ex10-7.htm


    
      


       

      Option
Agreement

       

      THIS OPTION
AGREEMENT (the "Agreement") effective as of
the 15th day of
October, 2008

       

      


       

      BETWEEN

      MASS
PETROLEUM INC.

      507 - 700 West
Pender Street

      Vancouver, BC V6C
1G8

      


      (the "Company")

       

      AND

      VITALY
MELNIKOV

      1130 – 4825 Hazel
Street

      Burnaby, BC V5H
4N4

       (the “Optionee”)

       

      


      WHEREAS:

      


       

      
        	
                A.

              	
                The Company
      entered into a consulting agreement (the “Consulting Agreement”)
      with the Optionee on June 9, 2008;
and

              


      

       

      
        	
                B.

              	
                In accordance
      with the provisions of the Consulting Agreement the Company has authorized
      the grant of options to the
Optionee.

              


      

      


      These securities
have not been registered under the Securities Act of 1933 (the "Act") and may not be offered
or sold in the United States or to U.S. persons (other than distributors) unless
the securities are registered under the Act, or an exemption from the
registration requirements of the Act is available. Hedging transactions
involving these securities may not be conducted unless in compliance with the
Act.

      


       

      THIS AGREEMENT WITNESSES that
the parties have agreed that the terms and conditions of the relationship shall
be as follows:

       

      1.    Grant of
Option, Purchase Price and Term.  The Company shall grant to
the Optionee the right and option, effective as of the vesting date (as defined
in the table below), to purchase all or any part of an aggregate of 500,000
common shares in the capital stock of the Company (the “Options”), at a purchase price
of US$1.50 per share, as set out in the table below.  The number of
Options being subject to adjustment as provided in Section 7 of this Agreement,
on the terms and conditions set forth in this Agreement. The Options may be
exercised by the Optionee until the expiry date of the Options as per the
following table.

       

      


      
        	
                Vesting
      Date

              	
                Number
      of Options

              	
                Purchase
      Price Per
      Share (US$)

              	
                Expiry
      Date (1)

              
	
                December 6,
      2008

              	
                125,000

              	
                1.50

              	
                December 5,
      2010

              
	
                June 6,
      2009

              	
                125,000

              	
                1.50

              	
                June 5,
      2011

              
	
                December 6,
      2009

              	
                125,000

              	
                1.50

              	
                December 5,
      2011

              
	
                June 6,
      2010

              	
                125,000

              	
                1.50

              	
                June 5,
      2012

              


      

       

      (1) Any unvested
Options will expire upon termination of the Consulting Agreement entered into
between the Optionee and the Company if such termination occurs prior to the
stated Expiry Date. Any stock Options held by the Optionee and vested at the
date of termination of the Consulting Agreement shell be exercisable for at
least ninety days immediately following the termination.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      2.    Non-transferability.  The
Options shall not be transferable except to the Optionee’s estate, and the
Options may be exercised during the lifetime of the Optionee, only by the
Optionee, or thereafter by its estate.  More particularly, but without
limiting the generality of the foregoing, the Options may not be assigned,
transferred, pledged or hypothecated in any way, shall not be assignable by
operation of law, and shall not be subject to execution, attachment or similar
process.  Any attempted assignment, transfer, pledge, hypothecation or
other disposition of the Options contrary to these provisions, and the levy of
any execution, attachment or similar process on the Options, shall be null and
void.

       

      3.    Optionee.  In
consideration of the granting of the Options, and regardless of whether or not
the Options shall be exercised, the Optionee will devote the agreed upon time,
energy and skill to the service of the Company or one or more of its
subsidiaries.

       

      4.    Representations
and Warranties of Optionee.  The
Optionee is purchasing as principal and is either :  

       

      
        	
                i.  

              	
                not a U.S.
      person and is not acquiring the Shares for the account or benefit of any
      U.S. person; OR

              


      

      
        	
                ii.  

              	
                a U.S. person
      who is purchasing the Shares in a transaction that does not require
      registration under the U.S. Securities
Act.

              


      

       

      5.    Method of
Exercising Option.  Subject to the terms and conditions of this
Agreement, the Optionee may exercise the Options by sending a written notice to
the Company, mailed or personally delivered to the Company at the following
address: 507 – 700 West Pender
Street, Vancouver BC V6C 1G8.  Such notice shall state the
election to exercise the Options and the number of shares in respect of which it
is being exercised, and shall be signed by the Optionee. The notice shall be
accompanied by payment of the full exercise price of the shares by certified
cheque, bank draft or money order. The Company shall issue for the Optionee’s
collection, a certificate or certificates representing the shares within 14 days
after receiving the notice.

       

      6.    Changes
in Capital Structure.  If all or any portion of the Options
shall be exercised subsequent to any share dividend, split-up, recapitalization,
merger, consolidation, combination or exchange of shares, separation,
reorganization or liquidation occurring after the date of this Agreement, as a
result of which shares of any class shall be issued in respect of outstanding
common shares, or common shares shall be changed into the same or a different
number of shares of the same or another class or classes, the person or persons
so exercising the Options shall receive the aggregate number and class of shares
which, if common shares (as authorized at the date of this Agreement) had been
purchased at the date of this Agreement for the same aggregate price (on the
basis of the price per share set forth in Section 1 of this Agreement) and had
not been disposed of, such person or persons would be holding, at the time of
such exercise, as a result of such purchase and all such share dividends,
split-ups, recapitalizations, mergers, consolidations, combinations or exchanges
of shares, separations, reorganizations or liquidations; provided, however, that
no fractional share be issued on any such exercise, and the aggregate price paid
shall be appropriately reduced on account of any fractional share not
issued.

       

      7.    Changes
in Control. For the purpose of this
Agreement, a Change in Control (the “Change in Control”) means
the acquisition by any person or any parties acting jointly or in concert with
the person (collectively, the “Acquirors”) of shares of the
Company such that the Acquirors beneficially own or exercise control or
direction over greater than 50% of the outstanding shares of the
Company.

       

      In
the event that Consulting Agreement entered into between the Optionee and the
Company is terminated  by the Company or by the Optionee within twelve
(12) months following the Change in Control of the Company, all stock options
granted to the Optionee and held by the Optionee at the date of termination
shall immediately vest and shall be exercisable for at least ninety (90) days
following the termination of the Consulting Agreement.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      9.    Reservation
of Shares to Satisfy Option.  The Company shall at all times
during the term of the Options reserve and keep available such number
of  shares as will be sufficient to satisfy the requirements of this
Agreement.

       

      10.        Currency.   Unless
otherwise indicated, all references to currency in this Agreement are in US
dollars.

       

       

      IN WITNESS WHEREOF this
Agreement is effective as of the date first written.

       

      
        	
                MASS
      PETROLEUM INC.

                by its
      authorized signatory

              	 
    	
                OPTIONEE:

              
	 	 	 
	
                /s/
      Oleg Bilinski  

              	 
    	
                /s/
      Vitaly Melnikov

              
	
                Oleg
      Bilinski, President, CEO and Director

              	 
      	
                Vitaly
      Melnikov