Document:

ex4_1.htm

Exhibit 4.1

METHES ENERGIES INTERNATIONAL LTD.

AMENDED AND RESTATED

 2008 DIRECTORS, OFFICERS AND EMPLOYEES STOCK OPTION PLAN

1.             Purpose.  This Amended and Restated 2008 Directors, Officers and Employees Stock Option Plan amends the Plan that was adopted by the
Board of Directors in December, 2007.  The purpose of this Amended and Restated 2008 Directors, Officers and Employees Stock Option Plan (the “Plan”) is to enable Methes Energies International Ltd. (the “Company”) to attract and retain the services of highly qualified and experienced directors, officers, employees, and consultants and to give such persons an interest in the success of the Company and its subsidiaries.  For purposes of this Plan, a person is considered
to be employed by or in the service of the Company if the person is employed by or in the service of any entity (the “Employer”) that is either the Company or a parent or subsidiary of the Company.

 

2.             Shares Subject to the Plan.  Subject to adjustment as provided below and in Section 9, the shares to be offered under the Plan
shall consist of voting Common Stock of the Company, and the total number of shares of Common Stock that may be issued under the Plan shall be 1,500,000 shares.  If an option or Performance-Based Award granted under the Plan expires, terminates or is canceled, the unissued shares subject to that option or Performance-Based Award shall again be available under the Plan.  If shares awarded as a bonus pursuant to Section 7 or sold pursuant to Section 8 under the Plan are forfeited to
or repurchased by the Company, the number of shares forfeited or repurchased shall again be available under the Plan.

 

3.             Effective Date and Duration of Plan.

 

3.1           Effective Date.  The Plan shall become effective as of July 23, 2008.  No Incentive Stock Option (as defined in Section 5 below) granted under the Plan shall become exercisable
and no payments shall be made under a Performance-Based Award, however, until the Plan is approved by the affirmative vote of the holders of a majority of the shares of Common Stock represented at a shareholders meeting at which a quorum is present or by means of unanimous consent resolutions, and the exercise of any Incentive Stock Options granted under the Plan before approval shall be conditioned on and subject to that approval.  Subject to this limitation, options and Performance-Based Award may
be granted and shares may be awarded as bonuses or sold under the Plan at any time after the effective date and before termination of the Plan.

 

3.2           Duration.  The Plan shall continue in effect until all shares available for issuance under the Plan have been issued and all restrictions on the shares have lapsed.  The Board
of Directors may suspend or terminate the Plan at any time except with respect to options, or Performance-Based Awards and shares subject to restrictions then outstanding under the Plan.  Termination shall not affect any outstanding options, any outstanding Performance-Based Awards or any right of the Company to repurchase shares or the forfeitability of shares issued under the Plan.

 

 

 

 

 

4.             Administration.

 

4.1           Board of Directors.  The Plan shall be administered by the Board of Directors of the Company, which shall determine and designate the individuals to whom awards shall be made, the amount
of the awards and the other terms and conditions of the awards.  Subject to the provisions of the Plan, the Board of Directors may adopt and amend rules and regulations relating to administration of the Plan, advance the lapse of any waiting period, accelerate any exercise date, waive or modify any restriction applicable to shares (except those restrictions imposed by law) and make all other determinations in the judgment of the Board of Directors necessary or desirable for the administration of the
Plan.  The interpretation and construction of the provisions of the Plan and related agreements by the Board of Directors shall be final and conclusive.  The Board of Directors may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any related agreement in the manner and to the extent it deems expedient to carry the Plan into effect, and the Board of Directors shall be the sole and final judge of such expediency.

 

4.2           Committee.  The Board of Directors may delegate to any committee of the Board of Directors (the “Committee”) any or all authority for administration of the Plan.  If
authority is delegated to the Committee, all references to the Board of Directors in the Plan shall mean and relate to the Committee, except (i) as otherwise provided by the Board of Directors and (ii) that only the Board of Directors may amend or terminate the Plan as provided in Sections 3 and 11.

 

5.             Types of Awards, Eligibility, Limitations.  The Board of Directors may, from time to time, take the following actions, separately or
in combination, under the Plan:  (i) grant Incentive Stock Options, as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), as provided in Sections 6.1 and 6.2; (ii) grant options other than Incentive Stock Options (“Non-Statutory Stock Options”) as provided in Sections 6.1 and 6.3; (iii) award stock bonuses as provided in Section 7; (iv) sell shares subject to restrictions as provided in Section 8 ; and (v) award Performance-Based
Awards as provided in Section 10.  Awards may be made to employees, including employees who are officers or directors, and to other individuals described in Section 1 selected by the Board of Directors; provided, however, that only employees of the Company or any parent or subsidiary of the Company (as defined in subsections 424(e) and 424(f) of the Code) are eligible to receive Incentive Stock Options under the Plan.  The Board of Directors shall select the individuals to whom awards
shall be made and shall specify the action taken with respect to each individual to whom an award is made.  At the discretion of the Board of Directors, an individual may be given an election to surrender an award in exchange for the grant of a new award.

 

6.             Option Grants.

 

6.1           General Rules Relating to Options.

 

6.1-1           Terms of Grant.  The Board of Directors may grant options under the Plan.  With respect to each option grant, the Board of Directors shall determine the number of shares subject to the option,
the exercise price, the period of the option, the time or times at which the option may be exercised and whether the option is an Incentive Stock Option or a Non-Statutory Stock Option.  At the time of the grant of an option or at any time thereafter, the Board of Directors may provide that an optionee who exercised an option with Common Stock of the Company shall automatically receive a new option to purchase additional shares equal to the number of shares surrendered and may specify the terms and
conditions of such new options.

 

 

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6.1-2           Exercise of Options.  Except as provided in Section 6.1-4 or as determined by the Board of Directors, no option granted under the Plan may be exercised unless at the time of exercise the optionee is
employed by or in the service of the Company and shall have been so employed or provided such service continuously since the date the option was granted.  Except as provided in Sections 6.1-4 and 9, options granted under the Plan may be exercised from time to time over the period stated in each option in amounts and at times prescribed by the Board of Directors, provided that options may not be exercised for fractional shares.  Unless otherwise determined by the Board of Directors, if
an optionee does not exercise an option in any one year for the full number of shares to which the optionee is entitled in that year, the optionee’s rights shall be cumulative and the optionee may purchase those shares in any subsequent year during the term of the option.

 

6.1-3           Nontransferability.  Each Incentive Stock Option and, unless otherwise determined by the Board of Directors, each other option granted under the Plan by its terms (i) shall be nonassignable and nontransferable
by the optionee, either voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the optionee’s domicile at the time of death, and (ii) during the optionee’s lifetime, shall be exercisable only by the optionee.

 

6.1-4           Termination of Employment or Service.

 

(a)           General Rule.  Unless otherwise determined by the Board of Directors, if an optionee’s employment or service with the Company terminates for any reason other than because of total disability or death
as provided in Sections 6.1-4(b) and (c), his or her option may be exercised at any time before the expiration date of the option or the expiration of 30 days after the date of termination, whichever is the shorter period, but only if and to the extent the optionee was entitled to exercise the option at the date of termination.

 

(b)           Termination Because of Total Disability.  Unless otherwise determined by the Board of Directors, if an optionee’s employment or service with the Company terminates because of total disability, his or
her option may be exercised at any time before the expiration date of the option or before the date 12 months after the date of termination, whichever is the shorter period, but only if and to the extent the optionee was entitled to exercise the option at the date of termination.  The term “total disability” means a medically determinable mental or physical impairment that is expected to result in death or has lasted or is expected to last for a continuous period of 12 months or more and
that, in the opinion of the Company and two independent physicians, causes the optionee to be unable to perform his or her duties as an employee, director, officer or consultant of the Employer and unable to be engaged in any substantial gainful activity.  Total disability shall be deemed to have occurred on the first day after the two independent physicians have furnished their written opinion of total disability to the Company and the Company has reached an opinion of total disability.

