Source: http://www.agreementbase.com/contract-127852/
Timestamp: 2018-07-21 06:04:33
Document Index: 526416404

Matched Legal Cases: ['ART 1', 'ART 2', 'ART 3', 'ART 4', 'ART 5', 'ART 6', 'ARTS 18', 'ART 1', 'ART 2', 'art 5', 'ART 3', 'ART 4', 'art 4', 'art 4', 'art 4', 'ART 5', 'ART 6', 'arts6']

Exhibit 4.13============ CONFIDENTIAL EMPLOYMENT AGREEMENT made this 1st day of October, 2005 T A B L E O F C O N T E N T S PagePART 1 INTERPRETATION 2 INTERPRETATION 2PART 2 EMPLOYMENT, TERMS AND DUTIES 3 EMPLOYMENT 3 TERM 3 TITLE AND REPORTING 4 PARTICULAR DUTIES 4 GENERAL DUTIES 4PART 3 COMPENSATION 4 SALARY 4 BONUS 4 OTHER BENEFITS 8 STOCK OPTIONS 9 HOLIDAYS 9 INCOME TAX AND OTHER DEDUCTIONS 9 REVIEW 10PART 4 EMPLOYEE’S ADDITIONAL COVENANTS 10 CONFIDENTIAL INFORMATION 10 NO DISCLOSURE 10 NO COMPETITION 11 NOTICE OF CONFLICT 11 EXCEPTIONS 12 COMPANY’S PROPRIETARY RIGHTS 12 SPECIAL REMEDIES 12PART 5 TERMINATION 13 VOLUNTARY TERMINATION 13 IF COMPANY TERMINATES OR PARTIES FAIL TO RENEW 13 TERMINATION FOR CAUSE AND OTHER EVENTS OF EARLY TERMINATION 15 EFFECT OF TERMINATION UNDER SECTION 5.3 15 RETURN OF PROPERTY 16 RESIGNATION OF OFFICE 16PART 6 GENERAL 16 FURTHER ASSURANCES 16 ASSIGNMENT 16 SEVERABILITY 16 MODIFICATIONS, WAIVER AND CONSENT 17 NOTICE 17 BINDING EFFECT 18 GOVERNING LAW 18 TIME OF ESSENCE 18 COUNTERPARTS 18 ENTIRE AGREEMENT 18 SURVIVAL OF TERMS 18 CONFIDENTIAL EMPLOYMENT AGREEMENTTHIS AGREEMENT dated for reference and made the 1st day of October 2005 (the”Effective Date”)BETWEEN: DynaMotive Energy Systems Corporation, a body corporate duly incorporated under the law of the Province of British Columbia, having offices at Suite 230, 1700 West 75th Avenue, Vancouver, BC, V6P 6G2 (the “Company”) OF THE FIRST PARTAND: Brian Richardson, an individual residing at 1738 25th Street, West Vancouver, BC. V7V 4J9 (the “Employee”) OF THE SECOND PARTWHEREAS:(A) The Company is an energy systems company that is focused on thedevelopment of innovative energy solutions based on its patented pyrolysissystem and, through the application of its technology and know how, theCompany intends to tap into abundant organic resources that are generallydiscarded by the agricultural and forest industries at a cost and toeconomically convert them into a renewable and environmentally friendly fuel;and(B) The Company and the Employee have mutually agreed to evidence the termsof the Employee’s full time employment by the Company by this Agreement,which is to supersede all prior agreements between the parties;WITNESSETH that the parties mutually agree as follows: – 2 – PART 1 INTERPRETATIONInterpretation1.1 For all purposes of this Agreement, except as otherwise expresslyprovided or unless the context otherwise requires: (a) “this Agreement” means this agreement of employment, including any schedules hereto, as from time to time supplemented or amended by one or more agreements entered into pursuant to the applicable provisions hereof; (b) the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, subsection, paragraph, subparagraph or other subdivision; (c) all references to currency mean Canadian currency, unless specified otherwise; (d) a reference to an entity includes any entity that is a successor to such entity; (e) the headings are for convenience only and are not intended as a guide to interpretation of this Agreement or any portion hereof; (f) a reference to a statute includes all regulations made pursuant thereto, all amendments to the statute or regulations in force from time to time, and any statute or regulation which supplements or supersedes such statute or regulations; (g) “Board” means the board of directors of the Company as from time to time constituted; (h) “Bonus Criteria” means the objectives referred to as Bonus Criteria in section 3.2 of this agreement and determined in the manner provided therein; (i) “CIBC Prime Rate” means the annual rate of interest announced from time to time by Canadian Imperial Bank of Commerce as a reference rate then in effect for determining interest rates on Canadian dollar commercial loans in Canada; (j) “Contract Year” means the period commencing October 1, 2005 and ending the next following September 30, 2006 provided that the first Contract Year shall commence October 1, 2005 and end September 30, 2006 and the second, third and fourth contract years shall commence respectively on the 1st day of October of 2006, 2007 and 2008; (k) “Closing Price of the Company’s Common Shares” and “Closing Price” means as of any given date, the average of the high and low trading prices of the Common shares in the capital stock of the Company on the NASD’s Over the Counter Bulletin Board on such date, or if the – 3 – Common shares trade on the TSX Venture Exchange or TSX Exchange on such date, then the average of the high and low trading prices of the Common shares of the Company on such exchange, or if the Common shares in the capital stock of the Company did not trade on such date, on the next preceding day on which trades were made; (l) “Salary” in respect of a Contract Year, means the amount determined for a Contract Year pursuant to section 3.1 of this Agreement; and (m) “Stock Option” mean the rights under an agreement between the Company and the Employee, to have the Company sell or issue shares of the Company, or shares of a corporation that does not deal at “arm’s length” with the Company (as that term is defined pursuant to the Income Tax Act of Canada), to the Employee. (n) “Common Share Purchase Warrants” mean the rights under an agreement between the Company and the Employee, to have the Company sell or issue shares of the Company, or shares of a corporation that does not deal at “arm’s length” with the Company (as that term is defined pursuant to the Income Tax Act of Canada), to the Employee.In the event that it may be necessary at any time for any party to thisAgreement to prove the CIBC Prime Rate applicable as at any time or times, acertificate in writing of the manager of Canadian Imperial Bank of Commerce,400 Burrard Street, Vancouver, British Columbia, V6C 3A6 setting forth theCIBC Prime Rate as at any time or times, shall be, and shall be deemed to be,conclusive evidence of the CIBC Prime Rate as set forth in the certificate. PART 2 EMPLOYMENT, TERMS AND DUTIESEmployment2.1 The Company and the Employee hereby confirm the employment of theemployee by the Company on a full-time basis upon and subject to the termsand conditions of this Agreement.Term2.2 This Agreement shall be for a period of four years commencing October1, 2005 and ending September 30, 2009 unless earlier terminated pursuant toPart 5. A notice to renew the terms of the Employee’s employment with theCompany shall be provided by the Company to the Employee not less than ninemonths prior to the expiration of this Agreement, but neither the notice, northe requirement for the notice, shall be taken to imply that the Employee isrequired to consent to the renewal. – 4 -Title and Reporting2.3 The Employee shall have the title of Chief Financial Officer (“CFO”).2.4 The Employee shall report to the President and CEO.Particular Duties2.5 As CFO, the Employee shall be responsible for all related functions ofoffice of the CFO.General Duties2.6 During the term of this Agreement, the Employee will: (a) diligently perform his duties arising under this Agreement to the best of his skill and ability; and (b) attend to his duties on a full-time basis, at the specific times and days as reasonably directed by the Company, excepting holidays, absence due to sickness and other authorized absences as set out in this Agreement. PART 3 COMPENSATIONSalary3.1 The Company shall