Document:

EXHIBIT 10(k)

                                 LEASE AGREEMENT

         The capitalized terms in this Lease shall have the meanings ascribed to
in the Lease and as summarized below, and each reference to such term in the
Lease shall incorporate such meaning therein as if fully set forth therein.

TERMS:

Landlord:                 Sand Lake West Business Park, Inc., a Delaware
                          corporation

Tenant:                   Caribbean Pacific Natural Products, Inc., a Delaware
                          corporation

Leased Premises:          Suites 308 and 309, consisting of approximately 5,088
                          square feet

Project:                  Sand Lake West Business Park
                          Orlando, Florida

Phase:                    Phase IV of Project

Term:                     From 12:01 a.m. on December 1, 2000
                          (the "Commencement Date") through 11:59 p.m. on
                          November 30, 2005 (the "Expiration Date")

Annual Minimum Rent
Payable by Tenant for
First Year of Term:       $61,056 per annum

Base Year:                2000

Security Deposit                    $5,088.00

<PAGE>

                                                       INDEX

Paragraph                         Heading
                                  Summary
                                  Index
1                                 Leased Premises
2                                 Term
3                                 Rent
4                                 Use
5                                 Acceptance of Lease Premises, Landlord's Work
                                  Repairs by Landlord
6                                 Repairs by Tenant
7                                 Plans for Specifications
8                                 Right of Entry
9                                 Landlord's Rights to Act
10                                Defaults and Remedies
11                                Tenant's Improvements, Liens
12                                Tenant's Property, Landlord's Lien
13                                Subletting and Assignment
14                                Casualty
15                                Condemnation
16                                Insurance
17                                Signage
18                                Attorney's Fees
19                                Parties
20                                Landlord and Tenant Relationship
21                                Holding Over
22                                Sale by Landlord
23                                Surrender of the Premises
24                                Notices
25                                Covenant of Quiet Enjoyment
26                                Subordination
27                                Estoppel Certificate
28                                Relocation
29                                Successors and Assigns
30                                Limitation of Liability
31                                Broker's Commission
32                                Rules and Regulations
33                                Hazardous Substances
34                                Miscellaneous

Exhibit A:                 Diagram of the Project
Exhibit B:                 Landlord's Work
Exhibit C:                 Rules and Regulations

<PAGE>

                                 LEASE AGREEMENT

         This Lease Agreement (herein called "Lease") is made on the 6th of
November, 2000 by and between Sand Lake West Business Park, Inc., a Delaware
corporation with an office at Sentinel Real Estate Corporation, 1251 Avenue of
the Americas, 36th Floor, New York, NY 10020 ("Landlord") and Caribbean Pacific
Natural Products, Inc. A Delaware corporation with an office at 5422 Carrier
Drive, Suite 309, Orlando FL 32819 ("Tenant").

                                   WITNESSETH

         1. Lease Premises: Landlord hereby demises and leases to Tenant, and
Tenant hereby takes and leases from Landlord, that certain space known and
numbered as Suites 308 and 309 and containing approximately 5,088 square feet
(the "Leased Premises") now or hereafter to be constructed in the Sand Lake West
Business Park (the "Project"), located in Phase IV of the Project attached
hereto as Exhibit A and made a part hereof. Exhibit A sets forth the general
layout of the Project Phase and Building and shall not be deemed to be a
warranty of the part of the Landlord that the Project Phase and Building will be
exactly as indicated on said diagram. Landlord may increase, reduce or change
the number, dimensions and locations of roadways, walks, buildings, landscaped
areas and parking areas as Landlord shall from time to time deem proper.
Occupancy by Tenant of the Lease Premises shall include the use in common with
others entitles thereto of parking areas, service roads and sidewalks shown and
depicted in Exhibit A subject, however, to the terms and conditions of this
Lease and to all rules and regulations for the use thereof as set forth herein
and as may from time to time be otherwise prescribed by Landlord. No easement is
included in the Lease Premises.

         2. Term (a) The term ("Term") of this Lease shall be for a period of
sixty (60) months commencing on December 1, 2000 (herein referred to as the
"Commencement Date") and expiring on November 30, 2005 (herein referred to as
the "Expiration Date"). All references to the "Term" or "term of this Lease"
refer to the term of the Lease as it is renewed, extended or sooner terminated.

