Document:

Exhibit 10.1

ACQUISITION OPTION AGREEMENT

 

BY AND AMONG

 

WILSON HOLDINGS, INC.,

 

GREEN BUILDERS, INC.

 

AND

 

THE STOCKHOLDERS OF GREEN BUILDERS, INC.

 

 

 

 

 

 

December 14, 2006

 

 

ACQUISITION OPTION AGREEMENT

TABLE OF CONTENTS

Page

	
            ARTICLE I DEFINITIONS
 	
            1
 

	
             
 	
            1.1.
 	
            “Expiration Date”
 	
            1
 

	
             
 	
            1.2.
 	
            “Fair Market Value”
 	
            1
 

	
             
 	
            1.3.
 	
            “GAAP”
 	
            2
 

	
             
 	
            1.4.
 	
            “Material Adverse Effect”
 	
            2
 

	
             
 	
            1.5.
 	
            “Merger”
 	
            2
 

	
             
 	
            1.6.
 	
            “Merger Agreement”
 	
            2
 

	
             
 	
            1.7.
 	
            “Option Exercise Date”
 	
            2
 

	
             
 	
            1.8.
 	
            “Option Period”
 	
            2
 

	
             
 	
            1.9.
 	
            “Option Price”
 	
            2
 

	
             
 	
            1.10.
 	
            “Option Price Per Share”
 	
            2
 

	
             
 	
            1.11.
 	
            “Target Securities”
 	
            2
 

	
            ARTICLE II ACQUIROR OPTION TO ACQUIRE TARGET
 	
            2
 

	
             
 	
            2.1.
 	
            Option to Acquire Target
 	
            2
 

	
             
 	
            2.2.
 	
            Determination of Option Price
 	
            3
 

	
             
 	
            2.3.
 	
            Terms of Option
 	
            3
 

	
            ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF TARGET
 	
            3
 

	
             
 	
            3.1.
 	
            Organization and Good Standing
 	
            3
 

	
             
 	
            3.2.
 	
            Authorization
 	
            3
 

	
             
 	
            3.3.
 	
            Government and Other Consents
 	
            4
 

	
             
 	
            3.4.
 	
            Effect of Agreement
 	
            4
 

	
             
 	
            3.5.
 	
            Target Shareholders
 	
            4
 

	
            ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF STOCKHOLDERS
 	
            4
 

	
             
 	
            4.1.
 	
            Share Ownership and Agreement to Retain Shares
 	
            4
 

	
             
 	
            4.2.
 	
            Agreement to Vote Target Securities
 	
            5
 

	
             
 	
            4.3.
 	
            Authority
 	
            5
 

	
             
 	
            4.4.
 	
            No Conflict with Instruments
 	
            5
 

	
             
 	
            4.5.
 	
            No Claims Against Target
 	
            6
 

	
             
 	
            4.6.
 	
            Brokers or Finders
 	
            6
 

	
            ARTICLE V PROXY
 	
            6
 

	
            ARTICLE VI REPRESENTATIONS, WARRANTIES AND COVENANTS OF ACQUIROR
 	
            6
 

	
             
 	
            6.1.
 	
            Representations
 	
            6
 

		

 

i

 

 

Page

 

	
             
 	
            6.2.
 	
            Agreement to Vote
 	
            6
 

	
            ARTICLE VII TARGET COVENANTS
 	
            6
 

	
             
 	
            7.1.
 	
            Conduct of Business of Target
 	
            6
 

	
             
 	
            7.2.
 	
            No Solicitation
 	
            7
 

	
            ARTICLE VIII ACQUIROR CONSENT
 	
            7
 

	
            ARTICLE IX TERMINATION
 	
            7
 

	
            ARTICLE X GENERAL PROVISIONS
 	
            8
 

	
             
 	
            10.1.
 	
            Severability
 	
            8
 

	
             
 	
            10.2.
 	
            Binding Effect and Assignment
 	
            8
 

	
             
 	
            10.3.
 	
            Amendment and Modification
 	
            8
 

	
             
 	
            10.4.
 	
            Specific Performance; Injunctive Relief
 	
            8
 

	
             
 	
            10.5.
 	
            Notices
 	
            8
 

	
             
 	
            10.6.
 	
            Governing Law
 	
            9
 

	
             
 	
            10.7.
 	
            Entire Agreement
 	
            9
 

	
             
 	
            10.8.
 	
            Further Assurances
 	
            10
 

	
             
 	
            10.9.
 	
            Counterparts
 	
            10
 

	
             
 	
            10.10.
 	
            Remedies Cumulative
 	
            10
 

	
             
 	
            10.11.
 	
            Rules of Construction
 	
            10
 

 

EXHIBITS

TO

ACQUISITION OPTION AGREEMENT

	
            Exhibit A
 	
            -
 	
            Stockholders of Target (including addresses)
 

	
            Exhibit B
 	
            -
 	
            Form of Adoption Agreement
 

	
            Exhibit C
 	
            -
 	
            Proxy
 

 

 

ii

 

 

ACQUISITION OPTION AGREEMENT  

THIS ACQUISITION OPTION AGREEMENT (the “Agreement”) is made and entered into as of December 14, 2006 (the “Effective Date”) by and among Green Builders, Inc., a Texas corporation (“Target”), Wilson Holdings, Inc., a Nevada corporation (“Acquiror”), and the holders of securities of Target listed on Exhibit A, as such schedule may be amended from time to time with no further action by the parties hereto to add subsequent holders of securities of Target (individually, a “Stockholder”, and collectively, the “Stockholders”), and the spouses of the Stockholders, as applicable.

R E C I T A L S:

A.          As of the date hereof, each Stockholder owns, beneficially and of record, the Target Securities set forth on Exhibit A on the date hereof.

B.           Target and the Stockholders desire to grant Acquiror an option to have Target merged with and into Acquiror, in a tax-free reorganization (the “Merger”), on the terms and subject to the conditions set forth herein.

C.           The parties also wish to set forth certain other terms regarding Acquiror’s relationship with Target and the Stockholders.

AGREEMENT:

NOW, THEREFORE, in consideration of the respective representations and warranties and the mutual promises, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I

DEFINITIONS

As used in this Agreement, the following terms shall have the following respective definitions:

1.1.         “Expiration Date” shall mean June 19, 2009.

1.2.        “Fair Market Value”, as used with reference to Acquiror’s common stock, shall mean the average of the five trading days’ closing price on the date ending one trading day prior to the Option Exercise Date. The closing price shall be determined as follows: if the Acquiror’s common stock is (i) traded on Nasdaq or an a national securities exchange, then on the closing sales price per share of Acquiror’s common stock on the NASDAQ Stock Market (or any successor thereto) or any national securities exchange in which such common stock is quoted or listed, (ii) traded over-the-counter, then the average of the closing bid and asked prices for such common stock; and (iii) not traded, quoted or listed on The NASDAQ Stock Market or any national securities exchange or the over-the-counter
market, then as determined in good faith by Acquiror’s Board of Directors.

 

 

1.3.        “GAAP” shall mean generally accepted accounting principles as consistently applied for companies that conduct their principal operations in the United States.

1.4.        “Material Adverse Effect” with respect to any party to this Agreement shall mean any event, change or effect that is materially adverse to the condition (financial or otherwise), properties, assets, liabilities, business, operations or results of operations of such party.

1.5.        “Merger” shall mean the merger contemplated by and effected pursuant to the Merger Agreement (as defined below).

1.6.        “Merger Agreement” shall mean the Agreement and Plan of Merger to be negotiated in good faith by Acquiror and Target pursuant to which Acquiror (or, in Acquiror’s discretion, an affiliate of Acquiror) purchases all of the Target Securities (as defined below) or the Target Securities become converted into a right to receive the Option Price as a result of a statutory merger or reorganization.

1.7.        “Option Exercise Date” shall mean the date during the Option Period on which Acquiror gives written notice to Target of its election to exercise the Option (as defined below) pursuant to Section 2.1 hereof; provided, however, that the Option Exercise Date shall be no earlier than June 19, 2007.

1.8.        “Option Period” shall mean the period beginning on the date hereof and ending on the Expiration Date, subject to earlier termination pursuant to Section 2.3 hereof.

