Document:

exh4-1_certdesignation.htm

     

    
      

      

    

     

     

     

     

     

     

     

     

     

    EXHIBIT 4.1

     

    CERTIFICATE OF DESIGNATION OF RIGHTS,
PREFERENCES,

    AND PRIVILEGES FOR SERIES A PREFERRED
STOCK

     

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    CERTIFICATE
OF DESIGNATION of

    RIGHTS,
PREFERENCES & PRIVILEGES for

    SERIES
A PREFERRED STOCK of

    BRINX
RESOURCES LTD., A NEVADA CORPORATION

     
 

    1.             Designation.

    

    One
Million (1,000,000) shares of the Preferred Stock of this corporation are hereby
constituted as a series of Preferred Stock, $0.001 par value per share,
designated as “Series A Preferred Stock” (the “Series A Preferred
Stock”).

    

    2.           Redemptions.

    

     (a)           (i)           If
a Fundamental Change (as hereinafter defined) is to occur, this corporation will
notify each holder of Series A Preferred Stock in writing of such pending
Fundamental Change no less than twenty-five (25) days prior to the consummation
thereof.  Such notice will describe the material terms and conditions
of the Fundamental Change (including, but not limited to, the amount and nature
of the total consideration to be paid in connection therewith) and the
provisions of this Section 2(a)(i) and this corporation will thereafter give
each holder prompt notice of any material changes in such terms.  The
holder or holders of a majority of the Series A Preferred Stock then outstanding
may (a) reject the Fundamental Change or (b) require this corporation to redeem
for cash all the Series A Preferred Stock then outstanding at a price per share
of Series A Preferred Stock equal to the Series A Redemption Price (as
hereinafter defined), by giving written notice to this corporation of such
election within twenty-five (25) days after receipt of notice from this
corporation. Upon receipt of such election to redeem, this corporation will be
obligated to redeem the outstanding Series A Preferred Stock at the time of the
consummation of such Fundamental Change.  If the proposed Fundamental
Change does not occur, the request for redemption automatically will be deemed
rescinded.

    

    (ii)           The
term “Fundamental
Change” means (a) individuals who constitute the Board of Directors of
the corporation as of the date hereof shall cease to constitute a majority of
the members of the Board of Directors still in office, (b) a sale, lease or
other transfer of more than fifty percent (50%) of the assets of this
corporation on a consolidated basis (computed on the basis of book value,
determined in accordance with generally accepted accounting principles
consistently applied, or fair market value, as determined by the Board of
Directors in its reasonable good faith judgment) in any transaction or series of
related transactions (other than sales in the ordinary course of business), or
(c) any merger, consolidation or reorganization to which this corporation
is a party, except for a merger, consolidation or reorganization in which either
(x) this corporation is the surviving corporation or (y) the outstanding Series
A Preferred Stock is converted into or exchanged for shares of convertible
preferred stock of an entity succeeding to the business of this corporation,
which convertible preferred stock has powers, preferences, and relative,
participating, optional, or other rights, and qualifications, limitations, and
restrictions, substantially similar to those of the Series A Preferred Stock,
and in either case (x) or (y), after giving effect to such merger, consolidation
or reorganization, the holders of this corporation’s outstanding capital stock
(on a fully-diluted basis) immediately prior to the merger, consolidation or
reorganization will own immediately following the merger, consolidation or
reorganization outstanding capital stock of this corporation or other surviving
entity (on a fully diluted basis) having the ordinary voting power to elect a
majority of the members of the Board of Directors of this corporation or other
surviving entity.

     

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    (iii)           If
and to the extent that applicable law or any other restriction prohibits the
payment to the holders of Series A Preferred Stock of all or any portion of the
amounts required to be paid under this subsection (a), such unpaid amounts will
be paid to the holders of Series A Preferred Stock by the person (other than
this corporation) who is a party to the Fundamental Change described under
clauses (a) through (c) of the definition thereof  upon the closing
thereof or on such other date determined pursuant to Section 2(a)(ii) by
purchase of such shares of Series A Preferred Stock under an agreement which
will provide that such purchased shares will be canceled effective upon such
purchase.  In the event the full amount of any payment hereunder is
not paid to the holders of the Series A Preferred Stock upon or immediately
prior to such closing or other date in accordance herewith, then the entire
amount payable in respect of the Fundamental Change will be distributed ratably
among the holders of Series A Preferred Stock in proportion to the aggregate
Series A Redemption Price of the shares of Series A Preferred Stock held by
each holder.

     

    (iv)           In
the event that the requirements of this subsection (a) are not complied with
respect to a Fundamental Change, this corporation will either:

     

    (A)           cause
the closing of the Fundamental Change to be postponed until such time as the
requirements of this subsection (a) have been complied with; or

     

    (B)           cancel
such Fundamental Change, in which event the rights, preferences and privileges
of the holders of Series A Preferred Stock shall revert to and be the same as
such rights, preferences and privileges existing immediately prior to the date
of the first notice referred to in this subsection (a).

     

    (v)           For
purposes hereof, the “Series A Redemption
Price” of any Series A Preferred  Stock is an amount equal to
the Fair Market Value (as defined below) of such Series A Preferred
Stock.

     

    (vi)           “Fair Market Value”
means in the case of a transaction constituting a Fundamental Change, the value
of the consideration (determined as provided in subsection 2(a)(vii) below) that
will be paid by the purchaser in the transaction constituting the Fundamental
Change in respect of such Series A Preferred Stock.  If such parties
are unable to reach agreement within a reasonable period of time not to exceed
thirty days, such fair value will be determined by an independent appraiser
jointly selected by this corporation and the holder or holders of a majority of
the Series A Preferred Stock. If this corporation and the holder or holders of a
majority of the Series A Preferred Stock are unable to mutually agree upon an
appraiser, each of this corporation and the holder or holders of a majority of
the Series A Preferred Stock shall select an appraiser, and the two appraisers
shall select a third appraiser to determine such Fair Market Value, which
appraised value shall be binding on all parties.  The fees and
expenses of all appraisers hereunder shall be borne by this
corporation.  Fair Market Value with respect to any securities of this
corporation shall be determined without discount for lack of liquidity, or the
fact that any securities so appraised represent a minority interest in the
corporation.

