Document:

mivi_ex101.htm

EXHIBIT 10.1

 

THIS OPTION AGREEMENT made as of June 30, 2011

BETWEEN:

Prosper Enterprises Ltd. A British Columbia Corporation

 (The “Owner”)

 

AND:

Modern International Ventures, Inc., a Nevada Corporation

 

(The “Optionee”)

 

WHEREAS:

	
A.  

	
The Owner is real estate development company and owns certain real property located at 7411 Moffatt Road, Richmond British Columbia Canada, more particularly known and described as:

Lot N 1⁄2 18, Suburban Block 1, Except Plan 62052, Plan 8037, Block 4N,

Land District 36, Section 17, Range 6W.

 

(The “Lands”)

	
B.  

	
The Owner proposes to build a condominium development on the Lands (the “Project”);

	
C.  

	
The Owner has agreed to grant to the Optionee an option to purchase an interest in the Project and a right of first refusal for future projects on the terms and conditions set forth in this Agreement.

	
D.  

	
The Optionee desires a right of first refusal to participate in any future projects the Owner may develop.

NOW, THEREFORE, THIS AGREEMENT WITNESSES that in consideration of $10 now paid by the Optionee to the Owner and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by each of the parties, the Owner and the Optionee covenant, agree, warrant and represent as follows:

  

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ARTICLE 1—INTERPRETATION

 

1.1          Definitions.  In this Agreement:

“Business Day” means any day that is not a Saturday, Sunday or statutory holiday in British Columbia;

“Closing Date” means the first Business Day which is 30 days after the Exercise Date;

“Exercise Date” means the date on which notice of the exercise of the Option is delivered by the Optionee to the Owner under section 2.3;

“Government Body” means any domestic or foreign, national, federal, provincial, state, municipal or other local government body and any division, agent, commission, board, or authority of any quasi-governmental or private body exercising any statutory, regulatory, expropriation or taxing authority under the authority of any of the foregoing, and any domestic, foreign, international, judicial, quasi-judicial, arbitration or administrative court, tribunal, commission, board or panel acting under the authority of any of the foregoing;

“Lands” means the real property described in Schedule A, together with all improvements on the Lands and all rights and benefits appurtenant to the Lands;

“Laws” means all constitutions, treaties, laws, statutes, codes, ordinances, orders, decrees, rules, regulations and municipal bylaws, whether domestic, foreign or international, any judgments, orders, writs, injunctions, decisions, rulings, decrees, and awards of any Government Body, and any published policies or guidelines of any Government Body and including, without limitation, any principles of common law and equity;

“Municipality” means Richmond British Columbia in which the Project is located;

“Option” means the option granted by the Owner in favor of the Optionee under section 2.1;

“Option Expiry Date” means February 27, 2013;

“Option Fee” means 12,500,000 shares of the Optionee’s Class B Common Stock to be issued by the Optionee to the Owner;

“Optionee’s Solicitors” means Charles Rendina Law Corp.;

“Owner’s Solicitors” means [name of solicitors];

  

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“Permitted Encumbrances” means, collectively, the legal notations set out in Schedule B and the permitted encumbrances described in Schedule B;

“Person” includes an individual, partnership, corporation, trust, unincorporated association, pension plan, joint venture or other entity;

“Purchase Price” means the amount set out in section 2.2;

1.2          Currency.  All dollar amounts referred to in this Agreement are Canadian dollars.

1.3          Optionee.  In respect of the transactions contemplated by this Agreement, the Optionee is acting as principal and not as agent or trustee.

1.4          Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the Province of British Columbia and of Canada applicable in the Province of British Columbia.

1.5          Schedules.  The following are Schedules to this Agreement:

Schedule A — Lands

Schedule B — Permitted Encumbrances

 

ARTICLE 2—GRANT AND EXERCISE OF OPTION

2.1          Option.  In consideration of the payment of the Option Fee, the receipt of which is acknowledged by the Owner, the Owner grants to the Optionee the sole and exclusive option, irrevocable within the time herein limited, for exercise by the Optionee to purchase up to a 40% interest in the Project.

2.2          Purchase Price.  Shall be calculated as follows:

 

	
(a)  

	
a minimum amount of  $180,000 (the “Minimum Participation Amount”)

	
(b)  

	
an additional amount which, with the Minimum Participation Amount, will not exceed 40% of the amount expended on the project by the Owner as shown on the books of the Owner at the Closing Date.

2.3          Exercise of Option.  The Optionee may exercise the Option at any time until 5:00 pm on the Option Expiry Date by delivering to the Owner the following:

	
(a) 

	
written notice of the exercise of the Option; and

 

  

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(b)

	
written confirmation from the Optionee’s Solicitors confirming that $180,000 has been paid to the Optionee’s Solicitors, in trust, and is held by them as a deposit under section 2.6.

If the Option is exercised as set forth in this section 2.3, this Agreement will become a binding agreement for the purchase and sale of the percentage of the project which will be completed upon the terms and conditions contained in this Agreement on the Closing Date.

2.3          Non-exercise of Option.  If the Option is not exercised within the time and in the manner set forth in section 2.3, the Option and this Agreement will be null and void and no longer binding upon the parties and the Option Fee will be paid to the Owner.  The Optionee shall immediately execute and deliver to the Owner a release of all claims and discharge of the Option. The Owner shall be entitled to keep the shares representing the Option Fee free and clear of all claims as liquidated damages.

 

ARTICLE 3—UPON THE EXERCISE OF OPTION

 

3            Upon the Exercise of the Option.  The Optionee's interest in the Project shall commence upon receipt by the Owner of written notice of intention to exercise the option and payment of the Minimum Participation Amount.