         (b) If Landlord is unable to give possession of the Lease Premises to
Tenant on the Commencement Date because (i) Landlord is performing improvements
to the Leased Premises and Landlord's Work, as hereinfter defined, is not
completed or (ii) for any other reason then Landlord shall not be liable for
such failure and no such failure shall affect the validity of this Lease,
provided, however, Tenant shall not be required to pay rent for any period
during which Landlord is prevented from giving possession of the Leased Premises
to Tenant.

         3.       Rent

         (a) Minimum Rent: Landlord reserves and Tenant covenants to pay to
Landlord at the address set forth below, or such other address as Landlord shall
from time to time designate in writing, without prior demand being made therefor
and without offset or deduction of any kind, minimum rent for the Lease Premises
is as follows:

         (i) For the period commencing on December 1, 2000 and expiring on
November 30, 2001, the sum of $61,056.00 per annum, payable in equal monthly
installments, in advance, of $5,088.00 per month;

         (ii) For the period commencing on December 1, 2001 and expiring on
November 30, 2002 the sum of $63,600.00 per annum, payable in equal monthly
installments, in advance, of $5,300.00;

         (iii) For the period commencing on December 1, 2002 and expiring on
November 30, 2003 the sum of $66,144.00 per annum, payable in equal monthly
installments, in advance, of $5,512.00 per month;

         ( iv) For the period commencing on December 1, 2003 and expiring on
November 20, 2004, the sum of $68,688.00 per annum, payable in equal monthly
installments, in advance, of $5,724.00 per month.

         (v) For the period commencing on December 1, 2004 and expiring on
November 20, 2005, the sum of $71,232.00 per annum, payable in equal monthly
installments, in advance, of $5,936.00 per month.

         (b ) In addition to the Minimum Rent hereinabove set forth, Landlord
reserves, and Tenant covenants to pay to Landlord, as additional rent for the
Leased Premises, a proportion of the Phase's Taxes, Operating Expenses and
Insurance Expense, as such terms are hereinafter defined which proportion shall
be 6.0%.

                                                                              3

<PAGE>

         (c) For the purposes of this Lease the term "Taxes" shall mean the
excess of (k), the sum of all real estate, and valorem, property taxes and any
general or special assessments levied upon all or any part of the Phase, both
land and improvements thereon, for each year of the Term, over (y), Taxes for
the 2000 calendar year (the "Base Year Taxes").

         (d) For the purposes of this Lease, the term "Insurance Expense" shall
mean the excess of (x), the sum of all costs of all fire and extended casualty
Insurance and all liability insurance on the Project together with the costs of
other insurance protections, including but not limited to, business interruption
insurance, as are from time to time paid by Landlord with respect to the
Project, for each year of the Term, over (y), the Insurance Expense for the 2000
calendar year (the "Base Year Insurance Expense").

         (e) For the purposes of this Lease, the term "Operating Expenses" shall
mean the total cost and expense incurred in operating and maintaining the common
areas of the Phase actually used or available for use by Tenant and the
employees, agents, servants, customers and other invitees of Tenant, including
without limitation, gardening and landscaping, repairs, maintenance, painting,
lighting, sanitary control, security, removal of snow, trash, rubbish, garbage
and other refuse, pest control, window washing, janitorial, depreciation on
machinery and equipment used in such maintenance, capital expenditures amortized
over their useful lives, management fees, the cost of personnel and 15% of all
of the foregoing to cover Landlord's administrative and overhead costs. For the
purposes of this Lease the term "common areas" shall mean all areas, space,
equipment and services provided by Landlord for the common or joint use and
benefit of the occupants of the Project, their employees, agents, servants,
customers and other invitees, including without limitation, parking areas,
access roads, driveways, retaining walls, landscaped areas, truck serviceways or
tunnels, loading docks, pedestrian or other malls, courts, stairs, ramps and
sidewalks, comfort and first aid stations, washrooms and parcel pickup stations.
The additional rent provided to be paid in this Paragraph for Operating Expenses
at the commencement of the Term have been computed based on Operating Expenses
anticipated to be incurred during the current calendar year for an estimated
charge of $754.72 per month to be paid, in advance, without prior demand being
made therefore and without offset or deduction of any kind.

