BIOPACK ENVIRONMENTAL SOLUTIONS INC.
FACTORY LEASING AGREEMENT
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>exhibit10-2.htm
<DESCRIPTION>FACTORY LEASING AGREEMENT
<TEXT>
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   <TITLE>Filed by Automated Filing Services Inc. (604) 609-0244 - Biopack Environmental Solutions Inc. - Exhibit 10.2</TITLE>
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<P align=center><B><U>Factory Leasing Agreement</U></B><B> </B></P>
Party A: Chen Jin Yao (Identity card number: 440721570929731)<br>
Party B: &#27743;&#38376;&#24066;&#27963;&#24605;&#29615;&#20445;&#21253;&#35013;&#21046;&#21697;&#26377;&#38480;&#20844;&#21496;
(Jiangmen) Roots Biopack Company Ltd</p>
<P align=justify>Agreement between Party A and Party B for Party B&#146;s leasing of
Party A&#146;s industrial premises and dormitory located in Duruan Tingyuan
Industrial Area, Duruan Town, Pengjian District, Jiangmen City is made on the
basis of fairness, equality and mutual benefit and in accordance with the
&#147;Contract Law of the People&#146;s Republic of China&#148;. Both parties are to abide by
the terms and conditions stipulated under the agreement. </P>
<P align=justify>I.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;Lease Period and Conditions of the aforesaid premises</P>
<TABLE
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  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>The lease term is 15 years commencing from the date of
      signing this Contract (i.e. from 1<SUP>st </SUP>March 2007 to 29 February
      2022). When the lease period expires, Party B shall have the priority to
      renew the lease.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P align=justify>The premises shall be handed over to Party B15 days after
      the signing of this Contract. At the time of handover, the Parties shall
      state and confirm the handover checklist as an annex of this Contract.
      Party A shall provide all inspection certificates of the premises and
      attached facilities, ensuring all facilities are in good conditions and
      fulfill general purpose of usage.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3. </TD>
    <TD>
      <P align=justify>All factories (Four blocks), dormitories (three blocks),
      all first floor shops, second floor office, entrance, toilets, garage,
      storing shelter and all (open) land, substation, transformer (315kW), a
      set of kitchen stove are leased to Party B. (factory areas, garage,
      dormitory are all equipped with water, electricity, fire prevention and
      fire fighting equipment, and thunder attack prevention
  facilities).</P></TD></TR></TABLE>
<P align=justify>II.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Due
Date and Payment Method of Rent and Deposit </P>
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  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>Party B shall on the signing hereof deposit with Party A
      the sum of RMB100,000.00 as partial rental deposit. Party B shall further
      deposit with Party A the sum of RMB209,000.00 before 5 March 2007 as the
      balance of 3 months&#146; rental deposit (three months&#146; rental deposit equals
      to RMB309,000.00). The rental deposit shall be refunded to Party B by
      Party A without interest upon the expiration of the lease.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P align=justify>Monthly rent shall be RMB103,000.00. For the period from
      the first to the fifth year, monthly rent shall be RMB103,000.00 (RMB One
      Hundred and Three Thousand Only), total annual rent shall be
      RMB1,236,000.00 (RMB One Million Two Hundred and Thirty Six Thousand
      Only).</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>From the sixth year (1 March 2012) onward, the rent shall
      be increased by 5% every 3 years. i.e. From 1 March 2012 to 30 February
      2015, annual rent shall be RMB1,297,800.00 (RMB One Million Two Hundred
      Ninety Seven Thousand and Eight Hundred Only), monthly rent shall be
      RMB108,150.00 (RMB One Hundred Eight Thousand One Hundred and Fifty
      Only).</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>From 1 March 2015 to 30 February 2018, annual rent shall
      be RMB 1,362,690.00 (One Million Three Hundred Sixty Two Thousand Six
      Hundred and Ninety Only),</P></TD></TR></TABLE>
<P align=center>1</P>
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    <TD width="5%"  >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>monthly rent shall be RMB 113,557.50 (RMB One Hundred
      Thirteen Thousand Five Hundred Fifty Seven and Fifty Cents
Only).</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>From 1 March 2018 to 30 February 2022, annual rent shall
      be RMB1,430,824.50 (RMB One Million Four Hundred Thirty Thousand Eight
      Hundred Twenty Four and Fifty Cents Only), monthly rent shall be
      RMB119,235.80 (RMB One Hundred Nineteen Thousand Two Hundred Thirty Five
      and Eighty Cents Only).</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3. </TD>
    <TD>
      <P align=justify>Party B shall pay Party A the rent on or before 15<SUP>th