pay the Employee an annual Salary of $220,000.00payable bi-monthly in arrears and subject to appropriate deductions andremittances pursuant to income tax and social security legislation. TheSalary shall be adjusted annually equivalent to the percentage of the rise inthe Canadian Consumer Price Index commencing January 1, 2007.Bonus3.2 The Company shall pay to the Employee an annual bonus for each calendaryear or partial calendar year (the “Bonus Period”), governed by the terms ofthis Agreement, calculated as a minimum bonus of 25% and a maximum bonus ofup to 60% of the aggregate Salary payable to the Employee, or on theEmployee’s behalf, with respect to the Bonus Period pursuant to section 3.1(before any amounts deducted or paid on behalf of the Employee pursuant toincome tax and social security legislation), to be based on the achievementof certain objectives (the “Bonus Criteria”), such Bonus Criteria to beagreed by the parties hereto for each Bonus Period as hereafter provided.The Bonus Criteria must be presented by the Employee to the CEO within 30days of the first day of each Bonus Period provided that for the Bonus Periodwhich falls within the ______calendar year, the Bonus Criteria must be – 5 -presented by the Employee to the CEO by ___________. Failure by the Employeeand the Company to agree on the annual Bonus Criteria by the date that is 60days after the first day of the Bonus Period for which it is to be determined(or by _______________ in the case of the Bonus Period which falls within the_________ calendar year) shall be resolved by arbitration.3.3.1 The annual bonus amount for a Bonus Period must be determined by theCompany within 90 days after the last day of the Bonus Period (the “BonusDetermination Date”) and is payable to the Employee on the day that is 150days after the last day of the Bonus Period (the “Payment Date”) unless andonly to the extent, at least ten days prior to the Bonus Determination Dateand before being notified of the amount of his bonus, the Employee elects to: (a) defer the receipt of all or a portion (expressed as a percentage or otherwise) of the annual bonus amount until a specified date which is not later than the ______ day of ________ of the third calendar year following the calendar year in which the Bonus Period ended ( in this section called the “Cash Bonus Deferral Election”); or (b) in lieu of payment of all or part of the bonus in cash, enter into an agreement with the Company to purchase that number of Common shares in the Company determined by dividing the amount of the annual bonus amount for which the Employee elects to receive shares (expressed as a percentage or otherwise), by the Closing Price of the Company’s Common shares on the date notice of the Employee’s election under this section is given to the Company (in this section called the “Share Purchase Election”).The Employee must provide annual written notice to the Company of his CashBonus Deferral Election, specifying the amount, percentage, or fraction orother means of calculating the annual bonus amount to be deferred, and of hisShare Purchase Election, specifying the amount of the annual bonus amount tobe used to calculate the number of shares subject to the Share PurchaseElection, and such notice must be presented to the Company at least ten daysprior to the Bonus Determination Date, i.e. before the Employee wouldotherwise know of the amount and be entitled to receive payment of the annualbonus. Once a Cash Bonus Deferral Election or Share Purchase Election isdelivered to the Company by the Employee, it may not be revoked for the BonusPeriod to which it relates and thereafter the annual bonus amount for thatBonus Period shall: (a) to the extent of the amount set forth in or calculated pursuant to the Cash Bonus Deferral Election, be dealt with solely in accordance with that election; (b) to the extent of the amount subject to the Share Purchase Election, be dealt with solely in accordance with that election; and (c) to the extent of any balance of the annual bonus amount for that Bonus Period, which is not covered by either the Cash Bonus Deferral Election or Share Purchase Election, be payable to the Employee on the Payment Date.3.3.2 If the Employee makes a Cash Bonus Deferral Election, then he shall inthat election specify the amount of the annual bonus amount, or means of – 6 -calculating the amount, of the bonus to be deferred by reason of thatelection (the “Deferred Amount”) and the Company agrees to grant at option tothe Employee, for a period of three years from the date of the particularCash Bonus Deferral Election, to purchase that number of Common shares in theCompany determined by dividing the Deferred Amount by the Closing Price ofthe Company’s Common shares on the day that the election is made or the daythe amount of the annual bonus amount is determined by the Company, whicheverday is later, with the exercise price for such Stock Options to be the saidClosing Price on such later day (the “Valuation Day”), and the Company andthe Employee will execute a stock option agreement substantially in the sameform as that attached as Schedule 2 to this Agreement but dated the ValuationDay and relating only to the Stock Options referred to in this subsectionwith such Stock Option rights to expire on the 4th anniversary of the makingof the election.3.3.3 Notwithstanding the 60% of Salary maximum for the amount of an annualbonus determined pursuant to this section, any amount of an annual bonus,awarded by the Company to the Employee, that is not used to calculate thenumber of shares subject to a Share Purchase Election or the number of StockOptions to be granted by the Company pursuant to the preceding subsection,and which remains unpaid by the Company 180 days after the end of the BonusPeriod shall be increased for an interest factor which shall be calculated byadding to such unpaid bonus amount, an amount equal to what the interestwould be if such unpaid bonus amount were a debt owing to the Employee whichbears interest at the rate of 6% per annum calculated from and including thePayment Date for such unpaid bonus amount and compounded monthly until paid;provided that if, for any regulatory or other reason whatsoever, the StockOption referred to in the preceding subsection cannot be granted or, unlesswaived by the Employee, be subject to immediate vesting (such an option beingreferred to in this section as an “Impaired Option”), then the amount of thebonus used to calculate the number of shares subject to the Impaired Optionshall be included in the amount of the bonus to be increased by the interestfactor pursuant to this subsection and such increased amount shall be payableto the Employee as part of the bonus and the right of the Employee to theImpaired Option shall lapse, and provided further that under no circumstancesmay the date of payment of an annual bonus, or any portion thereof other thanthe portion used to calculate the number of shares subject to a SharePurchase Election, including any related interest factor, be later than thelast day of the third calendar year following the calendar year in which theBonus Period ended (herein referred to as the “Three Year Deadline”).Failure by the Company to pay any Deferred Amount of an annual bonus, whichis the subject of a Cash Bonus Deferral Election, by the Three Year Deadlinein respect of that amount shall result in the Company: (a) paying and indemnifying the Employee against any interest and penalties related to any income taxes that the Employee may become subject to as a result of such a failure by the Company; (b) providing the Employee with an interest free loan to pay