 

 

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(c)           Termination Because of Death.  Unless otherwise determined by the Board of Directors, if an optionee dies while employed by or providing service to the Company, his or her option may be exercised at any time
before the expiration date of the option or before the date 12 months after the date of death, whichever is the shorter period, but only if and to the extent the optionee was entitled to exercise the option at the date of death and only by the person or persons to whom the optionee’s rights under the option shall pass by the optionee’s will or by the laws of descent and distribution of the state or country of domicile at the time of death.

 

(d)          Amendment of Exercise Period Applicable to Termination.  The Board of Directors may at any time extend the 30-day and 12-month exercise periods any length of time not longer than the original expiration date of
the option.  The Board of Directors may at any time increase the portion of an option that is exercisable, subject to terms and conditions determined by the Board of Directors.

 

(e)           Failure to Exercise Option.  To the extent that the option of any deceased optionee or any optionee whose employment or service terminates is not exercised within the applicable period, all further rights
to purchase shares pursuant to the option shall cease and terminate.

 

(f)            Leave of Absence.  Absence on leave approved by the Employer or on account of illness or disability shall not be deemed a termination or interruption of employment or service.  Unless otherwise
determined by the Board of Directors, vesting of options shall continue during a medical, family or military leave of absence, whether paid or unpaid, and vesting of options shall be suspended during any other unpaid leave of absence.

 

6.1-5           Purchase of Shares.

 

(a)           Notice of Exercise.  Unless the Board of Directors determines otherwise, shares may be acquired pursuant to an option granted under the Plan only upon the Company’s receipt of written notice from the
optionee of the optionee’s binding commitment to purchase shares, specifying the number of shares the optionee desires to purchase under the option and the date on which the optionee agrees to complete the transaction, and, if required to comply with the Securities Act of 1933, containing a representation that it is the optionee’s intention to acquire the shares for investment and not with a view to distribution.

 

(b)           Payment.  Unless the Board of Directors determines otherwise, on or before the date specified for completion of the purchase of shares pursuant to an option exercise, the optionee must pay the Company the
full purchase price of those shares in cash or by check or, with the consent of the Board of Directors, in whole or in part, in Common Stock of the Company valued at fair market value, restricted stock or other contingent awards denominated in either stock or cash, promissory notes and other forms of consideration.  Unless otherwise determined by the Board of Directors, any Common Stock provided in payment of the purchase price must have been previously acquired and held by the optionee for at least
six months. The fair market value of Common Stock provided in payment of the purchase price shall be the closing price of the Common Stock last reported before the time payment in Common Stock is made or, if earlier, committed to be made, if the Common Stock is publicly traded, or another value of the Common Stock as specified by the Board of Directors.  No shares shall be issued until full payment for the shares has been made, including all amounts owed for tax withholding.  With the consent
of the Board of Directors, an optionee may request the Company to apply automatically the shares to be received upon the exercise of a portion of a stock option (even though stock certificates have not yet been issued) to satisfy the purchase price for additional portions of the option.

 

 

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(c)           Tax Withholding.  Each optionee who has exercised an option shall, immediately upon notification of the amount due, if any, pay to the Company in cash or by check amounts necessary to satisfy any applicable
federal, state and local tax withholding requirements.  If additional withholding is or becomes required (as a result of exercise of an option or as a result of disposition of shares acquired pursuant to exercise of an option) beyond any amount deposited before delivery of the certificates, the optionee shall pay such amount, in cash or by check, to the Company on demand.  If the optionee fails to pay the amount demanded, the Company or the Employer may withhold that amount from other amounts
payable to the optionee, including salary, subject to applicable law.  With the consent of the Board of Directors, an optionee may satisfy this obligation, in whole or in part, by instructing the Company to withhold from the shares to be issued upon exercise or by delivering to the Company other shares of Common Stock; provided, however, that the number of shares so withheld or delivered shall not exceed the minimum amount necessary to satisfy the required withholding obligation.

 

(d)           Reduction of Reserved Shares.  Upon the exercise of an option, the number of shares reserved for issuance under the Plan shall be reduced by the number of shares issued upon exercise of the option (less the
number of any shares surrendered in payment for the exercise price or withheld to satisfy withholding requirements).

 

6.1-6           Limitations on Grants to Non-Exempt Employees.  Unless otherwise determined by the Board of Directors, if an employee of the Company or any parent or subsidiary of the Company is a non-exempt employee subject
to the overtime compensation provisions of Section 7 of the Fair Labor Standards Act (the “FLSA”), any option granted to that employee shall be subject to the following restrictions: (i) the option price shall be at least 85 percent of the fair market value, as described in Section 6.2-4, of the Common Stock subject to the option on the date it is granted; and (ii) the option shall not be exercisable until at least six months after the date it is granted; provided, however, that this six-month
restriction on exercisability will cease to apply if the employee dies, becomes disabled or retires, there is a change in ownership of the Company, or in other circumstances permitted by regulation, all as prescribed in Section 7(e)(8)(B) of the FLSA.

 

6.2           Incentive Stock Options.  Incentive Stock Options shall be subject to the following additional terms and conditions:

 

6.2-1           Limitation on Amount of Grants.  If the aggregate fair market value of stock (determined as of the date the option is granted) for which Incentive Stock Options granted under this Plan (and any other stock
incentive plan of the Company or its parent or subsidiary corporations, as defined in subsections 424(e) and 424(f) of the Code) are exercisable for the first time by an employee during any calendar year exceeds $100,000, the portion of the option or options not exceeding $100,000, to the extent of whole shares, will be treated as an Incentive Stock Option and the remaining portion of the option or options will be treated as a Non-Statutory Stock Option.  The preceding sentence will be applied by taking
options into account in the order in which they were granted.  If, under the $100,000 limitation, a portion of an option is treated as an Incentive Stock Option and the remaining portion of the option is treated as a Non-Statutory Stock Option, unless the optionee designates otherwise at the time of exercise, the optionee’s exercise of all or a portion of the option will be treated as the exercise of the Incentive Stock Option portion of the option to the full extent permitted under the $100,000
limitation.  If an optionee exercises an option that is treated as in part an Incentive Stock Option and in part a Non-Statutory Stock Option, the Company will designate the portion of the stock acquired pursuant to the exercise of the Incentive Stock Option portion as Incentive Stock Option stock by issuing a separate certificate for that portion of the stock and identifying the certificate as Incentive Stock Option stock in its stock records.

 

 

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6.2-2           Limitations on Grants to 10 Percent Shareholders.  An Incentive Stock Option may be granted under the Plan to an employee possessing more than 10 percent of the total combined voting power of all classes
of stock of the Company or any parent or subsidiary (as defined in subsections 424(e) and 424(f) of the Code) only if the option price is at least 110 percent of the fair market value, as described in Section 6.2-4, of the Common Stock subject to the option on the date it is granted and the option by its terms is not exercisable after the expiration of five years from the date it is granted.

 

6.2-3           Duration of Options.  Subject to Sections 6.1-2, 6.1-4 and 6.2-2, Incentive Stock Options granted under the Plan shall continue in effect for the period fixed by the Board of Directors, except that
by its terms no Incentive Stock Option shall be exercisable after the expiration of 10 years from the date it is granted.

 

6.2-4           Option Price.  The option price per share shall be determined by the Board of Directors at the time of grant.  Except as provided in Section 6.2-2, the option price shall not be less than
100 percent of the fair market value of the Common Stock covered by the Incentive Stock Option at the date the option is granted.  The fair market value shall be the closing price of the Common Stock last reported before the time the option is granted, if the stock is publicly traded, or another value of the Common Stock as specified by the Board of Directors.

 

6.2-5           Limitation on Time of Grant.  No Incentive Stock Option shall be granted on or after the tenth anniversary of the last action by the Board of Directors adopting the Plan or approving an increase in the
number of shares available for issuance under the Plan, which action was subsequently approved within 12 months by the shareholders.