	
(a)  

	
To the extent set forth in this agreement the Parties shall have an undivided fractional interest in the project.

	
(b)  

	
Separate capital accounts shall be maintained for each party and shall consist of the sum of its contributions to the capital of the Project plus its share of the profits of the Project, less its share of any losses of the Project, and less any distributions to or withdrawals made by or attributed to it from the Project

	
(c)  

	
The parties shall make such other capital contributions, in proportion to their respective percentage of ownership, required to enable the Project to carry out its purposes as set forth herein. The parties shall arrange for or provide any financing as may be required by the Project for carrying out the purposes of the Project. The terms and conditions of all such loans shall be subject to the prior approval of the parties. The parties shall endorse, assume, or guarantee such obligations of the Project as the parties may mutually agree upon.

	
(d)  

	
Should either party fail to pay its percentage of any expense or cost of the project the remaining party may make up any shortfall but the percentage of ownership shall be forthwith adjusted based on the actual money contribution of the parties. The Optionee shall not be entitled, without written consent of the Owner, to acquire more than a 40% interest in the Project.

  

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3.1          Powers of Parties. The following powers may be exercised only upon the consent of the parties:

	
(a)  

	
The power to borrow money on the general credit of the project in any amount, or to create, us, or incur any indebtedness to any person or entity;

	
(b)  

	
the power to make loans in any amount, the guarantee obligations of any person or entity, or to make any other pledge or extension of credit;

	
(c)  

	
the power to purchase or otherwise acquire any other property except in the ordinary course of business of The Project;

	
(d)  

	
the power to sell, encumber, mortgage or refinance any loan or mortgage on any of the project property;

	
(e)  

	
the power to confess any judgment against the project, or to create, as soon, incur or consent to any charge (including any deed, pledge, encumbrance,or security interest of any kind) upon any property or assets

3.2          Deadlock. In the event the Parties are divided on a material issue and cannot agree on the conduct of the business and there's of the project, then a deadlock between the parties shall be deemed to have occurred. Upon the occurrence of a deadlock, one party may elect to purchase the interest of the other at a price calculated as the Offeree's percentage interest in a total purchase price for all the assets of the Project. The offeror shall notify the offeree in writing of the offer to purchase, stating the total purchase price for all of the assets of the Project, and the price offered for the Offeree’s project interest expressed as the Offeree's percentage interest in the Project assets multiplied by the total purchase price of all of the assets of the Project. The Offeree shall have the right to buy the interest of the Offer were at the designated price and terms, or to sell the Offeree's interest to the offeror at the designated price and terms whichever the offeree may elect. The offer, when made by the offeror is irrevocable for 30 days. The Offeree shall have 10 days from the receipt of such offer to make its election, that is, either to buy such interest of the Offer or to sell its own interest, which shall be made in writing executed by the Offeree and stating the nature of the election. A party which is  obligated to purchase the interest of another Party pursuant to the provisions hereof shall have 20 days from the date of receipt of the written election from such other party to pay the designated price and satisfy the terms of such purchase. Should the Party who has received an offer to sell or buy failed to make the election required herein in a timely fashion, then such non-responding party shall be deemed to have elected and agreed to sell or buy, as the case may be, according to the terms of the offer.

3.4          Legal Title to the Project. The Parties agree that the legal title to the property and assets, including the Project itself may remain in the name of the Owner or be transferred to an entity created hold the property and assets including the project itself provided that the percentage ownership remains consistent with the percentage of ownership reflected in capital accounts.

  

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3.5          Transfer of Interest. Except as otherwise expressly permitted herein, neither party may sell, transfer, assign or encumber its interest in the project, or admit additional project members, without the prior written consent of the other Party. Any attempt to transfer or encumber any interest in the project in violation of this Section shall be null and void.

3.5.1       The Obligations and Rights Of Transferees are as follows:

	
(a)  

	
Any person who acquires, in any manner whatsoever, any interest in the Project, irrespective of whether such person has accepted and adopted writing the terms and provisions of this Agreement, shall be deemed by the acceptance of the benefit of the acquisition thereof to have agreed to be subject to and bound by all the obligations of this Agreement that any predecessor in interest of such person was subject to or bound by;

	
(b)  

	
the person acquiring an interest in the Project shall have only such rights, and shall be subject to all of the obligations, as are set forth in this Agreement; and, without limiting the generality of the foregoing, such a person shall not have any right to have the value of its interest ascertained or receive the value of such interest or, in lieu of thereof, profits attributable to any right in the Project except as herein set forth.

 

ARTICLE 4—INSPECTION

 

4.1          Inspection.  The Optionee and its advisors will be entitled upon reasonable notice to the Owner and in accordance with the Owner’s reasonable requirements as to security to enter the Lands and carry out investigations, tests and studies of the Lands.  If such action on the part of the Optionee or its advisers results in any damage of a material nature to the Lands, then the Optionee will at its own expense cause such repairs to be done as are necessary for purposes of returning the Lands to the state in which they were before the commencement of such action.  In addition, the Optionee will indemnify and save the Owner harmless from and against all losses, damages, expenses, claims and liabilities suffered or incurred by the Owner by reason of any negligence on the part of the Optionee or its advisers in carrying out the investigations, tests and studies contemplated in this section 3.1.

