Document:

exhibit_10-12.htm

EXHIBIT 10.12

 

MEMORANDUM OF AGREEMENT FOR STRATEGIC RELATIONSHIP

 

THIS MEMORANDUM OF AGREEMENT FOR STRATEGIC RELATIONSHIP ("MOA") DATED AS OF AUGUST 19, 2011 AND BY AND BETWEEN ADVANCED MEDICAL ISOTOPE CORPORATION, A DELAWARE CORPORATION ("AMIC") AND SPIVAK MANAGEMENT INC., A CALIFORNIA CORPORATION ("SMI") SETS FORTH THE TERMS OF A STRATEGIC RELATIONSHIP AMONG AMIC, SMI AND MANN HEALTHCARE PARTNERS INC., A DELAWARE CORPORATION ("MHP") AND IS ENTERED INTO ON THE FOLLOWING TERMS:

 

WHEREAS

 

	
A.

	
Through a joint venture with SMI and SMI's relationship with MHP, SMI and MHP will assist AMIC with: (1) strategic advice, (2) deal-specific advice and assistance, (3) board representation, and (4) introductions to potential investors.

 

	
B.

	
The initial use of proceeds will consist of funds to initiate purchase of a stable isotope company identified by AMIC (the "Initial Target"), operating overhead for AMIC and pre­payment of SMI's and MHP's expenses to assist AMIC.

 

NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:

 

	
1.

	
AMIC and SMI hereby agree to form a joint venture (the "Venture"), through which SMI, directly and through SMI's relationship with MHP, will provide management and consulting services to AMIC in forming and implementing its commercial and growth strategies, participate in structuring and negotiating acquisitions and ventures and introduce AMIC to potential investors and investment bankers. Neither SMI nor MHP will perform or provide any services for which a license is required, including, without limitation, investment banking or law. MHP also will provide advice directly to the Venture and AMIC through a consulting agreement described below. The Venture will be terminable by either AMIC or SMI if the introduction described in the first sentence of Section 2 does not occur within two months after the date the Information Confirmation (as defined in Section 2) occurs (such outside date, the "Introduction Date"). If either AMIC or SMI terminates the Venture, thereafter the parties will have no further obligations to each other, except as otherwise provided for herein. The foregoing termination right is the sole remedy available to either party for the fact that an introduction described in Section 2 does not occur.

 

	
2.

	
Commencing promptly after formation of the Venture and confirmation of the financial information of the Initial Target to the summary financial information presented by AMIC (the "Information Confirmation"), MHP will introduce AMIC to an entity or entities prepared to invest from $1.2 million to $2 million into AMIC. The terms and conditions of any investment are in the discretion of AMIC and the investor(s). The initial use of proceeds will consist of funds to initiate purchase of the Initial Target, operating overhead for AMIC and pre­payment of SMI's expenses to assist AMIC, as described in Section 3 below. The parties recognize that AMIC may also have to pay stock or by means of an earn-out or other similar consideration for the Initial Target. Except with respect to the termination right provided in Section 1 above, no party hereto makes any representation or warranty regarding when or whether the introduction described in this Section 2 or any other introduction will occur. SMI represents to AMIC that it has been advised by MHP that MHP is optimistic about making the introduction described in this Section 2, though MHP has not guaranteed any particular introduction or the outcome thereof, and the parties acknowledge that MHP's perspective is based upon the summary financial information presented by AMIC.

  

Page 1 of 10

  

 

 

	
3.

	
If AMIC accepts the investment, AMIC will contribute to the Venture a fee to be paid to SMI of $75,000 and the sum of $200,000 as a pre-payment of SMI's and MHP's expenses with respect to the Venture ("Initial Fee"). If fees, costs and expenses incurred, paid or payable by SMI and/or MHP with respect to the Venture are less than $200,000, SMI will reimburse the excess to AMIC following completion of financing activities. If fees, costs and expenses incurred, paid or payable by SMI and/or MHP with respect to the Venture exceed $200,000 but are less than $275,000, reimbursement of such fees, costs and expenses above $200,000 (and not to exceed $75,000) will be deferred and paid from the next financing after the $1.2 million financing. If fees, costs and expenses incurred, paid or payable by SMI and/or MHP with respect to the Venture exceed $275,000, the amount above $275,000 will be reimbursed by AMIC as incurred. In the event SMI and/or Ted Maloney is requested to assist AMIC prior to the payment of the Initial Fee and SMI and/or Maloney agree to so assist AMIC, then all expenses related to such assistance will be advanced by AMIC and shall be deducted from the Initial Fee. SMI shall be entitled to select class of travel and hotel with respect to any requested travel.

 

	
4.

	
If so requested by SMI, legal work on matters undertaken in furtherance of the Venture and related AMIC acquisitions and transactions will be handled by the law firm of SML LLP on the financial terms typically charged by SML LLP for such work, unless otherwise requested by AMIC as required or advantageous to AMIC under the circumstances and consented to by SMI, such consent not to be unreasonably withheld. The parties hereto hereby acknowledge that Kenin M. Spivak ("Spivak"), an officer and director of SMI, and Ted Maloney, a partner of MHP, also are partners in SML LLP.

 

	
5.

	
In consideration of SMI's and MHP's respective time, efforts and contributions to the Venture, AMIC will sell to Spivak as SMI's designee 5,033,333 warrants (the "Spivak Warrants") and to MHP and its designees 15,100,000 warrants (the "MHP Warrants" and, together with the Spivak Warrants, the "Warrants"). The Warrants will be subject to forfeiture as described below. MHP may assign the MHP Warrants to MHP affiliates or partners and if it does so, all forfeitures will apply ratably to all MHP Warrants held by each holder unless MHP otherwise advises AMIC and SMI by written notice at the time of its assignment of the MHP Warrants to implement a non-ratable forfeiture that totals the same number of total Warrants at all levels of forfeiture. Except for such assignments and assignments to affiliates (including intervivos trusts or other entities formed for estate planning purposes), spouses or by inheritance or intestacy, neither the Spivak Warrants nor the MHP Warrants are assignable. Whether or not they execute a joinder agreement to this Agreement, all such assignees take Warrants subject to the terms of this Agreement, and all certificates or other documents representing the Warrants will contain appropriate legends, including legends referencing this Agreement.

 

	 	
a.

	
If the following capitalization table understates the number of AMIC shares of common stock, options, warrants or convertible securities outstanding, the number of Spivak Warrants and the number of MHP Warrants issued hereunder each will increase by seventeen and one-half percent (17.5%) of that additional number of shares of common stock, options, warrants or convertible securities outstanding. Such additional Warrants will be subject to forfeiture in the same proportions as described below.

 

	 	69,959,896                        shares o/s

9,490,000                          options and warrants o/s

6,567,655                          convertible debt

 

 

 

  

Page 2 of 10

  

 

	 	
b.

	
The initial exercise price of the Warrants will be $.20 per share. The Warrants will have customary weighted average anti-dilution protection, based on a weighted 30-day moving average, for issuances below market and will have a full-ratchet anti-dilution protection for issuances below the then-applicable exercise price.

 

	 	
c.

	
AMIC initially will have the right to require exercise at $1.00 per share, reduced to 500% of the exercise price if the exercise price is reduced by the anti-dilution protection, and reduced or increased to 500% of the adjusted exercise price in the event of an adjustment due to stock split (forward or reverse), stock dividend or other recapitalization transactions.

 

	 	
d.

	
Subject to the forced exercise provision, at the holder's election, exercise will be for cash or cashless.

 

	
6.

	
AMIC will be entitled to a purchase price of one-tenth of one cent per Warrant, provided that AMIC will pay compensation to SMI equal to one-tenth of one cent for each Spivak Warrant and like compensation to MHP for each MHP Warrant, offsetting the purchase price. There will be no refund of the purchase price or compensation if Warrants are forfeited.

 

	
7.

	
Spivak Warrants will be forfeited as follows:

 

	 	
a.

	
3,523,333 warrants are not subject to forfeiture.

 

	 	
b.

	
If AMIC does not enter into contracts acceptable to AMIC by the date two months after the Introduction Date (the "First Determination Date") to secure capital in excess of the $1.2 million described above, the sum of the following number of Warrants will be forfeited:

 

	 	
i.

	
503,333 Warrants, plus

 

	 	
ii.

	
Up to 1,006,667 Warrants as follows: the same percentage of 1,006,667 Warrants as the percentage shortfall between $10 million and $1.2 million.

 

	 	
iii.

	
By way of illustration, if the total capital contracted is $3 million (inclusive of the $1.2 million), then the shortfall is 7/9 (77.78%); 77.78% of 1,006,667 Warrants is 782,963 Warrants. In this example, a total of 1,286,296 Warrants would be forfeited (503,333 + 782,963), leaving 3,747,037 Warrants.

 

	 	
c.

	
If AMIC does not enter into contracts acceptable to AMIC by the date five months after the Introduction Date (the "Second Determination Date") to secure capital in excess of $10 million of capital, the following number of Warrants will be forfeited: the same percentage of 503,333 Warrants as the percentage shortfall between $30 million and $10 million. By way of illustration, if the total capital contracted is $20 million (inclusive of the $10 million), then the shortfall is 50%; 50% of 503,333 Warrants in the example above is 251,667 Warrants. In this example, a total of 251,667 Warrants would be forfeited, leaving 4,781,667 Warrants.

  

Page 3 of 10

  

 

 

	 	
d.

	
As it relates to forfeiture, references to contracts include memoranda of understanding, provided that within 90 days thereafter the memorandum is succeeded by a definitive agreement and/or a completed financing.

 

	
8.

	
MHP Warrants will be forfeited as follows:

 

	 	
a.

	
3,523,333 warrants are not subject to forfeiture.

 

	 	
b.

	
If AMIC does not enter into contracts acceptable to AMIC by the First Determination Date to secure capital in excess of the $1.2 million described above, the sum of the following number of Warrants will be forfeited:

 

	 	
i.

	
3,523,333 Warrants, plus

 

	 	
ii.

	
Up to 8,053,333 Warrants as follows: the same percentage of 8,053,333 Warrants as the percentage shortfall between $10 million and $1.2 million.

 

	 	
iii.