1.9.        “Option Price” shall mean the aggregate value of the Target Securities, determined as of the Option Exercise Date in accordance with Section 2.2 of this Agreement, and paid in full by Acquiror by tender of the appropriate number of shares of Acquiror’s common stock valued at its Fair Market Value in accordance with this Agreement.

1.10.      “Option Price Per Share” shall mean the Option Price, divided by the aggregate number of Target Securities.

1.11.       “Target Securities” shall mean all outstanding common stock, preferred stock and other capital stock or voting securities of Target; all options, warrants, convertible notes, rights of conversion and other rights to acquire stock or voting securities of Target; and all shares then issuable upon exercise, exchange or conversion of the preferred stock, options, warrants, convertible notes, rights of conversion and other rights to acquire stock or voting securities of Target, whether or not then currently vested, exercisable, exchangeable or convertible, excluding only the Option defined in Section 2.1 below and the securities held by Acquiror and its affiliates, unless specified otherwise. 

ARTICLE II

ACQUIROR OPTION TO ACQUIRE TARGET

2.1.        Option to Acquire Target. In exchange for consideration in the amount of $15,000, the receipt of which is hereby acknowledged, Target and each Stockholder hereby grant to Acquiror an exclusive, irrevocable right (the “Option”), at any time during the Option Period, to require Target to merge with Acquiror (or, in Acquiror’s
discretion, an affiliate of Acquiror, provided, however, that if Acquiror
decides to use an
affiliate, 

 

2

 

 

the
Stockholders shall be entitled to receive Acquiror Stock at the Option Price. Each Stockholder agrees that the exercise of the Option by Acquiror in accordance with the terms of this Agreement shall irrevocably bind each and every Stockholder to proceed with the Merger on the terms specified herein and in the Merger Agreement. 

 

2.2.        Determination of Option Price. The Option Price shall be determined by the mutual agreement of Target and Acquiror on the Option Exercise Date. In the event that Acquiror and Target are unable to agree upon an Option Price, the Acquiror and Target shall retain a mutually agreeable third-party valuation firm to conduct a valuation of Target. Such valuation will be performed at the expense of Target. The final determination by such valuation firm shall be binding on both parties. Following such determination of the Option Price, Acquiror shall notify Target of the number of Acquiror shares that will be tendered by Acquiror as payment of the Option Price promptly upon the making of such determination.

 2.3.
       Terms of Option. In the event Acquiror exercises the Option, Target shall promptly (but in no event later than fifteen (15) days after the Option Exercise Date) provide to Acquiror access to any documents reasonably requested by Acquiror or its representatives in connection with Acquiror’s due diligence investigation. If, within fifteen (15) days of receipt of the same, Acquiror shall have indicated its determination to proceed with the acquisition of Target, it shall deliver written notice of such determination to Target and the Stockholders and Target and Acquiror shall negotiate in good faith the Merger Agreement following which the parties shall proceed toward the closing in accordance with the terms of the Merger Agreement. 

Nothing contained in this Section 2 shall release any party from any liability for any breach by such party of the terms and provisions of this Agreement or impair the right of any party to compel specific performance by any other party of its obligations hereunder.

ARTICLE III

REPRESENTATIONS, WARRANTIES AND

COVENANTS OF TARGET

Target hereby represents, warrants and covenants to the Acquiror as follows:

3.1.         Organization and Good Standing. Target represents and warrants to Acquiror that Target is a corporation duly organized, validly existing and in good standing under the laws of the State of [Texas]. Target has the corporate power to own its properties and to carry on its business as now being conducted and as proposed to be conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the failure to be so qualified and in good standing would have a material adverse effect on Target. Target is not in violation of any of the provisions of its Articles of Incorporation or Bylaws.

3.2.        Authorization. All corporate action on the part of the Target necessary for the authorization, execution and delivery of this Agreement and for the performance of all of its obligations hereunder has been taken, and this Agreement constitutes a valid, legally binding and enforceable obligation of the Target.

 

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3.3.        Government and Other Consents. No consent, authorization, license, permit, registration or approval of, or exemption or other action by, any governmental or public body or authority is required in connection with the Target’s execution and delivery of this Agreement and the performance by the Target of its obligations hereunder, except for any filings required by applicable securities laws.

3.4.        Effect of Agreement. The Target’s execution and delivery of this Agreement, performance of its obligations hereunder, and its consummation of the transactions contemplated hereby will not (i) violate any provision of any law, statute, rule or regulation to which the Target is subject, (ii) violate any judgment, order, writ, injunction or decree of any court applicable to the Target, or (iii) result in the breach of, or be in conflict with, any term, covenant, condition or provision of, or affect the validity, enforceability and subsistence of any agreement, indenture, or other commitment to which the Target is a party that would materially and adversely affect the Target.

3.5.        Target Shareholders. The list of each shareholder of Target and each holder of any right to acquire shares of Target Securities is set forth as Exhibit A hereto. 

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND

COVENANTS OF STOCKHOLDERS

Each Stockholder, solely as to himself or itself, represents, warrants, and covenants to Acquiror as of the date hereof as follows:

4.1.          Share Ownership and Agreement to Retain Shares.

(1)          Ownership. Each Stockholder is the beneficial owner of that number of Target Securities set forth on Exhibit A and has held such Target Securities at all times since the date set forth on Exhibit A. Such Target Securities constitute such Stockholder’s entire interest in the outstanding capital stock and voting securities of Target. No other person or entity not a signatory to this Agreement has a beneficial interest in or a right to acquire such Target Securities (except with respect to stockholders which are partnerships, partners, retired partners or former partners of such stockholders). Such Target Securities are and will be free and clear of any liens, claims,
options, charges or other encumbrances other than the liens for taxes not yet due and payable. Each Stockholder’s principal residence or place of business is set forth on Exhibit A.

(2)          No Transfers.  Each Stockholder agrees not to transfer (except as may be specifically required by court order or by operation of law), sell, exchange, pledge or otherwise dispose of or encumber the Target Securities or any New Securities (as defined below), or to make any offer or agreement relating thereto, at any time prior to the Expiration Date; provided, that such Stockholder may other than for value (except that shares may be transferred for value provided that any such transfers are effected for a bona fide estate planning purpose (e.g. generation skipping trust) for the benefit of the permitted transferees under this paragraph), transfer Target Securities to Stockholder’s grandparents, spouse, parents,
uncles, aunt, siblings, the children of such siblings, lineal descendants (in each such case whether by blood, marriage or
adoption) and any other 

 

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relatives approved by the Board of Directors of Target or partnerships or trust for which Stockholder or such family member act as sole trustee or trustees or general partner, so long as each transferee agrees (in a writing reasonably acceptable to Acquiror, a form of which is hereby attached as Exhibit B) to be bound by this Agreement and shall have executed and delivered a Proxy (as defined below) covering such transferred Target Securities. Notwithstanding the foregoing, this Agreement will be binding upon any transferee, whether the transfer is  voluntary or involuntary.

(3)          New Target Securities. Each Stockholder agrees that any Target Securities that such Stockholder purchases or receives or with respect to which Stockholder otherwise acquires beneficial ownership after the date of this Agreement and prior to the Expiration Date (“New Securities”) shall be subject to the terms and conditions of this Agreement to the same extent as if they constituted Target Securities on the date hereof.

4.2.        Agreement to Vote Target Securities. During the period beginning on the Effective Date and ending on the Expiration Date, at every meeting of the stockholders of Target called with respect to any of the following, and at every adjournment thereof, and on every action or approval by written consent of the stockholders of Target with respect to any of the following, each Stockholder shall vote the Target Securities and any New Securities in favor of approval of the Merger and any matter that could reasonably be expected to be necessary to facilitate the Merger.

4.3.        Authority. Each Stockholder has all power and authority necessary to execute and deliver this Agreement and to carry out and perform such Stockholder’s obligations under the terms hereof. Each Stockholder has the sole power to dispose of his or its Target Securities either as his or its sole and separate property or as community property, as may be applicable to such Stockholder. This Agreement and the Proxy, when executed and delivered by or on behalf of a Stockholder, will constitute such Stockholder’s valid and binding obligation, enforceable against him or it in accordance with its terms, except to the extent that such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to creditors’ rights generally, or is subject to general
principles of equity.