      </SUP>of each month. If Party B delays the payment of rent, in
      contradiction to this contract, for a period of 15 days or more), Party B
      shall pay monthly rate of 5% on the total overdue rent as penalty. If the
      rent is overdue for more than 60 days, Party A shall have the right to
      terminate this Contract. Tax is not included in the annual rents stated
      above and Party B shall be responsible for all tax payable).</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4. </TD>
    <TD>
      <P align=justify>In order to encourage investor, Party A grants a
      rent-free period of 2 months for Party B to carry out renovation. The
      rent-free period shall be from 1 March 2007 to 31 April 2007. Party B
      shall pay Party A the rent commencing from 1 May
2007.</P></TD></TR></TABLE>
<P align=justify>III.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Rights and
Obligations of The Parties </P>
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  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>(Party A) Shall guarantee the lawful ownership of the
      premises and dormitories as listed in Item I of this Contract. (If Party B
      suffers any loss due to the disputes on ownership of the aforesaid
      premises and dormitories, Party A shall bear full responsibilities and
      liabilities.)</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P align=justify>Party B shall take good care of the aforesaid premises
      and facilities within the lease period. If Party B wants to construct
      additional structures on the open area or inside the factory buildings,
      Party B shall obtain the consent from Party A in advance. However, if
      renovation, alteration, addition of structures and facilities are required
      for normal production or daily life, Party A shall grant the approval to
      Party B. Party B shall indemnify the cost for repairing damages caused
      deliberately. If the lease is not renewed upon the expiration, Party B
      shall return the premises and attached facilities (all buildings including
      additional ones) within the factory areas to Party A in intact conditions
      (fair wear and tear excepted).</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3. </TD>
    <TD>
      <P align=justify>Party A shall be responsible for connecting the water and
      electricity of the premises and dormitory to the respective municipal
      network . Party B shall be responsible for the charges on water and
      electricity usage during lease period.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4. </TD>
    <TD>
      <P align=justify>Throughout the lease period, Party A shall be responsible
      for repair and maintenance of the main structure of the leased premises,
      dormitories and infrastructure facilities. Party B shall be responsible
      for keeping, repairing, maintaining and managing the non-structural parts
      of the leased premises, dormitory and ancillary facilities regularly at
      the expense of Party B.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">5. </TD>
    <TD>
      <P align=justify>Throughout the lease period, Party B shall be entitled to
      using the premises and dormitories, but Party A shall be the owner. In any
      circumstances, the movable facilities invested by Party B shall be owned
      by Party B.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">6. </TD>
    <TD>
      <P align=justify>Party A shall mainly be responsible for leasing of the
      factory, facilities and land. Party A shall not be liable for any debt,
      safety incidents, civil disputes related to Party
B.</P></TD></TR></TABLE>
<P align=center>2</P>
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  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">7. </TD>
    <TD>
      <P align=justify>Party B shall be responsible for the sewage fee, security
      fee, hygiene fee, garbage fee, cleaning fee, factory and land tax in the
      course of business operation.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">8. </TD>
    <TD>
      <P align=justify>Throughout the lease period, Party B shall educate their
      staff to observe local rules on birth planning, hygiene, public security,
      safe production, and cooperate with local government and its executive
      departments on birth planning.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">9. </TD>
    <TD>
      <P align=justify>If Party B intends to sublet the premises and dormitories
      after leasing, he shall seek written consent from Party A and subject to
      not violating the principle of this Contract. Otherwise, all
      responsibilities shall be born by Party B. The consequence of subletting
      shall not relate to Party A, Party B shall remain liable to Party A under
      this Contract.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">10. </TD>
    <TD>
      <P align=justify>If Party B shall be desirous of renewing the lease of the
      factory on expiration of the term hereby created, Party B shall 90 days
      prior to the expiration of the present term give to Party A notice in
      writing of such intention. If Party B does not intend to renew, Party B