 

6.2-6           Early Dispositions.  If within two years after an Incentive Stock Option is granted or within 12 months after an Incentive Stock Option is exercised, the optionee sells or otherwise disposes of Common Stock
acquired on exercise of the Option, the optionee shall within 30 days of the sale or disposition notify the Company in writing of (i) the date of the sale or disposition, (ii) the amount realized on the sale or disposition and (iii) the nature of the disposition (e.g., sale, gift, etc.).

 

6.3           Non-Statutory Stock Options.  Non-Statutory Stock Options shall be subject to the following terms and conditions, in addition to those set forth in Section 6.1 above:

 

 

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6.3-1           Option Price.  The option price for Non-Statutory Stock Options shall be determined by the Board of Directors at the time of grant and may be any amount determined by the Board of Directors.

 

6.3-2           Duration of Options.  Non-Statutory Stock Options granted under the Plan shall continue in effect for the period fixed by the Board of Directors.

 

6.4           Stock Appreciation Rights.  The Board may, in its discretion, include in the grant of any Option the right of a grantee (hereinafter referred to as a "stock appreciation right") to elect,
in the manner described below, in lieu of exercising his or her Option for all or a portion of the shares of Common Stock covered by such Option, to relinquish his or her Option for all or a portion of the such shares and to receive from the Company a payment equal in value to (x) the fair market value,  of a share of Common Stock on the date of such election, multiplied by the number of shares as to which the grantee shall have made such election, less (y) the exercise price for that number of shares
of Common Stock for which the grantee shall have made such election under the terms of such Option.  A stock appreciation right shall be exercisable at the time the tandem option is exercisable, and the "expiration date" for the stock appreciation right shall be the amount described in (x) above exceeds the amount described in (y) above.  An election to exercise stock appreciation rights shall be deemed to have been made on the day written notice of such election, addressed to the Board, is
received by the Company.  An Option or any portion thereof with respect to which a grantee has elected to exercise a stock appreciation right shall be surrendered to the Company and such Option shall thereafter remain exercisable according to its terms only with respect to the number of shares as to which it would otherwise be exercisable, less the number of shares with respect to which stock appreciation rights have been exercised.  The grant of a stock appreciation right shall be evidenced
by an Agreement.  The Agreement evidencing stock appreciation rights shall be personal and will provide that the stock appreciation rights will not be transferable by the grantee otherwise than by will or the laws of descent and distribution and that they will be exercisable, during the lifetime of the grantee, only by him or her.  For purposes of this Plan, the fair market value of Common Stock price shall be the closing price of the Common Stock last reported before the time in question
if the Common Stock is publicly traded, or another value of the Common Stock as specified by the Board of Directors.

 

7.             Bonuses and Past Salaries and Fees Payable in Stock. The Board of Directors may award shares under the Plan as stock bonuses or as salaries and fees otherwise payable by the Company's to employees and consultants
eligible to participate in this Plan that were incurred for services rendered at any time to the Company.  Shares awarded under this section, shall be subject to the terms, conditions and restrictions determined by the Board of Directors.  The restrictions may include restrictions concerning transferability and forfeiture of the shares awarded, together with any other restrictions determined by the Board of Directors.  The Board of Directors may require the recipient to sign an agreement
as a condition of the award, but may not require the recipient to pay any monetary consideration other than amounts necessary to satisfy tax withholding requirements.  The agreement may contain any terms, conditions, restrictions, representations and warranties required by the Board of Directors.  The certificates representing the shares awarded shall bear any legends required by the Board of Directors.  The Company may require any recipient of stock under this section to pay to
the Company in cash or by check upon demand amounts necessary to satisfy any applicable federal, state or local tax withholding requirements.  If the recipient fails to pay the amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the recipient, including salary, subject to applicable law.  With the consent of the Board of Directors, a recipient may satisfy this obligation, in whole or in part, by instructing the Company to withhold from any shares
to be issued or by delivering to the Company other shares of Common Stock; provided, however, that the number of shares so withheld or delivered shall not exceed the minimum amount necessary to satisfy the required withholding obligation.  Upon the issuance of stock under this section, the number of shares reserved for issuance under the Plan shall be reduced by the number of shares issued, less the number of shares withheld or delivered to satisfy withholding obligations.

 

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8.             Restricted Stock.  The Board of Directors may issue shares under the Plan for any consideration (including promissory notes and services) determined by the Board of Directors.  Shares issued
under the Plan shall be subject to the terms, conditions and restrictions determined by the Board of Directors.  The restrictions may include restrictions concerning transferability, repurchase by the Company and forfeiture of the shares issued, together with any other restrictions determined by the Board of Directors.  All Common Stock issued pursuant to this Section 8 shall be subject to a purchase agreement, which shall be executed by the Company and the prospective purchaser of the
shares before the delivery of certificates representing the shares to the purchaser.  The purchase agreement may contain any terms, conditions, restrictions, representations and warranties required by the Board of Directors.  The certificates representing the shares shall bear any legends required by the Board of Directors.  The Company may require any purchaser of restricted stock to pay to the Company in cash or by check upon demand amounts necessary to satisfy any applicable federal,
state or local tax withholding requirements.  If the purchaser fails to pay the amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the purchaser, including salary, subject to applicable law.  With the consent of the Board of Directors, a purchaser may satisfy this obligation, in whole or in part, by instructing the Company to withhold from any shares to be issued or by delivering to the Company other shares of Common Stock; provided, however,
that the number of shares so withheld or delivered shall not exceed the minimum amount necessary to satisfy the required withholding obligation.  Upon the issuance of restricted stock, the number of shares reserved for issuance under the Plan shall be reduced by the number of shares issued, less the number of shares withheld or delivered to satisfy withholding obligations.

 

9.             Changes in Capital Structure.

 

9.1           Stock Splits, Stock Dividends.  If the outstanding Common Stock of the Company is hereafter increased or decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Company by reason of any stock split, combination of shares, dividend payable in shares, recapitalization or reclassification, appropriate adjustment shall be made by the Board of Directors in the number and kind of shares available for grants under the Plan and in all other share amounts set forth in the Plan.  In addition, the Board of Directors shall make appropriate adjustment in the number and kind of shares as to which outstanding options, or portions thereof then unexercised,
shall be exercisable, so that the optionee’s proportionate interest before and after the occurrence of the event is maintained.  Notwithstanding the foregoing, the Board of Directors shall have no obligation to effect any adjustment that would or might result in the issuance of fractional shares, and any fractional shares resulting from any adjustment may be disregarded or provided for in any manner determined by the Board of Directors.  Any such adjustments made by the Board of Directors
shall be conclusive.

 

 

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9.2           Mergers, Reorganizations, Etc.  In the event of a merger, consolidation, plan of exchange, acquisition of property or stock, split-up, split-off, spin-off, reorganization or liquidation
to which the Company is a party or any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company (each, a “Transaction”), the Board of Directors shall, in its sole discretion and to the extent possible under the structure of the Transaction, select one of the following alternatives for treating outstanding options under the Plan:

 

9.2-1  Outstanding options shall remain in effect in accordance with their terms.

 

9.2-2  Outstanding options shall be converted into options to purchase stock in one or more of the corporations, including the Company, that are the surviving or acquiring corporations in the Transaction.  The amount, type of securities subject thereto and exercise price of the converted options shall be determined by
the Board of Directors of the Company, taking into account the relative values of the companies involved in the Transaction and the exchange rate, if any, used in determining shares of the surviving corporation(s) to be held by holders of shares of the Company following the Transaction.  Unless otherwise determined by the Board of Directors, the converted options shall be vested only to the extent that the vesting requirements relating to options granted hereunder have been satisfied.

