ex10_1.htm


     

    
      

      

    

    


     OPTION
      AGREEMENT

    (the
      "Agreement")

     

    THIS
      AGREEMENT is effective as of the 8th  day
      of January, 2008.

     

    BETWEEN:

            ETIFF
      HOLDINGS,
      LLC., a corporation governed under the laws of the State of
      Delaware,

        

            (the
      "Optionor"),

     

    -
      and
      -

     

                        FOUNDATION
      VENTURE LEASING INC., in Trust, a corporation governed under the laws of
      the Province of Ontario,

     

                       
      (the "Optionee"),

     

    -
      and
      -

     

                       
      RACINO ROYALE, INC., a corporation organized under the laws of the State
      of Nevada (the "Corporation")

     

     

    RECITALS:

     

    
      	
              A.

            	
              The
                Optionor is the legal and beneficial owner of fourteen million twenty-one
                thousand, six hundred (14,021,600) shares of common stock (the "Shares")
                of the Corporation; 

            


    

     

    
      	
              B.

            	
              The
                Optionor has agreed to sell and the Optionee has agreed to purchase
                2,620,000 of the Shares in accordance with a share purchase agreement
                between the Optionor and the Optionee dated December 7, 2007 (the
                "Share
                Purchase
                Agreement"); 

            


    

     

    
      	
              C.

            	
              The
                Share Purchase Agreement contemplates that the Optionor grants the
                Option
                to the Optionee in accordance with the terms hereof.
                

            


    

     

     

    THIS
      AGREEMENT
      WITNESSES that in consideration of the sum of one dollar ($1.00) and
      other good and valuable consideration (the receipt and sufficiency of which
      is
      hereby acknowledged by the Optionor), it is agreed by and between the parties
      hereto as follows:

     

    
      	
              1.

            	
              In
                this Agreement, unless there is something in the subject matter or
                context
                inconsistent therewith, the following terms shall have the meanings
                set
                out below. 

            


    

     

    "Business
      Day"
      means a day, other than a Saturday or Sunday, on which banks in Toronto, Ontario
      are generally open for business;

     

    "Exercise
      Price" means those option exercise prices itemized in Section 3 hereto. 

     

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          
            - 2 -

             

          

        

      

    

    


     

     

    "Share"
      or
      "Shares"
      shall
      mean, as the case may be, one or more common shares in the capital of the
      Corporation owned by the Optionor as constituted at the date of this
      Agreement.

     

    
      	
              2.

            	
              The
                Optionor hereby gives and grants to the
                Optionee, subject to the terms and conditions hereinafter set out,
                an
                irrevocable option (the "Option")
                to purchase up to an aggregate of 2,620,000 Shares (the "Optioned
                Shares") (subject to adjustment in accordance with Section
                7 below)
                from
                the Vendor at the exercise price per Optioned Share as set out in
                Section
                3 below.
                

            


    

     

    
      	
              3.

            	
              Subject
                to Section 4 hereto,
                the Optioned Shares shall be made
                available for transfer from the Optionor to the Optionee on and from
                the
                date hereof at the exercise price of $0.05 per Option Share (subject
                to
                adjustment in accordance with Section 7 below)
                (the
                "Exercise
                Price"). 

            


    

     

    
      	
              4.

            	
              The
                Optionee shall have the right to exercise the Option, with respect
                to all
                or any part of the Optioned Shares, at any time prior to 5:00 p.m.
                Toronto
                time on the Termination Date (as hereinafter defined). To exercise
                the
                Option or any part of the Option, the Optionee shall deliver to the
                Optionor, at its head office, a written notice of exercise predominately
                in the form attached hereto as Schedule
                "A", specifying the number of Option Shares with respect to which
                the Option is being exercised, accompanied by a certified cheque
                or bank
                draft for the amount equal to the product of the Exercise Price and
                the
                number of Option Shares with respect to which the Option is being
                exercised.  Upon any such exercise of the Option, the Optionor
                shall, as soon as reasonably practical, deliver to the Optionee a
                certificate or certificates registered in the name of the Optionee
                representing in the aggregate the number of Option Shares in respect
                of
                which the Option was exercised.  The Optionee, its legal
                representatives, legatees or distributees shall not be, and shall
                be
                deemed not to be, a holder of any Option Shares subject to this Option,
                unless and until the certificate(s) representing such Option Shares
                is
                issued and delivered to the Optionee pursuant to this Agreement.
                

            


    

     

    
      	
              5.

            	
              At
                5:00 p.m. Toronto time September 1, 2008 (the "Termination
                Date"), the Option shall expire and terminate as to such of the
                Optioned Shares in respect of which the Option has not then been
                exercised. 

            


    

     

    
      	
              6.

            	
              Nothing
                herein contained or done pursuant hereto shall obligate the Optionee
                to
                purchase and/or pay for or the Optionor to issue any Optioned Shares
                except those Optioned Shares in respect of which the Optionee shall
                have
                exercised the Option in the manner hereinbefore provided.
                

            


    

     

    
      	
              7.