         (f) The additional rent payable for Taxes, Operating Expenses and
Insurance Expenses hereunder shall be adjusted annually to reflect the actual
cost of Taxes, Operating Expenses and Insurance Expenses incurred during the
preceding twelve (12) months, to bill Tenant for any amounts due or refund
Tenant for any amounts overpaid for the preceding twelve (12) months and to
compute or recompute the monthly estimates payable by Tenant to Landlord based
on Taxes, Operating Expenses and Insurance Expenses anticipated to be incurred
during the succeeding twelve (12) months.

         (g) All rental payments shall be made to Landlord in monthly
installments in advance, on or before the first of each month and delivered to
Landlord at Sentinel Real Estate Corporation, 1251 Avenue of the Americas, 35th
Floor, New York, New York 10020.

         (h) Tenant covenants and agrees to pay a $50.00 late fee plus interest
at the rate of one and one-half percent (1.5%) per month, compounded daily, on
all Minimum Rent, additional rent and all other sums due under this Lease from
the time said rents or sums accrue if they are not paid promptly when due.
Should Tenant pay its rent by a check which is returned for "non-sufficient
funds", Landlord may thereafter require that all future payment be made by
certified or bank check. Landlord expressly reserves all rights and remedies
provided herein and by law in respect thereto.

         (i) As used herein, the term "Lease Year" shall mean each term of
twelve (12) consecutive calendar months commencing on the Commencement Date or
on the first (1st) day of the first (1st) calendar month following the
Commencement Date, if the Commencement Date does not fall on the first (1st) day
of a calendar month; provided, however, that the first (1st) Lease Year shall
include the partial month, if any, caused by the Commencement Date's falling on
other than the first (1st) day of a calendar month.

         (j) Tenant has deposited with Landlord sum of $5,088.00 as security for
the full and faithful performance by Tenant of all terms of this Lease required
to be performed by Tenant. Said deposit shall be held by Landlord, without
liability for interest, and may be applied by Landlord, in whole or part, for
the payment of any past due fixed Minimum Rent, additional rent, or other money
damage or loss which may be sustained by Landlord because of a default by
Tenant. In the event of any such application by Landlord, Tenant shall, upon the
written demand of Landlord, promptly remit to Landlord a sufficient amount of
cash to restore the security to the original sum deposited. Said deposit shall
be returned to Tenant after termination of Tenant's occupancy hereunder and
after delivery of the entire possession of the Leased Premises to Landlord in
full accordance with the terms of this Lease provided Tenant has complied with
all of the terms, covenants and conditions of this Lease, including those
relating to the condition in which the Leased Premises shall be left by Tenant,
Landlord may deliver such deposit to any purchaser or other transferee of
Landlord's interest in the Building in which the Leased Premises are located,
and thereupon Landlord shall be discharged from any further liability with
respect to such deposit.

                                                                              4

<PAGE>

         (l) Utilities: Tenant shall promptly pay all charges for utilities and
other services furnished to the Leased Premises by Landlord or the applicable
utility company, including, but not limited to gas, water, electricity, fuel,
light, air and heat, and Tenant shall promptly pay all charges for garbage
collection services and for all other sanitary services rendered to the Leased
Premises or used by Tenant in connection herewith. In the event any utilities
furnished to the Leased Premises are not separately metered, Tenant shall pay to
Landlord, as additional rent, Tenant's pro rata share of the utilities used by
Tenant, within ten (10) calendar days following receipt of a statement showing
any amount due therefor. Tenant's prorated amount shall be determined on the
basis of the size of the Leased Premises, unless Landlord determines that
Tenant's use of the Leased Premises justifies a disproportionate allocation of
utility costs to Tenant.

         4.       Use:
                  ---

                  Omitted

         5.       Tenant's Acceptance of the Leased Premises.  Landlord's Work
                  and Repairs by Landlord:
                  -------------------------------------------------------------