 

9.2-3  The Board of Directors shall provide a period of 30 days or less before the completion of the Transaction during which outstanding options may be exercised to the extent then exercisable, and upon the expiration of that period, all unexercised options shall immediately terminate.  The Board of Directors may, in
its sole discretion, accelerate the exercisability of options so that they are exercisable in full during that period.

 

9.3           Dissolution of the Company.  In the event of the dissolution of the Company, options shall be treated in accordance with Section 9.2-3.

 

9.4           Rights Issued by Another Corporation.  The Board of Directors may also grant options and stock bonuses and fees and Performance-Based
Award and issue restricted stock under the Plan with terms, conditions and provisions that vary from those specified in the Plan, provided that any such awards are granted in substitution for, or in connection with the assumption of, existing options, stock bonuses and fees, Performance-Based Award and restricted stock granted, awarded or issued by another corporation and assumed or otherwise agreed to be provided for by the Company pursuant
to or by reason of a Transaction.

 

10.           Performance-Based Awards.  The Board of Directors may grant awards intended to qualify as qualified performance-based compensation under Section 162(m) of the Code and the regulations thereunder (“Performance-Based
Awards”).  Performance-Based Awards shall be denominated at the time of grant either in Common Stock (“Stock Performance Awards”) or in dollar amounts (“Dollar Performance Awards”).  Payment under a Stock Performance Award or a Dollar Performance Award shall be made, at the discretion of the Board of Directors, in Common Stock (“Performance Shares”), or in cash or in any combination thereof.  Performance-Based Awards shall be subject to the
following terms and conditions:

 

 

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10.1         Award Period.  The Board of Directors shall determine the period of time for which a Performance-Based Award is made (the “Award Period”).

 

10.2         Performance Goals and Payment.  The Board of Directors shall establish in writing objectives (“Performance Goals”) that must be met by the Company or any subsidiary, division or other
unit of the Company (“Business Unit”) during the Award Period as a condition to payment being made under the Performance-Based Award.  The Performance Goals for each award shall be one or more targeted levels of performance with respect to one or more of the following objective measures with respect to the Company or any Business Unit:  earnings, earnings per share, stock price increase, total shareholder return (stock price increase plus dividends), return on equity, return on
assets, return on capital, economic value added, revenues, operating income, inventories, inventory turns, cash flows or any of the foregoing before the effect of acquisitions, divestitures, accounting changes, and restructuring and special charges (determined according to criteria established by the Board of Directors).  The Board of Directors shall also establish the number of Performance Shares or the amount of cash payment to be made under a Performance-Based Award if the Performance Goals are met
or exceeded, including the fixing of a maximum payment (subject to Section 9(d)).  The Board of Directors may establish other restrictions to payment under a Performance-Based Award, such as a continued employment requirement, in addition to satisfaction of the Performance Goals.  Some or all of the Performance Shares may be issued at the time of the award as restricted shares subject to forfeiture in whole or in part if Performance Goals or, if applicable, other restrictions are not
satisfied.

 

10.3         Computation of Payment.  During or after an Award Period, the performance of the Company or Business Unit, as applicable, during the period shall be measured against the Performance Goals.  If
the Performance Goals are not met, no payment shall be made under a Performance-Based Award.  If the Performance Goals are met or exceeded, the Board of Directors shall certify that fact in writing and certify the number of Performance Shares earned or the amount of cash payment to be made under the terms of the Performance-Based Award.

 

10.4         Tax Withholding.  Each participant who has received Performance Shares shall, upon notification of the amount due, pay to the Company in cash or by check amounts necessary to satisfy any applicable
federal, state and local tax withholding requirements.  If the participant fails to pay the amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the participant, including salary, subject to applicable law.  With the consent of the Board of Directors, a participant may satisfy this obligation, in whole or in part, by instructing the Company to withhold from any shares to be issued or by delivering to the Company other shares of Common Stock; provided,
however, that the number of shares so delivered or withheld shall not exceed the minimum amount necessary to satisfy the required withholding obligation.

 

 

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10.5           Effect on Shares Available.  The payment of a Performance-Based Award in cash shall not reduce the number of shares of Common Stock reserved for issuance under the Plan.  The
number of shares of Common Stock reserved for issuance under the Plan shall be reduced by the number of shares issued upon payment of an award, less the number of shares delivered or withheld to satisfy withholding obligations.

 

11.           Amendment of the Plan.  The Board of Directors may at any time modify or amend the Plan in any respect.  Except as provided in Section 9, however, no change in an award already granted shall be made
without the written consent of the holder of the award if the change would adversely affect the holder.

 

12.           Approvals.  The Company’s obligations under the Plan are subject to the approval of state and federal authorities or agencies with jurisdiction in the matter.  The Company will use its best efforts
to take steps required by state or federal law or applicable regulations, including rules and regulations of the Securities and Exchange Commission and any stock exchange on which the Company’s shares may then be listed, in connection with the grants under the Plan.  The foregoing notwithstanding, the Company shall not be obligated to issue or deliver Common Stock under the Plan if such issuance or delivery would violate state or federal securities laws.

 

13.           Employment and Service Rights.  Nothing in the Plan or any award pursuant to the Plan shall (i) confer upon any employee any right to be continued in the employment of an Employer or interfere in any way with the
Employer’s right to terminate the employee’s employment at will at any time, for any reason, with or without cause, or to decrease the employee’s compensation or benefits, or (ii) confer upon any person engaged by an Employer any right to be retained or employed by the Employer or to the continuation, extension, renewal or modification of any compensation, contract or arrangement with or by the Employer.

 

14.           Rights as a Shareholder.  The recipient of any award under the Plan shall have no rights as a shareholder with respect to any shares of Common Stock until the date the recipient becomes the holder of record of
those shares.  Except as otherwise expressly provided in the Plan, no adjustment shall be made for dividends or other rights for which the record date occurs before the date the recipient becomes the holder of record.

 

15.           Section 16 Compliance. With respect to persons subject to Section 16 of the Securities Exchange Act of 1934, as amended ("1934 Act"), this Plan is intended to comply with all
applicable conditions of Rule 16b-3 (and all subsequent revisions thereof) ("Rule 16b-3") promulgated under the 1934 Act.  In such instance, to the extent any provision of this Plan fails to so comply, it shall be deemed null and void, to the extent permitted bylaw and deemed advisable by the Administrator.  In addition, the Board may amend this Plan from time to time as it deems necessary in order to meet the requirements of any amendments to Rule 16b-3 without the consent of the shareholders
of the Company.

 

16.           Miscellaneous Provisions.

 

16.1           This Plan shall be unfunded.  The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of shares or the payment of cash upon exercise
of any option or stock appreciation right under this Plan. The expenses of this Plan shall be borne by the Company.

 

 

11

 

 

16.2           The Board may, at any time and from time to time after the granting of an Option or the award of restricted stock or bonuses payable in Common Stock hereunder, specify such additional terms, conditions and restrictions with respect to such Option or stock as may be deemed
necessary or appropriate to ensure compliance with any and all applicable laws, including, but not limited to, the Code, federal and state securities laws and methods of withholding or providing for the payment of required taxes.

 

16.3           If at any time the Administrator(s) shall determine in its discretion that the listing, registration or qualification of shares of Common Stock upon any national securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of shares of Common Stock hereunder, no Option or stock appreciation right may be exercised or restricted stock or stock bonus may be transferred in whole or in part unless and until such listing registration, qualification, consent or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Board.

 

16.4           By accepting any benefit under this Plan, each participant and each person claiming under or through such Participant shall be conclusively deemed to have indicated his acceptance and ratification, and consent to, any action
taken under this Plan by the Administrator(s), the Company or the Board.

 

16.5           This Plan shall be governed by and construed in accordance with the laws of the Company's state of incorporation.

 

17.           Limits of Liability.

 

17.1           Any liability of the Company or a subsidiary of the Company to any participant with respect to any option or award shall be based solely upon contractual obligations created by this Plan and Agreement.