  

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4.2          Authorization.  The Owner expressly authorizes the Optionee and its advisers to meet with or correspond with the appropriate Government Bodies for the purpose of verifying the accuracy of the warranties and representations of the Owner contained in this Agreement, including but not limited to compliance with laws, bylaws, regulations and assessments, provided, however, that the Optionee will advise the Owner of any meeting with a Government Body and the Owner will be afforded the opportunity of having a representative present at any such meeting.  The Owner will promptly at the Optionee’s request execute and deliver any authorizations reasonably required by the Optionee to authorize the Government Bodies to meet and correspond with the Optionee and to release information to the Optionee as contemplated by this section.

 

ARTICLE 5—GENERAL COVENANTS

 

5.1          Covenants of the Owner.  The Owner covenants and agrees that it will, from and after the date of this Agreement to the Closing Date:

	
(a)

	
take all reasonable care to protect and safeguard the Lands and operate and otherwise deal with the Lands as a careful and prudent owner would do and in such a manner that, except as contemplated in this Agreement, the warranties and representations of the Owner remain true and correct;

	
(b)

	
maintain in full force and effect insurance coverage in respect of the Lands against such risks and to such limits as are in accordance with prudent business practice and suitable to the Lands;

	
(c)

	
observe and perform all of its obligations under the Permitted Encumbrances and diligently enforce all of its rights and remedies under the Permitted Encumbrances;

	
(e)

	
obtain the consent of the Bank with respect to the transactions contemplated in this Agreement as may be reasonably required under the Bank Security; and

	
(g)

	
forthwith advise the Optionee in writing upon the Owner becoming aware that any of the representations and warranties of the Owner 7.1 is inaccurate or incomplete in any material respect.

 

ARTICLE 5—RISK

 

5.1          Risk.  The Lands will be at the risk of the Owner until 12:00 am on the Closing Date.

 

ARTICLE 7—REPRESENTATIONS AND WARRANTIES

 

7.1          Representations and Warranties of the Owner.  The Owner represents and warrants to the Optionee, regardless of any independent investigations that the Optionee may cause to be made, that:

 

  

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(a)

	
the Owner is a corporation duly incorporated and validly existing under the laws of British Columbia and duly qualified to carry on business in British Columbia and has the corporate power and capacity to own its interest in its assets, and to enter into and to carry out the transactions contemplated in this Agreement;

	
(b)

	
the Owner is in good standing with the Office of the Registrar of Companies for British Columbia, has made all necessary filings required by the Business Corporations Act (British Columbia) and has never been struck from the register of companies maintained by the Office of the Registrar of Companies for British Columbia;

	
(c)

	
the execution and delivery of this Agreement and the completion of the transactions contemplated in this Agreement will have been by the Closing Date duly authorized by all necessary corporate action on the part of the Owner;

	
(d)

	
the Owner is not a non-resident of Canada within the meaning of the Income Tax Act (Canada);

	
(h)

	
no consent or approval of, or registration, declaration or filing with any Government Body is required for the execution or delivery of this Agreement by the Owner, the validity or enforceability of this Agreement against the Owner, or the performance by the Owner of any of the Owner’s obligations under this Agreement;

	
(i)

	
the Owner has no indebtedness or obligation to any person which might now or in future constitute a lien, charge or encumbrance on the Lands, other than the Bank Security and the Permitted Encumbrances;

	
(j)

	
no person has any agreement, or option or right to, or capable of becoming an agreement, option or right to, acquire any interest in the Lands, other than any right set out in any Permitted Encumbrances;

	
(k)

	
no person has entered into any lease, agreement to lease or license or acquired any right under which the person has any right to lease, use or occupy any portion of the Lands in the nature of a tenancy or license, other than the Permitted Encumbrances;

	
(l)

	
the Owner has a good and marketable title to the Lands free and clear of all security interests, liens, claims, mortgages, charges, encumbrances and legal notations other than the Permitted Encumbrances and the Bank Security;

	
(m)

	
the Permitted Encumbrances are in full force and effect and have not been further amended, neither the Owner nor any other party to the Permitted Encumbrances is in default thereunder and there are no existing disputes thereunder;

 

  

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(n)

	
there are no unpaid municipal taxes, local improvement taxes, rates, levies and assessments of any nature or kind assessed or imposed against the Lands or any part of the Lands;

	
(o)

	
the Owner has not received any notice and has no knowledge of any proposed expropriation of all or any part of the Lands;

	
(p)

	
the Owner has not received any notice and has no knowledge of any intention on the part of the Municipality to alter its zoning bylaw or official community plan so as to affect the Lands or the use or proposed use of the Lands;

	
(s)

	
in respect of the Bank Security:

	
  

	
(i)

	
there is no breach of, default under, acceleration of any obligation under, or occurrence of any event which, with the giving of notice or lapse of time or otherwise, would constitute a breach of, default under, or acceleration of any obligation under, any agreement relating to the Bank Financing, including the Bank Security; and

	
  

	
(ii)

	
all covenants on the part of the Owner have been fully observed and performed by the Owner to date in all material respects.

7.2          The Owner’s Warranties and Representations as of the Closing Date.  The Owner covenants and agrees that all representations and warranties of the Owner set forth in this Agreement or in any document delivered in connection with the purchase and sale contemplated by this Agreement will be true and correct at and as of the closing in all material respects (as if such representations and warranties were made on the Closing Date).