      shall notify Party A 90 days prior to the expiration of the present term
      and shall remove all machineries owned by Party B within 30 days after the
      expiration of the present term. The water and electricity facilities
      installed by Party B shall be owned by Party A.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">11. </TD>
    <TD>
      <P align=justify>During the lease period, withdrawal of Party B due to
      business operation or of his own accord shall be deemed as breach of this
      Contract (except due to government action). In this event, the 3 months&#146;
      rental deposit shall not be refunded by Party A. This Contract shall be
      terminated immediately.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">12. </TD>
    <TD>
      <P align=justify>During the lease period, when inevitable natural
      disaster, factors concerning the Government, or social factors cause Party
      B not to be able to continue the production, this Contract shall be
      terminated through mutual agreement of the Parties, rent shall be
      calculated according to actual days of occupancy. The Parties shall not be
      responsible for anything.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">13. </TD>
    <TD>
      <P align=justify>Prior to the expiration of the lease period, the
      compensation payment given to Party A due to collection of properties by
      the government, shall belong to Party A and the compensation payment given
      to Party B shall belong Party B. No party shall interfere.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">14. </TD>
    <TD>
      <P align=justify>Throughout the lease period, if Party A wants to sell the
      premises leased to Party B, Party A is required to inform Party B 90 days
      in advance, Party B shall have the priority to purchase on the same terms.
      Transferal (including grant, succession) of the premises by Party A shall
      not affect the validity of this Contract, transferee of the premises (new
      owner) shall continue to perform this Contract with Party
  B.</P></TD></TR></TABLE><BR>
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  <TR>
    <TD vAlign=top width="5%">IV. </TD>
    <TD>
      <P align=justify>The Parties agree, upon signing of this Contract, that
      Party B deposit with Party A the sum of RMB100,000 as rental deposit.
      Party A agrees to obtain consent from Mortgagor regarding this lease
      arrangement in this Contract. After that (submit the certificate of
      agreement on the lease from Jiangmen Duruan Credit Cooperatives), Party B
      shall appoint lawyer to carry out land search of the premises within 10
      days (Party A shall provide necessary cooperation). If the land search
      proves that Party A have the ownership of the premises and lawfully able
      to lease the premises to Party B, then the Parties shall continue to
      perform this Contract. Otherwise, Party A shall return Party B the paid
      deposit, rescind the Contract and the Parties shall not perform under the
      Contract.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">V. </TD>
    <TD>
      <P align=justify>Dispute Resolution</P></TD></TR></TABLE>
<P align=center>3</P>
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  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>When any disputes arise out of the performance or the
      interpretation of this Contract, the Parties shall resolved by mutual
      agreement .If the Parties fail to agree, any party may submit the matter
      to the People&#146;s Court where this Contract is signed or to the People&#146;s
      Court where the Parties are located.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P align=justify>During the time of disputes, the Parties shall continue
      to perform under the conditions (except the issues in dispute) of this
      Contract.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3. </TD>
    <TD>
      <P align=justify>The Parties may supplement this Contract by agreement on
      any items which are not covered by this Contract. The supplementary
      agreement shall have the same legal effect as this Contract.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4. </TD>
    <TD>
      <P align=justify>This Contract shall be effective upon signing by the
      Parties.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">5. </TD>
    <TD>
      <P align=justify>2 copies of this contract were made. Each party retains 1
      copy.</P></TD></TR></TABLE>
<P>&nbsp;</P>
<P><BR>&nbsp;</P>
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  <TR vAlign=top>
    <TD align=left>Party A: </TD>
    <TD align=left width="50%">Party B: </TD></TR>
  <TR vAlign=top>
    <TD align=left>Legal representative: </TD>
    <TD align=left width="50%">Legal representative: </TD></TR>
  <TR vAlign=top>
    <TD align=left>Representative: </TD>
    <TD align=left width="50%">Representative: </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>Date: 1 March 2007 </TD>
    <TD align=left width="50%">Date: 1 March 2007 </TD></TR></TABLE>
<P align=center>4</P>
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