                  Omitted

         6.       Repairs by Tenant:
                  -----------------

                  Omitted

         7.       Plans and Specifications:
                  ------------------------

                  Omitted

         8.       Right of Entry:
                  --------------

                  Omitted

         9.       Landlord's Right to Act for Tenant:
                  ----------------------------------

                  Omitted

         10.      Default and Remedies:
                  --------------------

                  Omitted

         11.      Tenant Improvements, Liens:
                  --------------------------

                  Omitted

         12.      Tenant's Property, Landlord's Lien:
                  ----------------------------------

                  Omitted

         13. Subletting and Assignment: (a) Tenant shall not (i) transfer or
assign this lease or any interest hereunder, nor permit any assignment hereof by
operation of law, (ii) sublet the Leased Premises or any part thereof nor (iii)
permit the use of the Leased Premises by desk tenants or any other parties other
than Tenant or its agents, without in each instance first obtaining the prior
written consent of Landlord. Should Tenant wish to obtain Landlord's consent to
an assignment or subletting, it shall make such request in written form
detailing the proposed sub-rent, term, sub-tenant or assignee, compensation to
be received by Tenant, name and financial data of the proposed sub-tenant or
assignee and such other information as Landlord may request. Landlord may, in
its sole discretion either (i) give its approval (ii) not give its approval, or
(iii) cancel and terminate this Lease, or if proposed subletting or assignment
is for less than all the Leased Premises, cancel and terminate this Lease with
respect to such portion (with the rent and all other charges payable hereunder
equitably apportioned). If Landlord should grant Tenant its approval to any
sublease or assignment, Tenant shall remain primarily liable for the performance
of all the covenants contained herein. Tenant shall not pledge or mortgage its
leasehold interest or any part thereof and such pledge or mortgage shall, at
Landlord's option, render this lease void.

         (b)      For purposes of this Paragraph:  (i) the merger, transfer of
a majority of the issued and outstanding capital

                                                                              5

<PAGE>

stock of any corporate Tenant or subtenant or transfer of a majority partnership
interest of Tenant or any subtenant that is a partnership, however accomplished,
whether in a single transaction or in a series of related or unrelated
transactions, shall be deemed an assignment of this Lease, or of such sublease,
as the case may be; (ii) a takeover, management or succession agreement shall be
deemed a transfer of this Lease; and (iii) a modification, amendment or
extension without Landlord's prior written consent of an assignment or a
sublease previously consented to by Landlord shall be deemed a new assignment or
sublease.

         (c) Landlord may assign this Lease or any part thereof or right
hereunder at any time. Upon such assignment, Landlord shall have no further
obligations with respect hereto and Tenant shall look solely to such assignee
for the performance of Landlord's obligation.

         14.      Casualty:
                  --------

                  Omitted

         15.      Condemnation:
                  ------------

                  Omitted

         16.      Insurance:
                  ---------

                  Omitted

         17.      Signage:
                  -------

                  Omitted

         18.      Attorneys' Fees:
                  ---------------

                  Omitted

         19.      Parties:
                  -------

                  Omitted

         20.      Landlord and Tenant Relationship:
                  --------------------------------

                  Omitted

         21.      Holding Over:
                  ------------

                  Omitted

         22.      Sale by Landlord:
                  ----------------

                  Omitted

         23.      Surrender of the Premises:
                  -------------------------

                  Omitted

         24.      Notices:
                  -------

                  Omitted

         25.      Covenant of Quiet Enjoyment:
                  ---------------------------

                                                                              6

<PAGE>

                  Omitted

         26.      Subordination:
                  -------------

                  Omitted

         27.      Estoppel Certificate:
                  --------------------

                  Omitted

         28.      Relocation:
                  ----------

                  Omitted

         29. Successors and Assigns: The provisions of this Lease shall inure to
the benefit of and be binding upon Landlord and Tenant and their respective
successors, heirs, legal representatives and assigns, subject, however, in the
case of Tenant, to the restrictions on assignment and subletting contained in
this Lease.

  The provisions of this Lease shall inure to the benefit of and be binding upon
Landlord and Tenant and their respective successors, heirs, legal
representatives and assigns, subject, however, in the case of Tenant, to the
restrictions on assignment and subletting contained in this Lease.
         30.      Limitation of Liability

                  Omitted

         31.      Broker's Commission:
                  -------------------

                  Omitted

         32.      Rules and Regulations:
                  ---------------------

                  Omitted

         33.      Hazardous Substances:
                  --------------------

                  Omitted

         34.      Miscellaneous:
                  -------------

                  Omitted

         35.      Option to Renew:
                  ----------------

                  Omitted

         36.      Guaranty of Lease:
                  -----------------

                  Omitted

         IN WITNESS WHEREOF, each corporate party hereto has caused this Lease
Agreement to be executed in its name and on behalf, each individual party hereto
has hereunto set his hand, and each partnership party hereto has caused this
Lease Agreement to be executed in its name and behalf by at least one of its
General Partners.