     

    (vii)           In
a transaction constituting a Fundamental Change, if the consideration received
is other than cash, its value will be determined as provided below. Any
securities shall be valued as follows:

     

    (A)           Securities
not subject to investment letter or other similar restrictions on free
marketability covered by (B) below:

     

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    (1)           If
traded on a securities exchange or through the Nasdaq National Market, the value
shall be deemed to be the average of the closing prices of the securities on
such exchange or system over the thirty (30) day period ending three (3) days
prior to the closing;

     

    (2)           If
actively traded over-the-counter, the value shall be deemed to be the average of
the closing bid or sale prices (whichever is applicable) over the thirty (30)
day period ending three (3) days prior to the closing; and

     

    (3)           If
there is no active public market, the value shall be the fair market value
thereof, as mutually determined by this corporation and the holders of at least
a majority of the voting power of all then outstanding shares of Series A
Preferred Stock or if they cannot agree, by an appraiser or appraisers selected
in the manner contemplated by the definition of "Fair Market
Value."

     

    (B)           The
method of valuation of securities subject to investment letter or other
restrictions on free marketability (other than restrictions arising solely by
virtue of a stockholder's status as an affiliate or former affiliate) shall be
to make an appropriate discount from the market value determined as above in (A)
(1), (2) or (3) to reflect the approximate fair market value thereof, as
mutually determined by this corporation and the holders of at least a majority
of the voting power of all then outstanding shares of the Series A Preferred
Stock.

     

    (C)           For
any other form of consideration other than cash or securities, the value shall
be the fair market value thereof, as mutually determined by this corporation and
the holders of at least a majority of the voting power of all then outstanding
shares of Series A Preferred Stock or if they cannot agree, by an appraiser or
appraisers selected in the manner contemplated by the definition of "Fair Market
Value."

     

     (b)             For
each share of Series A Preferred Stock that is to be redeemed, this corporation
shall be obligated to pay to the holder thereof (upon surrender by such holder
at this corporation’s principal office of the certificate representing such
Series A Preferred Stock) an amount in immediately available funds equal to the
Series A Redemption Price.  If the funds of this corporation legally
available for redemption of Series A Preferred Stock on any redemption date are
insufficient to redeem the total number of shares of Series A Preferred Stock to
be redeemed on such date, those funds that are legally available shall be used
to redeem the Series A Preferred Stock to be redeemed on such redemption date,
paid to the holders of the Series A Preferred Stock ratably in proportion to the
number of shares of Series A Preferred Stock held by each such holder on such
redemption date.  At any time thereafter when additional funds of this
corporation are legally available for the redemption of Series A Preferred
Stock, such funds shall immediately be used to redeem the balance of the Series
A Preferred Stock that this corporation had become obligated to redeem but had
not redeemed, paid to the holders of the Series A Preferred Stock ratably in
proportion to the number of shares of Series A Preferred Stock held by each such
holder on the date such funds become legally available.  In case fewer
than the total number of shares of Series A Preferred Stock represented by any
certificate are redeemed, a new certificate representing the number of
unredeemed shares of Series A Preferred Stock shall be issued to the holder
thereof without cost to such holder within three (3) business days after
surrender of the certificate representing the redeemed shares of Series A
Preferred Stock.

    

    (c)           
Any shares of Series A Preferred Stock that are redeemed or otherwise acquired
by this corporation shall be cancelled, shall no longer be deemed to be
outstanding and shall not be issuable by this corporation. The Articles of
Incorporation of this corporation shall be appropriately amended to

     

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    effect
the corresponding reduction in this corporation's authorized capital
stock.

    

    3.           Voting
Rights.

    

    (a)           General.  The
holders of the Series A Preferred Stock shall be entitled to elect one director
of this corporation in connection with each annual election of directors who
shall be the designated “Series A Director”.    With respect
to any other matter submitted for a vote (or a written consent in lieu thereof)
by the stockholders of this corporation (except those contained in Section 4, as
to which the Series A Preferred Stock will be entitled to vote separately as a
class), the holders of Series A Preferred Stock and the holders of the common
stock, $0.001 par value of this corporation (“Common Stock”) shall vote together
as a single class and not as separate series.

    

    (b)           Director
Vacancies.  In the case of any vacancy (other than a vacancy
caused by removal) in the office of the Series A Director, the affirmative vote
of the holders of a majority of the shares of the Series A Preferred Stock shall
elect a successor to hold office for the unexpired term of the Series A
Director.  The Series A Director may be removed during the aforesaid
term of office, either with or without cause, by, and only by, the affirmative
vote of the holders of the shares of the Series A Preferred Stock entitled to
elect such director, given either at a special meeting of such stockholders duly
called for that purpose or pursuant to a written consent of such stockholders,
and any vacancy thereby created may be filled by the holders of the Series A
Preferred Stock represented at the meeting or pursuant to written
consent.