any income taxes that the Employee may become subject to as a result of such a failure by the Company, any such advanced funds to be repaid in full by the Employee upon receipt of the related unpaid bonus amounts from the Company; and – 7 – (c) paying and indemnifying the Employee against any income taxes, interest, and penalties related to any taxable benefits which may be considered to have been received by the Employee as a result of (a) or (b).3.3.4 Where the Employee makes a Share Purchase Election, the Company herebyagrees: (a) in lieu of any obligation to pay the bonus to the Employee to the extent of the amount used to calculate the number of shares subject to a Share Purchase Election, and upon receipt of a subscription notice from the Employee subscribing for a specified number of Common shares in the Company (not being less than the lesser of 25,000 Common shares in total, or the balance of the Common shares of the Company that the Employee is entitled to purchase pursuant to one or more Share Purchase Elections) and payment by the Employee to the Company of one-tenth of one cent for each share subscribed for in the notice, to allot and issue to the Employee the number of shares specified in the notice in consideration for one-tenth of one cent per share plus the value of past services actually performed by the Employee during the Bonus Period for which the Share Purchase Election was made; (b) that the value of such past services shall be calculated for the Board by multiplying the number of shares subject to a Share Purchase Election for a particular Bonus Period, and subscribed for in the notice referred to in paragraph (a) of this section, by the Closing Price of the Company’s Common shares on the date of the Share Purchase Election for that Bonus Period; (c) that the Employee may give one or more notices pursuant to this provision with regard to a particular Share Purchase Election but the aggregate number of Common shares to be allotted and issued to him pursuant to all such notices shall not exceed the number of Common shares the Employee was entitled to purchase as a result of the particular Share Purchase Election before exercising any such rights;provided that the Employee shall only have until four years after the date aparticular Share Purchase Election was made to notify the Company, by one ormore notices, that the Employee wishes to purchase any of the shares, whichhe is entitled to purchase pursuant to the particular Share PurchaseElection, and to pay the price of one-tenth of one cent per share for anyshare that the Company has agreed to issue pursuant to the particular SharePurchase Election, and thereafter all rights of the Employee to any sharesnot referred to in a subscription notice given by the Employee to the Companypursuant to the particular Share Purchase Election by such date shall lapse.3.3.5 The Employee, by execution of the written Share Purchase Election,acknowledges that, subject to section 3.10 hereof, the Company is releasedfrom any and all obligations to pay a bonus to the Employee to the extent ofthe amount used to calculate the number of shares subject to the particularShare Purchase Election.3.3.6 Upon receipt of the notice from the Employee contemplated by a SharePurchase Election and payment of the subscription price to it, the Company – 8 -shall proceed to allot and issue the shares referred to in the notice,including giving such directions and making such adjustments as would havebeen necessary if the agreement between the Company and the Employee in thissection were a Stock Option governed by a Stock Option Agreement insubstantially the same form as Schedule 3 but dated the date of the SharePurchase Election and relating only to the right to purchase the sharessubject to the Share Purchase Election at the price of one-tenth of one centper share with such rights to expire only on the 3rd anniversary of themaking of the election and not to expire on the 30th day after termination ofthe Employee’s employment or one year after death or disability of theEmployee.New Plant Tonnage Bonus Share OptionsUpon the successful commissioning or licensing of future plants to use thetechnology and knowhow of the Company and its affiliates (including of anypartnership or joint venture in which the Company or its affiliates has atleast a 25% ownership interest), the Employee shall, during the term of thisAgreement and any renewals hereof, be granted additional rights to purchaseshares as commissioning bonuses consisting of the grant of a right to theEmployee to purchase Common shares of the Company upon receipt by the Companyof one or more subscription notices from the Employee subscribing for aspecified number of Common shares in the Company pursuant to this section(not being less than 25,000 shares or the balance of the Common shares ofthe Company that the Company has agreed to issue to the Employee pursuant tothis section, to a maximum value of US$25,000) and payment by the Employee tothe Company of one-tenth of one cent for each share subscribed for in thenotice. The Company agrees that upon receipt by the Company of such anotice, the Company will allot and issue to the Employee the number of sharesspecified in the notice in consideration of one-tenth of one cent per shareincluding the exercise price of one-tenth of one cent per share and the fouryear term from the Commissioning Date for a plant owned by the Company, orthe date the original License Agreement is executed in relation to theparticular plant, to which the bonus share options applies, and during whichthe four year term the right to purchase shares pursuant to the bonus shareoptions may be exercised.The number of shares that the Employee shall be granted the right to purchasewith respect to each plant commissioning or licensing, as contemplated bythis section, shall be determined for each plant by multiplying 150 times thenumber of tonnes of dry input capacity contracted on a daily basis, asestablished in or pursuant to the License Agreement, and measured in inputvalues or, in the case of a plant owned by the Company, as would beestablished by a License Agreement, if one was required; and provided that ifa plant, or the license applying to the operation of a plant, is expanded anddry input capacity, so measured, is increased during the term of thisAgreement, then as of the date the increased capacity becomes subject to theLicense Agreement, or an amendment thereto or replacement thereof, or wouldbecome subject to such a license or amendment if the plant were not owned bythe Company (the “Expansion Date”), this increased capacity shall also giverise to the right to purchase shares in the manner set out in this section asif the Expansion Date were the date of an original License Agreement over anew plant licensed for the increased capacity. – 9 -Other Benefits3.4 In addition to the other compensation set out in this Agreement, theEmployee shall participate in such health, medical, insurance or otherbenefit plans established by the Company from time to time and made availableto staff and officers of the Company. To be eligible, the Employee shall havea valid status in Canada, either a work permit or a landed status.Stock Options3.5 The 578,067 outstanding Stock Options previously granted by the Companyto the Employee under the terms of any prior employment or option agreement,as listed in the attached Schedule 1, will remain in full force and effect.3.6 The Company will, pursuant to a stock option agreement in the formattached as Schedule 2 to this Agreement, execute a stock option agreementwith the Employee to record the Company’s grant of Stock Options