Witnesses:                                Landlord:
                                          Sand Lake West Business Park, Inc.

                                                                              7

<PAGE>

By:                                      By:  /s/ Christine C. Kurtz
   -------------------------             ---------------------------------------
                                              Christine C. Kurtz, Vice President

                                        Tenant:
                                        Caribbean Pacific Natural Products, Inc.

By:                                      By:  /s/ William J. Reilly
   -------------------------            ---------------------------------------
                                               (title) Director

                                                                              8

<PAGE>Stock Option Plan

 

Exhibit 4.1

Stock Option Plan of Genoil Inc., as amended October 25, 2001 and January 13,

2003

 

 

GENOIL INC.

STOCK OPTION PLAN

as amended October 25, 2001

and January 13, 2003

ARTICLE I

PURPOSE OF PLAN

1.1 The purpose of the Plan is to attract, retain and motivate persons as
directors, officers, key employees and consultants of the Corporation and its
Subsidiaries and to advance the interests of the Corporation by providing such
persons with the opportunity, through share options, to acquire an increased
proprietary interest in the Corporation.

ARTICLE II

DEFINED TERMS

     Where used herein, the following terms shall have the following meanings,
respectively:

2.1 “Board” means the board of directors of the Corporation or, if established
and duly authorized to act, the Executive Committee or another Committee
appointed for such purpose by the board of directors of the Corporation;

2.2 “Business Day” means any day, other than a Saturday or a Sunday, on which
the Exchange is open for trading;

2.3 “Consultant” means an individual (including an individual whose services
are contracted through a personal holding corporation) with whom the
Corporation or any Subsidiary has a contract for substantial services;

2.4 “Corporation” means GENOIL INC. and includes any successor corporation
thereto;

2.5 “Eligible Person” means any director, officer, employee (part-time or
full-time) or Consultant of the Corporation or any Subsidiary;

2.6 “Exchange” means The Toronto Stock Exchange and, where the context permits,
any other exchange on which the Shares are or may be listed from time;

2.7 “Insider” means:

	 	(a)	 	an Insider as defined under Section 1(1) of the Securities
Act (Ontario), other than a person who falls within that definition
solely by virtue of being a director or senior officer of a
Subsidiary; and

 

 

	 	(b)	 	an associate as defined under Section 1(1) of the Securities
Act (Ontario) of any person who is an insider by virtue of (i)
above;

2.8 “Market Price” at any date in respect of the Shares shall be the greatest
closing price of such Shares on any Exchange on the last Business Day preceding
the date on which the Option is approved by the Board (or, if such Shares are
not then listed and posted for trading on the Exchange, on such stock exchange
in Canada on which the Shares are listed and posted for trading as may be
selected for such purpose by the Board). In the event that such Shares did not
trade on such Business Day, the Market Price shall be the average of the bid
and ask prices in respect of such Shares at the close of trading on such date.
In the event that such Shares are not listed and posted for trading on any
stock exchange, the Market Price shall be the fair market value of such Shares
as determined by the Board in its sole discretion;

2.9 “Option” means an option to purchase Shares granted under the Plan;

2.10 “Option Price” means the price per Share at which Shares may be purchased
under the Option, as the same may be adjusted from time to time in accordance
with Article 8;

2.11 “Optionee” means an Eligible Person to whom an Option has been granted;

2.12 “Outstanding Issue” means the number of Shares outstanding on a
non-diluted basis, determined on the basis of the number of shares that are
outstanding immediately prior to the share issuance under Article 5 herein,
excluding shares issued pursuant to share compensation arrangements over the
preceding one-year period;

2.13 “Person” means an individual, a corporation, a partnership, an
unincorporated association or organization, a trust, a government or department
or agency thereof and the heirs, executors, administrators or other legal
representatives of an individual and an associate or affiliate of any thereof
as such terms are defined in the Business Corporations Act (Alberta);

2.14 “Plan” means the GENOIL INC. Share Option Plan, as the same may be amended
or varied from time to time;

2.15 “Share Compensation Arrangement” means any stock option, stock option
plan, employee stock purchase plan or any other compensation or incentive
mechanism involving the issuance or potential issuance of Shares, including a
share purchase from treasury which is financially assisted by the Corporation
by way of a loan, guarantee or otherwise;

2.16 “Shares” means the common shares of the Corporation or, in the event of an
adjustment contemplated by Article 8, such other shares or securities to which
an Optionee may be entitled upon the exercise of an Option as a result of such
adjustment; and

2.17 “Subsidiary” means any corporation which is a subsidiary as such term is
defined in section 4 of the Business Corporations Act (Alberta) (as such
provision is from time to time amended, varied or re-enacted) of the
Corporation.