7.3          Optionee’s Representations and Warranties.  The Optionee represents and warrants to the Owner, regardless of any independent investigation that the Owner may cause to be made, that:

	
(a)

	
the Optionee is a corporation incorporated and validly existing under the laws of Nevada;

	
(b)

	
the Optionee is in good standing with the Secretary of State of Nevada, and has made all necessary filings required by the Revised Statues of Nevada;

	
(c)

	
the Optionee has the corporate power and capacity to enter into and carry out the transactions contemplated in this Agreement;

 

  

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(d)

	
the execution and delivery of this Agreement and the completion of the transactions contemplated in this Agreement will have been by the Closing Date duly authorized by all necessary corporate action on the part of the Optionee; and

7.4          Optionee’s Warranties and Representations as of the Closing Date.  The Optionee covenants and agrees that all representations and warranties of the Optionee set forth in this Agreement or in any document delivered in connection with the purchase and sale contemplated by this Agreement will be true and correct at and as of the closing in all material respects (as if such representations and warranties were made on the Closing Date).

7.5          Survival of Optionee’s Representations and Warranties.  The representations and warranties of the Optionee set forth in this Agreement or in any document delivered in connection with the purchase and sale contemplated by this Agreement will survive the closing of the purchase and sale of the Lands provided for in this Agreement and, notwithstanding such closing nor any investigation made by or on behalf of the Owner, will continue in full force and effect for the benefit of the Owner.  The Optionee acknowledges that the Owner is relying upon such representations and warranties in entering into this Agreement.

 

ARTICLE 8—CONDITIONS PRECEDENT

 

8.1          Optionee’s Conditions.  The Optionee’s obligation to complete the transactions contemplated by this Agreement is subject to fulfillment of the following conditions, each of which is for the sole benefit of the Optionee:

	
(a)

	
the representations and warranties of the Owner contained in section 7.1 will be true on and as of the Closing Date in all material respects with the same effect as though such representations and warranties had been made on and as of the Closing Date;

 

ARTICLE 9—PREPARATION OF CLOSING DOCUMENTS

 

9.1          Delivery of Documents—the Owner.  On or before the Closing Date, the Owner will cause the Owner’s Solicitors to deliver to the Optionee’s Solicitors the following items, in form and content satisfactory to the Optionee, acting reasonably, and duly certified by the Owner:

	
(a)

	
An accounting of the funds expended by the owner towards the total project price and the total amount of indebtedness of the owner in reference to the Project including the Permitted Encumbrances and  a statement of adjustments;

 

  

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(c)

	
a certificate of an authorized officer of the Owner dated the Closing Date certifying that each of the warranties and representations of the Owner set out in this Agreement is true and accurate on the Closing Date in all material respects or, to the extent any such representation or warranty is untrue or inaccurate, setting out in reasonable detail a description of the facts which give rise to such untruthfulness or inaccuracy; and

	
(f)

	
such further deeds, acts, things, certificates and assurances as may be requisite in the reasonable opinion of the Optionee’s Solicitors.

9.2          Delivery of Documents—Optionee.  On or before the Closing Date, the Optionee will deliver to the Optionee’s Solicitors the following items, in form and content satisfactory to the Owner, acting reasonably, and duly executed by the Optionee and the other parties thereto and in registrable form where appropriate, to be dealt with under Article 10:

	
(a)

	
the Minimum Purchase amount and any other purchase amount; and

	
(b)

	
a certificate of an authorized officer of the Optionee dated the Closing Date certifying that each of the representations and warranties of the Optionee set out in this Agreement is true and accurate on the Closing Date in all material respects or, to the extent any such representation or warranty is untrue or inaccurate, setting out in reasonable detail a description of the facts which give rise to such untruthfulness or inaccuracy;

	
(c)

	
a certificate of an authorized officer of the Optionee dated the Closing Date certifying acceptance of the accounting and adjustments provided by the Owner and the percentage of ownership of the project being acquired by the Optionee.

 

ARTICLE 10—CLOSING PROCEDURE

 

10.1        Payment in Trust.  On or before the Closing Date the Optionee will pay to the Optionee’s Solicitors in trust the Purchase Price.  The Owner irrevocably directs the Optionee to cause the Optionee’s Solicitors to pay the adjusted Purchase Price to the Owner’s Solicitors as contemplated in this Article 10 and this will be its good and sufficient authority for so doing.

10.2        Payment.  Forthwith upon the Optionee’s Solicitors being satisfied as to the priority of the Lands Transfer, after conducting a registration check of the property index disclosing only the following:

	
(a)

	
the existing title number to the Lands;

  

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(b) 

	
the Permitted Encumbrances;

	
(c) 

	
the Bank Security;

the Optionee will cause the Optionee’s Solicitors to deliver to the Owner’s Solicitors a trust cheque for the adjusted Purchase Price and to release the items referred to in sections 9.1 and 9.2 to the Optionee and the Owner, as the case may be.

10.4        Concurrent Requirements.  It is a condition of this Agreement that all requirements of this Article 10 are concurrent requirements and it is specifically agreed that nothing will be completed on the Closing Date until everything required to be paid, executed and delivered on the Closing Date has been so paid, executed and delivered.

 

ARTICLE 11—MISCELLANEOUS

 

11.1        Time.  Time will be of the essence of this Agreement and will remain of the essence notwithstanding the extension of any of the dates under this Agreement.

 

11.2        No Waiver.  No failure or delay on the part of either party in exercising any right, power or privilege under this Agreement will operate as a waiver thereof, nor will any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  Except as may be limited in this Agreement, either party may, in its sole discretion, exercise any and all rights, powers, remedies and recourses available to it under this Agreement or any other remedy available to it and such rights, powers, remedies and recourses may be exercised concurrently or individually without the necessity of making any election.

11.3        Tender.  It is agreed that any tender of documents or money may be made upon the respective solicitors for the parties and that it will be sufficient to tender a solicitor’s trust cheque, or a certified cheque drawn on one of the five largest Canadian chartered banks, rather than cash.