to theEmployee which entitle the Employee to purchase 1,750,000 Common shares ofthe Company at an exercise price of US $0.48 and US$0.58 per share, whichprice per share the Company and the Employee have determined to be at leastas great as the fair market value of the Company’s shares on October 28, 2005and which Stock Options will, in each case, have a term of three years fromthe date on which they are originally scheduled to vest, as set forth underthe heading “Vesting Date” in the following schedule:Number of Stock Exercise Vesting Termination Options Price Date Date 200,000 US$0.48 November 1, 2005 November 1, 2008 150,000 US$0.58 November 1, 2005 November 1, 2008 200,000 US$0.48 September 30, 2006 September 30, 2009 150,000 US$0.58 September 30, 2006 September 30, 2009 350,000 US$0.58 September 30, 2007 September 30, 2010 350,000 US$0.58 September 30, 2008 September 30, 2011 350,000 US$0.58 September 30, 2009 September 30, 2012Holidays3.7 The Employee shall be entitled to four weeks of annual holidays to betaken at time(s) reasonably satisfactory to the Employee and the Company.Income Tax and Other Deductions3.8 Notwithstanding any other provision of this Agreement, all amounts orbenefits to which the Employee is entitled under this Agreement, includingthe right to the issue of shares or rights to purchase shares, may be subjectto appropriate deductions and remittances pursuant to income tax and socialsecurity legislation and, as a condition of the issue of any shares that theCompany is required to issue to the Employee under any provision of thisAgreement, the Company may require the Employee to pay, to the Company, ormake arrangements satisfactory to the Company regarding payment of, anyfederal, provincial, state or local taxes or other deductions or remittancesof any kind required by law to be deducted or withheld and remitted to any – 10 -such taxing or other governmental authority with respect to such amounts orshares or other benefits. The Company shall, to the extent permitted by law,also have the right to deduct any such taxes or other payments from anypayment of any kind otherwise due to the Employee.Review3.9 At the end of the first year of employment under this Agreement, andannually thereafter, the CEO will carry out an objective review of the termsof reference of the position held by the Employee, the compensation to theEmployee and the Employee’s performance, and the CEO’s review shall bepresented to the Compensation Committee and the Board for approval. PART 4 EMPLOYEE’S ADDITIONAL COVENANTSConfidential Information4.1 The Employee acknowledges that in the course of his employment by theCompany he will have access to and be entrusted with confidential informationand trade secrets of the Company (collectively the “ConfidentialInformation”) relating to the business affairs, customers, suppliers,technology, proprietary rights, patents, research, plans, research data,marketing techniques, manufacturing methods, procedures and techniques,industrial designs, inventions, improvements, discoveries and routinesconcerning the Company, its business and those of its affiliates and of itscustomers and their particular business requirements, the disclosure of anyof which to competitors of the Company or the general public would be highlydetrimental to the best interests of the Company or its affiliates, as thecase may be. The Employee agrees to exercise reasonable efforts to maintainconfidentiality respecting the foregoing.The Employee further acknowledges that in the course of employment by theCompany he might, from time to time, be a representative of the Company innegotiations and discussions with others and as such will be significantlyresponsible for maintaining or enhancing the goodwill of the Company and itsaffiliates.The Employee further acknowledges that the right to maintain theconfidentiality of the Confidential Information and the right to preserve itsgoodwill are proprietary rights which the Company is entitled to protect.No Disclosure4.2 The Employee will not, during the term of this Agreement and thereafter,disclose any of the Confidential Information to any person nor will he usethe Confidential Information for any purpose other than the best interests ofthe Company or an affiliate of the Company nor will he disclose or use forany purpose other than those of the Company or its affiliates the privateaffairs of the Company or of the affiliates of the Company or any otherconfidential or proprietary information which he might acquire during the – 11 -course of his employment by the Company with relation to the business andaffairs of the Company or its affiliates except: (a) with the prior written authorization of the Company; (b) as required to carry out the purposes of this Agreement or to obtain advice of counsel thereon; (c) as otherwise permitted under this Agreement; (d) where the Confidential Information is in or comes into the public domain through no act or omission of the Employee; or(e) except as required by law.No Competition4.3 Except with the prior written consent of the Company or pursuant to thisPart 4, during the term of this Agreement and for one year after terminationof this Agreement, the Employee will not accept employment or provideservices to any person or engage in any business (directly or through anykind of ownership or other arrangement other than ownership of 5% or less ofthe securities of publicly held corporations) which is a competitor of theCompany and which is involved in the business of researching orcommercializing applications associated with the Company’s technology inareas that are being pursued by the Company during or prior to the termhereof or upon which the Company has expended significant resources inanticipation of future activity, and the Employee will not at any time aftertermination hereof: (a) interfere with the contractual arrangements between the Companyand any of its employees, contractors, suppliers, agents and any one else ina contractual or fiduciary relationship with the Company and will notrecruit, hire or assist others in recruiting or hiring any employee of theCompany; or (b) take any other action inconsistent with the fiduciary relationship of a senior executive officer to his employer.Notice of Conflict4.4 If the Board, acting reasonably, determines that the Employee isengaging in an activity which it deems to be a conflicting activity and theEmployee is so engaged, then the Company will so advise the Employee inwriting and the Employee will, as soon as possible in order to minimize anyinjury to the Company and in any event within 10 days, or such longer periodas the Company agrees upon, after receipt of notice, (a) discontinue the activity, and (b) certify in writing to the Company that he has discontinued the conflicting activity including where appropriate by sale or other – 12 – disposition or by transfer of all such interests, except a beneficial interest, into a “blind trust” or other fiduciary arrangement over which the Employee has no control, direction or discretion; oradvise the Company that he disputes the conflict and the matter shall bereferred to arbitration.Exceptions4.5 Nothing in this Part 4 will operate to prevent the Employee from (a) owning shares of any corporation, the shares of which are listed for trading on any stock exchange or which are traded on the over-the- counter market, provided that the shareholding does not constitute 5% or more of the equity of the corporation; (b) acquiring any business (whether by the purchase of shares, assets or otherwise) for bona fide commercial reasons where an incidental part of the business would otherwise be