4.4.        No Conflict with Instruments. The execution, delivery and performance of this Agreement and the Proxy and the other agreements attached hereto or entered into in connection herewith by such Stockholder do not, and will not, (i) if Stockholder is a legal entity, conflict with or violate any provision of the organizational documents, as amended, of such Stockholder; (ii) conflict with or violate any law, regulation, order, judgment, decree or governmental authorization applicable to such Stockholder or any of its properties; (iii) require any consent, approval or action of any person, or result in any conflict with or breach of or constitute a violation or default (or an event that with notice or lapse of time or both would become a violation or default), under any note, mortgage, indenture,
agreement, lease, license or other obligation or instrument to which such Stockholder is a party or by which he or it or any of his or its properties are bound or affected; or (iv) result in the creation of any lien, security interest, restriction or other encumbrance on any of the properties or assets of such Stockholder except as contemplated hereby.

 

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4.5.        No Claims Against Target. Each Stockholder has no claims (other than by virtue of owning Target Securities) against Target, does not intend to bring any claim against Target or any of its subsidiaries, and is aware of no facts that would, at this time, reasonably form the basis for any such claim against Target.

4.6.        Brokers or Finders. Each Stockholder has not dealt with any broker or finder in connection with the transactions permitted by this Agreement. Each Stockholder has not incurred, and shall not incur, directly or indirectly, any liability for any brokerage or finders’ fees or agents’ commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby.

ARTICLE V

PROXY

Each Stockholder is hereby delivering to Acquiror concurrently with the execution of this Agreement a duly executed proxy in the form attached as Exhibit C hereto (the “Proxy”), such Proxy to cover the total number of Target Securities and New Securities in respect of which Stockholder is entitled to vote at any meeting or by written consent. Upon the execution of this Agreement by a Stockholder, such Stockholder hereby revokes any and all prior proxies given by the Stockholder with respect to the Target Securities for purposes of approving a Takeover Proposal and agrees not to grant any subsequent proxies with respect to the Target Securities or any New Securities for the purpose of approving an Takeover Proposal (defined below) until after the Expiration Date.

ARTICLE VI

REPRESENTATIONS, WARRANTIES AND COVENANTS OF ACQUIROR

6.1.        Representations. Acquiror represents and warrants to Target and the Stockholders that Acquiror is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. Acquiror has the corporate power to own its properties and to carry on its business as now being conducted and as proposed to be conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the failure to be so qualified and in good standing would have a material adverse effect on Acquiror. Acquiror is not in violation of any of the provisions of its Certificate of Incorporation or Bylaws.

6.2.        Agreement to Vote. During the period beginning on the Effective Date and ending on the earlier to occur of (i) termination of this Agreement and (ii) the Expiration Date, Acquiror agrees to vote shares of any Target Securities and any New Securities then held by Acquiror, beneficially and of record, in favor of this Agreement and the Merger.

ARTICLE VII

TARGET COVENANTS

7.1.        Conduct of Business of Target.  During the period from the Option Exercise Date  until the consummation of the Merger, Target agrees to pay all debts and taxes when due subject to good faith disputes over such debts or taxes, to pay or perform all other obligations when due, and to use commercially reasonable efforts consistent with prudent business practice to preserve intact its business organizations, keep available the services of its
officers and preserve its relationships with customers, suppliers, distributors,
licensors, licensees 

 

6

 

 

and others having business dealings with it, to the end that its goodwill and ongoing businesses shall be unimpaired at the effective time of the Merger; and Target agrees to promptly notify Acquiror of any material event or occurrence not in the ordinary course of its or its subsidiaries’ business, and of any event which has or could reasonably be expected to have a material adverse effect on Target.

7.2.        No Solicitation. During the Option Period and, if the Option is exercised, continuing until the consummation of the Merger, Target, the officers, directors, employees or other agents of Target and the Stockholders, will not, directly or indirectly, take any action to solicit, initiate or encourage any offer or proposal for, or any indication of interest in, a merger or other business combination involving Target or the acquisition of outstanding shares of capital stock of Target that represent more than fifty percent (50%) of the voting control of Target held by securities holders of Target (excluding Acquiror), or substantially all of the assets of Target, other than the transactions contemplated by this Agreement (a “Takeover Proposal”) or (ii)
engage in negotiations with, or disclose any nonpublic information relating to Target to, or afford access to the properties, books or records of Target to, any person that has advised Target that it may be considering making, or that has made, a Takeover Proposal. During the Option Period and, if the Option is exercised, continuing until the consummation of the Merger, Target shall not, and shall not permit any of its officers, directors, employees or other representatives, to accept, agree to or endorse any Takeover Proposal. During the Option Period and, if the Option is exercised, continuing until the consummation of the Merger, Target will promptly notify Acquiror in writing after Target’s receipt of any Takeover Proposal or any notice that any person is considering making a Takeover Proposal or any request for nonpublic information relating to Target or for access to the properties, books or records of Target by any person that has advised Target that it may be considering
making, or that has made, a Takeover Proposal and will keep Acquiror fully informed of the status and details of any such Takeover Proposal notice, request or any correspondence or communications related thereto and shall provide Acquiror with a true and complete copy of such Takeover Proposal notice with the identity of the third party involved and the material terms of the Takeover Proposal, or request or correspondence or communications related thereto, if it is in writing, or a written summary thereof, if it is not in writing.

ARTICLE VIII

ACQUIROR CONSENT

Notwithstanding anything in this Agreement or otherwise, unless expressly provided to the contrary, no consent or approval by any designee of Acquiror on Target’s Board of Directors with respect to any matter shall be deemed to constitute the consent or approval of Acquiror with respect to any matter hereunder or under the Merger Agreement. 

ARTICLE IX

TERMINATION

Acquiror, at its sole discretion, may terminate this Agreement prior to the consummation of the Merger fifteen (15) business days written notice to Target. Target may not terminate this Agreement without the written consent of Acquiror. Unless provided otherwise in
this Agreement or terminated prior the Expiration 

 

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Date pursuant to this Agreement, this Agreement shall terminate upon the Expiration Date.

ARTICLE X

GENERAL PROVISIONS

10.1.      Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, then the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

10.2.      Binding Effect and Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but, except as otherwise specifically provided herein, neither this Agreement nor any of the rights, interests or obligations of the parties hereto may be assigned by Target or any of the Stockholders without the prior written consent of Acquiror.

10.3.      Amendment and Modification. This Agreement may not be terminated, modified, amended, altered or supplemented (each, a “Change”) except by the execution and delivery of a written agreement executed by Acquiror and Target. Notwithstanding the foregoing, Exhibit A hereto may be amended from time to time with no further action on the part of the parties hereto to add subsequent holders of Target Securities (each a “New Party”), provided that such New Party shall have executed and delivered an Adoption Agreement substantially in the form attached hereto as Exhibit B and a Proxy substantially in the form attached hereto
as Exhibit C. Upon the execution and delivery of an Adoption Agreement by a New Party reasonably acceptable to Acquiror, such New Party shall be deemed to be a party hereto as if such New Party’s signature appeared on the signature pages hereto. By their execution hereof of the Agreement, each of the parties hereto appoints Target as its attorney-in-fact for the purpose of executing any Adoption Agreement which may be required to be delivered hereunder.

10.4.      Specific Performance; Injunctive Relief. The parties hereto acknowledge that there will be no adequate remedy at law for a violation of any of the covenants or agreements set forth herein. Therefore, it is agreed that, in addition to any other remedies that may be available to a party upon any such violation, such party shall have the right to enforce such covenants and agreements by specific performance, injunctive relief or by any other means available to such party at law or in equity and each party hereby waives any and all defenses which could exist in its favor in connection with such enforcement.

10.5.      Notices. All notices, requests, demands or other communications that are required or may be given pursuant to the terms of this Agreement shall be in writing. Any notice, request, demand or other communication hereunder shall be deemed delivered four (4) business days after it is sent by registered or certified mail, (return receipt requested), postage prepaid, or one (1) business day after it is sent for next business day delivery via a reputable nationwide overnight courier service, in each case to the intended recipient as set forth below:

 

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If to a Stockholder, at the address set forth below the Stockholder’s name on Exhibit A hereof, with a copy (which shall not constitute notice) to Target at the address set forth below. 