            	
              If
                the outstanding Shares are increased, decreased, changed into or
                exchanged
                for a different number or kind of shares of securities of the Corporation
                through re-organization, merger, re-capitalization, re-classification,
                stock dividend, subdivision or consolidation, an appropriate and
                proportionate adjustment shall be made by the board of directors
                of the
                Optionor in its discretion in the number or kind of shares optioned
                and
                the 

            


    

     

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          
            -
              3
              -

             

          

        

      

    

    


    exercise
      price per share, as regards any unexercised
      portion of the Option.  In the event of any consolidation or change of
      the Shares of the Corporation at any time prior to a Termination Date into
      a
      lesser number of shares, the number of shares deliverable by the Optionor on
      any
      exercise thereafter of the Option shall be reduced to such number of shares
      as
      would have resulted from such consolidation or change if such exercise of the
      Option had been prior to the date of such consolidation or change.  In
      the event of any reclassification of the Shares of the Corporation at any time
      prior to a Termination Date, the number and class of shares deliverable by
      the
      Optionor on any exercise thereafter of the Option shall be the number and class
      of shares as would have resulted from such reclassification if the Option had
      been exercised prior to the date of such
      reclassification.  Adjustments under this Section 7 shall
      be made by Optionor with respect to the
      Option Shares in the same manner as the adjustments made by the board of
      directors of the Corporation with respect to the Shares.  No
      fractional Option Share or other security shall be required to be issued under
      this Option or pursuant to any adjustment contemplated in this
      section. 

     

    
      	
              8.

            	
              The
                Optionor represents that the Optioned Shares are duly issued and
                outstanding as fully paid and non-assessable common shares of the
                Corporation. The Optionor covenants that it has duly reserved, set
                aside
                and conditionally allotted the Optioned Shares to and in favour of
                the
                Optionee, its successors and assigns, for transfer upon exercise
                of the
                Option. 

            


    

     

    
      	
              9.

            	
              All
                notices given hereunder must be in writing and may be delivered by
                personal delivery or by pre-paid, registered or certified mail, or
                by
                telecopier or facsimile transmission to the following address or
                to such
                other address or addresses as a party hereto may advise the other
                party in
                writing from time to time and shall be deemed received three days
                after
                mailing by registered or certified mail, and on the day on which
                it was
                personally delivered or on which it was transmitted by telecopier
                or
                facsimile if such a day is a Business Day and if delivered or transmitted
                prior to 5:00 pm on such Business Day, otherwise it shall be deemed
                to
                have been received on the next Business Day following such personal
                delivery or transmission: 

            


    

     

    if
      to the
      Optionor:

     

    ETIFF
      Holdings, LLC

    144
      Front
      Street West, Suite 700

    Toronto,
      Ontario  M5J 2L7

     

    Fax:                 
      905-833-9847

    Attention:      
      Jason Moretto

     

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          
            - 4 -

             

          

        

      

    

    


    if
      to the
      Optionee:

     

    Foundation
      Venture Leasing Inc., in Trust

    95
      Wellington Street West, Suite 1200

    Toronto,
      Ontario  M5J 2Z9

     

    Fax:                  416-941-8852

    Attention:      
      Jeremy Goldman

     

     

    
      	
              10.

            	
              Time
                shall be of the essence of this Agreement.


            


    

     

    
      	
              11.

            	
              This
                Agreement may be signed in counterparts and each such counterpart
                shall
                constitute an original document and such counterparts, taken together,
                shall constitute one and the same instrument.


            


    

     

    
      	
              12.

            	
              This
                Agreement shall enure to the benefit of and be binding upon the successors
                and assigns of the parties hereto. All benefits, rights and options
                accruing to the Optionee in accordance with the terms and conditions
                of
                this Option shall be transferable or assignable by the Optionee upon
                compliance with all applicable securities laws.


            


    

     

    
      	
              13.

            	
              This
                Agreement shall be construed under and governed by the internal laws
                of
                the province of Ontario without regard to its conflict of laws provisions.
                The parties hereto submit and attorn to the exclusive jurisdiction
                of the
                courts of the province of Ontario and irrevocably agree that any
                action
                commenced by any party shall be in Toronto, Ontario.
                

            


    

     

     

     

     

    SIGNATURE
      PAGE TO FOLLOW

     

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          
            - 5 -

             

          

        

      

    

    


    IN
      WITNESS WHEREOFthis
      agreement has been
      executed by the parties hereto.

     

     

     

    ETIFF
      HOLDINGS, LLC.

    


    


    


    Per:      
      
        
Name:

    

    Title:

     

    I
      have
      the authority to bind the corporation.

     

     

     

    FOUNDATION
      VENTURE LEASING INC., in Trust

     

     

     

    Per: 
      
        

      
Name:

    Title:

     

    I
      have
      the authority to bind the corporation.

     

     

     

    RACINO
      ROYALE, INC.

     

     

     

    Per:
      
        

      
Name:

    Title:

     

    I
      have
      the authority to bind the corporation.

     

     

     

     

     

     

     

     

     

    


     

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      "A"

     

    EXERCISE
      FORM

     

     

    TO:           
      ETIFF HOLDINGS, LLC

     

    The
      undersigned Holder of the Option hereby purchases _______ Common Shares in
      the
      capital of Racino Royale, Inc. and hereby makes payment of the purchase price
      for the said number of Common Shares.

     

    The
      undersigned hereby directs that the Common Shares hereby purchased be issued
      and
      delivered as follows:

     

     

    
      	
               

              Name
                in Full

            	
               

              Address
                in Full

               

            	
               

              Number
                of Shares

               

            
	
               

               

            	 	 
	
               

               

            	 	 


    

     

     

    (Please
      state full names in which share certificates are to be issued, stating whether
      Mr., Mrs., Ms. or Miss.)

     

    DATED
the
      ________ day of ______________________, 20____.

     

    
      	 	 	 
	 	 	
               

              Holder’s
                Name (please print)

               

            


    

     

     

    
      	 	 	 
	 	 	
               

              Authorized
                Signature