    

    (c)           Events of
Noncompliance.  If an Event of Noncompliance (as hereinafter
defined) shall have occurred, then the holders of Series A Preferred Stock,
voting as a separate class, will have the special right (in addition to any
other voting rights such holders may have) to elect that number of directors to
the Board of Directors that would constitute a majority of the Board of
Directors at such time.  Whenever such special right has vested, it
may be exercised at any special meeting of this corporation’s stockholders as
provided below or by written consent of the holders of a majority of the Series
A Preferred Stock then outstanding.  If an Event of Noncompliance
shall have occurred, then upon the written request of the holders of a majority
of the Series A Preferred Stock, a proper officer of this corporation will call
as promptly as possible a special meeting of this corporation’s stockholders for
the purpose of electing directors.  If such meeting has not been
called by a proper officer of this corporation within five (5) days after
personal service of said written request upon the secretary of this corporation
or within ten (10) days after mailing the same by registered mail addressed to
the secretary of this corporation at its principal office, then the holders of
record of a majority of the Series A Preferred Stock at the time outstanding may
designate in writing one of their number to call such meeting at the expense of
this corporation, and such meeting may be called by such person so designated
upon the notice required for annual meetings of stockholders and will be held at
such place designated by such holders.  Any holder of Series A
Preferred Stock so designated will be given access to the stock record books of
this corporation for the purpose of causing meetings of stockholders to be
called pursuant to these provisions.  Upon the convening of such
meeting, the office of all persons who were theretofore directors of this
corporation shall terminate and the entire Board of Directors shall consist of
those members elected at the meeting, the majority of which shall be elected by
the holders of a majority of the Series A Preferred Stock, voting as a separate
class, and the remainder of which shall be elected by the holders of the
Corporation’s other classes of voting stock then outstanding.  The
special right of the holders of the Series A Preferred Stock provided for in
this subsection 3(c) shall continue until the Event of Noncompliance giving rise
to such right ceases to exist, but may be invoked again if an additional Event
of Noncompliance occurs.  Any director elected pursuant to these
special rights may be removed, and any vacancy in the board existing at such
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    written
consent or at another special meeting in accordance with these
provisions.

    

    (d)           An
“Event of
Noncompliance” shall be deemed to have occurred if this corporation fails
to make any redemption payment with respect to the Series A Preferred Stock that
it is obligated to make hereunder (regardless of whether funds are legally
available therefor).

    

    4.           Protective Provisions.

    

    This
corporation shall not without first obtaining the approval (by vote or written
consent, as provided by law) of the holders of a majority of the Series A
Preferred Stock do any of the following:

    

    (a)           amend,
alter, or repeal any provision of the Articles of Incorporation or the Bylaws of
this corporation (including any filing of a Certificate of Designation) that
alters or changes the voting powers, preferences, or other special rights or
privileges, or restrictions of the Series A Preferred Stock;

     

    (b)           increase
or decrease the total number of authorized shares of Series A Preferred
Stock;

     

    (c)           authorize
or issue, or obligate itself to issue, any other equity security, including any
other security convertible into or exercisable for any other equity security,
which has a preference over the Series A Preferred Stock with respect to voting,
or authorize any increase in the authorized or designated number of any such
security;

     

    (d)           purchase
or otherwise acquire any share or shares of Preferred Stock or Common Stock (or
pay into or set aside for a sinking fund for such purpose); provided, however,
that this restriction shall not apply to the repurchase of shares of Common
Stock from employees, officers, directors, consultants or other persons
performing services for this corporation or any subsidiary pursuant to
agreements under which this corporation has the option to repurchase such shares
at cost or at cost upon the occurrence of certain events, such as the
termination of employment;

     

    (e)           authorize
the voluntary or involuntary dissolution, liquidation or winding-up of this
corporation;

     

    (f)           pay
any dividend or other distribution other than (i) in the case of the Common
Stock, a dividend or distribution payable solely in Common Stock and (ii) any
dividend or distribution the fair market value of which does not exceed 10% of
this corporation's aggregate net profits for the fiscal year of this corporation
in which such dividend is declared and the immediately preceding fiscal
year;

     

    (g)           cause
this corporation to enter into or engage, directly or indirectly, in any
material respect any line of business other than the other than the business
anticipated to be conducted by this corporation as of the date of the first
issuance of the Series A Preferred Stock; or

     

    (h)           enter
into any transaction with any officer, director or stockholder of this
corporation or any "affiliate" or "associate" (as such
terms are defined in the regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1940) of any such person or
entity, other than normal employment arrangements and benefit programs on
reasonable terms and other than any transaction (or series of related
transactions) involving not more than $100,000 in the aggregate that has been
approved by a majority of the Board of Directors (excluding any director who is
interested in such transaction, either directly or through one of his affiliates
or associates) after full disclosure of the terms thereof to the Board of
Directors and after the determination by such majority of the Board of Directors

     

     

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    that the
terms of such transaction are at least as favorable to this corporation as those
which could be obtained from an unaffiliated third
party).   

     

    5.           Miscellaneous.

     

    (a)           Registration of
Transfer.  This corporation will keep at its principal office a
register for the registration of Series A Preferr­ed Stock.  Upon
the surrender of any certificate representing Series A Preferred Stock at such
place, this corporation will, at the request of the record holder of such
certificate, execute and deliver (at this corporation’s expense) a new
certificate or certificates in exchange therefor representing in the aggregate
the number of Series A Preferred Stock represented by the surrendered
certi­ficate.  Each such new certificate will be registered in
such name and will represent such number of Series A Preferred Stock as is
requested by the holder of the surrendered certificate and will be substantially
identical in form to the surrendered certificate.

     

    (b)           Replacement.  Upon
receipt of evidence reasonably satisfactory to this corporation (an affidavit of
the registered holder will be satisfactory) of the ownership and the loss,
theft, destruction or mutilation of any certificate evidencing Series A
Preferred Stock, and in the case of any such loss, theft or destruction, upon
receipt of indemnity reasonably satisfactory to this corporation (provided that
if the holder is an institutional investor its own agreement will be
satisfactory), or, in the case of any such mutilation upon surrender of such
certificate, this corporation will (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of Series A Preferred Stock represented by such lost, stolen, destroyed
or mutilated certificate and dated the date of such lost, stolen, destroyed or
mutilated certificate.

    

    (c)           Notices.  Except
as otherwise expressly provided, all notices referred to herein will be in
writing and will be delivered by registered or certified mail, return receipt
requested, postage prepaid and will be deemed to have been given when so mailed
(a) to this corporation, at its principal executive offices and (b) to any
shareholder, at such holder’s address as it appears in the stock records of this
corporation (unless otherwise indicated in writing by such holder).