	
By way of illustration, if the total capital contracted is $3 million (inclusive of the $1.2 million), then the shortfall is 7/9 (77.78%); 77.78% of 8,053,333 Warrants is 6,263,704 Warrants. In this example, a total of 9,787,037 Warrants would be forfeited (3,523,333 + 6,263,704), leaving 5,312,963 Warrants.

 

	 	
c.

	
If AMIC does not enter into contracts acceptable to AMIC by the Second Determination Date to secure capital in excess of $10 million of capital, the following number of Warrants will be forfeited: the same percentage of 3,523,333 Warrants as the percentage shortfall between $30 million and $10 million. By way of illustration, if the total capital contracted is $20 million (inclusive of the $10 million), then the shortfall is 50%; 50% of 3,523,333 Warrants in the example above is 1,761,667 Warrants. In this example, a total of 1,761,667 Warrants would be forfeited, leaving 13,338,333 Warrants.

 

	 	
d.

	
As it relates to forfeiture, references to contracts include preliminary documents such as memoranda of understanding, provided that within 90 days thereafter the preliminary document is succeeded by a definitive agreement and/or a completed financing.

 

	
9.

	
SMI will be entitled to designate one board member. SMI may from time-to-time remove such member and may from time-to-time designate the successor. SMI, MHP, the board designee and Spivak will be named beneficiaries and insured under AMIC's insurance policies.

 

	
10.

	
Pursuant to this Section 10, AMIC hereby engages SMI as a consultant to AMIC and the Venture, and SMI accepts such engagement as a consultant, to provide the services enumerated as (1), (2) and (3) in Whereas clause A. SMI also will have the rights and any duties specifically designated for SMI in this Agreement. In consideration thereof, SMI will receive the compensation described below in Section 12. AMIC and SMI hereby incorporate herein by this reference SMI's standard consulting agreement terms and conditions to govern such consulting arrangement, a copy of which is attached hereto as an Appendix. This Section 10, the relevant provisions of Sections 12, 13 and 14 and the Appendix constitute the "SMI Agreement" and at SMI's request will be replaced by a stand­alone agreement consistent herewith.

  

Page 4 of 10

  

 

 

	
11. 

	
Within five days after entering into this MOA, AMIC will enter into a consulting agreement (the "MHP Agreement") with MHP on substantially the same terms as the SMI Agreement, except that: (a) MHP will provide board representation only if so designated by SMI, (b) MHP will provide the services enumerated as (1), (2) and (4) in Whereas clause A; (c) SMI (not MHP) will have the approval and designation rights described in this MOA; (d) MHP's compensation terms differ, as described in Section 12, (e) if and during any period SMI designates a representative of MHP to be a director of AMIC, MHP (not SMI) will provide that individual's services as a director; and (f) there will be other differences as specified in this Agreement.

 

	
12. 

	
The annual compensation payable under each of the SMI Agreement and the MHP Agreement will be one-third of the cash and stock compensation payable to the highest compensated executive officer of AMIC in each year and such payments will be made at the same time and in the same manner as payments are made to such officer. The initial term of the MHP Agreement will be three years and the initial term of the SMI Agreement is five years. Each such term will, unless notice of termination is delivered by either party thereto during the 30 days prior to each anniversary date, be automatically extended on such anniversary date for an additional one year.

 

	 	
a.

	
The compensation payable to SMI under the SMI Agreement will be reduced below one-third (33-1/3%) and to a minimum of one-fifth (20%) of the compensation payable to the highest paid executive of AMIC if AMIC contracts for less than $10 million of capital by the date three months after the Introduction Date. The reduction from one-third to one-fifth will be ratable, based on the amount less than $10 million and more than $1.2 million contracted to by AMIC by the date three months after the Introduction Date. By way of illustration, if AMIC contracts for $5 million inclusive of the $1.2 million, the reduction would be 5/9 of the difference between one-third and one-fifth (0.13333), i.e., the reduction would equal the product of 5/9 and 0.1333, which is 0.074 and as a result, SMI would be entitled to be compensated at the rate equal to the difference between 0.3333 and rate of 0.074, which is 25.93% of the compensation payable to AMIC's highest paid executive.

 

	 	
b.

	
The compensation payable under the MHP consulting agreement will be reduced below one-third (33-1/3%) and to a minimum of one-twentieth (5%) of the compensation payable to the highest paid executive of AMIC if AMIC contracts for less than $10 million of capital by the date three months after the Introduction Date. The reduction from one-third to one-twentieth will be ratable, based on the amount less than $10 million and more than $1.2 million contracted for by AMIC by the date three months after the Introduction Date. By way of illustration, if AMIC contracts for $5 million inclusive of the $1.2 million, the reduction would be 5/9 of the difference between one-third and one-twentieth (0.28333), i.e., the reduction would equal the product of 5/9 and 0.28333, which is 0.1574 and as a result, MHP would be entitled to be compensated at the rate equal to the difference between 0.3333 and 0.1574, which is 0.1759, resulting in compensation to MHP equal to 17.59% of the compensation payable to AMIC's highest paid executive.

 

 

 

 

  

Page 5 of 10

  

 

	 	
c.

	
As it relates to forfeiture, references to contracts include memoranda of understanding, provided that within 90 days thereafter the memorandum is succeeded by a definitive agreement and/or a completed financing.

 

	
13.

	
As part of its consulting services to AMIC, SMI will advise AMIC in connection with an identified medical isotope production transaction and an identified transaction (which may be in the form of a commercial, investment, acquisition or other transaction) presented through MHP's relationships. This advice will be included within the compensation structure provided above, provided that if advice is required prior to the pre-payment of expenses to SMI, AMIC will separately pre-pay SMI's expenses with respect thereto and then may deduct such sums from the $275,000 pre-payment of expenses described above.

 

	
14.

	
Except as required by law, all public announcements pertaining to this MOA or made by AMIC pertaining to SMI or MHP shall be mutually approved by AMIC and SMI.

 

	
15.

	
Certain Rules of Construction:

 

	 	
a.

	
Captions and Section Headings. Any captions and section headings appearing in this MOA are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this MOA.

 

	 	
b.

	
No Interpretation Against a Party. Neither this MOA nor any uncertainty or ambiguity in it shall be construed or resolved using any presumption against any party. On the contrary, each party acknowledges that this MOA has been reviewed by its legal counsel and, in the case of any ambiguity or uncertainty, shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intention of the parties.

 

	 	
c.

	
References. Reference to MOA. Any reference to this MOA includes any and all permitted amendments, supplements, extensions, and renewals of this MOA. Any references in this MOA to any document, instrument or agreement (1) shall include all exhibits, appendices, schedules and other attachments thereto, (2) shall include all documents, instruments or agreements issued or executed in replacement thereof if such replacement is permitted hereby or thereby, and (iii) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time to time and in effect at any given time if such amendment, modification or supplement is permitted h

 

	 	
d.

	
Additional Rules of Construction. References in this MOA to "Persons" shall include individuals and legal entities, of whatever form. The words "hereof," "herein" and "hereunder" and words of similar import when used in this MOA shall refer to this MOA as a whole and not to any particular provision of this MOA. Unless the context clearly requires otherwise (1) the plural and singular numbers shall each be deemed to include the other; (2) the masculine, feminine and neuter genders shall each be deemed to include the others; (3) "shall," "will" or "agrees" are mandatory and "may" is permissive; (4) "or" is not exclusive, and (5) "includes" and "including" are not limiting and mean "without limitation."

 

 

 

 

  

Page 6 of 10

  

 

 

 

	 	
e.

	
Other Agreements. In the event of any inconsistency between the terms of this MOA and the terms of any other agreement among the Parties, the terms of the subsequent agreement shall govern.

 

	
16.

	
General Provisions:

 

	 	
a.

	
Further Cooperation. Each party shall promptly execute, acknowledge and deliver, or promptly procure the execution, acknowledgement and delivery, of any and all further certificates, agreements and instruments which may be necessary or expedient to effectuate the purposes of this MOA.

 

	 	
b.

	
Indemnification: AMIC indemnifies and holds harmless SMI, MHP and their shareholders, members, partners, directors, officers, employees, agents, representatives, counsel and their spouses from any claims, costs, judgements, settlements, fees, fines and expenses arising from or related to any alleged acts or omissions to act by AMIC or its agents and representatives, any alleged securities filing, public announcement or information allegedly provided by AMIC or its agents and representatives and any alleged failure by AMIC or its representatives to comply with all laws and regulations applicable to the foregoing.

 

	 	
c.

	
Assignment. Except as set forth herein with respect to payment of amounts to third parties in connection with performance of the services provided for herein and as applicable to the right of SMI and its designees to transfer warrants received as compensation in accordance with applicable securities laws, no party shall have any right, power or ability to assign its rights or benefits or delegate its duties or obligations under this MOA without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. Notwithstanding the first sentence of this section, either party, upon thirty (30) days prior written notice to the other, may assign its rights or delegate its duties or any portion thereof as a matter of right without the consent of the other party to (1) an affiliate of the assignor or (2) a Person succeeding to substantially all of the business of the party effecting such assignment, provided in either case that the assignee specifically assumes all obligations of the assignor party under this MOA, and provided further that the assignor shall continue to remain primarily liable for all obligations (monetary and non-monetary) assumed by the assignee. No party shall have the power to make an assignment in contradiction of this paragraph. Any purported assignment, grant or transfer in contradiction of this MOA shall be void ab initio.

 

	 	
d.

	
No Third-Party Beneficiaries. MHP is an express intended third-party beneficiary of the provisions hereof relating to MHP. Except as described in this MOA, no third Person is a beneficiary of this MOA and no third Person is a guarantor of the performance by any party, nor shall any third Person have any liability with respect to the performance by any party. SMI is not liable for MHP and MHP is not liable for SMI.

 

	 	
e.

	
Notices. All notices and other communications to any party under this MOA shall be in writing and shall be given in writing and shall be given to the party at its address or facsimile number set forth below or any other address or facsimile number as the party may hereafter specify for the purpose of notice hereunder.

 

 

 

 

 

  

Page 7 of 10

  

 

 

 

Each notice or other communication shall be effective (1) if delivered in person, when so delivered, (2) if given by registered or certified (or comparable) mail, return receipt requested, five (5) business days after deposit in the mail with postage prepaid, (3) if sent by nationally recognized overnight air courier (including UPS and Federal Express), on the second business day after delivery to an overnight air courier service, carriage prepaid, or (4) if given by facsimile, at the moment of transmission by facsimile if the party sending the facsimile has telephonically confirmed its successful transmission.