2

 

ARTICLE III

ADMINISTRATIN OF THE PLAN

3.1 The Plan shall be administered in accordance with the rules and policies of
the Exchange in respect of employee stock option plans by the Board. The Board
shall receive recommendations of management and shall determine and designate
from time to time those directors, officers, employees and Consultants of the
Corporation or its Subsidiaries to whom an Option should be granted and the
number of Shares, which will be optioned from time to time to any individual
and the terms and conditions of the grant.

3.2 The Board shall have the power, where consistent with the general purpose
and intent of the Plan and subject to the specific provisions of the Plan:

	 	(a)	 	to establish policies and to adopt, prescribe, amend or vary
rules and regulations for carrying out the purposes, provisions and
administration of the Plan and make all other determinations
necessary or advisable for its administration;

	 	(b)	 	to interpret and construe the Plan and to determine all
questions arising out of the Plan and any Option granted pursuant to
the Plan and any such interpretation, construction or determination
made by the Board shall be final, binding and conclusive for all
purposes;

	 	(c)	 	to determine which Eligible Persons are granted Options and
to grant Options;

	 	(d)	 	to determine the number of Shares covered by each Option;

	 	(e)	 	to determine the Option Price;

	 	(f)	 	to determine the time or times when Options will be granted
and exercisable;

	 	(g)	 	to determine if the Shares which are subject to an Option
will be subject to any restrictions upon the exercise of such
Option; and

	 	(h)	 	to prescribe the form of the instruments relating to the
grant, exercise and other terms of Options which initially shall be
substantially in the form annexed hereto as Schedule “A”.

ARTICLE IV

SHARES SUBJECT TO THE PLAN

4.1 Options may be granted in respect of authorized and unissued Shares
provided that, subject to increase by the Board, the receipt of the approval of
the Exchange and the approval of shareholders of the Corporation, the maximum
aggregate number of Shares reserved by the Corporation for issuance and which
may be purchased upon the exercise of all Options shall equal 19,000,000 Shares
in respect of which Options are not exercised shall be available for subsequent
Options under the Plan. No fractional Shares may be purchased or issued under
the Plan.

3

 

ARTICLE V

ELIGIBILITY; GRANT; TERMS OF OPTIONS

5.1 Options may be granted to Eligible Persons.

5.2 Options may be granted by the Corporation pursuant to the recommendations
of the Board from time to time provided and to the extent that such decisions
are approved by the Board.

5.3 Subject to the provisions of this Plan, the number of Shares subject to
each Option, the Option Price, the expiration date of each Option, the extent
to which each Option is exercisable from time to time during the term of the
Option and other terms and conditions relating to each such Option shall be
determined by the Board. At no time shall the period during which an Option
shall be exercisable exceed 10 years.

5.4 In the event that no specific determination is made by the Board with
respect to the following matter, the period during which an Option shall,
subject to any other specific provisions of the Plan, be exercisable shall be
five years from the date the Option is granted to the Optionee.

5.5 The Option Price of Shares which are the subject of any Option shall in no
circumstances be lower than the Market Price of the Shares at the date of the
grant of the Option.

5.6 The maximum number of Shares which may be reserved for issuance to any one
Optionee under this Plan or under any other Share Compensation Arrangement
shall not exceed 5% of the Outstanding Issue.

5.7 The maximum number of Shares which may be reserved for issuance to Insiders
under the Plan or under any other Share Compensation Arrangement shall be 10%
of the Outstanding Issue.

5.8 The maximum number of Shares which may be issued to any one Insider and
such Insider’s associates under the Plan and any other Share Compensation
Arrangement in any 12 month period shall be 5% of the Outstanding Issue. The
maximum number of Shares which may be issued to any Insiders under the Plan and
any other Share Compensation Arrangement in any 12 month period shall be 10% of
the Outstanding Issue.