prohibited under this Agreement, but only if the Employee and his affiliate(s) and associate(s), as the case may be, use their best efforts to divest themselves upon reasonable terms and with all reasonable speed of the incidental parts; (c) serving as an officer or director, or being involved in, or receiving any compensation from any other entity which does not compete with the Company, provided that the Employee would not be otherwise in conflict with his obligations of loyalty to the Company and to render his full-time services to the Company and its affiliates during the term of his employment by the Company.Company’s Proprietary Rights4.6 All property, including intellectual property such as patentableinventions, non-patentable processes or know-how, designs, copyright and thelike which the Employee creates or is involved in creating, directly orindirectly, as a result of the services performed by the Employee for theCompany during his employment with the Company (the “Property”) will be ownedby the Company and the Company shall at all times have sole proprietaryright, title and interest in the Property. The Employee will give theCompany notice of all Property as soon as it is created. The Employeefurther agrees to execute, without delay or further consideration, any patentassignments, conveyances, other documents and assurances as may be necessaryto effect the intent of this provision.Special Remedies4.7 The Employee acknowledges his obligations under this Part 4 are of aspecial character and that in the event of any conduct by him in violation ofthis Agreement or any of these obligations, the Company will sustainirreparable injury and that money damages will not provide an adequate remedytherefor. Accordingly, the Employee agrees that in addition to otherremedies and damages available to the Company at law or otherwise and if theCompany so elects, the Company is entitled (a) to institute and prosecute proceedings either at law or in equity in any court of competent jurisdiction, – 13 – (b) to obtain damages for the conduct, (c) to enforce specific performance, (d) to enjoin the Employee, any principal, partner, agent, servant, employer and employee of, and any other person acting for, on behalf of or in conjunction with the Employee from the conduct, or (e) to obtain any other relief or any combination of the foregoing which the Company may elect to pursue.4.8 If any restriction as to time, area, capacity or activity imposed on theEmployee by this Agreement is finally determined by a Court of competentjurisdiction to be unenforceable (the “Offending Restriction”) and so oftenas it occurs, the Employee agrees that upon written notice from the Companyspecifying for inclusion in this Agreement a lesser time or area, fewercapacities or an activity of lesser scope than now contained in thisAgreement (the “Lesser Restriction”), then this Agreement will be deemed tobe amended by the substitution of the Lesser Restriction for the OffendingRestriction insofar as is lawfully enforceable. PART 5 TERMINATIONVoluntary Termination5.1 Subject to section 5.2, the Employee’s employment may be terminatedbefore the end of the then current term of this Agreement on (a) the effective termination date set out in any notice given by the Company to the Employee, which termination date must occur not less than three months after the date of the notice, or by any notice given by the Employee to the Company on the same basis, or (b) the effective termination date as set out in any agreement between the Company and the Employee for voluntary termination.If Company Terminates or Parties Fail to Renew5.2 (a) If the Company gives notice under subsection 5.1(a) of this Agreement, or the term of this Agreement or any renewal hereof expires, then the Company will pay to the Employee forthwith a lump sum equal to the aggregate of: (i) the greater of a. the Salary remaining until September 30, 2009; and b. two times the Salary (at the rate in effect at the date of termination or expiry); – 14 – (ii) in lieu of bonuses, a pro-rated bonus to the date of termination or expiry calculated at the target rate of 50% of Salary to such date, plus an amount equal to the amount payable under subsection 5.2(a)(i); plus (iii) in lieu of benefits, 10% of an amount equal to the amount payable under subsection 5.2(a)(i); and the Employee will accept such amount as full compensation for the cessation of his employment. (b) If within 12 months of a Change of Control, the Company gives notice under subsection 5.1(a), the Company changes a fundamental term or condition of employment of the Employee, or this Agreement or any renewal hereof expires, then the Company will pay to the Employee forthwith a lump sum equal to the aggregate of: (i) the greater of a. the Salary remaining until September 30, 2009; and b. three times the Salary (at the rate in effect at the date of such termination, change in terms of employment or expiry); (ii) in lieu of bonuses, a pro-rated bonus to the date of such termination, change in terms of employment or expiry at the target rate of 50% of Salary to such date, plus an amount equal to the amount payable under subsection 5.2(b)(i); plus (iii) in lieu of benefits, 10% of an amount equal to the amount payable under subsection 5.2(a)(i); and the Employee will accept such amount as full compensation for the cessation of his employment. (c) For the purpose of this Agreement “Change of Control” means the occurrence of any of the following events: (i) the acquisition by an acquiror (or group of acquirors acting in concert) of a number of shares which at any time aggregate at least 50.1% of the outstanding shares of the Company; (ii) all or substantially all of the assets of the Company are sold, transferred or otherwise disposed of; (iii) the individuals who are members of the Board of Directors of the Company on October 1, 2005 cease for any reason to constitute a majority of the Board of Directors of the Company; or (iv) the Board of Directors of the Company deems a transaction or series of transactions to be a change of control. – 15 – (d) If there is a Change of Control, the Employee may resign, and upon such resignation the Company will pay to the Employee the lump sum amounts set out in section 5.2(b) herein. (e) In the event the Employee ceases to be employed and becomes entitled to any amount pursuant to subsections 5.2 (a), (b) or (d): (i) all Stock Options and Common Share Purchase Warrants that the Company has granted or agreed to grant to the Employee pursuant to the Company’s employee Stock Option Plan shall be made the subject of a Stock Option Agreement substantially in the same form as Schedule 1 and Schedule 2, except for the number of shares under Option, the exercise price, and the fact that all the Options shall “vest” immediately upon cessation of the Employee’s employment; (ii) any options granted in lieu of bonus or salary (i.e. not be pursuant to the Company’s Stock Option Plan at fair market value at the date of the grant) shall be made the subject of a Stock Option Agreement substantially in the same form as Schedule 3 (unless such agreement for such options already exists) and for greater certainty shall expire at the termination or expiry date established at the time of the grant or pursuant to any agreement in relation thereto; and (iii) all other Stock Options that the Company would have issued to the Employee in the normal course of the Employee’s employment with the Company will be issued at the fair market price for such stock or shares as at the date of termination and shall automatically vest with the Employee and be made the subject of a