 

Notices to AMIC shall be given to:

 

Advanced Medical Isotope Corporation

Attention: James Katzaroff

6208 W. Okanogan Ave.

Kennewick, Wa. 99336

Fax: +1 (509) 736-4007

Email: jkatzaroff@isotopeworld.com

 

Notices to SMI shall be given to:

 

Spivak Management Inc.

Attn: Kenin M. Spivak

450 North Roxbury Drive, 7th Floor

Beverly Hills, California 90210

Fax: +1 (310) 691-5809

Email: kspivak@SMImanagement.com

 

With a copy to:

 

SML LLP

Attention: Ted Maloney

450 North Roxbury Drive, 7th Floor 

Beverly Hills, California 90210 

Fax: +1 (424) 238-2162

Email: tmaloney@SML-LLP.com

 

	 	
f.

	
Governing Law. This MOA will be governed by and interpreted in accordance with the law of the State of California, without regard to conflicts of law provisions thereof.

 

 

 

 

 

 

  

Page 8 of 10

  

 

 

	 	
g.

	
Dispute Resolution. Any controversy or claim arising out of or relating to this MOA, or any breach hereof, shall be submitted to JAMS and settled by confidential arbitration in accordance with the commercial arbitration rules of JAMS (the "JAMS Rules"), which JAMS Rules are deemed to be incorporated by reference into this paragraph. THE PARTIES EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY CONTROVERSY OR CLAIM ARISING OUT OF THIS AGREEMENT OR THE BREACH HEREOF. Arbitration will be conducted by a single arbitrator, unless the parties agree otherwise. The language of arbitration shall be in English and the arbitral award shall be final and binding on the parties. The arbitrator(s) shall apply the rules of evidence under California law. The decision reached by the arbitrator may be entered as a judgment of any court whose jurisdiction covers the venue of the arbitration proceeding. The place of the arbitration shall be Beverly Hills, California, or such other mutually convenient location as agreed by the parties. The parties waive any and all objections based on the jurisdiction, venue or proceedings set forth in this paragraph. All fees and expenses of the arbitrator(s) shall be initially borne on a pro rata basis by the parties, but shall be recoverable by the prevailing party. If any party fails to pay its share of the fees and expenses of the arbitrator(s) when and as due then the other party may request upon ten (10) days written notice to all parties, and the arbitrator(s) shall enter, an award by default against the non-paying party, unless such fees are paid within such ten-day (10-day) period. All fees and expenses of counsel to each party shall be initially borne by such party, but the arbitrator(s) shall award the prevailing party reasonable costs and expenses, including reasonable attorneys' fees and expert witness fees, to resolve the dispute and to enforce the final judgment.

 

	 	
h.

	
Waiver. Any waiver of the provisions of this MOA or of a party's rights or remedies under this MOA must be in writing to be effective. Failure, neglect or delay by a party to enforce the provisions of this MOA or its rights or remedies at any time will not be construed to be deemed a waiver of such party's rights under this MOA and will not in any way affect the validity of the whole or any part of this MOA or prejudice such party's right to take subsequent action.

 

	 	
i.

	
Attorneys’ Fees and Litigation Costs. In any arbitration or other proceeding by which one party either seeks to enforce its rights under this MOA (whether in contract, tort, or otherwise) or seeks a declaration of any rights or obligations under this MOA, the prevailing party shall be awarded reasonable costs and expenses, including reasonable attorneys' fees and expert witness fees, to resolve the dispute and to enforce the final judgment.

 

	 	
j.

	
Severability. If a court or an arbitrator of competent jurisdiction holds any provision of this MOA to be illegal, unenforceable or invalid in whole or in part for any reason: (1) such provision shall be in good faith adjusted rather than voided, if possible, to achieve the intent of the parties, (2) this MOA shall be read as if the invalid, illegal or unenforceable words or provisions had to that extent been deleted, and (3) the validity of the remainder of this MOA shall not be affected thereby unless an essential purpose of this MOA would be defeated by the loss of the illegal, unenforceable, or invalid provisions.

 

	 	
k.

	
Entire Agreement. This MOA, including the agreements referenced herein, expresses the entire understanding of the parties with respect to the subject matter hereof. This MOA supersedes any terms or conditions contained on printed forms submitted with purchase orders, sales acknowledgments or invoices or any other form. This MOA also supersedes all previous agreements, representations or other communications (whether written or oral) between the parties relating to the subject matter hereof, but not as to any other agreement pertaining to AMIC, SMI or Persons related thereto. There are no representations, warranties or other agreements between the parties (whether express or implied) in connection with the subject matter of this MOA except as specifically set forth herein.

 

 

 

 

 

  

Page 9 of 10

  

 

 

	 	
l.

	
Modifications. This MOA may not be modified, amended or waived, except by a writing executed by both of the parties hereto. Under no circumstance or conditions shall any other conduct be relied upon by the parties.

 

	 	
m.

	
Force Majeure. No party shall be liable for any delays or failures in performance due to circumstances beyond its reasonable control. In the event of the happening of such a cause, the party whose performance is so affected will give prompt, written notice to the other party, stating the period of time the same is expected to continue.

 

	 	
n.

	
Representation by Legal Counsel. Each party has had access to legal counsel prior to the execution of this MOA. AMIC acknowledges that the law firm of SML LLP has represented SMI in the preparation and negotiation of this MOA. Certain individuals who are partners of SML LLP are principals in SMI or MHP and will separately provide services in such capacities to AMIC pursuant to the provisions hereof and the related consulting agreements. AMIC waives any objection based upon conflict of interest, or otherwise, as to the foregoing engagements, activities and financial arrangements. AMIC further understands that SML LLP does not represent AMIC in connection with the negotiation of this MOA but will represent AMIC in the future on other matters and AMIC consents thereto.

 

	 	
o.

	
Counterparts and Signature Validity. This MOA may be executed in several counterparts and all counterparts so executed shall constitute one agreement that is binding on all parties, notwithstanding that all parties are not signatories to the original or the same counterpart. Facsimile and PDF signatures shall be acceptable as if original signatures had been exchanged.

 

 

 

 

 

 

 

  

Page 10 of 10

  

IN WITNESS WHEREOF, the parties have executed this Memorandum of MOA by their duly authorized representatives.

 

	 	
ADVANCED MEDICAL ISOTOPE CORPORATION

	 
	 	 	 	 
	
 

	
By 

	/s/ James C. Katzaroff	 
	 	 	Name: James C. Katzaroff	 
	 	 	Title: CEO	 
	 	 	 	 

 

 

	 	
SPIVAK MANAGEMENT INC.

	 
	 	 	 	 
	
 

	
By 

	/s/ Kenin M. Spivak	 
	 	 	Name: Kenin M. Spivak	 
	 	 	Title: President	 
	 	 	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

11

  

 

 

 

APPENDIX - STANDARD & GENERAL TERMS & CONDITIONS ("STANDARD TERMS")

 

1.           Applicability of Standard Terms. Except as expressly set forth in these Standard Terms pertaining to choice of law, dispute resolution and related matters, including damage limitations and representations and notice, these Standard Terms govern only the relationship between Consultant and Client as to Consultant's consulting engagement by Client as set forth in Section 10 of the MOA (as defined below) to which these Standard Terms are attached or into which they are incorporated. Except with respect to the consulting engagement and the foregoing provisions, no definitions or other provisions of these Standard Terms are intended to be read into or integrated with any Party Agreement for any purpose.

 

2.             Certain Definitions.

 

As used in these Standard Terms, the following terms have the following meanings:

 

"Applicable Law" means the law set forth in Section 13 below as the governing law of this Agreement.

 

"Agreement" means the MOA and these Standard Terms.

 

"Client" means the Person with whom Consultant is contracting in the Agreement. 

 

"Consultant" means Spivak Management Inc., a California corporation.

 

"Intellectual Property Rights" means intellectual property rights recognized in any country or jurisdiction in the world, including (1) patents, patent applications, patent disclosures, and rights of priority; (2) trademarks, service marks, trade dress, trade names, Internet domain names, slogans, logos, and corporate names and registrations and applications for registration together with all the goodwill associated therewith; (3) copyrights (registered or unregistered), moral rights, and copyrightable works and registrations and applications for registration thereof; (4) computer software, data, databases, and related documentation; (5) trade secrets and other confidential information including ideas, inventions (whether or not patentable and whether or not reduced to practice), know-how, negative know-how, research information, drawings, specifications, designs, plans, proposals, financial and marketing plans, employee information, customer lists, supplier lists, and related information and marketing materials; and (6) other intellectual property rights.

 

"MOA" means the Memorandum of Agreement for Strategic Relationship dated as of August 19, 2011 and by and between Advanced Medical Isotope Corporation, a Delaware corporation and Spivak Management Inc., a California corporation to which these Standard Terms are an attachment or is otherwise incorporated by reference, excluding these Standard Terms.

 

"Party" shall refer to Client and Consultant, as applicable, and "Parties" shall include each Party that is signatory to the Party Agreement involved.

 

"Party Agreements" means and includes this Agreement and any related agreements to all or any of the foregoing entered into by or among the Parties and relating to the same subject matter as the Agreement or that are referred to herein and that survive the execution and delivery of the Agreement by the Parties.

 

"Person" means any natural individual, legal person, firm, corporation, limited liability company, limited partnership, association, trust, charity, government department, agency, unit or other entity, or any other group or entity.

  

Appendix - Page 1 of 11

  

 

 

 

"Responsible Officer" means the most senior executive officer of Client.

 

"Rule" means any applicable law, rule, regulation or other provision with the force of law.

 

3.            Authority. Except as otherwise expressly provided in a Party Agreement, Consultant is an independent consultant and contractor to Client; and neither Consultant nor any of its representatives has any authority with respect to Client or its business and do not participate as decision-makers with respect thereto. Except as otherwise expressly provided in a Party Agreement, as between Consultant and its representatives on one part and Client on the other part, Client will be the decision-maker in all instances with respect to Client and its business.

 

4.             Limitation of Role; Devotion of Time.

 

	

	
a.