5.9 Any entitlement to acquire Shares granted pursuant to the Plan or any other
Share Compensation Arrangement prior to the Optionee becoming an Insider shall
be excluded for the purposes of the limits set out in 5.7 and 5.8 above.

5.10 An Option is personal to the Optionee and is non-assignable.

4

 

ARTICLE VI

EXERCISE OF OPTIONS

6.1 Subject to the provisions of the Plan, an Option may be exercised from time
to time by delivery to the Corporation at its registered office of a written
notice of exercise addressed to the Secretary of the Corporation specifying the
number of Shares with respect to which the Option is being exercised and
accompanied by payment in full of the Option Price of the Shares to be
purchased. Certificates for such Shares shall be issued and delivered to the
Optionee within a reasonable period of time following the receipt of such
notice and payment.

6.2 Notwithstanding any of the provisions contained in the Plan or in any
Option, the Corporation’s obligation to issue Shares to an Optionee pursuant to
the exercise of an Option shall be subject to:

	 	(a)	 	completion of such registration or other qualification of
such Shares or obtaining approval of such governmental or regulatory
authority as counsel to the Corporation shall reasonably determine
to be necessary or advisable in connection with the authorization,
issuance or sale thereof;

	 	(b)	 	the listing of such Shares on the Exchange, if applicable;
and

	 	(c)	 	the receipt from the Optionee of such representations,
agreements and undertakings, including as to future dealings in such
Shares, as the Corporation or its counsel reasonably determines to
be necessary or advisable in order to safeguard against the
violation of the securities laws of any jurisdiction.

     In this connection the Corporation shall, to the extent necessary, take
all reasonable steps to obtain such approvals, registrations and qualifications
as may be necessary for the issuance of such Shares in compliance with
applicable securities laws and for the listing of such Shares on the Exchange.

ARTICLE VII

TERMINATION OF EMPLOYMENT; DEATH

7.1 Subject to Section 7.2 and any express resolution passed by the Board with
respect to an Option, an Option, and all rights to purchase pursuant thereto,
shall expire and terminate immediately upon the Optionee ceasing to be a
director, officer or a part-time or full-time employee of the Corporation or of
any Subsidiary. The entitlement of a Consultant to Options including the
termination thereof shall be in accordance with the terms of the consulting
agreement entered into between the Corporation or the Subsidiary and the
Consultant but will not exceed 90 days after termination of the contract.

7.2 If, before the expiry of an Option in accordance with the terms thereof,
the employment of the Optionee with the Corporation or with any Subsidiary
shall terminate, in either case by reason of the death of the Optionee, such
Option may, subject to the terms thereof and any other terms of the Plan, be
exercised by the legal representative(s) of the estate of the Optionee at any
time during the first six months following the death of the Optionee (but prior
to the expiry of the

5

 

Option in accordance with the terms thereof) but only to the extent that the
Optionee was entitled to exercise such Option at the date of the termination of
his employment.

7.3 Options shall not be affected by any change of employment of the Optionee
or by the Optionee ceasing to be a director where the Optionee continues to be
employed by the Corporation or continues to be a director or officer of, the
Corporation or any Subsidiary.

ARTICLE VIII

CHANGE IN CONTROL AND CERTAIN ADJUSTMENTS

8.1 Notwithstanding any other provision of this Plan in the event that the
Corporation receives an offer (the “Offer”) for:

	 	(a)	 	the acquisition by any Person of Shares or rights or options
to acquire Shares of the Corporation or securities which are
convertible into Shares of the Corporation or any combination
thereof such that after the completion of such acquisition such
Person would be entitled to exercise 30% or more of the votes
entitled to be cast at a meeting of the shareholders; or

	 	(b)	 	the sale by the Corporation of all or substantially all of
the property or assets of the Corporation;

then notwithstanding that at the effective time of the Offer the Optionee may
not be entitled to all the Shares granted by the Option, the Optionee shall be
entitled to exercise the Options to the full amount of the Shares remaining at
that time from the date of the Offer to the date of the close of any such
transaction. If such transaction is not completed within 90 days of the date of
the Offer and the Optionee has not so exercised that portion of the Option
relating to Shares to which the Optionee would not otherwise be entitled, this
provision shall cease to apply to the Offer.