     

     

     

     

     

     

     

     

     

     

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6exh4-1_stockplan.htm

     

    
      

      

    

     

     

    EXHIBIT
4.1

     

    EMPLOYEE STOCK
PURCHASE PLAN

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    ENERGY
COMPOSITES CORPORATION

    

    EMPLOYEE
STOCK PURCHASE PLAN

    

    

    

    As
Approved and Effective June 2, 2009

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

    

    
      	 
      	 
      	 
      	
              Page

            
	
              SECTION
      1.

            	
              PURPOSE
      OF THE PLAN

            	
              1

            
	 
      	 
      	 
      	 
      
	
              SECTION
      2.

            	
              ADMINISTRATION
      OF THE PLAN

            	
              1

            
	 
      	
              (a)

            	
              Authority

            	
              1

            
	 
      	
              (b)

            	
              Responsibilities

            	
              1

            
	 
      	 
      	 
      	 
      
	
              SECTION
      3.

            	
              ENROLLMENT
      AND PARTICIPATION

            	
              1

            
	 
      	
              (a)

            	
              Offering
      Periods

            	
              1

            
	 
      	
              (b)

            	
              Accumulation
      Periods

            	
              1

            
	 
      	
              (c)

            	
              Enrollment

            	
              1

            
	 
      	
              (d)

            	
              Duration
      of Participation

            	
              1

            
	 
      	
              (e)

            	
              Applicable
      Offering Period

            	
              1

            
	 
      	 
      	 
      	 
      
	
              SECTION
      4.

            	
              EMPLOYEE
      CONTRIBUTIONS

            	
              2

            
	 
      	
              (a)

            	
              Frequency
      of Payroll Deductions

            	
              2

            
	 
      	
              (b)

            	
              Amount
      of Payroll Deductions

            	
              2

            
	 
      	
              (c)

            	
              Changes
      in Payroll Deductions

            	
              2

            
	 
      	
              (d)

            	
              Tax
      Withholding

            	
              2

            
	 
      	 
      	 
      	 
      
	
              SECTION
      5.

            	
              WITHDRAWAL
      FROM THE PLAN

            	
              2

            
	 
      	
              (a)

            	
              Withdrawal

            	
              2

            
	 
      	
              (b)

            	
              Re-Enrollment
      After Withdrawal

            	
              2

            
	 
      	 
      	 
      	 
      
	
              SECTION
      6.

            	
              CHANGE
      IN EMPLOYMENT STATUS

            	
              2

            
	 
      	
              (a)

            	
              Termination
      of Employment

            	
              2

            
	 
      	
              (b)

            	
              Change
      in Employment Status

            	
              2

            
	 
      	
              (c)

            	
              Leave
      of Absence

            	
              2

            
	 
      	
              (d)

            	
              Death

            	
              2

            
	 
      	 
      	 
      	 
      
	
              SECTION
      7.

            	
              PLAN
      ACCOUNTS AND PURCHASE OF SHARES

            	
              3

            
	 
      	
              (a)

            	
              Plan
      Accounts

            	
              3

            
	 
      	
              (b)

            	
              Purchase
      Price

            	
              3

            
	 
      	
              (c)

            	
              Number
      of Shares Purchased

            	
              3

            
	 
      	
              (d)

            	
              Available
      Shares Insufficient

            	
              3

            
	 
      	
              (e)

            	
              Issuance
      of Stock

            	
              3

            
	 
      	
              (f)

            	
              Unused
      Cash Balances

            	
              3

            
	 
      	
              (g)

            	
              Stockholder
      Approval

            	
              3

            
	 
      	 
      	 
      	 
      
	
              SECTION
      8.

            	
              LIMITATIONS
      ON STOCK OWNERSHIP

            	
              3

            
	 
      	
              (a)

            	
              Five
      Percent Limit

            	
              3

            
	 
      	
              (b)

            	
              Dollar
      Limit

            	
              4

            
	 
      	 
      	 
      	 
      
	
              SECTION
      9.

            	
              RIGHTS
      NOT TRANSFERABLE

            	
              4

            
	 
      	 
      	 
      	 
      
	
              SECTION
      10.

            	
              NO
      RIGHTS AS AN EMPLOYEE

            	
              4

            
	 
      	 
      	 
      	 
      
	
              SECTION
      11.

            	
              NO
      RIGHTS AS A STOCKHOLDER

            	
              4

            
	 
      	 
      	 
      	 
      
	
              SECTION
      12.

            	
              SECURITIES
      LAW REQUIREMENTS

            	
              4

            
	 
      	 
      	 
      	 
      
	
              SECTION
      13.

            	
              STOCK
      OFFERED UNDER THE PLAN

            	
              5

            
	 
      	
              (a)

            	
              Authorized
      Shares

            	
              5

            
	 
      	
              (b)

            	
              Anti-Dilution
      Adjustments

            	
              5

            
	 
      	
              (c)

            	
              Reorganizations

            	
              5

            

       

      i

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      	 
      	 
      	 
      	 
      
	
              SECTION
      14.

            	
              AMENDMENT,
      SUSPENSION OR TERMINATION

            	
              5

            
	 
      	
              (a)

            	
              Amendment

            	
              5

            
	 
      	
              (b)

            	
              Suspension
      or Termination

            	
              5

            
	 
      	 
      	 
      	 
      
	
              SECTION
      15.

            	
              REPORTS
      AND NOTICES

            	
              5

            
	 
      	
              (a)

            	
              Statements

            	
              5

            
	 
      	
              (b)

            	
              Notices

            	
              5

            
	 
      	 
      	 
      
	
              SECTION
      16.

            	
              TERM
      OF PLAN

            	
              5

            
	 
      	 
      	 
      	 
      
	
              SECTION
      17.