 

17.2           Neither the Company nor a division or subsidiary of the Company, nor any member of the Board, nor any other person participating in any determination of any question under this Plan, or in the interpretation, administration
or application of this Plan, shall have any liability to any party for any action taken or not taken in connection with this Plan, except as may expressly be provided by statute.

 

18.          Other Compensation Plans.

This Plan shall not be deemed to preclude the implementation by the Company or its divisions or subsidiaries of other compensation plans which may be in effect from time to time, nor adversely affect any rights of Participants under any other compensation plans of the Company or its divisions
or subsidiaries.

 

Adopted: July 23, 2008

 

 12ex10_1.htm

Exhibit 10.1

 

SHARE EXCHANGE AGREEMENT

THIS Agreement made as of the 5th day of September, 2007

 

	BETWEEN:	 	
GLOBAL BIODIESEL LTD., a corporation duly constituted under the laws of the state of Nevada, USA, and having an office at 1, place Ville Marie, suite 2818, Montreal (Quebec), H3B 4R4

 

	 	 	(Hereinafter “Global”) 	OF THE FIRST PART

 

	AND:  	 	JOHANN LOEWEN, residing at 405 Front ST, Cambridge, Ontario, N3H 2C5
	 	 	 
	 	 	 
	AND: 	 	HAN SWOONG NG, residing at 20 Futura Ave. Richmond Hill, Ontario, L4S 1V2
	 	 	 
	 	 	 
	AND:	 	ABRAHAM DYCK, residing at 1B Maple Ave West Beeton, Ontario, L0G 1A0
	 	 	 
	 	 	(Hereinafter “Shareholders”)

 

	 	 	 	OF THE SECOND PART
	 	 	 	 
	 	 	 
	AND:  	 	
METHES ENGERGIES INC., a corporation duly formed under the laws of the Province of Ontario, with its head office located at 19-4090 Ridgeway Drive, Mississauga, Ontario, L5L 5X5

	 	 	 
	 	 	(Hereinafter “Methes”)

 

	 	 	 	OF THE THIRD PART

 

WHEREAS:

 

	
A.
	
The Shareholders hold a total of Five Million (5,000,000) shares of common stock (the “Methes  Shares”) of Methes Energies Inc. (“METHES”), a corporation duly constituted under the laws of the province of Ontario;

 

	
B.
	
Global wishes to purchase from the Shareholders and the Shareholders wish to sell to Global, the Methes Shares in exchange for an equal number of shares of common stock of Global, (the “Global
Shares”) subject to the terms and conditions set forth in this Agreement.

 

 

 

 

 

NOW THEREFORE in consideration of the covenants, representations and warranties set forth herein and as such other further consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.             DEFINITIONS

A.            "Affiliate", with respect to any Person, shall mean at the time in question, any other Person controlling, controlled by or under common control with such Person.

B.             "Contracts" shall mean all contracts, agreements, undertakings, indentures, notes, bonds, loans, instruments, leases, mortgages, commitments or other binding arrangements.

C.             "Material Adverse Effect" shall mean a material adverse effect on the assets, liabilities, business, property, operations, prospects, results of operations or condition (financial or otherwise) of the relevant Person.

D.            "Permits" shall mean all licenses, permits, orders, approvals, registrations, authorizations, qualifications and filings with and under all Federal, state, local or foreign laws and governmental or regulatory bodies.

E.             "Person" shall mean any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, governmental, judicial or regulatory body or other entity.

2.             PURPOSE

On the basis of the representations and warranties herein contained, subject to the terms and conditions set forth herein, the Shareholders agree to exchange with Global a total of Five Million (5,000,000) common shares of Methes no par value per share (the "Methes Shares") Five Million (5,000,000) shares of Global common stock, $0.001
par value (the "Global Shares”).

3.             REPRESENTATIONS AND WARRANTIES OF GLOBAL

Global hereby represents and warrants to the Shareholders that:

A.            Organization.     Global is a corporation duly organized, validly existing and in good standing, under the laws of the State of
Nevada with all requisite power and authority to enter into, and perform its obligations under this Agreement.  Global is duly qualified or otherwise authorized as a foreign corporation to transact business and is in good standing in each jurisdiction in which it transacts business.

B.            Authority.     This Agreement has been duly executed and delivered by Global and constitutes a valid and binding agreement of Global enforceable
against Global in accordance with its terms.  The execution and performance of this Agreement will not violate or result in a breach of, or constitute a default in any agreement, instrument, judgment, order or decree to which Global is a party or to which the Global Shares are subject.

 

2

 

 

C.           Capitalization.  Schedule 3.C sets forth the authorized capitalization of Global.  All of the outstanding shares of common stock of Global are
duly authorized, validly issued, fully paid and non-assessable and free of pre-emptive rights.

 

D.            Certificates of Incorporation and Bylaws.  Global has heretofore delivered to the Shareholders true, correct and complete copies of the Certificates
or Articles of Incorporation (certified by the Secretary of State of the State of Nevada) and Bylaws of Global.  The minute book of Global accurately reflects all actions taken at all meetings and consents in lieu of meetings of its shareholders and all actions taken at all meetings and consents in lieu of meetings of its board of directors.

E.            Consents and Approvals.  Except as described below in this subsection 4.E, the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby in accordance with the terms and conditions hereof do not require Global to obtain any consent, approval or action of, or make any filing with or give any notice to, any Person.

F.            Legal Status.   The Global Shares are, or upon issuance shall be genuine, validity issued and outstanding, fully paid and non-assessable and are
not issued in violation of the pre-emptive rights of any person or of any agreement by which the Global is bound.

G.            Title.   Global will transfer the Global Shares to the Shareholders with good title and no encumbrances or liens thereon.  The Global Shares
shall have a restrictive legend restricting the transfer thereof in compliance with the United States federal securities laws.

The Global Shares shall be endorsed thereon with a legend to the following effect and may also be affixed with the required restrictive legends to comply with Canadian securities laws:

 

“THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED ONLY (i) TO THE COMPANY, (ii) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH REGULATION S UNDER THE 1933 ACT, (iii) IN ACCORDANCE WITH RULE 144 UNDER THE 1933 ACT, OR (iv) IN A TRANSACTION THAT IS OTHERWISE EXEMPT FROM REGISTRATION UNDER THE 1933 ACT AND APPLICABLE STATE SECURITIES LAWS, PROVIDED, PRIOR TO ANY SUCH SALE, TRANSFER OR ASSIGNMENT, THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL, IN FORM ACCEPTABLE TO THE COMPANY, THAT NO VIOLATION OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR
ASSIGNMENT.  HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.”

F.            Transfer. Global agrees further to defend, on behalf of the Shareholders and
their respective successors, heirs and assigns, as the case may be, the title to the Global Shares.

 

3

 

 

4.             REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS AND METHES

The Shareholders and METHES represent and warrant to Global that:

A.            Organization.     METHES is a corporation duly organized, validly existing and in good standing, under the laws of the Province of Ontario
with all requisite power and authority to enter into, and perform the obligations under this Agreement.  METHES is duly qualified or otherwise authorized as a foreign corporation to transact business and is in good standing in each jurisdiction in which it transacts business.

B.            Authority.     This Agreement has been duly executed and delivered by each of the Shareholders of METHES who is a party to this Agreement
and constitutes a valid and binding agreement of each of them enforceable against them in accordance with its terms.  The execution and performance of this Agreement will not violate or result in a breach of, or constitute a default in any agreement, instrument, judgment, order or decree to which any Shareholder is a party or to which the METHES Shares are subject.

C.            Capitalization.  Schedule 4.C sets forth the authorized capitalization of METHES.  All of the METHES Shares are duly authorized, validly
issued, fully paid and non-assessable and free of pre-emptive rights

D.            Certificates of Incorporation and Bylaws.  The Shareholders have heretofore delivered to Global true, correct and complete copies of the Certificates
or Articles of Incorporation (certified by the Province of Ontario) and Bylaws of METHES. The minute book of METHES accurately reflects all actions taken at all meetings and consents in lieu of meetings of its shareholders and all actions taken at all meetings and consents in lieu of meetings of its board of directors.