	
The Parties acknowledge that Consultant has not been engaged as a manager, agent, attorney, accountant, business manager, personal manager, financial advisor or any other position for which a professional license is required. Rather, Consultant has been engaged as a key, senior business consultant. Although Consultant may express views that affect legal or financial matters, all such views are expressed hereunder as a businessperson. Client acknowledges that it will require an attorney to assist in deal structuring and contract negotiations and that except as set forth in the Party Agreements or agreements with third Persons, it will retain counsel of its choosing for that purpose.

 

	

	
b.

	
One or more owners, officers or representatives of Consultant may be partners or otherwise affiliated with the law firm of SML LLP. Client may previously have engaged or may hereafter engage SML LLP. Any such engagement is entirely separate from this engagement. SML LLP is not liable for the performance by Consultant and Consultant is not liable for the performance of SML LLP. No rules of professional conduct applicable to SML LLP shall be applicable to Consultant. The financial terms on which each of SML LLP and Consultant are engaged have been or will be separately negotiated. Client is responsible for separately determining that the respective financial terms are fair and reasonable to Client and Client hereby represents and warrants that Client has not and will not engage Consultant and/or SML LLP unless Client determines that the financial terms and conditions upon which each such Person is engaged are fair and reasonable to Client.

 

	

	
c.

	
Client acknowledges that except as expressly set forth in these Standard Terms, no Party Agreement restricts the activities of Consultant, its affiliates or its representatives. Consultant's engagement hereunder is non-exclusive, meaning that Consultant's availability hereunder is subject to Consultant's conflicting commitments. Without limitation of the foregoing, Consultant may represent or otherwise act for itself or others, including Persons competitive with Client and projects that may be competitive with Client's business, during or after the Term. Client acknowledges that Consultant may have advised and has the right to continue to advise other Persons who have interests in Client's industry, including competitive or adverse interests.

 

	

	
d.

	
None of the Party Agreements individually or in the aggregate constitutes a partnership or joint venture between Consultant and Client, nor do any such agreements, individually or in the aggregate, impose any fiduciary duties on Consultant or its representatives. Consultant will determine, in its sole and absolute discretion, which of its representatives, if any, will perform services under this Agreement and the amount of time Consultant and/or its representatives will devote to performing such services, which time likely will vary over time and from time to time. In performing the services, Consultant shall solely report to and take instruction from the Responsible Officer.

  

Appendix - Page 2 of 11

  

 

 

 

 

	
  

	
e.

	
In the event that any third Person fails for any reason whatsoever to comply with its representations, warranties, covenants and/or obligations to Client, Consultant shall not be liable as a result thereof and, without limitation, Consultant shall not be deemed a party to any agreement between Client and any third Person.

 

	
  

	
f.

	
No Party Agreement conveys or transfers any Intellectual Property Rights or any other rights in any invention developed, created or acquired by Consultant or any representative thereof to Client. In the event Client and Consultant jointly create, develop or acquire any invention, no exploitation will be made thereof unless and until the Parties enter into a written agreement setting forth the terms and conditions thereof.

 

	
  

	
g.

	
As between Client and Consultant, Consultant exclusively owns the copyright and all other rights therein in any writings of Consultant or any representative thereof and except as expressly prohibited by the confidentiality provisions of a Party Agreement, as between Consultant and Client, Consultant has the exclusive right, power and authority to publish or otherwise use such writings as elected by Consultant in Consultant's sole discretion and without any obligation to Client pertaining thereto.

 

5.         No Solicitation; Non-Circumvention:

 

	
  

	
a.

	
During the Term, neither Party will solicit for employment or engagement as an independent contractor any Person at the time employed by and/or otherwise working on behalf of the other Party. The foregoing prohibition does not pertain to engagements of the law firm SML LLP.

 

	
  

	
b.

	
As between Client and Consultant, the identities of Persons, if any, and the business opportunities, if any, introduced by Consultant to Client are the exclusive property of Consultant. Client, its officers, and representatives will not make any contact, deal with, or otherwise become involved with any such Person or business opportunity, unless Consultant is notified in writing and compensated as provided for in any applicable Party Agreement. Client acknowledges and agrees that unauthorized contact without the express written consent of Consultant with any such Person or business opportunity may cause harm and/or financial detriment to Consultant. Client further acknowledges the confidential nature of the introduced Persons and business opportunities and agrees not to disclose these sources to anyone without the express written permission of Consultant.

 

6.         Compensation, Expenses and Other Payments.

 

	
  

	
a.

	
It is understood and acknowledged by the Parties that the value of Consultant's advice is not measurable in any quantitative manner, and that the amount of time spent rendering consulting advice shall be determined in Consultant's discretion.

 

	
  

	
b.

	
Except as described in the Party Agreements, Client shall be responsible for advancing or reimbursing (as elected by Consultant) all costs and expenses incurred or advanced by Consultant in connection with Consultant's services hereunder, other than Consultant's general overhead expenses such as Consultant's rent, domestic telephone service and regular secretarial assistance. Without limitation of the foregoing, Client will reimburse Consultant, or at Consultant's request, advance, any costs or expenses incurred or advanced by Consultant for international telephone, postage, travel expenses, duplication expenses, binders, special supplies, messenger, courier, attorneys' fees, and all other expenses incurred directly in connection with Consultant's activities hereunder. Consultant will not incur any expenses in excess of two thousand dollars ($2,000) without Client's prior written approval. Travel expenses will be advanced or promptly reimbursed.

  

Appendix - Page 3 of 11

  

 

 

 

 

	 	
c.

	
Except as described in the Party Agreements, all amounts payable to Consultant will be paid by wire transfer to the account designated in writing from time to time by Consultant. If any payment is not received by Consultant within fifteen (15) days after it is due, Consultant may suspend services to Client and may further deem the failure to be a material breach of the Parties' agreement. In addition to Consultant's other remedies, regardless of whether Consultant asserts the failure to timely pay to be a breach, Client shall pay to Consultant interest on the outstanding and unpaid amount, from the date due until paid at the rate of .75% per month and any courtesy discounts that might be granted in any invoice will be revoked.

 

7.         Disclosure; Publicity. Both Parties agree that the details connected with the transactions between the Parties will not be published or disclosed without the other Party's written permission, provided that this Section will not prohibit the following disclosures: (1) disclosures required by applicable Rules; (2) disclosures by Consultant that it has been engaged by Client and the general nature of the engagement; (3) disclosures by Client that it has engaged Consultant and the general nature of the engagement; (4) Consultant's disclosure of information previously disclosed by Client; and (5) disclosures by Consultant that it deems necessary or appropriate in furtherance of the performance of its services under this Agreement. Notwithstanding the foregoing, except as required by applicable Rules, in any press releases, filings or other publicly disseminated communications pertaining to or concerning this engagement or the services performed hereunder, the Parties shall consult and mutually approve of such communications and in any such communications suitable statements will be made or credit given that Consultant or its designated principals advised Client.

 

8.         Term and Termination:

 

	
  

	
a.

	
All references in these Standard Terms refer only to the Term of Consultant's services to Client. Nothing in these Standard Terms governs any other aspects of the "term" or "period" of the Party Agreements, if any.

 

	
  

	
b.

	
Except as described in this Section 8, the "Term" of Consultant's services shall be for the period specified in the relevant Party Agreement. At the conclusion of the Term, Consultant will have no further obligations to render services to Client. The conclusion of the Term does not affect the parties' indemnification obligations or the choice of law, dispute resolution, integration, damage limitation, notice provisions or other similar provisions of these Standard Terms nor any aspect of the Party Agreements, other than Consultant's engagement.

 

	
  

	
c.

	
Subject to any specific contrary provision in this Agreement, in the event any material breach of a Party Agreement by either Party is not corrected within sixty (60) days after delivery of written notice to the breaching Party describing such breach, the other Party may terminate the Term of the consulting engagement under this Agreement.

 

	
  

	
d.

	
If Client terminates the consulting engagement for cause, Client will be relieved of any further obligation to pay compensation to Consultant. If Consultant terminates the Consulting engagement for cause, Client will not be relieved of any obligations to Consultant, Consultant will not have any duty to mitigate damages and Client will not have any right of set-off should Consultant nonetheless do so.

  

Appendix - Page 4 of 11

  

 

 

 

9.           Exports of Technology: No products, items, commodities or technical data or information obtained from a Party nor any direct product of such technical data or information is intended to be, nor shall be, exported or re-exported, directly or indirectly, to any destination restricted or prohibited by applicable Rules without necessary authorization. Notwithstanding anything to the contrary, no Party will disclose to another Party any information concerning processing, fabrication and/or equipment which is subject to any applicable export restrictions without first notifying the Party of these restrictions, and securing written consent from an officer of the Party to the disclosure.

 

10.         Certain Representations, Acknowledgements and Agreements of Client.

 

	
  

	
a.

	
Except as set forth in the Party Agreements, there are no actions, suits or proceedings pending or, to the knowledge of Client, threatened against Client or any of its subsidiaries or any of their respective properties, at law or in equity, or before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency that are likely to result in a judgment, decree or order having a material adverse effect on the business, condition (financial or otherwise) or property of Client and its subsidiaries, taken as a whole.

 

	
  

	
b.

	
Except where the effect is not likely to have a material adverse effect on the properties, assets, operations, business or financial condition of Client and its subsidiaries, taken as a whole, neither Client nor any of its subsidiaries is in breach of, or in default under (nor has any event occurred which with notice, lapse of time, or both would constitute a breach of, or default under) its respective charter, by-laws, or partnership agreement, as applicable, or in the performance or observance of any obligation, agreement, covenant or condition contained in any license, indenture, mortgage, deed of trust, bank loan or credit agreement or any other agreement or instrument to which Client or any of its subsidiaries is a party or by which any of them or their respective properties are bound. Each of Client and its subsidiaries has all governmental licenses, permits, consents, orders, approvals and other authorizations necessary to conduct its business (collectively, "Licenses"), other than those Licenses the absence of which is not likely to have a material adverse effect on the properties, assets, operations, business or financial condition of Client and its subsidiaries, taken as a whole. Client and each of its subsidiaries are in compliance in all material respects with all applicable laws, orders, rules, regulations and directives except where failure to be in compliance is not likely to have a material adverse effect on the properties, assets, operations, business or financial condition of Client and its subsidiaries, taken as a whole.

 

	
  

	
c.