If to Acquiror to:  

	
             
 
	
             
 
	
            Wilson Holdings, Inc.
 
	
            8121 Bee Caves Road
 
	
            Austin, Texas 78731
 
	
            Attn: President
 
	
             
 
	
             
 
	
             
 
	
            with a copy (which shall not constitute notice) to:
 
	
             
 
	
            Andrews Kurth LLP
 
	
            111 Congress Avenue, Suite 1700
 
	
            Austin, TX 78701
 
	
            Attn:  Carmelo Gordian
 
	
            Facsimile:  (512) 320-9292
 
	
             
 
	
            If to Target to:
 
	
             
 
	
            Green Builders, Inc.
 
	
            2100 Hartford Dr. 
 
	
            Austin, Texas 78703
 

 

Any party may give any notice, request, demand or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail or electronic mail), but no such notice, request, demand or other communication shall be deemed to have been duly given unless and until it actually is received by the party for whom it is intended. Any party may change the address to which notices, requests, demands and other communications hereunder are to be delivered by giving the other parties notice in the manner herein set forth.

 

10.6.      Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas, without giving effect to any choice or conflict of law provision or rule (whether of the State of Texas or any other jurisdiction) that would cause the application of laws of any jurisdictions other than those of the State of Texas.

10.7.      Entire Agreement. This Agreement, including the exhibits attached hereto contains the entire understanding of the parties in respect of the subject matter hereof and thereof, and supersedes all prior negotiations and understandings between the parties, whether written or oral, with respect to such subject matter.

 

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10.8.      Further Assurances. From and after the date of this Agreement, upon the reasonable request of Acquiror or Target, Target and the Stockholders (a) shall take such action and execute and deliver such instruments, documents or other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purpose of this Agreement, (b) shall not (i) take an action against the intent and purpose of this Agreement or (ii) refrain from taking any action in their control which effectuates the intent and purpose of this Agreement.

10.9.      Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement.

10.10.   Remedies Cumulative. Unless otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy.

10.11.   Rules of Construction. The parties hereto agree that they have been represented by counsel during the negotiation, preparation and execution of this Agreement, the exhibits hereto and any other agreements to be entered into in connection with the transactions contemplated hereby, and therefore waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

 

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            ACQUIROR:

 

WILSON HOLDINGS, INC.

 

 

By:/s/ Clark Wilson

Name: Clark
Wilson

Title: President and CEO
 
	
             
 	
             
 
	
             
 	
             

TARGET:

 

GREEN BUILDERS, INC.

 

 

By:/s/ Victor Ayad

Name: Victor Ayad

Title:President
 
	
             
 	
             
 
	
             
 	
                                                                                                                                                                                                                                                                                                                 
 
	
             
 	
            STOCKHOLDER:

 

 

/s/ Victory Ayad

VICTOR AYAD
 

 

 

 

 

 

 

 

 

[SIGNATURE PAGE TO ACQUISITION OPTION AGREEMENT]

 

                                          
                                          
                  

 

 

EXHIBIT A

Stockholders of Target (including addresses)

 

 

	
            Name and Address of Principal Residence
 	
            Shares
 	
            Date of Issue
 
	
            Victor Ayad
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 

 

 

 

EXHIBIT B

Form of Adoption Agreement

 

THIS ADOPTION AGREEMENT (“Adoption Agreement”) is executed by the undersigned (the “New Party”) pursuant to the terms of that certain Acquisition Option Agreement dated as of [_____________], 2006 (the “Agreement”), by and among Wilson Holdings, Inc., a Nevada corporation, Green Builders, Inc., a Texas corporation (the “Company”), and the Company’s stockholders named therein. Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Agreement. By the execution of this Adoption Agreement, the New Party agrees as follows:

1.           Acknowledgement. The New Party acknowledges that the New Party is acquiring certain shares of the capital stock of the Company (the “Stock”), subject to the terms and conditions of the Agreement.

2.           Agreement. As partial consideration for such transfer, the New Party (i) agrees that the Stock acquired by the New Party shall be bound by and subject to the terms of the Agreement, and (ii) hereby adopts the Agreement with the same force and effect as if the New Party were originally a party thereto. 

3.            Notice. Any notice required or permitted by the Agreement shall be given to the New Party at the address listed beside the New Party’s signature below.

4.           Joinder. The spouse of the undersigned the New Party, if applicable, executes this Adoption to acknowledge its fairness and that it is in such spouse’s best interests and to bind to the terms of the Agreement such spouse’s community interest, if any, in the Stock. 

EXECUTED AND DATED this ______ day of _________________, ____.

	
             
 	
            TRANSFEREE
 
	
             
 	
             
 
	
             
 	
            By:                      
 
	
             
 	
                        Name:     
			                                                     
			               
 
	
             
 	
            
			            Title:       
			                                                     
			
 
	
             
 	
                        Address:                                                      
			                                                 
 
	
             
 	
                                                                                                                                                                                                                                                                                               
			                            
			                                                     
			                                                                                                                                                                                                                                                                                     
 
	
             
 	
                       
			Fax:                                                               
 
	
             
 	
             
 
	
             
 	
            Spouse: (if applicable):
 
	
             
 	
             
 
	
             
 	
            Name:                                                                        
 
	
             
 	
             
 
	
            ACKNOWLEDGED AND ACCEPTED:
 	
             
 
	
             
 	
             
 
	
            GREEN BUILDERS, INC.
 	
             
 
	
             
 	
             
 
	
            By: 
			                                                                      
 	
             
 
	
            Name:                                                         
 	
             
 
	
            Title:    
			                                                      
 	
             
 
			

            

 

 

EXHIBIT C

PROXY

 

TO VOTE STOCK OF

GREEN BUILDERS, INC.

a Texas corporation

Until the Expiration Date, the undersigned stockholder of Green Builders, Inc., a Texas corporation (“Target”), hereby appoints the members of the Board of Directors of Wilson Holdings, Inc., a Nevada corporation (“Acquiror”), and each of them, or any other designee of Acquiror, as the sole and exclusive attorneys and proxies of the undersigned, with full power of substitution and resubstitution, to vote and exercise all voting rights (to the full extent that the undersigned is entitled to do so) with respect to all of the shares of capital stock of Target that now are or hereafter may be beneficially owned by the undersigned, and any and all other shares or securities of Target issued or issuable in respect thereof on or after the date hereof (collectively, the
“Shares”) in accordance with the terms of this Proxy. The Shares beneficially owned by the undersigned stockholder of Target as of the date of this Proxy are listed on the final page of this Proxy. Upon the undersigned’s execution of this Proxy, any and all prior proxies given by the undersigned in connection with the Merger (as defined below) or a Takeover Proposal, as defined in the Agreement (as defined below), are hereby revoked and the undersigned agrees not to grant any subsequent proxies with respect to the Shares for the purpose of approving the Merger until after the Expiration Date (as defined below).

This Proxy is irrevocable (to the extent provided in the Texas Business Corporations Act) until the Expiration Date, is coupled with an interest, and is granted in consideration of Acquiror entering into that certain Acquisition Option Agreement dated as of
December 14, 2006, by and among Target, Acquiror, and stockholders of Target identified therein (the “Agreement”), which Agreement provides for the merger of Target with and into Acquiror under certain circumstances and upon the terms contemplated by the Agreement (the “Merger”). This Proxy shall be deemed revoked without requirement of any action by the undersigned and shall be of no further force or effect from and after the Expiration Date. All capitalized terms used herein which are not otherwise defined herein shall
have the respective meanings ascribed to such terms in the Agreement.