8.2 Appropriate adjustments with respect to Options granted or to be granted,
in the number of Shares optioned and in the Option Price, shall be made by the
Board to give effect to adjustments in the number of Shares of the Corporation
resulting from subdivisions, consolidations or reclassifications of the Shares
of the Corporation, the payment of stock dividends or cash dividends by the
Corporation (other than dividends in the ordinary course), the distribution of
securities, property or assets by way of dividend or otherwise (other than
dividends in the ordinary course), or other relevant changes in the capital
stock of the Corporation or the amalgamation or merger of the Corporation with
or into any other entity, subsequent to the approval of the Plan by the Board.
The appropriate adjustment in any particular circumstance shall be conclusively
determined by the Board in its sole discretion, subject to approval by the
Shareholders of the Corporation and to acceptance by the Exchange respectively,
if applicable.

ARTICLE IX

AMENDMENT OR DISCONTINUANCE OF PLAN

9.1 The Board may amend or discontinue the Plan at any time upon receipt of
requisite regulatory approval including without limitation, the approval of the
Exchange, provided,

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however, that no such amendment may, without the consent of the shareholders,
increase the maximum number of Shares that may be optioned under the Plan,
change the manner of determining the minimum Option Price, reduce the Option
Price for Options granted to Insiders or, without the consent of the Optionee,
alter or impair any of the terms of any Option previously granted to an
Optionee under the Plan. Any amendments to the terms of an Option shall also
require regulatory approval, including without limitation, the approval of the
Exchange.

ARTICLE X

MISCELLANEOUS PROVISIONS

10.1 The holder of an Option shall not have any rights as a shareholder of the
Corporation with respect to any of the Shares covered by such Option until such
holder shall have exercised such Option in accordance with the terms of the
Plan (including tendering payment in full of the Option Price of the Shares in
respect of which the Option is being exercised) and the issuance of Shares by
the Corporation.

10.2 Nothing in the Plan or any Option shall confer upon an Optionee any right
to continue in the employ of the Corporation or any Subsidiary or affect in any
way the right of the Corporation or any Subsidiary to terminate his employment
at any time; nor shall anything in the Plan or any Option be deemed or
construed to constitute an agreement, or an expression of intent, on the part
of the Corporation or any Subsidiary to extend the employment of any Optionee
beyond the time which he would normally be retired pursuant to the provisions
of any present or future retirement plan of the Corporation or any Subsidiary
or any present or future retirement plan of the Corporation or any Subsidiary,
or beyond the time at which he would otherwise be retired pursuant to the
provisions of any contract of employment with the Corporation or any
Subsidiary.

10.3 To the extent required by law or regulatory policy or necessary to allow
Shares issued on exercise of an Option to be free of resale restrictions, the
Corporation shall report the grant, exercise or termination of the Option to
the Exchange and the appropriate securities regulatory authorities.

ARTICLE XI

SHAREHOLDER AND REGULATORY APPROVAL

11.1 The Plan shall be subject to the approval of the shareholders of the
Corporation to be given by a resolution passed at a meeting of the shareholders
of the Corporation in accordance with the Business Corporations Act (Alberta),
and to acceptance by the Exchange. Any Options granted prior to such approval
and acceptances shall be conditional upon such approval and acceptance being
given and no such Options may be exercised unless such approval and acceptance
is given.

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SCHEDULE “A” TO SHARE OPTION PLAN

CERTIFICATE OF GENOIL INC.

     GENOIL INC. (the “Corporation”), for good and valuable consideration,
hereby grants to the Optionee set forth below an Option to purchase common
shares of the Corporation. The Option shall be subject to the terms and
conditions set forth in the GENOIL INC. Share Option Plan, as the same may be
amended or replaced from time to time (the “Plan”), and in addition shall be
subject to the terms set forth below:

	 	 	 
	Optionee:	 	 
	Position with the Corporation	 	
:
	Number of Shares	 	
:
	Option Price	 	
:
	Expiry Date of Option	 	
:
	Rights of Exercise	 	
:

     On the close of business on the Expiry Date, the Options granted will
expire and terminate and be of no further force and effect whatsoever as to the
Shares for which the Option hereby granted has not been exercised.

     Where used herein all defined terms shall have the respective meanings
attributed thereto in the Plan. As provided for under the Plan, the Option
provided for herein is not assignable to any other person. If you require a
copy of the Plan, please contact the Secretary of the Corporation and she will
provide a copy to you.

     DATED this 13th day of January, 2003.

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