	
Client acknowledges and agrees that Consultant may rely upon and use the data, material and other information supplied by Client without independently verifying the accuracy, completeness or veracity of same. Consultant also may look to others for factual information, economic advice and/or research upon which to base its advice to Client hereunder as Consultant shall in good faith deem appropriate. Consultant undertakes no responsibility for the accuracy of any statements to be made by Client contained in press releases or other communications, including filings with any regulatory authorities or governmental agencies. Client will keep Consultant informed of all material information and developments pertaining to Client's business, finances, legal issues and capitalization. All information with respect to Client or its business opportunities provided by or on behalf of Client (including through counsel) does not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading.

  

Appendix - Page 5 of 11

  

 

 

11.          Limitations on Representations and Warranties: Except as expressly stated in the Party Agreements, no Party makes any warranties or representations (express, implied or statutory). THE PARTIES EXPRESSLY DISCLAIM ALL SUCH OTHER WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE. Notwithstanding anything to the contrary (whether in the Party Agreements or elsewhere), nothing contained in the Party Agreements shall be or be construed as a representation, warranty, covenant, or guarantee that: (1) the result of Consultant's services will be beneficial for Client or that Client's business will be successful, or (2) that Consultant is conveying any Intellectual Property Rights to Client.

 

12.         Indemnification:

 

	 	
a.

	
To the fullest extent permitted by law, Client shall indemnify and hold Consultant, its shareholders, directors, officers, employees, agents and representatives and all those claiming through the foregoing (collectively, the "Indemnities") harmless from and against all losses, claims, damages, liabilities or expenses (or actions in respect thereof), including fees, costs, penalties, judgments, damages and any other amounts of any kind or character, including counsel, expert, and investigatory fees and costs, arising out of or related to Client and/or Consultant's engagement, other than as described in Section c below (collectively, "Losses"). Client shall promptly advance and shall directly pay all such Losses, as invoiced. Consultant shall have the right to select counsel and to direct any defense related to the foregoing claims. If the indemnification provided for in this Section 12 is unavailable or insufficient to hold harmless an Indemnities in respect of all Losses, then Client shall contribute to the amount paid or payable by such Indemnities as a result of such Losses in such proportion as is appropriate to reflect the relative benefits received by Client and the Indemnities from the transactions contemplated by the Party Agreements. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then Client shall contribute to such amount paid or payable by Client in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of Client and the Indemnitee in connection with the actions, inactions, statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. The relative benefits received by Client and the Indemnitees shall be deemed to be in the same proportion as the total net proceeds from the transactions contemplated by the Party Agreements (before deducting expenses) received by Client bear to the total compensation received by Indemnitees. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged act or inaction, untrue statement of a material fact or the omission or alleged omission to state a material fact is the responsibility of the respective Party or relates to information supplied by Client or the Indemnitees and the Parties' relative intent, knowledge, access to information and opportunity to correct or prevent such act, inaction, statement or omission. The Parties agree that it would not be just and equitable if contribution were determined by pro rata allocation (even if the Indemnitees were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above. If any claim is made that, if true, would prohibit Client from indemnifying any Indemnitee, Client shall nonetheless provide the indemnification provided for by this Section 12 unless and until a non-appealable court judgment is entered establishing that such indemnification or contribution was improper and in such event, the Indemnitee shall reimburse the amounts improperly indemnified or contributed.

  

Appendix - Page 6 of 11

  

 

 

 

 

	 	
b.

	
Client will be entitled to participate at its own expense in the defense, or, if it so elects, to assume the defense of any suit brought to enforce any such liability, but, if Client elects to assume the defense, such defense shall be conducted by counsel chosen by Consultant. If Client elects to assume the defense of any such suit and retain such counsel, the Indemnitee(s), defendant or defendants in the suit, may retain additional counsel but shall bear the fees and expenses of such counsel unless (i) Client shall have specifically authorized the retaining of such counsel or (ii) the parties to such suit include such Indemnitee(s) and Client, and an Indemnitee has been advised by counsel that one or more legal defenses may be available it which may not be available to Client, in which case Client shall not be entitled to assume the defense of such suit notwithstanding its obligation to bear the fees and expenses of such counsel.

 

	 	
c.

	
Notwithstanding Section a above, Consultant will indemnify Client for direct Losses arising solely from Consultant's intentional execution, without authority, of contracts or contract amendments purporting to bind Client once established by a non-appealable court judgment or a settlement of which Consultant has approved. The amount to be indemnified will be limited to the total amount of all fees paid or payable to Consultant under this Agreement.

 

	 	
d.

	
This indemnity agreement will be in addition to any liability that Client might otherwise have to Consultant to any other Person.

 

	 	
e.

	
Client shall cause Consultant and any of its designated representatives to be added as named or additional insured under all errors and omissions insurance policies, officers and directors insurance policies, general liability insurance policies and the like obtained by Client or any Person with respect to Client's business. Consultant and its designated representatives will cooperate in providing information necessary for the application and issuance of such insurance policies.

 

13.        Disputes. Except as provided for in a Party Agreement, any dispute involving the interpretation or application of any Party Agreement, and any controversy or claim arising out of or relating in any way to any Party Agreement, or the breach thereof (including as to the validity, scope and enforceability of this agreement to arbitrate), which has not been resolved within thirty (30) days after either party has notified the other in writing of the controversy, shall be finally determined by arbitration in Los Angeles County, California in accordance with the Commercial Arbitration Rules of JAMS (the "JAMS Rules") then in effect, except as those JAMS Rules are amended by this Section. There shall be a single arbitrator who shall be a retired federal judge. The decision of the arbitrator shall be consistent with applicable law and shall include written findings of fact and conclusions of law. The standard of proof in such arbitration shall be clear and convincing evidence and the burden of proof shall be on the party seeking relief. THE PARTIES UNDERSTAND AND ACKNOWLEDGE THAT UNDER THIS SECTION, THE PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY ARBITRABLE CONTROVERSY OR CLAIM. Judgment on the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. Each Party initially shall bear its own attorneys' fees and costs. IN THE EVENT FOR ANY REASON THAT THIS SECTION SHALL NOT BE SUFFICIENT OR ENFORCEABLE AS THE EXCLUSIVE MEANS OF RESOLVING ANY AND ALL DISPUTES RELATING TO THE PARTY AGREEMENTS OR ANY RIGHTS CREATED HEREBY SHALL BE INSTITUTED IN LOS ANGELES COUNTY, STATE OF CALIFORNIA. EACH PARTY AGREES TO SUBMIT TO THE JURISDICTION OF, AND AGREES THAT VENUE IS PROPER IN, LOS ANGELES COUNTY FOR ANY SUCH LEGAL ACTION OR PROCEEDING.

  

Appendix - Page 7 of 11

  

 

 

 

 

14.         Applicable Law: Except as provided for in a Party Agreement, the Party Agreements shall be governed by, construed, enforced and interpreted in accordance with the internal substantive law of the State of California applicable to agreements to be made and to be performed solely within such State, without giving effect to any conflicts or choice of laws principles which otherwise might be applicable and excluding the United Nations Convention on Contracts for the Sale of Goods; provided, however, that matters relating to corporate formalities or other corporate governance issues of Client shall be governed by the law of its jurisdiction of incorporation or formation.

 

15.         Interim Relief: Nothing in these Standard Terms shall be construed to preclude any Party from seeking injunctive or other provisional relief in order to prevent irreparable harm pending mediation or arbitration, provided, however, that such relief may only be sought within the appropriate judicial forum as provided in Section 13 above.

 

16.        Legal Fees and Costs: Except as provided for in a Party Agreement, the substantially prevailing party in any proceeding shall be entitled, in addition to any other rights and remedies it may have, to reimbursement for the expenses reasonably incurred by it in such proceeding, including reasonable attorneys' fees, reasonable costs, reasonable expenses of expert witnesses, reasonable costs of appeal, and any other reasonable out-of-pocket expenses.

 

17.         Limitations: EXCEPT ONLY AS TO INDEMNIFICATION REGARDING LOSSES PAID TO UNRELATED THIRD PERSONS, IN NO EVENT WILL ANY PARTY BE LIABLE TO THE OTHER (1) FOR COSTS OF SUBSTITUTE GOODS, (2) FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES, OR (3) FOR LOSS OF USE, OPPORTUNITY, MARKET POTENTIAL, GOODWILL AND/OR PROFIT ON ANY THEORY (CONTRACT, TORT, FROM THIRD PARTY CLAIMS OR OTHERWISE). THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OR OF ANY FAILURE OR INADEQUACY OF ANY REMEDY.

 

18.        Force Majeure: Neither Party shall be liable for failure to perform, in whole or in part, its obligations under this Agreement if such failure is caused by any event or condition not reasonably within the control of the affected Party, including by events of nature, fire, flood, typhoon, earthquake, explosion, strikes, labor troubles or other industrial disturbances, unavoidable accidents, war (declared or undeclared), acts of terrorism, sabotage, embargoes, blockage, acts of governmental, judicial, administrative, military or other authorities, riots, insurrections, or any other cause beyond the control of the Parties; provided, that the affected Party promptly notifies the other Party of the occurrence of the event of force majeure and takes all reasonable steps necessary to minimize the disruption to the other Party and to resume performance of its obligations so interfered with.

 

19.         Notices: All notices required or permitted to be given under the Party Agreements shall be in writing and delivered in person, by first class certified or registered priority mail, postage prepaid, by recognized overnight courier service for next-day delivery, carriage prepaid, or by telex, electronic facsimile transmission or electronic mail, if concurrently confirmed or acknowledged and with a concurrent copy by another permitted means (such as mail or courier), to the address specified in this Agreement or to such other address as may be specified in writing by the addressed Party to the other Party in accordance herewith. Each such notice or other communication shall for all purposes be treated as effective or as having been given as follows: (1) if delivered in person, when delivered; (2) if delivered by mail, at the earlier of its receipt or at 5 p.m., local time of the recipient, or on the seventh day after deposit in a regularly maintained receptacle for the deposition of mail, as the case may be; (3) if delivered by courier, on the date shown in the written confirmation of delivery issued by such courier service; and (iv) if sent by confirmed telex, electronic facsimile transmission or electronic mail, at 5 p.m., local time of the recipient on the first business day after confirmed transmission and proper tender of concurrent delivery. Either Party may change the address and/or addressee(s) to whom notice must be given by giving appropriate written notice at least seven (7) days prior to the date the change becomes effective.