The attorneys and proxies named above, and each of them are hereby authorized and empowered by the undersigned, at any time prior to the Expiration Date, to act as the undersigned’s attorney and proxy to vote the Shares, and to exercise all voting and other rights of the undersigned with respect to the Shares (including, without limitation, the power to execute and deliver written consents pursuant to the Texas Business Corporations Act), at every annual, special or adjourned meeting of the stockholders of Target and in every written consent in lieu of such meeting as follows:

	
             
 	
            [ X ]
 	
            IN FAVOR OF approval of the Merger specified in the Merger Agreement, IN FAVOR OF any matter that could reasonably be expected to be necessary to
			facilitate the transactions 
 

 

 

specified in the Agreement and the Merger Agreement, IN FAVOR  OF the Agreement and the Merger Agreement, and against any proposal for any recapitalization, merger, sale of assets or other business combination relating to the Target (other than the Merger specified in the Merger Agreement), and AGAINST any other action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of Target under the Agreement or that would result in any of the conditions to the completion of the Merger specified in the Merger Agreement not being fulfilled.

Specifically, but in no way by limitation, this Proxy shall not be used to waive or amend any rights or obligations of a Stockholder under, or any of the provisions of, the Agreement, Merger Agreement (in the form attached to the Agreement) or otherwise. The attorneys and proxies named above may not exercise this Proxy on any other matter except as provided above. The undersigned stockholder may vote the Shares and grant proxies on all other matters.

All authority herein conferred shall survive the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

This Proxy is coupled with an interest as aforesaid and is irrevocable.

Dated:
December 14, 2006

 

	
             	
            By:
 	
            /s/
			Victor Ayad
 

(Signature of Stockholder)

	
             	
            Name:    
 	
            Victor
			Ayad
 

(Print Name of Stockholder)

Spouse of Stockholder: ___________________ 

Shares beneficially owned:

_________ shares of Target Common Stock

[_________ shares of Target Common Stock issuable upon exercise of Target Options]Exhibit 10.1

    EXHIBIT
      10.1 

     

    

    

    2006
      NON-QUALIFIED STOCK COMPENSATION PLAN

    

    1. Purpose
      of Plan

    

    1.1 This
      2006
      NON-QUALIFIED STOCK
      COMPENSATION PLAN (the “Plan”) of China Fruits Corp., a Nevada corporation (the
“Company”), for employees, directors, officers consultants, advisors and other
      persons associated with the Company, is intended to advance the best interests
      of the Company by providing those persons who have a substantial responsibility
      for its management and growth with additional incentive and by increasing their
      proprietary interest in the success of the Company, thereby encouraging them
      to
      maintain their relationships with the Company. Further, the availability and
      offering of stock options and common stock under the Plan supports and increases
      the Company's ability to attract and retain individuals of exceptional talent
      upon whom, in large measure, the sustained progress, growth and profitability
      of
      the Company depends.

    

    2. Definitions

    

    2.1 For
      Plan
      purposes, except where the context might clearly indicate otherwise, the
      following terms shall have the meanings set forth below:

    

    “Board”
      shall mean the Board of Directors of the Company.

    

    “Committee”
      shall mean the Compensation Committee, or such other committee appointed by
      the
      Board, which shall be designated by the Board to administer the Plan, or the
      Board if no committees have been established. The Committee shall be composed
      of
two
      or
      more persons
      as from
      time to time are appointed to serve by the Board. 

    

    “Common
      Shares” shall mean the Company's Common Shares, $.001 par value per share, or,
      in the event that the outstanding Common Shares are hereafter changed into
      or
      exchanged for different shares of securities of the Company, such other shares
      or securities.

    

    “Company”
      shall mean China
      Fruits Corp., a Nevada corporation, and any parent or subsidiary corporation
      of
      China Fruits Corp., as such terms are defined in Sections 425(e) and 425(f),
      respectively, of the Code.

    

    “Fair
      Market Value” shall mean, with respect to the date a given stock option is
      granted or exercised, the average of the highest and lowest reported sales
      prices of the Common Shares, as reported by such responsible reporting service
      as the Committee may select, or if there were not transactions in the Common
      Shares on such day, then the last preceding day on which transactions took
      place. The above withstanding, the Committee may determine the Fair Market
      Value
      in such other manner as it may deem more equitable for Plan purposes or as
      is
      required by applicable laws or regulations.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    “Optionee”
      shall mean an employee of the company who has been granted one or more Stock
      Options under the Plan.

    

    “Common
      Stock” shall mean shares of common stock which are issued by the Company
      pursuant to Section 5, below.

    

              
      “Common Stockholder” means
      the
      employee of, consultant to, or director of the Company or other person to whom
      shares of Common Stock are issued pursuant to this Plan.

    

    “Common
      Stock Agreement” means an agreement executed by a Common Stockholder and the
      Company as contemplated by Section 5, below, which imposes on the shares of
      Common Stock held by the Common Stockholder such restrictions as the Board
      or
      Committee deem appropriate.

    

    “Stock
      Option” or “Non-Qualified Stock Option” or “NQSO” shall mean a stock option
      granted pursuant to the terms of the Plan.

    

    “Stock
      Option Agreement” shall mean the agreement between the Company and the Optionee
      under which the Optionee may purchase Common Shares hereunder.

    

    3. Administration
      of the Plan

    

    3.1 The
      Committee shall administer the Plan and accordingly, it shall have full power
      to
      grant Stock Options and Common Stock, construe and interpret the Plan, establish
      rules and regulations and perform all other acts, including the delegation
      of
      administrative responsibilities, it believes reasonable and proper.

    

    3.2 The
      determination of those eligible to receive Stock Options and Common Stock,
      and
      the amount, type and timing of each grant and the terms and conditions of the
      respective stock option agreements and Common Stock Agreements shall rest in
      the
      sole discretion of the Committee, subject to the provisions of the
      Plan.

    

    3.3 The
      Committee may cancel any Stock Options awarded under the Plan if an Optionee
      conducts himself in a manner which the Committee determines to be inimical
      to
      the best interest of the Company, as set forth more fully in paragraph 8 of
      Article 11 of the Plan.

    

    3.4 The
      Board, or the Committee, may correct any defect, supply any omission or
      reconcile any inconsistency in the Plan, or in any granted Stock Option, in
      the
      manner and to the extent it shall deem necessary to carry it into
      effect.

    

    3.5 Any
      decision made, or action taken, by the Committee or the Board arising out of
      or
      in connection with the interpretation and administration of the Plan shall
      be
      final and conclusive.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    3.6 Meetings
      of the Committee shall be held at such times and places as shall be determined
      by the Committee. A majority of the members of the Committee shall constitute
      a
      quorum for the transaction of business, and the vote of a majority of those
      members present at any meeting shall decide any question brought before that
      meeting. In addition, the Committee may take any action otherwise proper under
      the Plan by the affirmative vote, taken without a meeting, of a majority of
      its
      members.

    

    3.7 No
      member
      of the Committee shall be liable for any act or omission of any other member
      of
      the Committee or for any act or omission on his own part, including, but not
      limited to, the exercise of any power or discretion given to him under the
      Plan,
      except those resulting from his own gross negligence or willful
      misconduct.

    

    3.8 The
      Company, through its management, shall supply full and timely information to
      the
      Committee on all matters relating to the eligibility of Optionees, their duties
      and performance, and current information on any Optionee's death, retirement,
      disability or other termination of association with the Company, and such other
      pertinent information as the Committee may require. The Company shall furnish
      the Committee with such clerical and other assistance as is necessary in the
      performance of its duties hereunder.

    

    4. Shares
      Subject to the Plan

    

    4.1 The
      total
      number of shares of the Company available for grants of Stock Options and Common
      Stock under the Plan shall be 3,000,000 Common Shares, subject to adjustment
      in
      accordance with Article 7 of the Plan, which shares may be either authorized
      but
      unissued or reacquired Common Shares of the Company.

    

    4.2 If
      a
      Stock Option or portion thereof shall expire or terminate for any reason without
      having been exercised in full, the unpurchased shares covered by such NQSO
      shall
      be available for future grants of Stock Options.