Stock Option Agreement in the form of Schedule 1 or 3 as the case may be.Termination for Cause and Other Events of Early Termination5.3 Despite any other term of this Agreement to the contrary, the Employee’semployment by the Company (and any office held by him) may be terminated bythe Company for cause without a notice period prior to the expiration of thethen current term of this Agreement upon the receipt by the Employee ofwritten notice from the Company terminating his employment for cause;however, no termination based upon the Employee’s failure or refusal toperform his obligations under this Agreement, which if not remedied couldamount to cause, shall be considered to be for cause, under this Agreement,unless the Board first gives written notice to the Employee advising of theacts or omissions that the Company considers would constitute cause becauseof the Employee’s failure or refusal to perform his obligations and thefailure or refusal continues after the Employee has had a reasonableopportunity to correct the acts or omissions as set out in the notice.Effect of Termination under Section 5.35.4 If the Company terminates the Employee’s employment under section 5.3,then he is not entitled to receive and the Company will not pay any salary, – 16 -damages or other sums as a consequence of the termination except for Salary,any unpaid bonus amounts, and unpaid and reimbursable expenses, accrued oraccruable, but unpaid, to the effective termination date, plus any otheramounts owing by the Company to the Employee and plus interest at the CIBCPrime Rate plus 3% per annum on all amounts owing from the Company to theEmployee from and after the termination date until paid, such interest to bepayable and compounded monthly and if not so paid, itself bear interest, andthe Employee shall resign from any office, with the company or with anaffiliate, which the Company can not by itself lawfully terminate.Return of Property5.5 On the effective termination date, the Employee will deliver up to theCompany, in a reasonable state of repair, all property including withoutlimitation, all copies, extracts and summaries, whether in written, digital,magnetic or electronic form, of documents and information of the Company inthe possession or under the control or direction of the Employee at thetermination date.Resignation of Office5.6 Upon termination of this Agreement, the Employee will resign as anofficer of the Company and of any subsidiaries or affiliates of the Company,and of any other entity where the Employee has been appointed or nominated bythe Company. PART 6 GENERALFurther Assurances6.1 Each party will, at its own expense and without expense to any otherparty, execute and deliver the further agreements and other documents and dothe further acts and things as the other party reasonably requests toevidence, carry out or give full force and effect to the terms of thisAgreement.Assignment6.2 Neither party may assign any right, benefit or interest in thisAgreement without the prior written consent of the other party. Anypurported assignment without such consent will be void.Severability6.3 If any one or more of the provisions contained in this Agreement or theapplication of any of them to a person or circumstance is held by a court tobe illegal, invalid or unenforceable in respect of any jurisdiction, then tothe extent so held, it is separate and severable from this Agreement but thevalidity, legality and enforceability of the provision will not in any way beaffected or impaired in any other jurisdiction and the remainder of theAgreement or the application of the provision to persons or circumstances – 17 -other than those to which it is held to be invalid, illegal or unenforceableis not affected unless the severing has the effect of materially changing theeconomic benefit of this Agreement to the Employee or the Company.Modifications, Waiver and Consent6.4 No provision of this Agreement may be amended, modified, supplemented,waived or discharged unless the amendment, modification, supplement, waiveror discharge is agreed to in writing and signed by the Employee and on behalfof the Company by an officer specifically designated by the Board. No waiverby a party at any time or any breach by the other party of a term of thisAgreement or of performance of an obligation to be performed by the otherparty under this Agreement is deemed to be a waiver of similar or dissimilarterms or obligations at the same, any prior or subsequent time.Notice6.5 A notice, demand, request, statement or other evidence required orpermitted to be given under this Agreement (a “notice”) must be written. Itwill be sufficiently given if delivered to the address of a party set out onpage 1 and if (a) delivered in person to the Employee either by certified mail or courier so that a delivery receipt is obtained, or (b) delivered to the Company or the President of the Company, as the case may be, either by certified mail or courier so that a delivery receipt is obtained.At any time, a party may give notice to the other party of a change ofaddress and after the giving of the notice, the address specified in thenotice will be considered to be the address of the party for the purpose ofthis section.Any notice delivered or sent in accordance with this section will be deemedto have been given and received (c) if delivered, then on the day of delivery, (d) if mailed, on the earlier of the day of receipt and the 7th business day after the day of mailing, or (e) if sent by telex, telegram, facsimile or other similar form of written communication, on the first business day following the transmittal date. (f) if a notice is sent by mail and mail service is interrupted between the point of mailing and the destination by strike, slowdown, force majeure or other cause within three (3) days before or after the time of mailing, the notice will not be deemed to be received until actually received, and the party sending the notice will use any other service which has not been so interrupted or will deliver the notice in order to ensure prompt receipt. – 18 -Binding Effect6.6 This Agreement will enure to the benefit of and be binding upon theparties and their respective legal representatives and successors. Thisagreement is otherwise personal and non-assignable.Governing Law6.7 This Agreement will be interpreted under and is governed by the laws ofthe Province of British Columbia and the laws of Canada that are applicableand, except for matters which cannot properly or lawfully be resolved byarbitration, the courts of the Province of British Columbia will haveexclusive jurisdiction to entertain any action arising under this Agreementand the parties hereby attorn to the jurisdiction of those courts.Time of Essence6.8 Time is of the essence in the performance of each obligation under thisAgreement.Counterparts6.9 This Agreement and any other writing delivered pursuant to thisAgreement may be executed in any number of counterparts with the same effectas if all parties to this Agreement or such other writing had signed the samedocument and all counterparts will be construed together and will constituteone and the same instrument.Entire Agreement6.10 This Agreement constitutes the entire agreement between the parties inrespect of the employment of the Employee by the Company and supersedes andreplaces all prior negotiations, written or oral understandings, agreementsmade between the parties.Survival of Terms6.11 The provisions of sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 5.3,5.4, 5.5 and 5.6 shall survive the termination of this Agreement.IN WITNESS WHEREOF the parties hereto have executed this Agreement effectiveas of the day and year first above-written. – 19 -The Common Seal of DYNAMOTIVE )ENERGY SYSTEMS CORPORATION was )affixed in the presence of: ) ) )Per:___/s/Desmond Radlein _____ ) C/S Authorized Signatory ) )Per: __/s/Richard Lin__________ ) Authorized Signatory ) ) ) )Signed, Sealed and Delivered by )the Employee in the presence of: ) ) ) )__/s/___________________________ ) /s/ Brian Richardson_Witness (Signature) ) Brian Richardson ) )________________________________ )Name (please print) ) ) )________________________________ )Address ) ) )________________________________ )City, Province ) – 20 – SCHEDULE 1 OUTSTANDING STOCK OPTIONS