  

Appendix - Page 8 of 11

  

 

 

 

 

20.          Assignment and Delegation: Except as provided for in a Party Agreement, none of the Party Agreements nor any of the rights and obligations created hereunder may be assigned, transferred, pledged, delegated or otherwise encumbered or disposed of, in whole or in part, whether voluntarily or by operation of law or otherwise, by any Party without the prior written consent of the other Party, which consent shall not unreasonably be withheld; provided, however, that the foregoing shall not restrict or limit the assignment by Consultant of its rights and delegation of its duties under any Party Agreement to a company owned or controlled by a constituent of Consultant, subject to the assumption by such assignee company of all of the obligations of the respective Consultant company under the assigned Party Agreement. In the event of any such assignment, the assignee company shall be deemed to be the "Consultant" for all purposes and intents under the assigned Party Agreement.

 

21.       Certain Rules of Construction.

 

	 	
a.

	
Accounting Terms. Unless otherwise indicated in a Party Agreement, all accounting terms used in these Standard Terms or in the Party Agreements related to Consultant's engagement shall be construed, and all accounting and financial computations hereunder or thereunder shall be computed, in accordance with United States generally accepted accounting principles, applied in a consistent manner.

 

	 	
b.

	
Captions and Section Headings. The captions and section headings appearing in these Standard Terms or in the Party Agreements related to Consultant's engagement are included solely for convenience of reference and are not intended to affect the interpretation of any provision of any Party Agreement.

 

	 	
c.

	
Singular and Plural. All terms defined in these Standard Terms or in the Party Agreements related to Consultant's engagement in the singular form shall have comparable meanings when used in the plural form and vice versa.

 

	 	
d.

	
Time and Date. All references in these Standard Terms or in the Party Agreements related to Consultant's engagement to a time of day shall mean Pacific Time, unless otherwise indicated.

 

	 	
e.

	
No Interpretation Against a Party. In these Standard Terms and in the Party Agreements related to Consultant's engagement, no uncertainty or ambiguity shall be construed or resolved using any presumption against any Party. On the contrary, each Party acknowledges that each Party Agreement has been reviewed by its legal counsel and, in the case of any ambiguity or uncertainty, shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intention of the Parties.

 

	 	
f.

	
Other References. References in these Standard Terms or in the Party Agreements related to Consultant's engagement to "Recitals," "Sections," "Exhibits," "Schedules," "Appendices," "Annexes," "Attachments" and similar ancillary materials are to recitals, sections, exhibits, schedules, appendices, annexes, attachments and similar ancillary materials therein and thereto ("Exhibits") unless otherwise indicated. References in these Standard Terms or in the Party Agreements related to Consultant's engagement to any document, instrument or agreement (including any Party Agreement) (1) shall include all Exhibits thereto, (2) shall include all documents, instruments or agreements issued or executed in replacement thereof if such replacement is permitted thereby, and (iii) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time to time and in effect at any given time if such amendment, modification or supplement is permitted thereby.

 

 

 

 

  

Appendix - Page 9 of 11

  

 

 

 

 

	
  

	
g.

	
Additional Rules of Construction. The words "hereof," "herein" and "hereunder" and words of similar import when used in any Party Agreement related to Consultant's engagement shall refer to the Party Agreement as a whole and not to any particular provision of the Party Agreement. Unless the context clearly requires otherwise (1) the plural and singular numbers shall each be deemed to include the other; (2) the masculine, feminine and neuter genders shall each be deemed to include the others; (3) "shall", "will" or "agrees" are mandatory and "may" is permissive; (4) "or" is not exclusive, and (5) "includes" and "including" are not limiting and mean "without limitation."

 

	
  

	
h.

	
Other Agreements. In the event of any inconsistency between the terms of a Party Agreement and the terms of any other agreement among the Parties, the terms of the subsequent agreement shall govern. In the event of any inconsistency between the terms of these Standard Terms and the terms of the MOA, the terms of the MOA shall govern.

 

22.          Miscellaneous:

 

Except as expressly set forth in this Section, all references to the Party Agreements mean and refer to these Standard Terms and those provisions of the Party Agreements relating to Consultant's engagement by Client.

 

	
  

	
a.

	
Except as described in a Party Agreement, no third Person is a beneficiary of Consultant's engagement and no third Person is a guarantor of the performance by any Party, nor shall any third Person have any liability with respect to the performance by any Party.

 

	
  

	
b.

	
The Party Agreements and their Exhibits, all of which are incorporated herein by reference, set forth the entire understanding between the Parties with respect to the subject matter hereof and thereof and merge all prior agreements, dealings, negotiations, promises, representations and communications. The terms of the Party Agreements shall govern any and all exchanges of confidential information regardless of any other document signed and/or executed or agreement made prior to the date hereof.

 

	
  

	
c.

	
Each Party expressly represents and warrants that it is free to enter into the Party Agreements as it relates to Consultant's engagement and that it has not made and will not make any creations or commitments in conflict with the provisions of the Party Agreements as it relates to Consultant's engagement, or which reasonably might interfere with the full and complete performance of its obligations under the Party Agreements as it relates to Consultant's engagement. As it relates to Consultant's engagement, each Party further represents and warrants that the Party Agreements, and the performance of its respective obligations under the Party Agreements, and the consummation of the transactions contemplated under the Party Agreements have been duly authorized and approved by all necessary action, and all necessary consents or permits have been obtained, and neither the execution of the Party Agreements nor the performance of the Party's obligations under the Party Agreements will violate any term or provision of any valid contract or agreement to which such Party is subject and/or by which such Party is bound. For all purposes, no further actions or consents are necessary to make the Party Agreements valid and binding contract, enforceable against the respective Parties in accordance with their terms.

  

Appendix - Page 10 of 11

  

 

 

 

 

	 	
d.

	
No Party shall be entitled to act on behalf of and/or to bind any other Party.

 

	 	
e.

	
No provision of any Party Agreement may be modified, amended or waived, and no Party's rights or remedies under ant Party Agreement may be waived, except by a writing executed by authorized representatives of the Parties. Under no circumstance or conditions shall any other conduct be relied upon by the Parties. Failure, neglect or delay by a Party to enforce the provisions of this Agreement or its rights or remedies at any time will not be construed to be deemed a waiver of such Party's rights under a Party Agreement and will not in any way affect the validity of the whole or any part of the Party Agreement or prejudice such Party's right to take subsequent action.

 

	 	
f.

	
If a court or an arbitrator of competent jurisdiction holds any provision of any Party Agreement to be illegal, unenforceable or invalid in whole or in part for any reason: (1) such provision shall be in good faith adjusted rather than voided, if possible, to achieve the intent of the Parties, (2) the Party Agreement shall be read as if the invalid, illegal or unenforceable words or provisions had to that extent been deleted, and (3) the validity of the remainder of the Party Agreement shall not be affected thereby unless an essential purpose of the Party Agreement would be defeated by the loss of the illegal, unenforceable, or invalid provisions.

 

	 	
g. 

	
This Agreement may be executed in several counterparts and all counterparts so executed shall constitute one agreement that is binding on all Parties, notwithstanding that all Parties are not signatories to the original or the same counterpart. Facsimile and PDF signatures shall be acceptable as if original signatures had been exchanged.

 

 

 

 

 

 

 

 

 

 

 

 

Appendix - Page 11 of 11Baby Fox International, Inc.: Exhibit 10.1 - Filed by newsfilecorp.com

Exhibit 10.1

Stock Purchase Agreement 

THIS STOCK PURCHASE AGREEMENT (this
“Agreement”) is made effective as of the 20th
day of March, 2012, by and among Mu Zhang, Catalpa Holdings, Inc., First
Prestige, Inc., JD Infinity Holdings, Inc. and Favor Jumbo Enterprises Limited,
each with an address at Suite 6A02, Hanwei Plaza, 7 Guanghua Rd., Beijing, China
(collectively referred to as the “Sellers” or individually
as a “Seller”), Super-stable Group Holdings Limited, with
an address at Unit E8, 3/F, Tat Comm. Bldg. 97, Bonham Strand East, Sheng Wan,
Hong Kong (the “Purchaser”), and Baby Fox International,
Inc., a Nevada corporation (“BBFX” or the
“Company”). 

PRELIMINARY STATEMENTS 

	 	A. 	
      Sellers own an aggregate of 1,912,813 shares of common
      stock of BBFX and are willing to sell 1,912,813 shares of common stock of
      BBFX (the “Common Stock”) to Purchaser.

	 	 	 
	 	B. 	
      Sellers desire to sell the Common Stock to Purchaser, and
      Purchaser desires to purchase the Common Stock from Sellers, on the terms,
      provisions and conditions set forth herein.

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

ARTICLE I 

Purchase and Sale of the Common Stock 

Section 1.01. Purchase and Sale. Upon the execution and
delivery of this Agreement, and upon the terms and subject to the conditions set
forth herein, the Sellers shall deliver 1,912,813 shares of BBFX’s Common Stock,
as enumerated herein by their respective signatures, to the Purchaser free and
clear of all liens, and Purchaser shall purchase the Common Stock from the
Sellers in accordance with Section 1.02 below. 

Section 1.02. Purchase Price. The purchase price (the
“Purchase Price”) for the Common Stock is
$250,000. 

Section 1.03. Time and Place of Closing. The closing
(the “Closing”) of the transactions
contemplated by this Agreement is taking place concurrently with the execution
and delivery of this Agreement. The Closing shall be deemed to have become
effective on the date of this Agreement (the “Closing
Date”). The Closing shall take place at the offices of
Sellers’ counsel, The Crone Law Group (“Sellers’
Counsel”).

Section 1.04. Delivery of the Common Stock; Payment of
Purchase Price. At Closing: 

	 	(a) 	
      the Sellers shall deliver to the Purchaser the
      certificates representing the Common Stock, duly endorsed in blank or
      accompanied by stock powers duly endorsed in blank, with all taxes
      attributable to the transfer and sale of the Common Stock paid by the
      Sellers;

	 	 	 
	 	(b) 	
      the Purchaser shall deliver to the Sellers the Purchase
      Price in accordance with Section 1.02, less the nonrefundable deposit of
      $25,000.00 (the “Deposit”) which has
      previously been received by Sellers’ Counsel; and

	 	 	
       
	 	(c) 	
      Sellers and the Company shall deliver a letter of
      resignation from all of the officers and directors of the Company and
      resolutions of the Board of Directors of the Company appointing
      Purchaser’s designee(s) as the sole officer(s) and director(s) of the
      Company, each effective at the time of the
Closing.