E.             Consents and Approvals.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby in
accordance with the terms and conditions hereof do not require the Shareholders nor METHES to obtain any consent, approval or action of, or make any filing with or give any notice to, any Person.

F.             Legal Status.   The METHES Shares are genuine, validity issued and outstanding, fully paid and non-assessable and are not issued in violation
of the pre-emptive rights of any person or of any agreement by which any of the Shareholders or METHES is bound.

G.            Title.   Upon delivery to Escrow, the METHES Shares shall be delivered with good title and no encumbrances thereon.  The METHES Shares shall
have a restrictive legend restricting the transfer thereof in compliance with the Ontario securities laws.

E.             Transfer. The Shareholders and METHES agree further to defend, on behalf of Global and its successors and assigns, the title to the METHES Shares.

 

4

 

 

5.   COVENANTS AND AGREEMENTS.

A.            Conduct of Business in the Ordinary Course.  From the date hereof through the Closing Date, METHES shall, and the Shareholders shall cause METHES to,
conduct the business of METHES in a reasonably prudent and professional manner.

B.            Permits and Services.  From the date hereof through the Closing Date, METHES shall use, and the Shareholders shall cause METHES to use, its best efforts
to preserve any Permits in full force and effect and to keep available the services of its present officers, employees, consultants and agents, maintain its present suppliers and customers and preserve its goodwill.

C.            Litigation.  From the date hereof through the Closing Date, the Shareholders shall notify Global promptly of any actions or proceedings that are threatened
again METHES or against  any officer, director, employee, properties or assets of METHES.

D.   Due Diligence.  Prior to the Closing Date, Global shall be entitled, through its employees and representatives, to make such investigation of the
assets, liabilities, properties, business and operations of METHES and such examination of the books, records, tax returns, results of operations and financial condition of METHES as Global wishes.

E.   Acquisition Proposals.  From the date hereof through the Closing Date, neither any of the Shareholders, nor METHES, nor any of the officers, directors,
employees, representatives or agents of METHES, shall, directly or indirectly, solicit, initiate or participate in any way in discussion or negotiations with, or provide any information or assistance to, or enter into any contract with any person or entity or group of persons or entities (other than Global) concerning any merger, consolidation, liquidation, dissolution, or disposition of assets of METHES or any transfer of any of the outstanding securities of METHES (other than the pursuant to the transactions
contemplated by this Agreement) (each an "Acquisition Proposal"), or assist or participate in, facilitate or encourage any effort or attempt by any other Person to do or seek to do any of the foregoing.  The Shareholders and/or METHES shall promptly communicate to Global the terms of any Acquisition Proposal, which he or any such other Person may receive.

F.             Further Assurances.  Each of the parties shall execute such documents and other papers and take such further actions as may be reasonably required
or desirable to carry out the provision hereof and the transactions contemplated hereby.  Each such party shall use its best efforts to fulfill or obtain the fulfillment of the conditions to the Closing as promptly as practicable.

6.   CONDITIONS PRECEDENT TO THE OBLIGATION OF GLOBAL TO CLOSE.

The obligation of Global to enter into and complete the Closing is subject, at Global's option acting in accordance with the provisions of this Agreement with respect to the termination hereof, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may waived by it, to the extent permitted
by law.

A.            Representations and Covenants.  The representations and warranties of the Shareholders and METHES contained in this Agreement shall be true and correct
on and as of the Closing Date and all subsequent closing dates with the same force and effect as though made on and as of the Closing Date, except that any of such representations and warranties that are given as of a particular date and relate solely to a particular date or period shall be true as of such date or period.  The Shareholders and METHES shall have preformed and complied with all covenants and agreements required by this Agreement to be performed or complied with by the Shareholders and/or
METHES on or prior to the Closing Date.  The Shareholders and METHES shall have delivered to Global a certificate of the Shareholders and METHES, dated the Closing Date, and signed by the Shareholders and an officer of METHES to the foregoing effect.

 

 

5

 

 

B.            Third Party Consents.  All consents, Permits, and approvals from parties to Contracts with METHES or the Shareholders that may be required in connection
with the performance by the Shareholders of METHES of their respective obligations under this Agreement or the continuance of such Contracts with the Shareholders or METHES in full and effect after the Closing shall have been obtained.

C.            Lack of Litigation.  No action, suit or proceeding shall have been instituted and be continuing or be threatened by any Person to restrain, modify
or prevent the carrying out of the transactions contemplated hereby, or to seek damages in connection with such transactions, or those have or could have a Material Adverse Effect on METHES.

D.            No Change in Capitalization.  On the Closing Date, the capitalization of METHES shall be as represented in Schedule 4.C.

E.             Material Information.  This Agreement, the Schedules attached hereto and all other information provided, in writing, by METHES or the Shareholders,
taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make any statement contained herein or therein not misleading.  There are no facts or conditions which have not been disclosed to Global in writing which, individually or in the aggregate, could have a material adverse effect on Methes or a material adverse effect on the ability of Methes to perform any of its obligations pursuant to this Agreement.

F.             Financial Statements.

	
  
	
(a)
	
METHES unaudited financial statements as appended hereto as Schedule 6.F(a) for the years ended November 30th 2006 and November 30th 2005  as filed are true, correct and complete in all material respects and fairly present the financial condition of
METHES and the results of its operations for the periods then ended and were prepared in conformity with generally accepted accounting principles applied on a consistent basis;

	
  
	
(b)
	
METHES has, or will have prior to the Closing Date, provided to Global, as appended hereto as Schedule 6.F(b) the prepared by management  financial statements of METHES, for the period ended August 31st 2007 (together with the Financial Statements as represented in 6.F(a) above, the “METHES Financial Statements”).  The
METHES Financial Statements shall be true, correct and complete in all material respects and fairly present the financial condition of METHES and the results of its operations for the period then ended and shall be prepared in conformity with generally accepted accounting principles applied on a consistent basis.

 

G             Undisclosed Liabilities.   Except for the debt as disclosed on the Schedule 6.G appended hereto  METHES was not subject to, and since
the date of this Agreement METHES has not incurred, any direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise, of a kind required by generally accepted accounting principles to be reflected or reserved against on a financial statement (“Liabilities”), which has not been disclosed to Global prior to Closing. Any such
undisclosed liabilities shall be the responsibilities of the shareholders.

 

6

 

 

H.            Compliance with Laws.  To the best of METHES’ knowledge, METHES is not in violation of any applicable order, judgment, injunction, award or decree
nor is it in violation of any Federal, state, local or foreign law, ordinance or regulation or any other requirement of any governmental or regulatory body, court or arbitrator, other than those violations which, in the aggregate, would not have a material adverse effect on METHES and METHES has not received written notice that any violation is being alleged.

I.      Actions and Proceedings.  Except as may be reflected or included on METHES Financial Statements, there are no outstanding orders, judgments,
injunctions, awards or decrees of any court, governmental or regulatory body or arbitration tribunal against or involving METHES.  There are no actions, suits or claims or legal, regulatory, administrative or arbitration proceedings pending or, to the knowledge of METHES threatened against or involving METHES.