Date of Issue Number of Optionee Exercise Original Expiry Shares (Holder of Price Date of Option Option) US$- —————————————————————————- May 6, 2003 200,000 Brian Richardson $0.23 May 6, 2006August 31, 2003 100,000 Brian Richardson $0.45 August 30, 2006March 15, 2004 78,067 Brian Richardson $0.20 March 14, 2006January 21, 2005 200,000 Brian Richardson $0.48 January 21, 2009- —————————————————————————-
– 21 – SCHEDULE 2 STOCK OPTION AGREEMENTThis Agreement effective this 1st day of October, 2005.BY AND BETWEEN: BRIAN RICHARDSON, an individual residing at 1738 25th Street, West Vancouver, BC. V7V 4J9 (hereinafter referred to as the “Employee”)AND: DYNAMOTIVE ENERGY SYSTEMS CORPORATION 230 – 1700 West 75th Avenue, Vancouver, B.C. V6P 6G2 (hereinafter referred to as “DynaMotive”)WHEREAS, the Employee has agreed to continue to serve as an employee ofDynaMotive.AND WHEREAS, in connection with such employee/employer relationship,DynaMotive has agreed to grant to the Employee options to purchase commonshares in the capital stock of DynaMotive (“Common Shares”).NOW THEREFORE THE EMPLOYEE AND DYNAMOTIVE AGREE AS FOLLOWS:1. Stock Option GrantDynaMotive hereby irrevocably grants to the Employee share purchase optionsentitling the Employee to purchase 1,750,000* Common Shares at exerciseprices detailed below per Common Share (the “Options”), which price perCommon Share DynaMotive and the Employee have determined to be the marketvalue of DynaMotive’s Common Shares on the date first above written, or onthe date previously approved by the Company’s Board of Directors and whichOptions will, in each case but subject to section 10 hereof, have a term ofthree years from the date on which they are originally scheduled to Vest, asset forth in the following table:*to be released in increments as the Company accrues appropriate number ofoptions for distribution as required. – 22 – Number of Exercise Vesting TerminationStock Options Price Date Date 200,000 US$0.48 November 1, 2005 November 1, 2008 150,000 US$0.58 November 1, 2005 November 1, 2008 200,000 US$0.48 September 30, 2006 September 30, 2009 150,000 US$0.58 September 30, 2006 September 30, 2009 350,000 US$0.58 September 30, 2007 September 30, 2010 350,000 US$0.58 September 30, 2008 September 30, 2011 350,000 US$0.58 September 30, 2009 September 30, 20122. Vesting Provisions Notwithstanding the foregoing: (a) Vest and Vesting Date with regard to a particular Option granted hereby shall mean the date set forth in the above table following which that Option may be exercised, provided that the 350,000 Options which shall vest November 1, 2005 shall not be exercised until after actual execution of this Stock Option Agreement; and (b) If the Employee’s employment with DynaMotive is terminated or otherwise ends prior to the end of the term of the Confidential Employment Agreement between DynaMotive and the Employee, made with effect October 1, 2005 (the “Employment Agreement”), other than for “cause” within the meaning of section 5.3 of the Employment Agreement, or by the Employee acting voluntarily within the meaning of that agreement other than under subsection 5.2(d) thereof, then all of the Options granted to the Employee hereunder, will Vest immediately upon such termination, provided that such early Vesting will not affect the above-listed Option Termination Dates.3. In order to exercise the Options, the Employee shall, subject toSection 4 and 10 hereof, no later than the close of business (Vancouver time)on the applicable Option Termination Date set out above, give written noticeto DynaMotive of his intention to exercise the then-vested Options in wholeor in part, such notice to specify the number of Options that the Employeewishes to exercise and be accompanied by cash, bank draft or certifiedcheque, payable to “DynaMotive Energy Systems Corporation” in the amountrequired to pay for the Common Shares then being purchased by the Employee atthe exercise price of US $0.58 per Common Share. Promptly after receipt ofeach such notice and payment, DynaMotive shall issue a Treasury Order to itsRegistrar and Transfer Agent calling for the issuance of the required numberof Common Shares and will deliver a duly and validly issued certificaterepresenting such shares to the Employee within five business days.Following delivery of such share certificates to the Employee, but notbefore, DynaMotive shall be entitled to keep and retain, for its own use, thepurchase price paid to it by or on behalf of the Employee.4. The Options shall survive the cessation of the employment of theEmployee by DynaMotive and shall be in full force and effect and exercisable – 23 -until the Termination Date for the particular Options set forth in section 1hereof and following which, if not exercised, the Options shall lapse and beof no further force or effect.5. The Options granted hereunder are personal to the Employee and may beassigned or transferred in whole or in part to any company controlled by theEmployee or to the Employee’s immediate family, or to a family trust.6. The exercise of the Options or any amendments to this Agreement may besubject to the prior approval, where necessary, under certain securitieslegislation or jurisdictions.7. In the event that there is any material change in the Common Shares ofDynaMotive through the declaration of stock dividends or stock splits orconsolidations or exchanges of shares, the Options shall be deemed to havebeen exchanged by DynaMotive for new options to purchase a number of CommonShares at an exercise price which is adjusted appropriately (the “NewOptions”) such that the amount by which the total value of the Common Sharesunder the New Options exceeds the total price to acquire such shares underthe New Options, immediately after such a material change, is not greaterthan nor materially less than such an amount would have been under theoriginal Options, immediately prior to such material change. The adjustedterms of the New Options shall be effective and binding for all purposes ofthis Agreement.8. In the event that DynaMotive shall amalgamate, consolidate with, ormerge into another corporation, the Employee will thereafter receive, uponthe exercise of the Options, the securities or property to which a holder ofthe number of Common Shares then deliverable upon the exercise of the Optionswould have been entitled to upon such amalgamation, consolidation, or merger,and DynaMotive will take any and all steps in connection with suchamalgamation, consolidation, or merger as may be necessary to ensure that theprovisions hereof shall thereafter be applicable, as near as reasonably maybe, in relation to any securities or property thereafter deliverable upon theexercise of the Options granted herein.9. In the event of a change of control of DynaMotive as defined in theEmployment Agreement, or a sale of all or substantially all of the assets ofDynaMotive, then, immediately prior to the date of such an event, all of theOptions granted to the Employee hereunder will Vest, provided