loss that occurred as a result of the failure of such person to give such notice.  The indemnifying party shall have the right (without prejudice to the right of any indemnified party to participate at its expense through counsel of its own choosing) to defend or prosecute such claim at its expense and through counsel of its own choosing if it gives written notice of its intention to do so not later than twenty (20) days following notice thereof by the indemnifying party or such shorter time period as required so that the interests of the indemnified party would not be materially prejudiced as a result of its failure to have received such notice; provided, however, that if the defendants in any action shall include both an indemnifying party and an indemnified party and the indemnified party shall have reasonably concluded that counsel selected by the indemnifying party has a conflict of interest because of the availability of different or additional defenses to the indemnified party, the indemnified party shall have the right to select separate counsel to participate in the defense of such action on its behalf, at the expense of the indemnifying party.  If the indemnifying party does not so choose to defend or prosecute any such claim asserted by a third party for which any indemnified party would be entitled to indemnification hereunder, then the indemnified party shall be entitled to recover from the indemnifying party, on a monthly basis, all of its attorneys’ reasonable fees and other costs and expenses of litigation of any nature whatsoever incurred in the defense of such claim.  Notwithstanding the assumption of the defense of any claim by an indemnifying party pursuant to this paragraph, the indemnified party shall have the right to approve the terms of any settlement of a claim (which approval shall not be unreasonably withheld).

 

  

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          (b)        The indemnifying party and the indemnified party shall cooperate in furnishing evidence and testimony and in any other manner which the other may reasonably request, and shall in all other respects have an obligation of good faith dealing, one to the other, so as not to unrea­sonably expose the other to an undue risk of loss.  The indemnified party shall be entitled to reimbursement for out-of-pocket expenses reasonably incurred by it in connec­tion with such cooperation.  Except for fees and expenses for which indemnification is provided pursuant to Section 6.3, as the case may be, and as provided in the preceding sentence, each party shall bear its own fees and expenses incurred pursuant to this paragraph (b).

ARTICLE 7

MISCELLANEOUS

7.1          Expenses.  Except as otherwise specifically provided for herein, whether or not the transactions contemplated hereby are consummated, each of the Parties hereto shall bear the cost of all fees and expenses relating to or arising from its compliance with the various provisions of this Agreement and such Party’s covenants to be performed hereunder, and except as otherwise specifically provided for herein, each of the Parties hereto agrees to pay all of its own expenses (including, without limitation, attorneys and accountants’ fees and printing expenses) incurred in connection with this Agreement, the transactions contemplated hereby, the negotiations leading to the same and the preparations made for carrying the same into effect, and all such fees and expenses of the Parties hereto shall be paid prior to Closing.

7.2          Any notice, request, instruction or other document required by the terms of this Agreement, or deemed by any of the parties hereto to be desirable, to be given to any other party hereto shall be in writing and shall be delivered by facsimile or overnight courier to the following addresses:

If to Purchaser:

Xinghui Ltd.

78 Dres Voeux Rd

Central Hong Kong China

Attn. Tsang Yin Chiu

Telephone:  _______________

Facsimile:  _______________

Email: _______________

If to the Company:

Biopack Environmental Solutions, Inc.

Room 1302, 13/F, Enterprise Center

4 Hart Avenue

Tsim Sha Tsui, Kowloon, Hong Kong

Attn:

Telephone: _______________

Facsimile:  _______________

 

The persons and addresses set forth above may be changed from time to time by a notice sent as aforesaid.  Notice shall be conclusively deemed given at the time of delivery if made during normal business hours, otherwise notice shall be deemed given on the next business day.

 

  

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7.3          Entire Agreement.  This Agreement, together with the schedules and exhibits hereto, sets forth the entire agreement and understanding of the Parties hereto with respect to the transactions contemplated hereby, and supersedes all prior agreements, arrangements and understandings related to the subject matter hereof.  No understanding, promise, inducement, statement of intention, representation, warranty, covenant or condition, written or oral, express or implied, whether by statute or otherwise, has been made by any Party hereto which is not embodied in this Agreement, or exhibits hereto or the written statements, certificates, or other documents delivered pursuant hereto or in connection with the transactions contemplated hereby, and no Party hereto shall be bound by or liable for any alleged understanding, promise, inducement, statement, representation, warranty, covenant or condition not so set forth.