11.4        Legal Fees.  Each party will pay its own legal fees.  The Optionee will be responsible for all registration fees and property transfer tax payable in connection with the registration of the Lands Transfer.

11.5        Entire Agreement.  This Agreement and the agreements, instruments and other documents entered into under this Agreement set forth the entire agreement and understanding of the parties with respect to the subject matter of this Agreement and supersede all prior agreements and understandings among the parties with respect to the matters herein and there are no oral or written agreements, promises, warranties, terms, conditions, representations or collateral agreements, express or implied, other than those contained in this Agreement.

  

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11.6        Amendment.  This Agreement may be altered or amended only by an agreement in writing signed by the parties.

11.7        Further Assurances.  Each of the parties will at all times and from time to time and upon reasonable request do, execute and deliver all further assurances, acts, and documents for the purpose of evidencing and giving full force and effect to the covenants, agreements and provisions in this Agreement.

11.8        Notices.  Any demand or notice which may be given under this Agreement will be in writing and delivered addressed to the parties as follows:

To the Optionee:

Modern International Ventures, Inc,

C/o 3282 34th Ave West

Vancouver, BC V6N 2K4

Attention:  Patrick Li

With a copy to:

Rendina Law Firm, P.S

1991 Lake Whatcom Blvd

Bellingham, WA 98229

To the Owner:

Prosper Enterprises Ltd.

Attention:  Charles Lee

Telecopy:

or at such other address as either party may specify in writing to the other.  The time of giving and receiving any such notice will be deemed to be on the day of delivery or transmittal.

11.9        Assignment.  The Optionee will not assign its interest in this Agreement to any other person, without the prior consent of the Owner, which consent may be arbitrarily withheld.

11.10      Counterparts.  This Agreement may be executed in any number of original counterparts, with the same effect as it all the parties had signed the same document, and will become effective when one or more counterparts have been signed by all of the parties and delivered to each of the parties.  All counterparts will be construed together and evidence only one agreement, which, notwithstanding the dates of execution of any counterparts, will be deemed to be dated the reference date set out above.

  

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11.11      Binding Effect.  This Agreement will enure to the benefit of and be binding upon the heirs, executors, administrators, legal and personal representatives, successors and permitted assigns of the parties, as applicable.

11.12      Execution by Telecopy.  This Agreement may be executed by the parties and transmitted by telecopy and when it is executed and transmitted this Agreement will be for all purposes as effective as if the parties had delivered an executed original Agreement.

 

ARTICLE 12—RIGHT OF FIRST REFUSAL

 

12.1        In Further Consideration of Payment of the Option Fee of 12,500,000 shares of the Optionee’s Class B Common Stock the Owner hereby grants the Optionee a right of first refusal to purchase and participate in the profits of up to a 40% interest in any real estate development the Owner may undertake (“New Project”) between June 30, 2011 and June 30, 2016.

12.2        Notice. Owner will provide Optionee written notice of any New Project upon making a binding offer to purchase land.

12.3        Acceptance. Optionee shall signify the exercise of its right of first refusal by providing written notice of its intention to participate and the percentage of the project to which it will participate within 15 days of notice from the Owner.

12.4        Financial Participation. The right of first refusal to participate in any New Project is conditional upon the Optionee (a) providing evidence satisfactory to the owner of its solvency  and  ability to meet the financial requirements of the New Project; (b) the Optionee paying  all cash calls and making all financial commitments, including executing mortgages, and providing  guarantees  incidental to its participation in any New Project at the same date as the Owner or at such time as shall be agreed by the parties in writing.

 

  

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IN WITNESS WHEREOF the parties have executed this Agreement.

 

Prosper Enterprises Ltd

By Authorized Signatory

 

/s/ Shao Long Li

Shao Long Li

 

 

Modern International Ventures, Inc

By Authorized Signatory

 

/s/ Shao Long Li

Shao Long Li

 

  

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Schedule A

7411 Moffatt Road, Richmond British Columbia Canada, more particularly known and described as:

Lot N 1⁄2 18, Suburban Block 1, Except Plan 62052, Plan 8037, Block 4N,

Land District 36, Section 17, Range 6W.

  

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END OF DOCUMENT

 

 

 

17Exhibit 10.1

 

Exhibit 10.1

 

 

CUSTOM SOFTWARE DEVELOPMENT CONTRACT 

 

THIS CUSTOM SOFTWARE
DEVELOPMENT CONTRACT (“Contract” or “Agreement”) is made and entered into this 28th
day of June (the “Effective Date”) by and between Voice Assist, Inc.,
a Nevada corporation (“Voice Assist”), whose principal business address is 2 South Pointe Drive, Suite 100, Lake Forest,
California, 92630 and Augme Technologies, Inc., a Delaware corporation (“Customer”),
whose principal business address is 350 7th Avenue, 2nd Floor, New York, NY 10001.

 

WITNESSETH:

 

WHEREAS, Voice Assist
provides voice-activated, enhanced telecommunication services to the public;

 

WHEREAS, Customer
is a provider of mobile marketing technology to leading consumer and healthcare brands;

 

WHEREAS, Customer
would like Voice Assist to develop a customized software platform to facilitate the integration of its marketing and advertising
campaigns within Voice Assist’s services; and

 

WHEREAS, Voice Assist
is willing to develop a customized software platform for Customer, subject to the terms and conditions outlined herein;

 

WHEREAS, Voice Assist
and Customer will enter into an Advertising Agreement, dated of even date herewith, for the purchase of Voice Assist advertising
services;

 

NOW THEREFORE, Voice
Assist and Customer agree as set forth below:

 

1.1Development Plan.
This Contract is to develop a customized platform for Customer as more fully described on Exhibit A entitled “Development
Plan,” attached hereto and incorporated herein (the “Project”). Voice Assist shall furnish and supervise all
the work and schedule, coordinate, contract and administration necessary to complete the development of the Project in an expeditious
manner. The Development Plan shall include:

 

		(a)	Detailed Specifications for the Project and custom software platform;

		(b)	A list of all items to be delivered to Customer (“Deliverables”); and

		(c)	A delivery schedule containing a delivery date for each Deliverable.