J. Contracts.

(a)           METHES at the Closing shall not be a party to any:

	
  
	
(i)
	
contracts with any current or former officer, director, employee, consultant, agent or other representative other than those disclosed on Schedule 6.J appended hereto;

 

	
  
	
(ii)
	
contracts for the purchase or sale of equipment or services that contain an escalation, renegotiation or re-determination clause or that can be cancelled without liability, premium or penalty only on ninety days’ or more notice;

	
  
	
(iii)
	
contracts for the sale of any of its assets or properties or for the grant to any person of any preferential rights to purchase any of its or their assets or properties;

	
  
	
(iv)
	
contracts (including with limitation, leases of real property) calling for an aggregate purchase price or payments in any one year of more than $10,000 in any one case (or in the aggregate, in the case of any related series of contracts);

	
  
	
(v)
	
contracts relating to the acquisition by METHES of any operating business of, or the disposition of any operating business by, any other person;

	
  
	
(vi)
	
executory contracts relating to the disposition or acquisition of any investment or of any interest in any person;

	
  
	
(vii)
	
joint venture contracts or agreements;

	
  
	
(viii)
	
contracts under which METHES agrees to indemnify any party, other than in the ordinary course of business or in amounts not in excess of $10,000, or to share tax liability of any party;

	
  
	
(ix)
	
contracts containing covenants of METHES not to compete in any line of business or with any person in any geographical area or covenants of any other person not to compete with  METHES in any line of business or in any geographical area;

	
  
	
(x)
	
contracts relating to the making of any loan by METHES;

	
  
	
(xi)
	
contracts relating to the borrowing of money by METHES or the direct or indirect guarantee by METHES of any obligation for, or an agreement by METHES to service, the repayment of borrowed money, or any other contingent obligations in respect of indebtedness of any other Person, including, without limitation,

	
  
	
(1)
	
any contract with respect to lines of credit;

 

 

7

 

 

	
  
	
(2)
	
any contract to advance or supply funds to any other person other than in the ordinary course of business;

	
  
	
(3)
	
any contract to pay for property, products or services of any other person even if such property, products or services are not conveyed, delivered or rendered;

	
  
	
(4)
	
any keep-well, make-whole or maintenance of working capital or earnings or similar contract; or

	
  
	
(5)
	
any guarantee with respect to any lease or other similar periodic payments to be made by any other person;

	
  
	
(xii)
	
contracts for or relating to computers, computer equipment, computer software or computer services; or

	
  
	
(xiii)
	
any other material contract whether or not made in the ordinary course of business.

	
  
	
(xiv)
	
any promise of sale at a certain price or discount on equipment/ franchise or any other future commitment.

 

K. Operations of METHES.  Except as contemplated by this Agreement, since the date of the METHES Financial Statements, METHES has not:

	
  
	
(a)
	
amended its Certificate or Articles of Incorporation or By-laws or merged with or into or consolidated with any other person or entity, subdivided or in any way reclassified any shares of its capital stock or changed or agreed to change in any manner the rights of its outstanding capital stock or the character of its business;

	
  
	
(b)
	
issued, reserved for issuance, sold or redeemed, repurchased or otherwise acquired, or issued options or rights to subscribe to, or entered into any contract or commitment to issue, sell or redeem, repurchase or otherwise acquire, any shares of its capital stock or any bonds, notes, debentures or other evidence or indebtedness;

	
  
	
(c)
	
incurred any indebtedness for borrowed money or incurred or assumed any other liability in excess of $10,000 in any one case (or, in the aggregate, in the case of any related series of occurrences) or $30,000 in the aggregate;

	
  
	
(d)
	
declared or paid any dividends or declared or made any other distributions of any kind to its shareholders;

	
  
	
(e)
	
made any change in its accounting methods or practices or made any change in depreciation or amortization policies, except as required by law or generally accepted accounting principles;

	
  
	
(f)
	
made any loan or advance to any of  its shareholders or to any of its directors, officers or employees, consultants, agents or other representatives, or made any other loan or advance, otherwise than in the ordinary course of business;

	
  
	
(g)
	
entered into any lease (as lessor or lessee) under which METHES is obligated to make or would receive payments in any one year of $10,000 or more;

	
  
	
(h)
	
granted or suffered any lien on any of its assets or properties;

	
  
	
(i)
	
made any acquisition of all or a substantial part of the assets, properties, securities or business of any other person or entity;

	
  
	
(j)
	
paid, directly or indirectly, any of its material liabilities before the same became due in accordance with its terms or otherwise than in the ordinary course of business; or

	
  
	
(k)
	
entered into any other contract or other transaction that materially increases the liabilities of METHES.

K.            Absence of Certain Changes.  Since the date of the METHES Financial Statements, there has been no event, change or development which could have a material
adverse effect on METHES.

 

 

8

 

 

L.            Cooperation.  The Shareholders and METHES shall have provided Global or its representatives with any other certificates or other documents related
to this Agreement or the business and operations of METHES or in connection with the Closing that Global may request and shall otherwise have cooperated in Global's examination of the business and operations of METHES.  The Shareholders shall assure that Global has full and complete disclosure of all of the affairs of METHES as at the date of the Closing and there will be no other items, events, loans, agreements or transactions of any nature that are not disclosed in the schedules to this Agreement
or to Global with a signed acknowledgment by Global of disclosure of same.

M.           Appointment of Representative to the Board of Directors of METHES.  METHES, at or prior to the Closing, shall appoint or cause to have appointed two
representatives from Global to METHES’s board of directors.

N.           Signatories.  METHES, at or prior to receiving any funds from the Offering, shall execute all bank documents and authorizations necessary so that the
expenditure of any of its funds shall require the signature of one officer of METHES and one officer or designee of Global.  In the event that this Agreement terminates pursuant to Subsection 3.C, then upon the repayment of all amounts deemed to be a loan to Global under Subsection 3.C, and all accrued interest thereon, Global shall remove its officer or designee from all bank accounts of METHES.

7.   CONDITIONS PRECEDENT TO THE OBLIGATION OF SHAREHOLDERS AND METHES TO CLOSE.

The obligation of the Shareholders and METHES to enter into and complete the Closing is subject, at the option of the Shareholders and METHES, acting in accordance with the provisions of this Agreement with respect to the termination hereof, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more
of which may waived by them, to the extent permitted by law.

A.            Representations and Covenants. The representations and warranties of Global contained in this Agreement shall be true and correct on and as of the Closing Date
and all subsequent closing dates with the same force and effect as though made on and as of the Closing Date, except that any of such representations and warranties that are given as of a particular date and relate solely to a particular date or period shall be true as of such date or period.  Global shall have preformed and complied with all covenants and agreements required by this Agreement to be performed or complied with by Global on or prior to the Closing Date.  Global shall have delivered
to the Shareholders and METHES a certificate of Global, dated the Closing Date, and signed by an appropriate officer of Global to the foregoing effect.

B.            Third Party Consents.  All consents, Permits, and approvals from parties to Contracts with Global that may be required in connection with the performance
by Global of its obligations under this Agreement or the continuance of such Contracts with Global in full force and effect after the Closing shall have been obtained.

C.            Lack of Litigation.  No action, suit or proceeding shall have been instituted and be continuing or be threatened by any Person to restrain, modify
or prevent the carrying out of the transactions contemplated hereby, or to seek damages in connection with such transactions, or that have or could have a Material Adverse Effect on Global.

 

 

9

 

 

D.            Cooperation.  Global shall have provided the Shareholders and METHES or its representatives with any other certificates or other documents related
to this Agreement or the business and operations of Global or in connection with the Closing that the Shareholders or METHES may request and shall otherwise have cooperated in the Shareholder's  or METHES’s examination of the business and operations of Global.