    

    5. Award
      Of Common Stock

    

    5.1 The
      Board
      or Committee from time to time, in its absolute discretion, may (a) award Common
      Stock to employees of, consultants to, and directors of the Company, and such
      other persons as the Board or Committee may select, and (b) permit Holders
      of
      Options to exercise such Options prior to full vesting therein and hold the
      Common Shares issued upon exercise of the Option as Common Stock. In either
      such
      event, the owner of such Common Stock shall hold such stock subject to such
      vesting schedule as the Board or Committee may impose or such vesting schedule
      to which the Option was subject, as determined in the discretion of the Board
      or
      Committee.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    5.2 Common
      Stock shall be issued only pursuant to a Common Stock Agreement, which shall
      be
      executed by the Common Stockholder and the Company and which shall contain
      such
      terms and conditions as the Board or Committee shall determine consistent with
      this Plan, including such restrictions on transfer as are imposed by the Common
      Stock Agreement.

    

    5.3 Upon
      delivery of the shares of Common Stock to the Common Stockholder, below, the
      Common Stockholder shall have, unless otherwise provided by the Board or
      Committee, all the rights of a stockholder with respect to said shares, subject
      to the restrictions in the Common Stock Agreement, including the right to
      receive all dividends and other distributions paid or made with respect to
      the
      Common Stock.

    

    5.4. Notwithstanding
      anything in this Plan or any Common Stock Agreement to the contrary, no Common
      Stockholders may sell or otherwise transfer, whether or not for value, any
      of
      the Common Stock prior to the date on which the Common Stockholder is vested
      therein.

    

    5.5 All
      shares of Common Stock issued under this Plan (including any shares of Common
      Stock and other securities issued with respect to the shares of Common Stock
      as
      a result of stock dividends, stock splits or similar changes in the capital
      structure of the Company) shall be subject to such restrictions as the Board
      or
      Committee shall provide, which restrictions may include, without limitation,
      restrictions concerning voting rights, transferability of the Common Stock
      and
      restrictions based on duration of employment with the Company, Company
      performance and individual performance; provided that the Board or Committee
      may, on such terms and conditions as it may determine to be appropriate, remove
      any or all of such restric-tions. Common Stock may not be sold or encumbered
      until all applicable restrictions have terminated or expire. The restrictions,
      if any, imposed by the Board or Committee or the Board under this Section 5
      need
      not be identical for all Common Stock and the imposition of any restrictions
      with respect to any Common Stock shall not require the imposition of the same
      or
      any other restrictions with respect to any other Common Stock.

    

    5.6 Each
      Common Stock Agreement shall provide that the Company shall have the right
      to
      repurchase from the Common Stockholder the unvested Common Stock upon a
      termination of employment, termination of directorship or termination of a
      consultancy arrangement, as applicable, at a cash price per share equal to
      the
      purchase price paid by the Common Stockholder for such Common
      Stock.

    

    5.7 In
      the
      discretion of the Board or Committee, the Common Stock Agreement may provide
      that the Company shall have the a right of first refusal with respect to the
      Common Stock and a right to repurchase the vested Common Stock upon a
      termination of the Common Stockholder's employment with the Company, the
      termination of the Common Stockholder's consulting arrangement with the Company,
      the termination of the Common Stockholder's service on the Company's Board,
      or
      such other events as the Board or Committee may deem appropriate.

    

    5.8 The
      Board
      or Committee shall cause a legend or legends to be placed on certificates
      representing shares of Common Stock that are subject to restrictions under
      Common Stock Agreements, which legend or legends shall make appropriate
      reference to the applicable restrictions.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    6. Stock
      Option Terms and Conditions

    

    6.1 Consistent
      with the Plan's purpose, Stock Options may be granted to non-employee directors
      of the Company or other persons who are performing or who have been engaged
      to
      perform services of special importance to the management, operation or
      development of the Company.

    

    6.2 All
      Stock
      Options granted under the Plan shall be evidenced by agreements which shall
      be
      subject to applicable provisions of the Plan, and such other provisions as
      the
      Committee may adopt, including the provisions set forth in paragraphs 2 through
      11 of this Section 6.

    

    6.3 All
      Stock
      Options granted hereunder must be granted within ten years from the earlier
      of
      the date of this Plan is adopted or approved by the Company's
      shareholders.

    

    6.4 No
      Stock
      Option granted to any employee or 10% Shareholder shall be exercisable after
      the
      expiration of ten years from the date such NQSO is granted. The Committee,
      in
      its discretion, may provide that an Option shall be exercisable during such
      ten
      year period or during any lesser period of time.

     

        The
      Committee
      may establish installment exercise terms for a Stock Option such that the NQSO
      becomes fully exercisable in a series of cumulating portions. If an Optionee
      shall not, in any given installment period, purchase all the Common Shares
      which
      such Optionee is entitled to purchase within such installment period, such
      Optionee's right to purchase any Common Shares not purchased in such installment
      period shall continue until the expiration or sooner termination of such NQSO.
      The Committee may also accelerate the exercise of any NQSO. However, no NQSO,
      or
      any portion thereof, may be exercisable until thirty (30) days following date
      of
      grant (“30-Day Holding Period.”).

    

    6.5 A
      Stock
      Option, or portion thereof, shall be exercised by delivery of (i) a written
      notice of exercise of the Company specifying the number of common shares to
      be
      purchased, and (ii) payment of the full price of such Common Shares, as fully
      set forth in paragraph 6 of this Section 6.

     

        No
      NQSO or
      installment thereof shall be exercisable except with respect to whole shares,
      and fractional share interests shall be disregarded. Not less than 100 Common
      Shares may be purchased at one time unless the number purchased is the total
      number at the time available for purchase under the NQSO. Until the Common
      Shares represented by an exercised NQSO are issued to an Optionee, he shall
      have
      none of the rights of a shareholder.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    6.6 The
      exercise price of a Stock Option, or portion thereof, may be paid:

    

    A. In
      United
      States dollars, in cash or by cashier's check, certified check, bank draft
      or
      money order, payable to the order of the Company in an amount equal to the
      option price; or

    

    B. At
      the
      discretion of the Committee, through the delivery of fully paid and
      nonassessable Common Shares, with an aggregate Fair Market Value on the date
      the
      NQSO is exercised equal to the option price, provided such tendered Shares
      have
      been owned by the Optionee for at least one year prior to such exercise;
      or

    

    C. By
      a
      combination of both A and B above.

     

        The
      Committee
      shall determine acceptable methods for tendering Common Shares as payment upon
      exercise of a Stock Option and may impose such limitations and prohibitions
      on
      the use of Common Shares to exercise an NQSO as it deems
      appropriate.

    

    6.7 With
      the
      Optionee's consent, the Committee may cancel any Stock Option issued under
      this
      Plan and issue a new NQSO to such Optionee.

    

    6.8 Except
      by
      will or the laws of descent and distribution, no right or interest in any Stock
      Option granted under the Plan shall be assignable or transferable, and no right
      or interest of any Optionee shall be liable for, or subject to, any lien,
      obligation or liability of the Optionee. Stock Options shall be exercisable
      during the Optionee's lifetime only by the Optionee or the duly appointed legal
      representative of an incompetent Optionee.

    

    6.9 If
      the
      Optionee shall die while associated with the Company or within three months
      after termination of such association, the personal representative or
      administrator of the Optionee's estate or the person(s) to whom an NQSO granted
      hereunder shall have been validly transferred by such personal representative
      or
      administrator pursuant to the Optionee's will or the laws of descent and
      distribution, shall have the right to exercise the NQSO for one year after
      the
      date of the Optionee's death, to the extent (i) such NQSO was exercisable on
      the
      date of such termination of employment by death, and (ii) such NQSO was not
      exercised, and (iii) the exercise period may not be extended beyond the
      expiration of the term of the Option.

     

        No
      transfer
      of a Stock Option by the will of an Optionee or by the laws of descent and
      distribution shall be effective to bind the Company unless the Company shall
      have been furnished with written notice thereof and an authenticated copy of
      the
      will and/or such other evidence as the Committee may deem necessary to establish
      the validity of the transfer and the acceptance by the transferee or transferee
      of the terms and conditions by such Stock Option.

     

        In
      the event
      of death following termination of the Optionee's association with the Company
      while any portion of an NQSO remains exercisable, the Committee, in its
      discretion, may provide for an extension of the exercise period of up to one
      year after the Optionee's death but not beyond the expiration of the term of
      the
      Stock Option.

