STOCK OPTION AGREEMENT
This
Stock Option Agreement
(the “Option Agreement”) is made as of May 6, 2008 by and
between Xxxxxxx Xxxxxxx, an Individual residing at Xx. 00-00, 0
Xxxxx, Xxxxxx, Xxxxxxxx, Xxxxx, Xxxxx (the “Grantor”), and Xxxxxx Xxxx, , an
Individual residing at Room 1301, Jia Suite, Xx.0 xxxxxxxx, Xxxxxx
Xxxx, Xxxxxxxx Xxxxxxxx,Xxxxxxxxx, Xxxxx (the “Optionee”).
WHEREAS,
Grantor is owner of 10,000 shares (the “Shares”) of the common stock of Baby Fox
Limited, a British Virgin Islands corporation (the “Company”).
WHEREAS,
Grantor has agreed to grant Optionee an option to purchase 1,500 the Shares (the
“Option Shares”) subject to the terms and conditions hereunder;
NOW,
THEREFORE, in consideration of the mutual covenants and representations set
forth below, the Grantor and Optionee agree as follows:
1. Grant of
Option. The Grantor hereby grants to Optionee an option (the
“Option”) to purchase the Option Shares at an aggregate exercise price of
US$150.00 (the “Exercise Price”).
2. Delivery of Stock
Certificate and Stock Power. Concurrently with the delivery of
this Option Agreement, Grantor shall deliver to Optionee one or more stock
certificates totaling that number of shares of the Company common stock which
equal in the aggregate, that number of Option Shares granted hereunder, along
with a separate notarized stock power of attorney placing the Option Shares in
the name of Optionee. Grantor agrees that he will deliver any
additional forms and documents necessary to effect the transfer from Grantor to
Optionee should they be necessary.
3. Exercise of
Option. This Option shall be exercisable during the term
hereof by delivery of an exercise notice in the form attached hereto and made a
part hereof as Exhibit A (the
“Exercise Notice”) which shall state the election to exercise the Option, the
number of Shares with respect to which the Option is being exercised, and such
other representations and agreements as may be required by the Grantor. The
Exercise Notice shall be accompanied by payment of the Exercise
Price. This Option shall be deemed to be exercised upon receipt by
the Grantor of such fully executed Exercise Notice accompanied by the Exercise
Price. No Shares shall be issued pursuant to the exercise of an
Option unless such issuance and such exercise complies with applicable
laws. Assuming such compliance, for income tax purposes the Shares
shall be considered transferred to the Optionee on the date on which the Option
is exercised with respect to such Shares.
The
number of stock Option exercisable shall be based on Exhibit C.
4. Optionee’s
Representations. In the event the Shares have not been
registered under the Securities Act at the time this Option is exercised, the
Optionee shall, if required by the Grantor, concurrently with the exercise of
all or any portion of this Option, deliver to the Grantor his Investment
Representation Statement in the form attached hereto and made a part hereof as
Exhibit B.
5. Term of
Option. This Option may be exercised until December 31,
2018
6. Entire Agreement; Governing
Law. This Option Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes in its
entirety all prior undertakings and agreements of the Grantor and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Grantor and
Optionee. This agreement is governed by the internal substantive laws
but not the choice of law rules of Nevada.
Optionee
has reviewed this Option in its entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee further agrees to notify the
Grantor upon any change in the residence address indicated below.
| OPTIONEE | GRANTOR | |||
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Signature
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Signature
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| Xxxxxx Xxxx | Xxxxxxx Xxxxxxx | |||
| Room 1301, Jia Suite, Xx.0 xxxxxxxx | Xx. 00-00, 0 Xxxxx, Xxxxxx | |||
|
Xxxxxx
Park, Zhonglou District
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Nakanoku, Tokyo, Japan | |||
| Changzhou, China 213000 |
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EXHIBIT
A
EXERCISE
NOTICE
Xxxxxxx
Xxxxxxx
Xx.
00-00, 0 Xxxxx,
Xxxxxx,
Xxxxxxxx
Xxxxx,
Xxxxx
Attention:
Hotoshi Yoshida
1. Exercise of
Option. Effective as of today, _____________, _Linyin Wang,
the undersigned (“Optionee”) hereby elects to exercise Optionee’s option to
purchase _
1,500_ shares of the Common Stock (the “Shares”) of Baby Fox
Limited (the
“Company”) under and pursuant to the Stock Option Agreement dated as of _May 8, 2008 (the
“Option Agreement”).
