AGREEMENT WITH RESPECT TO OBLIGATIONS
This
Agreement with Respect to Obligations (the “Agreement”), dated effective as of
March 10, 2006 (the “Effective Date”), is between BIO-ONE
CORPORATION,
a
Nevada corporation (“Debtor”), and CSI
BUSINESS FINANCE, INC., a
Florida
corporation (“CSI”), on behalf of itself and as agent for Cornell Capital
Partners, L.P. (in such capacity, “Agent”).
WITNESSETH:
WHEREAS,
Debtor
and Cornell Capital Partners, L.P. (“Cornell”) are parties to that certain
Securities Purchase Agreement dated March 29, 2004 (the “Purchase
Agreement”);
WHEREAS,
Debtor
was originally indebted to Cornell pursuant to (i) that certain promissory
note
dated October 21, 2004 in the original principal amount of $200,000 (“Cornell
Note One”), (ii) that certain promissory note dated November 18, 2004 in the
original principal amount of $300,000 (“Cornell Note Two”), and (iii) that
certain Secured Debenture dated March 26, 2004 in the original principal amount
of $15,000,000 issued pursuant to the Purchase Agreement (the “Cornell
Debenture”);
WHEREAS, the
obligations of Debtor to Cornell were secured by all of the assets of Debtor
pursuant to that certain Security Agreement between Debtor and Cornell (the
“Security Agreement”) and by all of the Class A Common Shares of Debtor’s
subsidiary, Interactive Nutrition International, Inc. (the “INII Stock”),
pursuant to that certain Pledge Agreement between Debtor and Cornell (the
“Pledge Agreement”);
WHEREAS,
the
proceeds of the loan from Cornell to Debtor were used in part to finance the
purchase of INII by Debtor and to finance the purchase by Debtor of a 51%
ownership interest in Weifang Shengtai Pharmaceuticals Co., Ltd., a company
organized under the laws of the People’s Republic of China (“WSP”);
WHEREAS,
Cornell
Note One, Cornell Note Two and $8,500,000 of the amounts outstanding under
the
Cornell Debenture (the “CSI Portion of the Cornell Debenture”), along with the
rights of Cornell under the Purchase Agreement relating to the CSI Portion
of
the Cornell Debenture, have been transferred and assigned by Cornell to
CSI;
WHEREAS,
Debtor
is obligated to CSI pursuant to that certain Amended and Restated Unsecured
Promissory Note dated as of September 9, 2005 in the principal amount of
$600,000 (the “CSI Note”);
WHEREAS,
Debtor
is in default of its obligations under the Purchase Agreement, the Cornell
Debenture, Cornell Note One and Cornell Note Two and all amounts under the
Cornell Debenture, Cornell Note One and Cornell Note Two are now due and
payable;
-1-
WHEREAS,
Cornell
has authorized CSI to enter into this Agreement on its behalf and to bind
Cornell to the terms and conditions contained herein;
WHEREAS,
Debtor
has agreed to transfer and assign to CSI the INII Stock and the proceeds from
the liquidation of Debtor’s interest in WSP in exchange for the forgiveness by
CSI and Cornell of all obligations under the Purchase Agreement, the Cornell
Debenture, Cornell Note One, Cornell Note Two, the Cornell Debenture and the
CSI
Note (collectively, the “Debtor’s Debt Obligations to CSI and Cornell”), and
CSI, on its own behalf and as Agent, has agreed to accept the assignment of
the
INII Stock and the proceeds from the liquidation of Debtor’s interest in WSP in
exchange for the foregoing, all pursuant to the terms hereof;
NOW,
THEREFORE,
in
consideration of the premises and agreements contained herein, Debtor and CSI,
on behalf of itself and as Agent, hereby agree as follows:
Section
1. Assignment
of INII Stock.