     

    6.10 Any
      Optionee who disposes of Common Shares acquired on the exercise of a NQSO by
      sale or exchange either (i) within two years after the date of the grant of
      the
      NQSO under which the stock was acquired, or (ii) within one year after the
      acquisition of such Shares, shall notify the Company of such disposition and
      of
      the amount realized upon such disposition. The transfer of Common Shares may
      also be Common by applicable provisions of the Securities Act of 1933, as
      amended.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    7. Adjustments
      or Changes in Capitalization

    

    7.1 In
      the
      event that the outstanding Common Shares of the Company are hereafter changed
      into or exchanged for a different number or kind of shares or other securities
      of the Company by reason of merger, consolidation, other reorganization,
      recapitalization, reclassification, combination of shares, stock split-up or
      stock dividend:

    

    A. Prompt,
      proportionate, equitable, lawful and adequate adjustment shall be made of the
      aggregate number and kind of shares subject to Stock Options which may be
      granted under the Plan, such that the Optionee shall have the right to purchase
      such Common Shares as may be issued in exchange for the Common Shares
      purchasable on exercise of the NQSO had such merger, consolidation, other
      reorganization, recapitalization, reclassification, combination of shares,
      stock
      split-up or stock dividend not taken place;

    

    B. Rights
      under unexercised Stock Options or portions thereof granted prior to any such
      change, both as to the number or kind of shares and the exercise price per
      share, shall be adjusted appropriately, provided that such adjustments shall
      be
      made without change in the total exercise price applicable to the unexercised
      portion of such NQSO's but by an adjustment in the price for each share covered
      by such NQSO's; or

    

    C. Upon
      any
      dissolution or liquidation of the Company or any merger or combination in which
      the Company is not a surviving corporation, each outstanding Stock Option
      granted hereunder shall terminate, but the Optionee shall have the right,
      immediately prior to such dissolution, liquidation, merger or combination,
      to
      exercise his NQSO in whole or in part, to the extent that it shall not have
      been
      exercised, without regard to any installment exercise provisions in such
      NQSO.

    

    7.2 The
      foregoing adjustments and the manner of application of the foregoing provisions
      shall be determined solely by the Committee, whose determination as to what
      adjustments shall be made and the extent thereof, shall be final, binding and
      conclusive. No fractional Shares shall be issued under the Plan on account
      of
      any such adjustments.

    

    8. Merger,
      Consolidation or Tender Offer

    

    8.1 If
      the
      Company shall be a party to a binding agreement to any merger, consolidation
      or
      reorganization or sale of substantially all the assets of the Company, each
      outstanding Stock Option shall pertain and apply to the securities and/or
      property which a shareholder of the number of Common Shares of the Company
      subject to the NQSO would be entitled to receive pursuant to such merger,
      consolidation or reorganization or sale of assets.

    

    8.2 In
      the
      event that:

    

    A. Any
      person other than the Company shall acquire more than 20% of the Common Shares
      of the Company through a tender offer, exchange offer or otherwise;

    

    B. A
      change
      in the “control” of the Company occurs, as such term is defined in Rule 405
      under the Securities Act of 1933;

    

    C. There
      shall be a sale of all or substantially all of the assets of the
      Company;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    any
      then
      outstanding Stock Option held by an Optionee, who is deemed by the Committee
      to
      be a statutory officer (“Insider”) for purposes of Section 16 of the Securities
      Exchange Act of 1934 shall be entitled to receive, subject to any action by
      the
      Committee revoking such an entitlement as provided for below, in lieu of
      exercise of such Stock Option, to the extent that it is then exercisable, a
      cash
      payment in an amount equal to the difference between the aggregate exercise
      price of such NQSO, or portion thereof, and, (i) in the event of an offer or
      similar event, the final offer price per share paid for Common Shares, or such
      lower price as the Committee may determine to conform an option to preserve
      its
      Stock Option status, times the number of Common Shares covered by the NQSO
      or
      portion thereof, or (ii) in the case of an event covered by B or C above, the
      aggregate Fair Market Value of the Common Shares covered by the Stock Option,
      as
      determined by the Committee at such time.

    

    8.3 Any
      payment which the Company is required to make pursuant to paragraph 8.2 of
      this
      Section 8 shall be made within 15 business days, following the event which
      results in the Optionee's right to such payment. In the event of a tender offer
      in which fewer than all the shares which are validly tendered in compliance
      with
      such offer are purchased or exchanged, then only that portion of the shares
      covered by an NQSO as results from multiplying such shares by a fraction, the
      numerator of which is the number of Common Shares acquired pursuant to the
      offer
      and the denominator of which is the number of Common Shares tendered in
      compliance with such offer shall be used to determine the payment thereupon.
      To
      the extent that all or any portion of a Stock Option shall be affected by this
      provision, all or such portion of the NQSO shall be terminated.

    

    8.4 Notwithstanding
      paragraphs 8.1 and 8.3 of this Section 8, the Committee may, by unanimous vote
      and resolution, unilaterally revoke the benefits of the above provisions;
      provided, however, that such vote is taken no later than ten business days
      following public announcement of the intent of an offer or the change of
      control, whichever occurs earlier.

    

    9. Amendment
      and Termination of Plan

    

    9.1 The
      Board
      may at any time, and from time to time, suspend or terminate the Plan in whole
      or in part or amend it from time to time in such respects as the Board may
      deem
      appropriate and in the best interest of the Company.

    

    9.2 No
      amendment, suspension or termination of this Plan shall, without the Optionee's
      consent, alter or impair any of the rights or obligations under any Stock Option
      theretofore granted to him under the Plan.

    

    9.3 The
      Board
      may amend the Plan, subject to the limitations cited above, in such manner
      as it
      deems necessary to permit the granting of Stock Options meeting the requirements
      of future amendments or issued regulations, if any, to the Code.

    

    9.4 No
      NQSO
      may be granted during any suspension of the Plan or after termination of the
      Plan.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    10. Government
      and Other Regulations

    

    10.1 The
      obligation of the Company to issue, transfer and deliver Common Shares for
      Stock
      Options exercised under the Plan shall be subject to all applicable laws,
      regulations, rules, orders and approval which shall then be in effect and
      required by the relevant stock exchanges on which the Common Shares are traded
      and by government entities as set forth below or as the Committee in its sole
      discretion shall deem necessary or advisable. Specifically, in connection with
      the Securities Act of 1933, as amended, upon exercise of any Stock Option,
      the
      Company shall not be required to issue Common Shares unless the Committee has
      received evidence satisfactory to it to the effect that the Optionee will not
      transfer such shares except pursuant to a registration statement in effect
      under
      such Act or unless an opinion of counsel satisfactory to the Company has been
      received by the Company to the effect that such registration is not required.
      Any determination in this connection by the Committee shall be final, binding
      and conclusive. The Company may, but shall in no event be obligated to, take
      any
      other affirmative action in order to cause the exercise of a Stock Option or
      the
      issuance of Common Shares pursuant thereto to comply with any law or regulation
      of any government authority.

    

    11. Miscellaneous
      Provisions

    

    11.1 No
      person
      shall have any claim or right to be granted a Stock Option or Common Stock
      under
      the Plan, and the grant of an NQSO or Common Stock under the Plan shall not
      be
      construed as giving an Optionee or Common Stockholder the right to be retained
      by the Company. Furthermore, the Company expressly reserves the right at any
      time to terminate its relationship with an Optionee with or without cause,
      free
      from any liability, or any claim under the Plan, except as provided herein,
      in
      an option agreement, or in any agreement between the Company and the
      Optionee.

    

    11.2 Any
      expenses of administering this Plan shall be borne by the Company.

    

    11.3 The
      payment received from Optionee from the exercise of Stock Options under the
      Plan
      shall be used for the general corporate purposes of the Company.

    

    11.4 The
      place
      of administration of the Plan shall be in P. R. China, and the validity,
      construction, interpretation, administration and effect of the Plan and of
      its
      rules and regulations, and rights relating to the Plan, shall be determined
      solely in accordance with the laws of the State of Nevada.

    

    11.5 Without
      amending the Plan, grants may be made to persons who are foreign nationals
      or
      employed outside the United States, or both, on such terms and conditions,
      consistent with the Plan's purpose, different from those specified in the Plan
      as may, in the judgment of the Committee, be necessary or desirable to create
      equitable opportunities given differences in tax laws in other
      countries.