2. Payment of Exercise
Price. Optionee herewith delivers to the Grantor the full
purchase price of the Shares, as set forth in the Option Agreement, and any and
all withholding taxes due in connection with the exercise of the
Option.
3. Representations of
Optionee. Optionee acknowledges that Optionee has received,
read and understood the Option Agreement and agrees to abide by and be bound by
its terms and conditions.
4. Rights as
Stockholder. Until the issuance of the Shares (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Shares shall be
issued to the Optionee as soon as practicable after the Option is exercised in
accordance with the Option Agreement. No adjustment shall be made for
a dividend or other right for which the record date is prior to the date of
issuance.
5. Tax
Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee’s purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any
tax consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Grantor for
any tax advice.
6. Restrictive Legends and
Stop-Transfer Orders.
(a) Legends. Optionee
understands and agrees that the Company shall cause such legends that may be
required by the Company or by state or federal securities laws to be placed upon
any certificate(s) evidencing ownership of the Shares.
(b) Stop-Transfer
Notices. Optionee agrees that, in order to ensure compliance
with the restrictions referred to herein, the Company may issue appropriate
“stop transfer” instructions to its transfer agent, if any, and that, if the
Company transfers its own securities, it may make appropriate notations
to the same effect in its own records.
(c) Refusal to
Transfer. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Exercise Notice or (ii) to treat
as owner of such Shares or to accord the right to vote or pay dividends to any
Optionee or other transferee to whom such Shares shall have been so
transferred.
7. Governing Law;
Severability. This Exercise Notice is governed by the internal
substantive laws but not the choice of law rules, of Nevada. In the
event that any provision hereof becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Option Agreement will
continue in full force and effect.
8. Entire
Agreement. The Option Agreement is incorporated herein by
reference. This Exercise Notice, the Option Agreement and the
Investment Representation Statement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Grantor and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Grantor and
Optionee.
| Submitted by: | Accepted by: | |||
| OPTIONEE | GRANTOR | |||
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Signature
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Signature
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| Xxxxxx Xxxx | Xxxxxxx Xxxxxxx | |||
| Room 1301, Jia Suite, Xx.0 xxxxxxxx | Xx. 00-00, 0 Xxxxx, Xxxxxx | |||
|
Xxxxxx
Park, Zhonglou District
|
Nakanoku, Tokyo, Japan | |||
| Changzhou, China 213000 |
Date
Received
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EXHIBIT
B
INVESTMENT
REPRESENTATION STATEMENT
OPTIONEE: Xxxxxx
Xxxx
GRANTOR: Xxxxxxx
Xxxxxxx
SECURITY: COMMON
STOCK
AMOUNT:
DATE:
In
connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Grantor the following:
(a) Optionee
is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities. Optionee is
acquiring these Securities for investment for Optionee’s own account only and
not with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act.
(b) Optionee
acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of Optionee’s investment
intent as expressed herein. Optionee further understands that the
Securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is
available. In this connection, the Investor represents that it is
familiar with SEC Rule 144, as now in effect, and understands the resale
limitations imposed thereby and by the Act. Optionee further
acknowledges and understands that the certificate evidencing the Securities will
be imprinted with any legend required under applicable state securities
laws.
(c) Optionee
acknowledges that it is able to fend for itself, can bear the economic risk of
its investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Securities. Optionee is an “accredited investor” within the
meaning of SEC Rule 501 of Regulation D, as now in effect.
| Signature of Optionee: | |||
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| Date: ________, ____________ | |||
EXHIBIT
C
EXERCISE
SCHEDULE
Both
Grantor and Optionee agree that the number of Option Shares that become
exerciseable from time to time will depend on the following Milestones achieved
due to Optionee’s direct contributions:
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Milestones |
%
of Total Option becomes Exercisable
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1.
Employment, when Optionee completes his servicew as company’s consultant
with Baby Fox International, Inc.; ratio is based on proration over two
year period, from January 18, 2008 to January 17, 2010
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30%
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2.
Successfully filing the S-1 registation statement with SEC for the private
placement completed by , 2008
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5%
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3.
S-1 is declared effective by the SEC
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5%
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4.
Company engages a FINRA registered broker-dealer and succeeds in filing
Form 211 for application for Company’s shares of common stock to be quoted
on the OTCBB
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5%
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5.
Form 211 is delared effective by FINRA
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5%
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6.
Achieving net income of US$500,000 in fiscal year 2008
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25%
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7.
Achieving net income of US$1,000,000 in fiscal year 2009
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25%
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