7.4          Survival of Representations.  All statements of fact (including financial statements) contained in the schedules, the exhibits, the certificates or any other instrument delivered by or on behalf of the Parties hereto, or in connection with the transactions contemplated hereby, shall be deemed representations and warranties by the respective Party hereunder.  All representations, warranties, agreements, and covenants hereunder shall survive the Closing and remain effective regardless of any investigation or audit at any time made by or on behalf of the Parties or of any information a Party may have in respect thereto. Consummation of the transactions contemplated hereby shall not be deemed or construed to be a waiver of any right or remedy possessed by any Party hereto, notwithstanding that such Party knew or should have known at the time of Closing that such right or remedy existed.

7.5          Incorporated by Reference.  All documents (including, without limitation, all financial statements) delivered as part hereof or incident hereto are incorporated as a part of this Agreement by reference.

7.6          Remedies Cumulative.  No remedy herein conferred upon any Party is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise.

7.7          Execution of Additional Documents.  Each Party hereto shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby.

7.8          Finders’ and Related Fees.  Each of the Parties hereto is responsible for, and shall indemnify the other against, any claim by any third party to a fee, commission, bonus or other remuneration arising by reason of any services alleged to have been rendered to or at the instance of said Party to this Agreement with respect to this Agreement or to any of the transactions contemplated hereby.

7.9          Governing Law.  This Agreement has been negotiated and executed in the State of Texas and shall be construed and enforced in accordance with the laws of such state.

 

  

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7.10        Forum.  Each of the Parties hereto agrees that any action or suit which may be brought by any Party hereto against any other Party hereto in connection with this Agreement or the transactions contemplated hereby may be brought only in a federal or state court in Fort Bend County, Texas.

7.11        Attorneys’ Fees.  Except as otherwise provided herein, if a dispute should arise between the Parties including, but not limited to arbitration, the prevailing Party shall be reimbursed by the nonprevailing Party for all reasonable expenses incurred in resolving such dispute, including reasonable attorneys’ fees exclusive of such amount of attorneys’ fees as shall be a premium for result or for risk of loss under a contingency fee arrangement.

7.12        Binding Effect and Assignment.  This Agreement shall inure to the benefit of and be binding upon the Parties hereto and their respective heirs, executors, administrators, legal representatives and assigns.

7.13        Third Party Beneficiary.  The Preferred Stock Purchaser is a third party beneficiary under this Agreement.  Except as to the Preferred Stock Purchaser, this Agreement is not intended to and does not confer any rights on any third party, and no such third party shall be a third party beneficiary under or in respect of this Agreement.

7.14        Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  In making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart.

[Remainder of page intentionally left blank; signatures to follow]

 

  

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first written hereinabove.

 

	

“Purchaser”

	 	

“Company”

	 
	  	 	  	 
	

Xinghui Ltd.,

	 	

Biopack Environmental Solutions, Inc.

	 
	

a Chinese entity

	 	

a Nevada corporation

	 
	  	 	  	 
	By:	

/s/ Tsang Yin Chiu

	 	By:	

/s/ Gerald Lau 

	 
	 	
Tsang Yin Chiu

	 	 	
Gerald Lau

	 
	 	 	 	 	
President

	 

 

  

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Exhibit A

Form of Notice of Exercise

The undersigned, the holder of the option under that certain Subsidiary Acquisition Option Agreement to sell 100% of the shares of  the BPAC Subsidiaries (“Subsidiary Shares”) to Xinghui Ltd., in exchange for the Purchase Price, hereby irrevocably elects to exercise its right to sell  the Subsidiary Shares to Xinghui Ltd., in exchange for the Purchase Price.

 

	Dated: __________, 20___	
By:

	 	 
	  	
Its: 

	 	 

 

  

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Exhibit B

Assumption of Liabilities

 

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