1 

ARTICLE II 

Representations and Warranties of the Majority Shareholder
and the Company 

Subject to all of the terms, conditions and provisions of this
Agreement, Mu Zhang (the “Majority Shareholder”) and the Company hereby
represent and warrant to Purchaser as of the date hereof as follows: 

Section 2.01. Organization and Qualification. BBFX is a
Nevada corporation duly organized, validly existing and in good standing under
the laws of the State of Nevada. BBFX has all requisite power and authority,
corporate or otherwise, to own, lease and operate its assets and properties and
to carry on its business as now being conducted. The Company does not have any
subsidiaries. 

Section 2.02. Capitalization of The Company; Title to the
Common Stock. There are 90,000,000 shares of common stock authorized of the
Company, of which 2,390,013 shares of common stock are issued and outstanding,
$0.001 par value per share. There are 10,000,000 shares of preferred stock,
$0.001 par value per share, authorized of the Company, of which no shares of
preferred stock are issued and outstanding. All of the outstanding shares of
common stock have been duly authorized and validly issued, are fully paid and
nonassessable and are free of preemptive rights. The Common Stock transferred by
the Sellers to Purchaser will be free and clear of any liens. There are no
outstanding or authorized subscriptions, options, warrants, calls, rights or
other similar contracts, including rights of conversion or exchange under any
outstanding debt or equity security or other contract, to which any of the
Common Stock will be subject or obligating the Sellers and/or the Company to
issue, deliver or sell, or cause to be issued, delivered or sold, any other
shares of capital stock of the Company or any other debt or equity securities
convertible into or evidencing the right to subscribe for any such shares of
capital stock or obligating the Sellers and/or the Company to grant, extend or
enter into any such contract. There are no voting trusts, proxies or other
contracts to which Sellers and/or the Company are a party or are bound with
respect to the voting of any shares of capital stock of the Company. The Sellers
have full legal right to sell, assign and transfer the Common Stock to Purchaser
and will, upon payment for the Common Stock and delivery to Purchaser of a
certificate or certificates representing the Common Stock, transfer good title
to the Common Stock to Purchaser, free and clear of liens. 

Section 2.03. Authority. The Sellers and the Company
have all requisite power and authority, corporate or otherwise, to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The Sellers and the Company have duly and validly executed and delivered this
Agreement and will, on or prior to the Closing, execute, such other documents as
may be required hereunder and, assuming the due authorization, execution and
delivery of this Agreement by the other parties hereto, this Agreement
constitutes, the legal, valid and binding obligation of the Sellers and the
Company, as applicable, enforceable against the Sellers and the Company, as
applicable, in accordance with its terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and general equitable
principles. 

Section 2.04. No Conflict. The execution and delivery by
the Sellers and the Company of this Agreement and the consummation of the
transactions contemplated hereby do not and will not, by the lapse of time, the
giving of notice or otherwise: (a) constitute a violation of any law; (b)
constitute a breach or violation of any provision contained in the Articles of
Incorporation or Bylaws of the Company; (c) constitute a breach of any provision contained in, or a
default under, any governmental approval, any writ, injunction, order, judgment
or decree of any governmental authority or any contract to which the Sellers
and/or the Company are a party; or (d) result in or require the creation of any
lien upon the Common Stock. 

2 

Section 2.05. Consents and Approvals. No governmental
approvals and no notifications, filings or registrations to or with any
governmental authority or any other person is or will be necessary for the valid
execution and delivery by the Sellers and/or the Company of this Agreement or
the consummation of the transactions contemplated hereby or thereby, or the
enforceability hereof or thereof, other than those which have been obtained or
made and are in full force and effect and the filing of a Current Report on Form
8-K with regard to the transactions contemplated hereby. 

Section 2.06. Litigation. There are no claims pending
or, to the knowledge of the Majority Shareholder and the Company, threatened,
against or affecting the Company or any of its assets and properties before or
by any governmental authority or any other person. The Majority Shareholder and
the Company have no knowledge of any claim which seeks to restrain or enjoin the
execution and delivery of this Agreement or the consummation of any of the
transactions contemplated hereby or thereby. There are no judgments or
outstanding orders, injunctions, decrees, stipulations or awards against the
Company or any of its assets and properties. 

Section 2.07. Brokers, Finders and Financial Advisors.
No broker, finder or financial advisor has acted for Sellers or the Company in
connection with this Agreement or the transactions contemplated hereby or
thereby, and no broker, finder or financial advisor is entitled to any broker’s,
finder’s or financial advisor’s fee or other commission in respect thereof based
in any way on any contract with Sellers or the Company. 

Section 2.08. Liabilities of the Company. The Company
has no liability or liabilities that have not been previously disclosed to
Purchaser and listed on Schedule A hereto. Notwithstanding the foregoing, the
representation contained in this Section 2.08 shall terminate 12 months
following the Effective Date. 

ARTICLE III 

Representations and Warranties of Purchaser 

Subject to all of the terms, conditions and provisions of this
Agreement, Purchaser hereby represents and warrants to the Sellers as of the
date hereof as follows: 

Section 3.01. Authority. Purchaser has all requisite
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby and thereby. Purchaser has duly and validly
executed and delivered this Agreement and, assuming the due authorization,
execution and delivery of this Agreement by the other parties hereto, this
Agreement constitutes the legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and general
equitable principles. 

Section 3.02. No Conflict. The execution and delivery by
Purchaser of this Agreement and the consummation of the transactions
contemplated hereby do not and shall not, by the lapse of time, the giving of
notice or otherwise: (a) constitute a violation of any law; or (b) constitute a
breach of any provision contained in, or a default under, any governmental
approval, any writ, injunction, order, judgment or decree of any governmental
authority or any contract to which Purchaser is a party or by which Purchaser is
bound or affected. 

3 

Section 3.03. Consents and Approvals. No governmental
approvals and no notifications, filings or registrations to or with any
governmental authority or any other person is or will be necessary for the valid
execution and delivery by Purchaser of this Agreement and the closing documents
to which it is a party, or the consummation of the transactions contemplated
hereby or thereby, or the enforceability hereof or thereof, other than those
which have been obtained or made and are in full force and effect. 

Section 3.04. Litigation. There are no claims pending
or, to the knowledge of Purchaser, threatened, and Purchaser has no knowledge of
any claim, which either alone or in the aggregate, seeks to restrain or enjoin
the execution and delivery of this Agreement or the consummation of any of the
transactions contemplated hereby or thereby. There are no judgments or
outstanding orders, injunctions, decrees, stipulations or awards against
Purchaser which prohibits or restricts, or could reasonably be expected to
result in any delay of, the consummation of the transactions contemplated by
this Agreement. 

Section 3.05. Brokers, Finders and Financial Advisors.
No broker, finder or financial advisor has acted for Purchaser in connection
with this Agreement or the transactions contemplated hereby, and no broker,
finder or financial advisor is entitled to any broker’s, finder’s or financial
advisor’s fee or other commission in respect thereof based in any way on any
contract with Purchaser. 

Section 3.06. Exempt Transaction. Purchaser understands
that the offering and sale of the Common Stock is intended to be exempt from
registration under the Securities Act of 1933, as amended (the “Act”), and
exempt from registration or qualification under any state law. 

Section 3.07. Investment Intent. The Common Stock to be
purchased by Purchaser hereunder will be acquired for investment for Purchaser’s
own account, not as a nominee or agent, and not with a view to the public resale
or distribution thereof, and Purchaser has no present intention of selling,
granting any participation in, or otherwise distributing the same. 

Section 3.08. Information Concerning the Company.
Purchaser has conducted its own due diligence with respect to the Company and
its liabilities and believes it has enough information upon which to base an
investment decision in the Common Stock.

Section 3.09. Investment Experience. Purchaser
understands that purchase of the Common Stock involves substantial risk.
Purchaser: 

(i)                     has experience as a purchaser in
securities of companies in the development stage and acknowledges that it can
bear the economic risk of Purchaser’s investment in the Common Stock; and, 

(ii)                    has such knowledge and experience
in financial, tax, and business matters so as to enable Purchaser to evaluate
the merits and risks of an investment in the Common Stock, to protect
Purchaser’s own interests in connection with the investment and to make an
informed investment decision with respect thereto. 

Section 3.10. No Oral Representations. No oral or
written representations have been made other than or in addition to those stated
in this Agreement. Purchaser is not relying on any oral statements made by
Sellers, Sellers’ representatives, employees or affiliates in purchasing the
Common Stock. 

Section 3.11. Restricted Securities. Purchaser
understands that the Common Stock is characterized as “restricted securities”
under the Act inasmuch as they were acquired from the Company in transactionsnot
involving a public offering. Buyer acknowledges that if any transfer of the
Common Stock is proposed to
be made in reliance upon an exemption under the Act, the Company may require an opinion of counsel satisfactory to the Company that such transfer may be made pursuant to an applicable exemption under the Act. Buyer acknowledges that a restrictive
legend appears on the Common Stock and must remain on the Common Stock until such time as it may be removed under the Act. 

4 

Section 3.12. Shareholder Value.  Purchaser represents that Purchaser intends to implement a business plan designed to return value to the shareholders of the Company. 

Section 3.13. Role of The Crone Law Group.  Purchaser acknowledges that The Crone Law Group is acting as legal counsel to Sellers in connection with this Agreement and the transactions contemplated by this Agreement. The Crone Law Group does
not represent Purchaser and Purchaser does not consider The Crone Law Group to have represented its interests and has been advised to consult its own independent legal counsel on all matters pertaining to Purchaser, this Agreement and the
transactions contemplated hereby.

ARTICLE IV 

Covenants 

Section 4.01. Further Assurances. Sellers, the Company and Purchaser agree that, from time to time, whether at or after the Closing, each of them will take such other action and to execute, acknowledge and deliver such contracts, deeds, or
other documents (a) as may be reasonably requested and necessary or appropriate to carry out the purposes and intent of this Agreement; or (b) to effect or evidence the transfer to the Purchaser of the Common Stock. 