            	
              DEFINITIONS

            	
              5

            
	 
      	
              (a)

            	
              Act

            	
              5

            
	 
      	
              (b)

            	
              Accumulation
      Period

            	
              5

            
	 
      	
              (c)

            	
              Board

            	
              6

            
	 
      	
              (d)

            	
              Code

            	
              6

            
	 
      	
              (e)

            	
              Committee

            	
              6

            
	 
      	
              (f)

            	
              Company

            	
              6

            
	 
      	
              (g)

            	
              Compensation

            	
              6

            
	 
      	
              (h)

            	
              Corporate
      Reorganization

            	
              6

            
	 
      	
              (i)

            	
              Designated
      Agent Holding Period

            	
              6

            
	 
      	
              (j)

            	
              Eligible
      Employee

            	
              6

            
	 
      	
              (k)

            	
              Exchange
      Act

            	
              6

            
	 
      	
              (l)

            	
              Fair
      Market Value

            	
              6

            
	 
      	
              (m)

            	
              Offering
      Period

            	
              7

            
	 
      	
              (n)

            	
              Participant

            	
              7

            
	 
      	
              (o)

            	
              Participating
      Company

            	
              7

            
	 
      	
              (p)

            	
              Plan

            	
              7

            
	 
      	
              (q)

            	
              Plan
      Account

            	
              7

            
	 
      	
              (r)

            	
              Purchase
      Price

            	
              7

            
	 
      	
              (s)

            	
              Stock

            	
              7

            
	 
      	
              (t)

            	
              Subsidiary

            	
              7

            

    

    

     

     

     

     

     

    
ii 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ENERGY
COMPOSITES CORPORATION

    EMPLOYEE
STOCK PURCHASE PLAN

    

    SECTION
1.  PURPOSE OF THE PLAN.

    

    The
purpose of the Plan is to secure for the Company and its stockholders the
benefits of the incentive inherent in the ownership of Stock by current and
future Eligible Employees and to provide such Eligible Employees with an
opportunity to increase their proprietary interest in the success of the Company
by purchasing Stock from the Company on favorable terms and to pay for such
purchases through payroll deductions.  The Plan is intended to qualify
as an “employee stock purchase plan” under section 423 of the Code and
shall be administered, interpreted and construed in accordance with such
provisions.

    

    SECTION
2.  ADMINISTRATION OF THE PLAN.

    

    (a)  Authority.  The Plan
shall be administered by the Committee.

    

    (b)  Responsibilities.  The
Committee shall have full authority to construe, interpret and apply the terms
of the Plan, determine eligibility, make decisions relating to the operation of
the Plan and resolve any claims arising under the Plan.  The Committee
may adopt such rules, guidelines and forms as it deems necessary or appropriate
to implement and administer the Plan.  The Committee’s determinations
under the Plan shall be final and binding on all persons.  The Company
shall pay all costs of administration of the Plan.

    

    SECTION
3.  ENROLLMENT AND PARTICIPATION.

    

    (a)  Offering
Periods.  During the term of the Plan, two Offering Periods
shall commence in each calendar year.  The Offering Periods shall
consist of the six-month periods commencing on each January 1 and July
1.  Notwithstanding the foregoing, the first Offering Period under the
Plan will commence on the day on which a registration statement under the Act
with respect to Stock to be purchased hereunder shall be effective and end on
the earlier of the next June 30 or December 31 thereafter.

    

    (b)  Accumulation
Periods.  An Accumulation Period shall run concurrent with each
Offering Period.

    

    (c)  Enrollment.  Any
individual who, on the day preceding the first day of an Offering Period,
qualifies as an Eligible Employee may elect to become a Participant in the Plan
for such Offering Period by executing the enrollment form prescribed for this
purpose by the Committee.  The enrollment form shall be filed with the
Company at the designated location, or with the designated person, before the
start date of such Offering Period.

    

    (d)  Duration of
Participation.  Once enrolled in the Plan, a Participant shall
continue to participate in the Plan until he or she ceases to be an Eligible
Employee, withdraws from the Plan under Section 5(a) or reaches the end of
the Accumulation Period in which his or her employee contributions were
discontinued under Section 8(b).  A Participant who withdrew from
the Plan under Section 5(a) may again become a Participant, if he or she
then is an Eligible Employee, by following the procedure described in Subsection
(c) above.  A Participant whose employee contributions were
discontinued automatically under Section 8(b) shall automatically resume
participation at the beginning of the earliest Accumulation Period ending in the
next calendar year, if he or she then is an Eligible Employee.

    

    (e)  Applicable Offering
Period.  For purposes of calculating the Purchase Price under
Section 7(b), the applicable Offering Period shall be determined as
follows:

    

    (i)           Once
a Participant is enrolled in the Plan for an Offering Period, such Offering
Period shall continue to apply to him or her until the earliest of (A) the
end of such Offering Period, (B) the end of his or her participation under
Subsection (d) above or (C) re-enrollment for a subsequent Offering
Period under Paragraph (ii) below.

    

    (ii)           When
a Participant reaches the end of an Offering Period but his or her participation
is to continue, then such Participant shall automatically be re-enrolled for the
Offering Period that commences immediately 

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

      after the
end of the prior Offering Period.

    

    

    SECTION
4.  EMPLOYEE CONTRIBUTIONS.

    

    (a)  Frequency of Payroll
Deductions.  A Participant may purchase shares of Stock under
the Plan solely by means of payroll deductions.  Payroll deductions,
as designated by the Participant pursuant to Subsection (b) below, shall
occur on each payday during participation in the Plan.

    

    (b)  Amount of Payroll
Deductions.  An Eligible Employee shall designate on the
enrollment form the portion of his or her Compensation that he or she elects to
have withheld for the purchase of Stock, but not less than $10 for each pay
period.  The Committee may determine, in its sole discretion, to
establish a maximum dollar amount or percentage of Compensation Participants may
authorize for payroll deductions during any Accumulation Period or calendar
year.  Any such limit established by the Committee shall apply to all
Participants and meet the requirements of Section 423 of the Code.