    

    11.6 In
      addition to such other rights of indemnification as they may have as members
      of
      the Board or the Committee, the members of the Committee shall be indemnified
      by
      the Company against all costs and expenses reasonably incurred by them in
      connection with any action, suit or proceeding to which they or any of them
      may
      be party by reason of any action taken or failure to act under or in connection
      with the Plan or any Stock Option granted thereunder, and against all amounts
      paid by them in settlement thereof (provided such settlement is approved by
      independent legal counsel selected by the Company) or paid by them in
      satisfaction of a judgment in any such action, suit or proceeding, except a
      judgment based upon a finding of bad faith; provided that upon the institution
      of any such action, suit or proceeding a Committee member shall, in writing,
      give the Company notice thereof and an opportunity, at its own expense, to
      handle and defend the same, with counsel acceptable to the Optionee, before
      such
      Committee member undertakes to handle and defend it on his own
      behalf.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    11.7 Stock
      Options may be granted under this Plan from time to time, in substitution for
      stock options held by employees of other corporations who are about to become
      employees of the Company as the result of a merger or consolidation of the
      employing corporation with the Company or the acquisition by the Company of
      the
      assets of the employing corporation or the acquisition by the Company of stock
      of the employing corporation as a result of which it becomes a subsidiary of
      the
      Company. The terms and conditions of such substitute stock options so granted
      may vary from the terms and conditions set forth in this Plan to such extent
      as
      the Board of Directors of the Company at the time of grant may deem appropriate
      to conform, in whole or in part, to the provisions of the stock options in
      substitution for which they are granted, but no such variations shall be such
      as
      to affect the status of any such substitute stock options as a stock option
      under Section 422A of the Code.

    

    11.8 Notwithstanding
      anything to the contrary in the Plan, if the Committee finds by a majority
      vote,
      after full consideration of the facts presented on behalf of both the Company
      and the Optionee, that the Optionee has been engaged in fraud, embezzlement,
      theft, insider trading in the Company's stock, commission of a felony or proven
      dishonesty in the course of his association with the Company or any subsidiary
      corporation which damaged the Company or any subsidiary corporation, or for
      disclosing trade secrets of the Company or any subsidiary corporation, the
      Optionee shall forfeit all unexercised Stock Options and all exercised NQSO's
      under which the Company has not yet delivered the certificates and which have
      been earlier granted to the Optionee by the Committee. The decision of the
      Committee as to the cause of an Optionee's discharge and the damage done to
      the
      Company shall be final. No decision of the Committee, however, shall affect
      the
      finality of the discharge of such Optionee by the Company or any subsidiary
      corporation in any manner.

    

    12. Written
      Agreement

    

    12.1 Each
      Stock Option granted hereunder shall be embodied in a written Stock Option
      Agreement which shall be subject to the terms and conditions prescribed above
      and shall be signed by the Optionee and by the President or any Vice President
      of the Company, for and in the name and on behalf of the Company. Such Stock
      Option Agreement shall contain such other provisions as the Committee, in its
      discretion shall deem advisable.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    Number
      of
      Shares: ____________________                                                                                                                                         
Date
      of
      Grant: _____

    

    FORM
      OF
      NON-QUALIFIED STOCK OPTION AGREEMENT

    

    AGREEMENT
      made this____day
      of_____________________200___ ,
      between (the
      “Optionee”), and China
      Fruits Corp.,
      (the
“Company”).

    

    1. Grant
      of Option

     

        The
      Company,
      pursuant to the provisions of the Non-Qualified Stock Compensation Plan (the
      “Plan”), adopted by the Board of Directors on October 19, 2006, the Company
      hereby grants to the Optionee, subject to the terms and conditions set forth
      or
      incorporated herein, an option to purchase from the Company all or any part
      of
      an aggregate of ______
      shares
      of its $.001 par value common stock, as such common stock is now constituted,
      at
      the purchase price of $________ per share. The provisions of the Plan governing
      the terms and conditions of the Option granted hereby are incorporated in full
      herein by reference.

    

    2. Exercise

     

        The
      Option
      evidenced hereby shall be exercisable in whole or in part on or
      after______and
      on or
      before________,
      provided that the cumulative number of shares of common stock as to which this
      Option may be exercised (except in the event of death, retirement, or permanent
      and total disability, as provided in paragraph 6.9 of the Plan) shall not exceed
      the following amounts:

     

    Cumulative
      Number   Prior
      to
      Date

          
      of Shares                          
      (Not
      Inclusive of)

     

    

    The
      Option evidenced hereby shall be exercisable by the delivery to and receipt
      by
      the Company of (i) written notice of election to exercise, in the form set
      forth
      in Attachment B hereto, specifying the number of shares to be purchased; (ii)
      accompanied by payment of the full purchase price thereof in cash or certified
      check payable to the order of the Company, or by fully paid and nonassessable
      common stock of the Company properly endorsed over to the Company, or by a
      combination thereof, and (iii) by return of this Stock Option Agreement for
      endorsement of exercise by the Company on Schedule I hereof. In the event fully
      paid and nonassessable common stock is submitted as whole or partial payment
      for
      shares to be purchased hereunder, such common stock will be valued at their
      Fair
      Market Value (as defined in the Plan) on the date such shares received by the
      Company are applied to payment of the exercise price.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    3. Transferability

     

        The
      Option
      evidenced hereby is not assignable or transferable by the Optionee other than
      by
      the Optionee's will or by the laws of descent and distribution, as provided
      in
      paragraph 6.9 of the Plan. The Option shall be exercisable only by the Optionee
      during his lifetime.

    

    China
      Fruits Corp.

    

    

    

    By:

    Name:

    ATTEST:                                                                                                                                 
      Title:

    

    

    

    ________________________________

    Secretary

     

        Optionee
      hereby acknowledges receipt of a copy of the Plan, attached hereto and accepts
      this Option subject to each and every term and provision of such Plan. Optionee
      hereby agrees to accept as binding, conclusive and final, all decisions or
      interpretations of the of the Board of Directors administering the Plan on
      any
      questions arising under such Plan. Optionee recognizes that if Optionee's
      employment with the Company or any subsidiary thereof shall be terminated
      without cause, or by the Optionee, prior to completion or satisfactory
      performance by Optionee (except as otherwise provided in paragraph 6 of the
      Plan) all of the Optionee's rights hereunder shall thereupon terminate; and
      that, pursuant to paragraph 6 of the Plan, this Option may not be exercised
      while there is outstanding to Optionee any unexercised Stock Option granted
      to
      Optionee before the date of grant of this Option.

    

    Dated:___________                                                                                                                
      ______________________________________

    Optionee

    

                                                                                                                                                   
      ______________________________________

    Print
      Name

    

                                                                                                                                                   
      ______________________________________

    Address

     

                                                                                                                                                   
______________________________________

    Social
      Security No.

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    ATTACHMENT
      B

    

    NOTICE
      OF
      EXERCISE

    

    

    

    To: China
      Fruits Corp.,

    

    

    (1)  The
      undersigned hereby elects to purchase ________ shares of Common Shares (the
      “Common Shares”), of China Fruits Corp.,
      pursuant
      to the terms of the attached Non-Qualified Stock Option Agreement, and tenders
      herewith payment of the exercise price in full, together with all applicable
      transfer taxes, if any.

     

    (2)  Please
      issue a certificate or certificates representing said shares of Common Shares
      in
      the name of the undersigned or in such other name as is specified
      below:

     

    

    _______________________________

    (Name)

    

    _______________________________

    (Address)

    

    _______________________________

                                                                           
      (Address)

    

    

    

    Dated:

    

    

    ________________________

    Signature

    

    

    Optionee:____________________________          
      Date
      of
      Grant: ________________________

    

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      I

    

    

    
      	
              DATE

            	
              SHARES
                PURCHASED

            	
              PAYMENT
                RECEIVED

            	
              UNEXERCISED

              SHARES

              REMAINING

            	
              ISSUING

              OFFICER

              INITIALS

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

    

     

     

     

    
      
        
        

      

      
        14

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