8.             SHAREHOLDERS' AGREEMENT NOT TO COMPETE

A.            In the case of the Shareholders that are individuals, each of such Shareholders agrees that he will not, for the period from the date of execution hereof until the earlier of Five (5) years from such date of execution
or the closing date, without the written permission of Global, directly or indirectly, undertake any of the actions described below in this subparagraph 8.A, the  Shareholders shall not undertake any of the following:

(1) Make any statement or perform any act intended to advance an interest of any existing or prospective competitor of METHES or Global that may injure an interest of METHES or Global in its relationship and dealings with existing or potential customers or clients, or solicit or encourage any employee of METHES or Global to do any act
that is inconsistent with METHES's or Global's interests or in violation of any provision of this Agreement; and

(2) Within the geographical area of North America or any other geographical area whereby Methes or Global is doing business, directly or indirectly, either as an individual or as a partner or joint venturer or as an employee, principal, consultant, agent, officer, director, or as a sales representative for any person, firm, association,
organisation, syndicate, company or corporation, or in any manner whatsoever, carry on, be engaged in, concerned with, interested in, advise, lend money to, guarantee the debts or obligations of, or permit his name or any part thereof to be used or employed in a business which is the same as, or directly competitive with, the business of METHES, including, but without limiting, any business relating to the development, production, sales or marketing of Biodiesel that are contained in METHES’s business plan
or annual plan as constituted at the time of such termination or expiration.

B.           Each Shareholder agrees that during the applicable period of time described in subparagraph 8.A above, he will not, in any manner that will result in the detriment to METHES, disclose or reveal to any Person any trade
secret, or other confidential information relating to METHES or to any of the businesses operated by METHES, including without limitation, any customer lists, unless readily ascertainable from public or published information or trade sources, and each Shareholder confirms that such information constitutes the exclusive property of METHES.

C.           Where, during the applicable period described in subparagraph 8.A above, any Shareholder has participated in the providing of services or the sale of products to an existing client or customer of METHES, or participated
in discussions or negotiations with representatives of an existing client or customer with regard to future services or products which may or may not be provided or sold by METHES, or participated in the preparation of proposals, whether formal or informal, relating to such services or products, such Shareholder agrees that he will not make any statement or do any act intended to cause such existing client or customer to make use of the services or purchase the products of any competitive business.

D.           In addition to any other remedies, at law or otherwise, that Global or METHES may have against any Shareholder generally for the breach of this Agreement, METHES and Global or either of them is entitled to an injunction
to be issued by any court of competent jurisdiction, enjoining and restraining such Shareholder from committing any violation of this Section 8.  The Shareholders and Global acknowledge that any damage caused by reason of the breach of any of the agreements contained is this Section 8 could not be adequately compensated for in monetary damages, and therefore each Shareholder agrees that METHES and Global or either of them shall be entitled to specific performance of this Section 8.

 

 

10

 

 

It is the intent and desire of the parties to this Agreement that the provisions of this Section 8 shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought.  Accordingly, if any particular portion of this Section 8 shall be adjudicated to
be invalid or unenforceable, this Section 8 shall be amended to delete therefrom the portion thus adjudicated to be invalid and unenforceable, such deletion to apply only with respect to the operation of this Section 9 in the particular jurisdiction in which such adjudication is made.

9.             MISCELLANEOUS.

A.            Notices.   Any notice under this Agreement shall be deemed to have been sufficiently given if sent by registered or certified mail, postage prepaid,
addressed as follows:

To the Shareholders:

19 – 4090 Ridgeway Drive,

Mississauga, Ontario L5L 5X5

Telephone:  905 828 2700

Facsimile: 866 276 9589

E-mail: nng@methes.com

With a copy to: John Loewen

And to:

Global:

Michel G. Laporte

1 Place Ville Marie suite 2818

Montreal, Quebec

H3B 4R4

Telephone:  514-845-0084

Facsimile: 514-845-0883

E-mail: mlaporte@new-shore.com

Or to any other address which may hereafter be designated by either party by notice given in such manner. All notices shall be deemed to have been given as of the date of receipt by the parties hereto and no other prior written or oral statement or agreement shall be recognized or enforced.

 

 

11

 

 

B.            Severability.   If a court of competent jurisdiction determines that any clause or provision of this Agreement is invalid, illegal or enforceable,
the other clauses and provisions of the Agreement shall remain in full force and effect and the clauses and provisions which are determined to be void, illegal and unenforceable shall be limited so that they shall remain in effect to the extent permissible by law.

C.            Assignment.   Neither party may assign this Agreement without the express written consent of the other party, however, any such assignment shall
be binding on and inure to the benefit of such successor, or, in the event of death or incapacity, on their heirs, executors, administrators and successors of any party.

D.            Attorney's Fees.   If any legal action or other proceeding (non-exclusively including arbitration) is brought for the enforcement of or to declare
any right or obligation under this Agreement or as a result of a breach, default or misrepresentation in connection with any of the provisions of this Agreement, or otherwise because of a dispute among the parties hereto, any successful or prevailing party will be entitled to recover reasonable attorney's fees (including fees for appeals and collection) and other expenses incurred in such action or proceeding, in addition to any other relief to which such party may be entitled.

E.             No Third Party Beneficiary. Nothing in this Agreement, expressed or implied, is intended to confer upon any person other than the parties hereto and their
successors, any rights or remedies under or by reason of this Agreement, except  however that each of the individual Shareholders may assign his or rights hereunder without the approval or consent of any other party.

F.             Counterparts. It is understood and agreed that this Agreement may be executed in any number of identical counterparts, each of which may be deemed an original
for all purposes.

G.            Further Assurances.   At any time, and from time to time, after the effective date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or perfect title to the subject shares transferred hereunder or otherwise to carry out the intent and purposes of this Agreement.

H.            Broker's and Finders' Fee.  The Shareholders, METHES and Global warrant that neither has incurred any liability, contingent or otherwise, for brokers' or
finders' fees or commissions relating to this Agreement for which the other shall have responsibility.  Except as otherwise provided herein, all fees, costs and expenses incurred by either party relating to this Agreement shall be paid by the party incurring the same.

I.             Amendment or Waiver.   Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to the consummation of the transactions contemplated hereunder, this Agreement may be amended by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may
be waived or the time for performance hereof may be extended by a writing signed by the party or parties for whose benefit the provision is intended.

J.             Headings. The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.

 

 

12

 

 

K.   Applicable Law and Attornment.  This Agreement shall be governed and interpreted in accordance
with the laws of the State of Nevada and the parties hereto irrevocably attorn to the Non-exclusive jurisdiction of the courts of the State of Nevada.

Mandatory Arbitration.  (a) Any controversy or claim between or among the parties including but not limited to those arising out of or relating to this Agreement or any related agreements (“Subject Documents”), including any claim based on or arising from an alleged
tort, shall be determined by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”).  All statutes of limitation which would otherwise be applicable shall apply to any arbitration proceeding under this Section 9.K (a).  Judgment upon the award rendered may be entered in any court having jurisdiction.

(b) Judicial Reference.  If the controversy or claim is not submitted to arbitration as provided and limited in Section.9.K(a), but becomes the subject of a judicial action, any party may elect to have all decisions of Methes and law determined by a reference in
accordance with applicable state law.  If such an election is made, the parties shall designate to the court a referee or referees selected under the auspices of the AAA in the same manner as arbitrators are selected in AAA-sponsored proceedings.  The referee, or presiding referee of the panel, shall be an active attorney or retired judge.  Judgment upon the award rendered shall be entered in the court on which such proceeding was commenced.

 

INTENTIONALLY LEFT BLANK

 

 

 

 

 

13

 

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed the day and the year first above written.

GLOBAL BIODIESEL LTD.,

a Nevada Corporation

	 	 	 
	By:  	
/s/ Michel Laporte
	 
	
Name:
	

Michel Laporte

	 
	Title:	

President

	 

 

 

METHES ENERGIES INC.,

An Ontario corporation

	 	 	 
	By:  	
/s/ John Loewen
	 
	
Name:
	

John Loewen

	 
	Title:	

President

	 

 

SHAREHOLDERS 

	 	 	 
	By:  	

/s/ John Loewen

	 
	
Name:
	

John Loewen

	 

 

	 	 	 
	By:  	

/s/ Han Swoong Ng

	 
	
Name:
	

HAN SWOONG NG

	 

 

	 	 	 
	By:  	

/s/ Abraham Dyck

	 
	
Name:
	

ABRAHAM DYCK

	 

 

 14

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