    

    (c)  Changes in Payroll
Deductions.  If a Participant wishes to change the rate of
payroll deductions, he or she may do so by filing a new enrollment form with the
Company at the designated location, or with the designated person, at any
time.  The new payroll deduction rate shall be effective for the next
Offering Period.

    

    (d)  Tax
Withholding.  Payroll deductions under the Plan are subject to
income and employment tax withholding.  By executing an enrollment
form, each Participant agrees that such income and employment tax withholding
may be deducted from other Compensation of the Participant.

    

    SECTION
5.  WITHDRAWAL FROM THE PLAN.

    

    (a)  Withdrawal.  A
Participant may elect to withdraw from the Plan by filing the prescribed form
with the Company at the designated location, or with the designated person, at
any time before the last day of an Accumulation Period.  As soon as
reasonably practicable thereafter, payroll deductions shall cease and the entire
amount credited to the Participant’s Plan Account shall be refunded to him or
her in cash, without interest.  No partial withdrawals shall be
permitted.

    

    (b)  Re-Enrollment After
Withdrawal.  A former Participant who has withdrawn from the
Plan shall not be a Participant until he or she re-enrolls in the Plan under
Section 3(c).  Re-enrollment may be effective only at the
commencement of an Offering Period.

    

    SECTION
6.  CHANGE IN EMPLOYMENT STATUS.

    

    (a)  Termination of
Employment.  Termination of employment as an Eligible Employee
for any reason, including death, shall be treated as an automatic withdrawal
from the Plan under Section 5(a).  A transfer from one
Participating Company to another shall not be treated as a termination of
employment.

    

    (b)  Change in Employment
Status.  If a Participant’s customary employment drops
below five months per calendar year or less than 20 hours per week, such change
in employment status shall be treated as an automatic withdrawal from the Plan
under Section 5(a).

    

    (c)  Leave of
Absence.  For purposes of the Plan, employment shall not be
deemed to terminate when the Participant goes on a military leave, a sick leave
or another bona
fide leave of absence, if the leave was approved by the Participating
Company in writing.  Employment, however, shall be deemed to terminate
90 days after the Participant goes on a leave, unless a contract or statute
guarantees his or her right to return to work.  Employment shall be
deemed to terminate in any event when the approved leave ends, unless the
Participant immediately returns to work.

    

    (d)  Death.  In the event
of the Participant’s death, the amount credited to his or her Plan Account shall
be paid to a beneficiary designated by him or her for this purpose on the
prescribed form or, if none, to the Participant’s estate.  Such form
shall be valid only if it was filed with the Company at the designated location,
or with the designated person, before the Participant’s death.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    SECTION
7.  PLAN ACCOUNTS AND PURCHASE OF SHARES.

    

    (a)  Plan Accounts.  The
Company shall maintain a Plan Account on its books in the name of each
Participant.  Whenever an amount is deducted from the Participant’s
Compensation under the Plan, such amount shall be credited to the Participant’s
Plan Account.  Amounts credited to Plan Accounts shall not be trust
funds and may be commingled with the Participating Company’s general assets and
used for or applied to any corporate purpose.  No interest shall
accrue on the amounts deducted from a Participant’s Compensation or credited to
Plan Accounts.

    

    (b)  Purchase Price.  The
Purchase Price for each share of Stock purchased at the close of an Accumulation
Period shall be the lower of:

    

    (i)           85%
of the Fair Market Value of such share on the first trading day in such
Accumulation Period; or

    

    (ii)           85%
of the Fair Market Value of such share on the last trading day in such
Accumulation Period.

    

    (c)  Number of Shares
Purchased.  As of the last day of each Accumulation Period,
each Participant shall be deemed to have elected to purchase the number of
shares of Stock calculated in accordance with this Subsection (c), unless
the Participant has previously elected to withdraw from the Plan in accordance
with Section 5(a).  The amount then in the Participant’s Plan
Account shall be divided by the Purchase Price, and the number of shares that
results shall be purchased from the Company with the funds in the Participant’s
Plan Account.  The foregoing notwithstanding, no Participant shall
purchase more than 5,000 shares of Stock with respect to any Offering Period nor
the amounts of Stock set forth in Sections 8(b) and 13(a).  The
Committee may determine with respect to all Participants that any fractional
share, as calculated under this Subsection (c), shall be (i) rounded down
to the next lower whole share or (ii) credited as a fractional
share. In the event any fractional share is rounded down to the next lower
whole share, the amount of the Participant’s Plan Account that is not sufficient
to purchase a whole share shall be retained in the Plan Account for the next
Accumulation Period unless the Participant has previously elected to withdraw
from the Plan in accordance with Section 5(a).

    

    (d)  Available Shares
Insufficient.  In the event that the aggregate number of shares
that all Participants elect to purchase during an Accumulation Period exceeds
the maximum number of shares remaining available for issuance under
Section 13(a), then the number of shares to which each Participant is
entitled shall be determined by multiplying the number of shares available for
issuance by a fraction, the numerator of which is the number of shares that such
Participant has elected to purchase and the denominator of which is the number
of shares that all Participants have elected to purchase.

    

    (e)  Issuance of
Stock.  A Participant in the Plan initially will hold his or
her shares in book entry form through an agent designated by the
Committee.  As soon as reasonably practicable after the close of the
applicable Accumulation Period, the Company shall deliver the purchased shares
to the agent designated by the Committee to hold shares for
Participants. The Committee may establish a Designating Agent Holding
Period to permit the tracking of disqualified dispositions of purchased
shares.  A Participant may, after the expiration of the Designated
Agent Holding Period, request that the agent deliver to him or her a certificate
for the shares held for his or her account.

    

    (f)  Unused Cash
Balances.  Except as provided in Section 7(c), an amount
remaining in the Participant’s Plan Account at the end of an Accumulation Period
shall be refunded to the Participant in cash, without interest.