 

1.2Payment Schedule.
Customer will pay Voice Assist a one time, flat fee of Two Hundred Thousand Dollars ($200,000), booked, payable and collectable
as of the Effective Date, as compensation for Voice Assist’s Project software development services under this Agreement (the
“Contract Price”).

 

    	1

    	 

    

 

This fee shall be paid to Voice Assist in three
(3) installments as follows: Seventy Five Thousand Dollars ($75,000) within thirty (30) days of the Effective Date of this Agreement;
($75,000 within thirty (60) days of the Effective Date of this Agreement and Fifty Thousand Dollars ($50,000) when the project
as described in Exhibit A of this Agreement is complete. The entire Contract Price will be invoiced by Voice Assist on or before
June 30, 2012.

 

1.3Recoupment
of Contract Price. In the event Voice Assist enters into an agreement with and collects a nonrecurring engineering fee from
an advertising affiliate or other Voice Assist partner other than Customer, for the development of a customized software platform
the same as or similar to the one contemplated herein, Voice Assist shall pay Customer 50% of each such payment collected by Voice
Assist until such time as Customer has recouped the Contract Price. Voice Assist shall be liable under this Section 1.3 only as
to payments actually received by Voice Assist from its partners or affiliates and in no event shall Voice Assist’s total
liability under this Section 1.3 exceed Two Hundred Thousand Dollars ($200,000).

 

1.4Voice Assist
Warrants. As part of the consideration for entering into this Agreement and the related Advertising Agreement, entered into
in conjunction herewith, Voice Assist agrees to grant Customer 100,000 warrants of VSST for fifty cents ($0.50) each under the
same terms as those warrants previously issued.

 

2.1Acceptance Testing of
Software. Immediately upon completion of each development phase set forth in the Development Plan’s delivery schedule,
Voice Assist shall deliver and install the Software and shall deliver all documentation and other materials required to be provided
in accordance with the delivery schedule. Customer shall have ten (10) days from the delivery of the Software to inspect, test
and evaluate it to determine whether the Software satisfies the acceptance criteria in accordance with procedures set forth in
the Development Plan.

 

If the Software does not
satisfy the acceptance criteria, Customer shall give Voice Assist written notice stating why the Software is unacceptable. Voice
Assist shall have ten (10) days from the receipt of such notice to correct the deficiencies. Customer shall then have seven (7)
days to inspect, test and reevaluate the Software. If the Software still does not satisfy the acceptance criteria, Customer shall
have the option of either: (1) repeating the procedure set forth above, or (2) terminating this Agreement pursuant to the section
of this Agreement entitled “Termination.”

 

Upon completion of the
final development phase set out in the Development Plan, acceptance testing shall be performed on the Software in its entirety
to determine whether the Software satisfies the acceptance criteria and operates with internal consistency. Customer shall have
seven (7) days to perform such tests. If the completed Software does not satisfy the acceptance criteria, the parties shall follow
the acceptance procedures described in the preceding paragraph.

 

If and when the acceptance
tests establish the Software delivered upon completion of any phase of development complies with the acceptance criteria, Customer
shall promptly notify Voice Assist that it accepts the delivered Software.

 

3.1Project
Timing. Voice Assist shall devote its best efforts to completion of the Project on time, in accordance with the Development
Plan. Delay in the Project arising from Customer’s failure to comply with the provisions of this Contract shall result in
no revisions to the Contract Price, but shall allow Voice Assist an equitable adjustment to the delivery schedule in the Development
Plan. Delay in the Project arising from Voice Assist’s failures to deliver shall result in Customer’s ability to withhold
payments, until completion of all Deliverables as required under the Development Plan and there shall be a fifteen percent (15%)
decreasing adjustment to the Contract Price to take into consideration additional costs or lost benefits, which Customer may incur
for delays in the implementation of the Project and unanticipated additional administrative expenses.

 

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4.1Changes to Project.
The Customer, without invalidating the Contract, may order changes to the Project consisting of additions, deletions, or modifications.
All changes to the Project shall be pursuant to a written change order prepared by Voice Assist and executed by both Customer and
Voice Assist (the “Change Order”), which shall set forth (a) the cost of the change in the Project; (b) the change,
if any, in the Project, (c) the change, if any, in the Contract Price; and (d) the change, if any, to the Development Plan schedules
(both delivery and payment). If Voice Assist anticipates a change in the scope of the Work that shall cause the Contract Price
to be exceeded, Contractor shall notify Owner in writing and only written and executed Change Orders shall become part of the Contract
and cause an increase in the Contract Price equal to that set forth in the Change Order.

 

5.1Customer’s Responsibilities.
Customer shall furnish all Project related documents to Voice Assist and shall forward all instructions to Voice Assist. Customer
shall select in a timely manner all design and related items required during the development process. Customer agrees to cooperate
and make every reasonable effort to assist Voice Assist during the course of development.