Section 4.02. Public Announcements. Except as required by law, without the prior written approval of the other party, neither Sellers, the Company nor Purchaser will issue, or permit any agent or affiliate thereof to issue, any press release
or otherwise make or permit any agent or affiliate thereof to make, any public statement or announcement with respect to this Agreement or the transactions contemplated hereby. 

ARTICLE V 

Indemnification 

Section 5.01. Indemnification of Sellers. Subject to the terms and conditions of this Article V, Purchaser agrees to indemnify, defend and hold harmless Sellers, their respective affiliates, their respective present and former directors,
officers, shareholders, employees and agents and their respective heirs, executors, administrators, successors and assigns (the “Sellers’ Indemnified Persons”), from and against any and all claims, liabilities
and losses which may be imposed on, incurred by or asserted against any Sellers’ Indemnified Person, arising out of or resulting from, directly or indirectly: 

(a)                    the inaccuracy of any representation or breach of any warranty of Purchaser contained in or made pursuant to this Agreement which was not disclosed to Sellers in writing prior to the Closing; 

(b)                    the breach of any covenant or agreement of Purchaser contained in this Agreement; or 

(c)                    any claim to fees or costs for alleged services by a broker, agent, finder or other person claiming to act in a similar capacity at the request of Purchaser in connection with this Agreement; 

provided, however, that Purchaser shall not be liable
for any portion of any claims, liabilities or losses resulting from a material
breach by Sellers, of any of its obligations under this Agreement or from a
Sellers Indemnified Person’s gross negligence, fraud or willful misconduct. 

5 

Section 5.02. Indemnification of Purchaser. Subject to
the terms and conditions of this Article V, from and after the Closing, the
Majority Shareholder agrees to indemnify, defend and hold harmless the
Purchaser, its respective affiliates, their respective present and former
directors, officers, shareholders, employees and agents and their respective
heirs, executors, administrators, successors and assigns (the
“Purchaser’s Indemnified Persons”), from and against any
and all claims, liabilities and losses which may be imposed on, incurred by or
asserted against any Purchaser’s Indemnified Person, arising out of or resulting
from, directly or indirectly: 

(a)                    the inaccuracy of any representation or breach of any
warranty of the Majority Shareholder or the Company contained in or made
pursuant to this Agreement which was not disclosed to Purchaser in writing prior
to the Closing; 

(b)                    the breach of any covenant or agreement of Sellers or the
Company contained in this Agreement; or 

(c)                    any claim to fees or costs for alleged services rendered by
a broker, agent, finder or other person claiming to act in a similar capacity at
the request of the Sellers or the Company in connection with this Agreement;

provided, however, that the Majority Shareholder shall
not be liable for any portion of any claims, liabilities or losses resulting
from a material breach by Purchaser of its obligations under this Agreement or
from a Purchaser’s Indemnified Person’s gross negligence, fraud or willful
misconduct. 

ARTICLE VI 

Miscellaneous 

Section 6.01. Notices. Any and all notices, requests or
other communications hereunder shall be given in writing and delivered by: (a)
regular, overnight or registered or certified mail (return receipt requested),
with first class postage prepaid; (b) hand delivery; (c) facsimile transmission;
or (d) overnight courier service, to the parties at the following addresses or
facsimile numbers: 

	 	(i) if to Sellers, to: 	Mu Zhang 
	 	  	Suite 6A02, Hanwei Plaza 
	 	  	7 Guanghua Rd. 
	 	  	Beijing, China 
	 	  	  
	 	  	  
	 	  	  
	 	With copies to: 	Mark E. Crone, Esq. 
	 	  	The Crone Law Group 
	 	  	101 Montgomery St., Suite 2650 
	 	  	San Francisco, CA 94104 
	 	  	(415) 955-8900 
	 	  	(415) 955-8910 – FAX 

6 

	 	(ii) if to Purchaser, to: 	Super-stable Group Holdings 
	 	  	Limited 
	 	  	Unit E8, 3/F, Tat Comm. Bldg. 97, 
	 	  	Bonham Strand East, Sheng Wan, 
	 	  	Hong Kong 
	 	  	  
	 	  	  
	 	With copies to: 	  

or at such other address or number as shall be designated by
either of the parties in a notice to the other party given in accordance with
this Section 6.01. All notices or other communications required or permitted by
this Agreement shall be in writing and shall be deemed to have been duly
received upon actual receipt thereof. 

Section 6.02. Benefit and Burden. This Agreement shall
inure to the benefit of, and shall be binding upon, the parties hereto and their
successors and permitted assigns. 

Section 6.03. No Third Party Rights. Nothing in this
Agreement shall be deemed to create any right in any creditor or other person
not a party hereto (other than the Purchaser’s Indemnified Persons and the
Sellers’ Indemnified Persons) and this Agreement shall not be construed in any
respect to be a contract in whole or in part for the benefit of any third party
(other than the Purchaser’s Indemnified Personsor the Sellers’ Indemnified
Persons). 

Section 6.04. Amendments and Waiver. No amendment,
modification, restatement or supplement of this Agreement shall be valid unless
the same is in writing and signed by the parties hereto. No waiver of any
provision of this Agreement shall be valid unless in writing and signed by the
party against whom that waiver is sought to be enforced. 

Section 6.05. Counterparts. This Agreement may be
executed in counterparts and by the different parties in separate counterparts,
each of which when so executed shall be deemed an original and all of which
taken together shall constitute one and the same agreement. 

Section 6.06. Construction. The parties acknowledge that
each of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and that
this Agreement shall be construed as if jointly drafted by the parties hereto.

Section 6.07. Severability. Should any clause, sentence,
paragraph, subsection, Section or Article of this Agreement be judicially
declared to be invalid, unenforceable or void, such decision will not have the
effect of invalidating or voiding the remainder of this Agreement, and the
parties agree that the part or parts of this Agreement so held to be invalid,
unenforceable or void will be deemed to have been stricken herefrom by the
parties, and the remainder will have the same force and effectiveness as if such
stricken part or parts had never been included herein. 

Section 6.08. Remedies. The parties agree that the
covenants and obligations contained in this Agreement relate to special, unique
and extraordinary matters and that a violation of any of the terms hereof or
thereof would cause irreparable injury in an amount which would be impossible to
estimate or determine and for which any remedy at law would be inadequate.
As such, the parties agree that if either party fails or refuses to fulfill any
of its obligations under this Agreement or to make any payment or deliver any
instrument required hereunder or thereunder, then the other party shall have the
remedy of specific performance, which remedy shall be cumulative and
nonexclusive and shall be in addition to any other rights and remedies otherwise
available under any other contract or at law or in equity and to which such
party might be entitled. 

7 

Section 6.09. Applicable Law. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA, WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF. 

Section 6.10. Submission to Jurisdiction. Each of the
parties hereby: (a) irrevocably submits to the non-exclusive personal
jurisdiction of any Nevada court, over any claim arising out of or relating to
this Agreement and irrevocably agrees that all such claims may be heard and
determined in such Nevada court; and (b) irrevocably waives, to the fullest
extent permitted by applicable law, any objection it may now or hereafter have
to the laying of venue in any proceeding brought in a Nevada court. 

Section 6.11. Expenses; Prevailing Party Costs. The
Sellers, the Company, and Purchaser shall pay their own expenses incident to
this Agreement and the transactions contemplated hereby and thereby, including
all legal and accounting fees and disbursements, and Sellers shall be solely
liable for any and all expenses of the Sellers and/or the Company which are
incident to this Agreement and the transactions contemplated hereby and thereby
and are incurred up to the time of Closing. Notwithstanding anything contained
herein or therein to the contrary, if any party commences an action against
another party to enforce any of the terms, covenants, conditions or provisions
of this Agreement, or because of a breach by a party of its obligations under
this Agreement, the prevailing party in any such action shall be entitled to
recover its losses, including reasonable attorneys’ fees, incurred in connection
with the prosecution or defense of such action, from the losing party. 

Section 6.12. Entire Agreement. This Agreement sets
forth all of the promises, agreements, conditions, understandings, warranties
and representations among the parties with respect to the transactions
contemplated hereby and thereby, and supersedes all prior agreements,
arrangements and understandings between the parties, whether written, oral or
otherwise, including any letter of intent previously executed with respect to a
sale of the Common Stock. 

Section 6.13. Faxed Signatures. For purposes of this
Agreement, a faxed or pdf signature shall constitute an original signature. 

Section 6.14. Waiver of Jury Trial. IN ANY ACTION,
SUIT OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER
PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT
PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND
EXPRESSLY WAIVE FOREVER THE RIGHT TO TRIAL BY JURY.

[Signature Page Follows] 

8 

IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written. 

	 	SELLERS: 
	 	  
	 	/s/ Mu
      Zhang                                      
                
	 	MU ZHANG 
	 	 
	 	Number of shares Delivered at Closing:
      1,308,255 
	 	 
	 	CATALPA HOLDINGS, INC. 
	 	 
	 	/s/ Fred
      Chang                                
                     
	 	By: Fred Chang 
	 	Title: President 
	 	 
	 	Number of shares Delivered at Closing: 178,410
    
	 	  
	 	FIRST PRESTIGE INC. 
	 	 
	 	/s/ Hongtao
      Shi                                              
      
	 	By: Hongtao Shi 
	 	Title: President 
	 	 
	 	Number of shares Delivered at Closing: 164,648
    
	 	 
	 	JD INFINITY HOLDINGS INC. 
	 	 
	 	/s/ Liuyi
      Zhang                                                
      
	 	By: Liuyi Zhang 
	 	Title: President 
	 	 
	 	Number of shares Delivered at Closing: 164,648
    
	 	 
	 	FAVOR JUMBO ENTERPRISES LIMITED 
	 	 
	 	/s/ Annie
      Wang                                               
      
	 	By: Annie Wang 
	 	Title: President 
	 	 
	 	Number of shares Delivered at Closing: 96,852
    

[Signature Page to Stock Purchase Agreement] 

	 	THE COMPANY: 
	 	BABY FOX INTERNATIONAL, INC. 
	 	  
	 	/s/ Mu
      Zhang                                                 
      
	 	By: Mu Zhang 
	 	Title: Chief Executive Officer 
	 	  
	 	PURCHASER: 
	 	SUPER-STABLE GROUP HOLDINGS LIMITED 
	 	  
	 	/s/ Wei
      Wang                                                   
      
	 	By: Wei Wang 
	 	Title: 

[Signature Page to Stock Purchase Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}]]