    

    (g)  Stockholder
Approval.  Any other provision of the Plan notwithstanding, no
shares of Stock shall be purchased under the Plan unless and until the Company’s
stockholders have approved the adoption of the Plan.

    

    SECTION
8.  LIMITATIONS ON STOCK OWNERSHIP.

    

    (a)  Five Percent
Limit.  Any other provision of the Plan notwithstanding, no
Participant shall be 

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

      granted a
right to purchase Stock under the Plan if such Participant, immediately after
his or her election to purchase such Stock, would own stock possessing more than
5% of the total combined voting power or value of all classes of stock of the
Company or any parent or Subsidiary of the Company.  For purposes of
this Subsection (a), the following rules shall apply:

    

    

    (i)           Ownership
of stock shall be determined after applying the attribution rules of
section 424(d) of the Code;

    

    (ii)           Each
Participant shall be deemed to own any stock that he or she has a right or
option to purchase under this or any other plan; and

    

    (iii)           Each
Participant shall be deemed to have the right to purchase 5,000 shares of Stock
under this Plan with respect to each Offering Period.

    

    (b)  Dollar Limit.  Any
other provision of the Plan notwithstanding, no Participant shall purchase Stock
with a Fair Market Value in excess of $25,000 during any calendar year (under
this Plan and all other employee stock purchase plans of the Company or any
parent or Subsidiary of the Company). For purposes of this
Subsection (b), the Fair Market Value of Stock shall be determined in each
case as of the beginning of the Offering Period in which such Stock is
purchased.  Employee stock purchase plans not described in
section 423 of the Code shall be disregarded.  If a Participant
is precluded by this Subsection (b) from purchasing additional Stock under
the Plan, then his or her employee contributions shall automatically be
discontinued and shall resume at the beginning of the earliest Accumulation
Period ending in the next calendar year (if he or she then is an Eligible
Employee).  The limitations set forth in this Subsection are in
addition to any other limitation the Committee may establish from time to
time.

    

    SECTION
9.  RIGHTS NOT TRANSFERABLE.

    

    The
rights of any Participant under the Plan, or any Participant’s interest in any
Stock or moneys to which he or she may be entitled under the Plan, shall not be
transferable by voluntary or involuntary assignment or by operation of law, or
in any other manner other than by beneficiary designation or the laws of descent
and distribution.  If a Participant in any manner attempts to
transfer, assign or otherwise encumber his or her rights or interest under the
Plan, other than by beneficiary designation or the laws of descent and
distribution, then such act shall be treated as an election by the Participant
to withdraw from the Plan under Section 5(a).

    

    SECTION
10.  NO RIGHTS AS AN EMPLOYEE.

    

    Nothing
in the Plan or in any right granted under the Plan shall confer upon the
Participant any right to continue in the employ of a Participating Company for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Participating Companies or of the Participant, which
rights are hereby expressly reserved by each, to terminate his or her employment
at any time and for any reason, with or without cause.

    

    SECTION
11.  NO RIGHTS AS A STOCKHOLDER.

    

    A
Participant shall have no rights as a stockholder with respect to any shares of
Stock that he or she may have a right to purchase under the Plan until such
shares have been purchased on the last day of the applicable Accumulation
Period and are delivered to the agent designated by the
Committee.

    

    SECTION
12.  SECURITIES LAW REQUIREMENTS.

    

    Shares of
Stock shall not be issued under the Plan unless a registration statement under
the Act with respect to such shares shall be effective and the issuance and
delivery of such shares otherwise comply with (or are exempt from) all
applicable requirements of law, including without limitation the Act, the rules
and regulations promulgated thereunder, state securities laws and regulations,
and the regulations of any stock exchange or other securities market on which
the Company’s securities may then be traded.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    SECTION
13.  STOCK OFFERED UNDER THE PLAN.

    

    (a)  Authorized
Shares.  The number of shares of Stock available for purchase
under the Plan shall be 1,000,000 (subject to adjustment pursuant to this
Section 13).  Stock subject to the Plan may be shares now or
hereafter authorized but unissued, treasury shares, or both.

    

    (b)  Anti-Dilution
Adjustments.  Subject to any required action by the
stockholders of the Company and the 5,000-share limitation described in Section
7(c), the aggregate number of shares of Stock offered under the Plan and
the price of shares that any Participant has elected to purchase shall be
adjusted proportionately by the Committee for any increase or decrease in the
number of outstanding shares of Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification, or any other
increase or decrease in the number of shares of Stock effected without receipt
or payment of consideration by the Company.

    

    (c)  Reorganizations.  Any
other provision of the Plan notwithstanding, immediately prior to the effective
time of a Corporate Reorganization, the Offering Period and Accumulation Period
then in progress shall terminate and shares shall be purchased pursuant to
Section 7, unless the Plan is continued or assumed by the surviving
corporation or its parent corporation.  The Plan shall in no event be
construed to restrict in any way the Company’s right to undertake a dissolution,
liquidation, merger, consolidation or other reorganization.

    

    SECTION
14.  AMENDMENT, SUSPENSION OR TERMINATION.

    

    (a)  Amendment.  The
Board may at any time and without notice amend the Plan in any respect;
provided, however, that no amendment shall be made without the approval of the
stockholders of Company to increase the aggregate number of shares of Stock
which may be issued under the Plan (other than as provided in Section 13)
or for which stockholder approval is required under applicable tax, securities
or other laws.

    

    (b)  Suspension or
Termination.  The Plan and all rights of Participants under any
offering hereunder may be terminated or suspended at any time and without notice
at the discretion of the Board. Upon any suspension or termination of the
Plan, all amounts in Plan Accounts shall in the sole discretion of the Committee
be either (i) refunded to Participants in total or (ii) refunded to Participants
to the extent not used to purchase Stock.  Such suspension or
termination may be made without the approval of the stockholders of the Company
or the consent of any Participant.

    

    SECTION
15.  REPORTS AND NOTICES.