that such earlyVesting will not, subject to section 4 and 10 hereof, affect the above-listedOption Termination Dates.10. This Agreement shall enure to the benefit of and be binding upon theparties hereto and upon the successors or assigns of DynaMotive and upon theheirs, executors, administrators and legal personal representatives of theEmployee; provided that any of the Options which have not been exercisedbefore the Employee dies or his employment is terminated at a time when theEmployee is disabled, may notwithstanding section 4 hereof be exercised bythe Employee’s heirs, executors, administrators or legal personalrepresentatives at any time before the later of the Termination Date for theOptions and one year after the date of death of the Employee. – 24 -11. This Agreement shall be governed, construed and enforced according tothe laws of the Province of British Columbia and is subject to the exclusivejurisdiction of the courts of the Province of British Columbia.IN WITNESS WHEREOF the parties hereto have hereunto executed this Agreementas of the day and year first above written.THE COMMON SEAL OF DYNAMOTIVE )ENERGY SYSTEMS CORPORATION )was hereunto affixed in the )presence of: ) C/S )___/s/Desmond Radlein_________ ) ) ) )__ /s/Richard Lin __________ ) )SIGNED, SEALED AND DELIVERED )by the Employee in the presence )of: ) )______________________________ )Name ) __/s/ Brian Richardson_ ) Brian Richardson )______________________________ )Address ) ) )______________________________ ) )______________________________ )Occupation ) – 25 – SCHEDULE 3 STOCK OPTION AGREEMENTThis Agreement effective this day of , 200_ .BY AND BETWEEN: BRIAN RICHARDSON, an individual residing at 1738 25th Street, West Vancouver, BC. V7V 4J9 (hereinafter referred to as the “Employee”)AND: DYNAMOTIVE ENERGY SYSTEMS CORPORATION 230 – 1700 West 75th Avenue, Vancouver, B.C. V6P 6G2 (hereinafter referred to as “DynaMotive”)WHEREAS, the Employee has agreed to continue to serve as an employee ofDynaMotive;AND WHEREAS, in connection with such employee/employer relationship,DynaMotive has agreed to grant to the Employee options to purchase commonshares in the capital stock of DynaMotive (“Common Shares”).NOW THEREFORE THE EMPLOYEE AND DYNAMOTIVE AGREE AS FOLLOWS:1. Bonus/Remuneration Stock Option GrantDynaMotive hereby irrevocably grants, to the Employee, share purchase optionsentitling the Employee to purchase Common Shares at an exercise price ofone-tenth of one cent in Canadian currency (CDN $0.001) per Common Share (the”Options”), which Options will, in each case, have a term of 3 years from theeffective date of the agreement of the Company to issue such Common Shares ifthe option is exercised by the Employee.2. Exercise of Bonus Stock OptionIn order to exercise the Options, the Employee shall, no later than the closeof business (Vancouver time) on the termination date of the Options grantedby this Agreement, give written notice to DynaMotive of his intention toexercise the Options in whole or in part, such notice to specify the number – 26 -of Options that the Employee wishes to exercise (not being less than for25,000 Common Shares, or the balance of the Common Shares that the Employeeis entitled to purchase pursuant to this Agreement) and be accompanied bycash, bank draft or certified cheque, payable to “DynaMotive Energy SystemsCorporation” in the amount required to pay for the Common Shares then beingpurchased by the Employee at the exercise price of CDN $0.001 per CommonShare. Promptly after receipt of each such notice and payment, DynaMotiveshall issue a Treasury Order to its Registrar and Transfer Agent calling forthe issuance of the required number of Common Shares and will deliver a dulyand validly issued certificate representing such shares to the Employeewithin 5 business days. Following delivery of such share certificates to theEmployee, but not before, DynaMotive shall be entitled to keep and retain,for its own use, the purchase price paid to it by or on behalf of theEmployee.3. Termination of EmploymentThe Options shall survive the cessation of the employment of the Employee byDynaMotive and shall be in full force and effect and exercisable until thetermination date applicable to the Options provided herein.4. AssignmentThe Options granted hereunder are personal to the Employee and may beassigned or transferred in whole or in part to any company controlled by theEmployee or to the Employee’s immediate family, or to a family trust.5. Required ApprovalsThe exercise of the Options or any amendments to this Agreement may besubject to the prior approval, where necessary, under certain securitieslegislation or jurisdictions.6. Adjustments for Material ChangesIn the event that there is any material change in the Common Shares ofDynaMotive through the declaration of stock dividends or stock splits orconsolidations or exchanges of shares, the Options shall be deemed to havebeen exchanged by DynaMotive for new options to purchase a number of CommonShares at an exercise price which is adjusted appropriately (the “NewOptions”) such that the amount by which the total value of the Common Sharesunder the New Options exceeds the total price to acquire such shares underthe New Options, immediately after such a material change, is not greaterthan nor materially less than such an amount would have been under theoriginal Options, immediately prior to such material change. The adjustedterms of the New Options shall be effective and binding for all purposes ofthis Agreement.7. Adjustments for mergersIn the event that DynaMotive shall amalgamate, consolidate with, or mergeinto another corporation, the Employee will thereafter receive, upon theexercise of the Options, the securities or property to which a holder of the – 27 -number of Common Shares then deliverable upon the exercise of the Optionswould have been entitled to upon such amalgamation, consolidation, or merger,and DynaMotive will take any and all steps in connection with suchamalgamation, consolidation, or merger as may be necessary to ensure that theprovisions hereof shall thereafter be applicable, as near as reasonably maybe, in relation to any securities or property thereafter deliverable upon theexercise of the Options granted herein.8. EnurementThis Agreement shall enure to the benefit of and be binding upon the partieshereto and upon the successors or assigns of DynaMotive and upon the heirs,executors, administrators and legal personal representatives of the Employee;provided that any of the Options which have not been exercised before theEmployee dies or his employment is terminated at a time when the Employee isdisabled, may notwithstanding section 3 hereof be exercised by the Employee’sheirs, executors, administrators or legal personal representatives at anytime before the later of the termination date for the Options and one yearafter the date of death of the Employee.9. Governing LawThis Agreement shall be governed, construed and enforced according to thelaws of the Province of British Columbia and is subject to the exclusivejurisdiction of the courts of the Province of British Columbia.IN WITNESS WHEREOF the parties hereto have hereunto executed this Agreementas of the day and year first above written.THE COMMON SEAL OF DYNAMOTIVE )ENERGY SYSTEMS CORPORATION )was hereunto affixed in the )presence of: ) C/S )___/s/Desmond Radlein ___ ) ) )___/s/Richard Lin_____________ ) )SIGNED, SEALED AND DELIVERED )by the Employee in the presence )of: ) )___Brian Richardson___________ )Name ) _/s/ Brian Richardson_ ) Brian Richardson )______________________________ )Address ) ) )______________________________ )Occupation )