Debtor
hereby transfers, conveys and assigns the INII Stock to CSI, which stock is
represented by certificate No. A-5, representing 101 shares of Class A Common
Shares of Interactive Nutrition International Inc. Debtor represents that Debtor
is the record and beneficial owner of the INII Stock and has not transferred,
pledged or otherwise conveyed any interest in the INII Stock other than pursuant
to the Pledge Agreement, and that other than with respect to the lien granted
pursuant to the Pledge Agreement, Debtor owns the INII Stock free and clear
of
all liens, claims or encumbrances. Debtor agrees to endorse the back of the
certificate representing the INII Stock or execute a stock power so that record
ownership of the INII Stock can be transferred to CSI. In addition, Debtor
hereby transfers, conveys and assigns to CSI all of its interest in WSP
including, but not limited to, the proceeds from the liquidation of such
interest (the “WSP Interest”). In consideration of the foregoing, CSI, on its
own behalf and as Agent, hereby releases Debtor from all obligations under
Debtor’s Debt Obligations to CSI and Cornell. Furthermore, in clarification of
the foregoing, CSI, on its own behalf and as Agent, accepts the INII Stock
and
the WSP Interest in full satisfaction of all obligations of Debtor to CSI and
Cornell secured by the INII Stock, the WSP Interest and all other collateral
pledged to Cornell pursuant to the Security Agreement and the Pledge
Agreement.
Section
2. Confirmation
by Debtor.
Debtor
hereby confirms that it has no valid offsets, setoffs or counterclaims against
CSI or Cornell with respect to Debtor’s Debt Obligations to CSI and
Cornell.
Section
3. Release.
Debtor
hereby releases, remises, acquits and forever discharges CSI and Cornell,
together with their respective employees, agents, representatives, consultants,
attorneys, fiduciaries, servants, officers, directors, partners, predecessors,
successors and assigns, subsidiary corporations, parent corporations, and
related corporate divisions (all of the foregoing hereinafter called the
“Released
Parties”),
from
any and all actions and causes of action, judgments, executions, suits, debts,
claims, demands, liabilities, obligations, damages and expenses of any and
every
character, known or unknown, direct and/or indirect, at law or in equity, of
whatsoever kind or nature, whether heretofore or hereafter accruing, for or
because of any matter or things done, omitted or suffered to be done by any
of
the Released Parties prior to and including the date hereof, and in any way
directly or indirectly arising out of or in any way connected to Debtor’s Debt
Obligations to CSI and Cornell, any security or pledge instrument executed
in
connection therewith, and this Agreement. THE
FOREGOING RELEASE INCLUDES ACTIONS AND CAUSES OF ACTION, JUDGMENTS, EXECUTIONS,
SUITS, DEBTS, CLAIMS, DEMANDS, LIABILITIES, OBLIGATIONS, DAMAGES AND EXPENSES
ARISING AS A RESULT OF THE NEGLIGENCE OF ONE OR MORE OF THE RELEASED
PARTIES.
-2-
Section
4. Reaffirmation
of Security Agreement and Pledge Agreement.
Debtor
does hereby confirm the validity of the security interest created pursuant
to
the Security Agreement and Pledge Agreement through the date of the execution
of
this Agreement.
Section
5. Additional
Provisions.
2.01 Governing
Law.
This
Agreement shall be construed in accordance with the laws of the State of Texas.
2.02 Recitals.
Each of
the parties hereby confirms that the recitals to this Agreement are true and
correct and are a part of and incorporated into this Agreement for all
purposes.
2.03 Severability.
If any
provision of this Agreement, or the application thereof to any person or
circumstance, shall, for any reason and to any extent, be invalid or
unenforceable, the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected thereby,
but
rather shall be enforced to the greatest extent permitted by applicable
law.
2.04 Binding
Agreement.
This
Agreement shall be binding upon the successors and assigns of the parties
hereto.
2.05 Counterparts.
This
Agreement may be executed in any number of counterparts; each of which shall
be
deemed an original and all of which together shall be construed as one and
the
same instrument.
2.06 No
Oral Agreements.
This
Amendment embodies the final, entire agreement among the parties hereto. There
are no oral agreements among the parties hereto.
(Remainder
of Page Intentionally Left Blank)
-3-
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement on this 10th
day of
March, 2006, effective as of the date and year first above written.
| BIO-ONE CORPORATION | |||
| |
|
|
|
| By: | /s/ Xxxxxx X. Xxxxxx | ||
|
|
|||
| Name: | Xxxxxx X. Xxxxxx | ||
|
|
|||
| Title: | Chief Restructuring Officer | ||
|
|
|||
|
on
its own behalf and as Agent
|
|||
| |
|
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxxx | ||
|
|
|||
| Name: | Xxxxxxx X. Xxxxxxxx | ||
|
|
|||
| Title: | Chief Executive Officer | ||
|
|
|||
-4-