    

    (a)  Statements.  Statements
of account shall be provided to Participants at least annually, which statements
shall set forth the amounts deducted from a Participant’s Compensation, the
Purchase Price for Stock purchased under the Plan on the last day of each
Accumulation Period, the number of shares of Stock purchased under the Plan on
the last day of each Accumulation Period and such other information as the
Committee may deem appropriate.

    

    (b)  Notices.  All
notices or other communications by an Eligible Employee or Participant to a
Participating Company under or in connection with the Plan shall be deemed given
when received by the Participating Company at the location, or by the person,
designated by the Participating Company.

    

    SECTION
16.  TERM OF PLAN.

    

    The Plan
shall continue in effect for a term of ten (10) years following the date of
adoption by the Board, unless sooner terminated pursuant to Section
14.

    

    SECTION
17.  DEFINITIONS.

    

    (a)  “Act” means the Securities Act
of 1933, as amended.

    

    (b)  “Accumulation Period” means the period during
which contributions may be made by Participants toward the purchase of Stock
under the Plan, as determined pursuant to Section 3(b).

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (c)  “Board” means the Board of Directors
of the Company, as constituted from time to time.

    

    (d)  “Code” means the Internal Revenue
Code of 1986, as amended.

    

    (e)  “Committee” means the Board or, to the
extent permitted by law, such committee consisting exclusively of one or more
officers or directors of the Company as may be appointed by the Board from time
to time.  Nothing herein shall be construed as obligating the Board to
delegate authority under the Plan, and the Board may at any time rescind the
authority delegated to a committee appointed hereunder or appoint a new
committee.

    

    (f)  “Company” means Energy Composites
Corporation, a Nevada corporation.

    

    (g)  “Compensation” means (i) the total
compensation paid in cash to a Participant by a Participating Company, including
salaries, wages, bonuses, incentive compensation, commissions, overtime pay and
shift premiums, plus (ii) any pre-tax contributions made by the Participant
under section 401(k) or 125 of the Code.  “Compensation” shall exclude
all non-cash items, moving or relocation allowances, cost-of-living equalization
payments, car allowances, tuition reimbursements, imputed income attributable to
cars or life insurance, severance pay, fringe benefits, contributions or
benefits received under employee benefit plans, income attributable to the
exercise of stock options, and similar items.  The Committee shall
determine whether a particular item is included in Compensation.

    

    (h)  “Corporate Reorganization” means:

    

    
      	
               
      

            	
              (i)

            	
              The
      consummation of a merger or consolidation of the Company with or into
      another entity or any other corporate reorganization (other than one in
      which the Company is the surviving entity);
or

            

    

    

    
      	
               
      

            	
              (ii)

            	
              The
      sale, transfer or other disposition of all or substantially all of the
      Company’s assets or the complete liquidation or dissolution of the
      Company.

            

    

    

    (i)  “Designating Agent Holding
Period” means a reasonable period of time that purchased shares of
Stock must be retained by an agent designated by the Committee to hold shares of
Stock in book entry form on behalf of Participants in order to permit the
tracking of disqualified dispositions of Stock.

    

    (j)  “Eligible Employee” means any employee of a
Participating Company who meets both of the following requirements:

    

    
      	
               
      

            	
              (i)

            	
              His
      or her customary employment is for more than five months per calendar year
      and for more than 20 hours per week;
  and

            

    

    

    
      	
               
      

            	
              (ii)

            	
              He
      or she has been an employee of a Participating Company for not less than
      three consecutive months.

            

    

    

    The
foregoing notwithstanding, an individual shall not be considered an Eligible
Employee if his or her participation in the Plan is prohibited by the law of any
country which has jurisdiction over him or her or if compliance with the laws of
the foreign jurisdiction would cause the Plan to violate the requirement of
section 423 of the Code.

    

    (k)  “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

    

    (l)  “Fair Market Value” means the market price of
Stock, determined by the Committee as follows:

    

    
      	
               
      

            	
              (i)

            	
              If
      the Stock was traded on The Nasdaq National Market or the Over-the-Counter
      Bulletin Board on the date in question, then the Fair Market Value shall
      be equal to the last-transaction price quoted for such date by such
      quotation service;

            

    

    

    
      
        	
                 
      

              	
                (ii)

              	
                If
      the Stock was traded on a stock exchange on the date in question, then the
      Fair Market 

              

         

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

         

        	 	 	Value
      shall be equal to the closing price reported by the applicable composite
      transactions report for such date;
or

      

    

    

    
      	
               
      

            	
              (iii)

            	
              If
      none of the foregoing provisions is applicable, then the Fair Market Value
      shall be determined by the Committee in good faith on such basis as it
      deems appropriate.

            

    

    

    Whenever
possible, the determination of Fair Market Value by the Committee shall be based
on the prices reported in The Wall Street
Journal or as reported directly to the Company by The Nasdaq National
Market, the Over-the-Counter Bulletin Board or a stock exchange.  Such
determination shall be conclusive and binding on all persons.

    

    (m)  “Offering Period” means the period with
respect to which the right to purchase Stock may be granted under the Plan, as
determined pursuant to Section 3(a).

    

    (n)  “Participant” means an Eligible Employee
who elects to participate in the Plan, as provided in
Section 3(c).

    

    (o)  “Participating Company” means (i) the Company
and (ii) each present or future Subsidiary of the Company.

    

    (p)  “Plan” means this Energy Composites
Corporation Employee Stock Purchase Plan, as it may be amended from time to
time.

    

    (q)  “Plan Account” means the account
established for each Participant pursuant to Section 7(a).

    

    (r)  “Purchase Price” means the price at which
Participants may purchase Stock under the Plan, as determined pursuant to
Section 7(b).

    

    (s)  “Stock” means the $0.001 par value
common stock of the Company.

    

    (t)  “Subsidiary” means a “subsidiary
corporation” as defined under Section 424(f) of the Code.

     

     

    7

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