 

6.1Ownership of Project.
Voice Assist retains all right, title and interest in anything created or developed by Voice Assist for Customer under this Agreement
(“Work Product”) including all patents, copyrights, trade secrets and other proprietary rights.

 

6.2 Ownership of Technology.
Customer acknowledges that Voice Assist owns or holds a license to use and sublicense various preexisting development tools, routines,
subroutines and other programs, data and materials (specifically including the Voice Assist platform and each of its components)
that Voice Assist may include in the Project developed under this Contract (the “Background Technology”).

 

Voice Assist retains all
right, title and interest, including all copyright, patent rights and trade secret rights in the Background Technology. Subject
to full payment of the Contract Price due under this Contract, Voice Assist grants Customer a nonexclusive, perpetual worldwide
license to use the Background Technology solely in the Project developed for and delivered to Customer under this Contract. However,
Customer shall make no other commercial use of the Background Technology without Voice Assist’s prior express written consent.
Customer expressly acknowledges and agrees that it has no right, title or interest in such Background Technology and further that
Customer will obtain no right, title or interest in the Background Technology.

 

6.3Infringement Indemnity.
Voice Assist will defend and indemnify Customer against a claim that the Work Product infringes a copyright or patent or other
intellectual property right, provided that: (a) Customer notifies Voice Assist in writing within thirty (30) days of the claim;
and (b) Customer provides Voice Assist with the assistance, information and authority necessary to perform Voice Assist’s
obligations under this Section. If the Work Product is held or is believed by Voice Assist to infringe, Voice Assist shall have
the option, at its expense, to (a) modify the Work Product to be non-infringing; or (b) obtain for Customer a license to continue
using the Work Product.

 

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7.1Termination by Customer.
Customer may terminate the Contract at any time by providing thirty (30) days advance written notice to Voice Assist; however,
termination shall not relieve Customer’s obligations specified in this Contract. Further, Customer expressly acknowledges
and agrees that in the event the Contract is terminated by Customer, Customer will still be liable for the Contract Price through
the date of termination of this Contract.

 

7.2Termination by Voice Assist.
Voice Assist may terminate this Contract immediately if Customer materially breaches this Contract. Voice Assist may also terminate
this Contract by providing written notice to Customer if Customer permanently discontinues business or is adjudicated a bankrupt
or files a voluntary petition in bankruptcy or reorganization.

 

8.1Confidentiality. During
the term of this Agreement and for four (4) years afterward, the parties will use reasonable care to prevent the unauthorized use
or dissemination of the other’s confidential information, including the terms of this Agreement. Reasonable care means at
least the same degree of care each party uses to protect its own confidential information from unauthorized disclosure.

 

9.1Relationship of Parties.
Nothing contained in this Agreement will be construed as creating any agency, partnership, joint venture or other form of joint
enterprise between the parties. Voice Assist is solely an independent contractor, and neither Voice Assist nor Voice Assist’s
staff is, or shall be deemed, Customer’s employees. In its capacity as an independent contractor, Voice Assist agrees and
represents, and Customer agrees, as follows:

 

		(a)	Voice Assist will furnish all equipment and materials used to provide the services required by
this Agreement;

		(b)	The services required by this Agreement shall be performed by Voice Assist’s staff, and Customer
shall not be required to hire, supervise or pay any other individuals or entities to assist Voice Assist;

		(c)	Voice Assist is responsible for paying all expenses of its staff;

		(d)	Voice Assist is responsible for the collection and payment of all taxes associated with this Contract.

 

10.1Dispute
Resolution – Binding Arbitration. The Parties agree that if any dispute arises from or relates to this Contract, that
is not resolved through mediation or other informal settlement negotiations, such dispute shall be determined in a binding arbitration
proceeding conducted in Orange County, California administered by a single neutral arbitrator mutually acceptable to the Parties
or, if the Parties are unable to agree on an arbitrator, by an arbitrator selected through the American Arbitration Association.
The Arbitrator shall have the authority to grant both legal and equitable relief, and judgment upon the decision rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The decision of the arbitrator shall be final and binding upon
the Parties and in the event of any need to clarify or interpret the decision of the arbitrator, the matter shall be resubmitted
to the arbitrator for clarification or interpretation. Neither party shall initiate any litigation or other dispute resolution
procedure (other than mediation or informal settlement negotiations, which are allowed and encouraged) and any attempt to do so
shall be void and of no effect.

 

11.1Governing Law. This
Contract shall be governed by the laws of the State of California without regard to conflicts of law principles.

 

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12.1Successors and Assigns.
The parties shall not assign their rights hereunder without the prior express written consent of the other party, provided that
Voice Assist can subcontract any portion of the Project. Subject to the immediately preceding sentence, Customer and Voice Assist,
respectively, bind themselves, their successors, assigns and legal representatives to the other party and to successors, assigns
and legal representatives of such other party with respect to all covenants of this Contract. This section shall survive the termination
of this Agreement.

 

12.2No Third-Party Beneficiaries.
Nothing contained herein shall create a contractual relationship with, or any rights in favor of, any third party.

 

12.3Attorneys’ Fees.
The prevailing party in any arbitration or other dispute (including mediation or informal settlement discussions) arising out of
any interpretation, enforcement, default or failure in performance by the other party hereunder shall be entitled to receive all
of its costs incurred in prosecution or defense thereof, along with enforcement of any judgment, order or other award, including
all attorneys’ fees, incurred therefor.

 

12.4Notices. Any notice
hereunder shall be given in writing to the party for whom it is intended and delivered either in person or by United States Certified
or Registered Mail, postage prepaid, return receipt requested, or by facsimile, at addresses listed on the signature page hereto.

 

12.5No Waiver. If either
Voice Assist or Customer waives the performance of any term, covenant or condition of this Contract, such waiver shall not be deemed
to be a waiver of the term, covenant or condition itself, or a waiver of any subsequent breach of the same or any other term, covenant
or condition. Failure by either to enforce any of the terms, covenants or conditions of this Contract for any length of time shall
not be deemed to waive or decrease the right of such party to insist thereafter upon strict performance by the other party. Nor
shall any customary practice which may occur between the parties in the course of administering this Contract be construed to waive
or lessen any right of a party to insist upon the performance by the other of any term, covenant, or condition herein or to exercise
any rights given a party on account of any default. Waiver by either party of any term, covenant or condition of this Contract
may be made only by written document signed by such party.

 

12.6Severability.
If any provision of this Contract or the application of any provision of this Contract to any person or circumstance shall be found
to be invalid or unenforceable to any extent, the remainder of this Contract and the application of any such provision to other
persons or circumstances shall not be effected, and shall be enforced to the greatest extent permitted by law.

 

12.7Modification.This
Contract may not be modified, extended, canceled or discharged, or any covenant or provision waived, except by an agreement in
writing, signed by the party against whom enforcement of the modification, extension, discharge or waiver is sought.

 

12.8Headings. The headings
and titles of the paragraphs used herein are used for convenience only, and shall have no effect upon the construction or interpretation
of this Contract.

 

12.9Counterparts; Facsimile/Email
Transmission. This Contract may be executed in separate counterparts, each of which is deemed to be an original and all of
which taken together constitute one and the same agreement. Each party to this Contract agrees that its own facsimile and/or emailed
signature will bind it and that it accepts the facsimile and/or emailed signature of each other party to this Contract.

 

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12.10Entire Contract.
This Contract constitutes the entire Contract of the parties with respect to the subject matter and supersedes all prior negotiations,
understandings, and Contracts between them. Both Voice Assist and Customer acknowledge and agree that neither party has relied
on any representations or promises in connection with this Contract not contained herein. Notwithstanding the foregoing, Voice
Assist and Customer acknowledge that the parties have also entered into a Platform License Agreement for use by Customer of Voice
Assist’s background technology.

 

IN WITNESS
WHEREOF, the Parties have caused this Custom Software Development Contract to be executed as of the date first set forth above.

	VOICE ASSIST:	 	 
	 	 	 
	Dated: June 28, 2012	VOICE ASSIST, INC.
	 	 
	 	By:	/s/ Michael Metcalf
	 	Name: 	Michael Metcalf
	 	Its:	Chief Executive Officer
	 	Mail:	
        2 South Pointe Drive, Suite 100

        Lake Forest, California, 92630

 

	CUSTOMER:	 	 
	 	 	 
	Dated: June 28, 2012	AUGME TECHNOLOGIES, INC.
	 	 
	 	By:	/s/ Paul Arena
	 	Name: 	Paul Arena
	 	Its:	Chief Executive Officer
	 	Mail:	
        350 7th Avenue, 2nd Floor

        New York, NY 10001

 

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EXHIBIT A

to

CUSTOM SOFTWARE DEVELOPMENT CONTRACT

 

Development Plan:

 

		1)	In-Message AdvertisingTM

Voice Assist will incorporate Hipcricket
ad banner serving code in Voice Assist Mobile Apps and Voice Assist Emails (sent from free accounts) to allow non-targeted advertisements
to be displayed. Requires Ad Banner integration information from HipCricket.

 

		●	Estimated completion: July 31st 2012

 

		2)	In-Audio AdvertisingTM

Voice Assist will work with Augme
to optimize the effectiveness of audio advertising within the Voice Assist audio experience. This may include a branding attribution
upon log-in to the Voice Assist platform, an audio advertising after x actions (dial, email, text, post) or location based ad opportunities.
Audio ads will be actionable by voice commands; such as love it, like it, hate it, buy it, share it, connect me or text me.

 

		●	Voice Assist will develop a test version of the Voice Assist service that incorporates different
types of audio advertising (branding, direct response, interactive).

 

		●	Voice Assist will conduct research to determine the potential effectiveness of the different forms.

 

		●	Voice Assist will provide hooks for integration into the Hipcricket platform allowing the platform
to serve ads into the Voice Assist service and provide data on usage and actions taken.

 

		●	Estimated completion: September 30th 2012

 

		3)	DriveMode AdvertisingTM

A mobile app will be used to listen
to music or Internet radio and will be location and audio aware. Audio advertisements will be inserted based on location (drive
by), time and user profile. The app will pause music and read data messages upon receipt (text, Facebook, Twitter, email). Drivers
can respond verbally and then continue to listen to the audio content. Advertisements will be actionable with voice commands; such
as love it, like it, hate it, buy it, share it, connect me, text me.

 

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		●	Voice Assist will develop a mobile app that works with a 3rd party music or internet
radio service, Voice Assist communication services (Text, Email, Call, Post), interactive audio ad’s and related mobile banner
ads.

		●	The App will capture location information to allow geo-tagged ad serving.

		●	The App will capture spoken audio through the device microphone to enable voice commands for the
interactive ads and the Voice Assist services.

		●	The App and cloud based services will be audio aware ensuring that when one audio based service
is playing it can be interrupted by a higher priority audio service, such as incoming calls or text messages.

		●	Voice Assist will provide hooks for integration into the Hipcricket platform allowing the platform
to serve ads into the Voice Assist service and provide data on usage and actions taken.

		●	Estimated completion: September 30th 2012

 

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