Document:

DYNASIL CORPORATION OF AMERICA
                     AGREEMENT OF EMPLOYMENT

     THIS AGREEMENT is effective as of December 1, 2000, by and between
DYNASIL CORPORATION OF AMERICA (the "Company"), a New Jersey corporation,
with offices at 385 Cooper Road, West Berlin,  New Jersey, 08091, and JOHN
KANE ("Employee"), whose address is 149 Plowshare Road, Norristown,
Pennsylvania, 19403.

     1.   Employment.  Company agrees to employ Employee as President (and
Secretary, until a replacement can be elected) of the Company, with such
duties as are customary for such position.  Included in such duties shall be
oversight of the Company's compliance with pollution and environmental safety
laws.  The parties agree that as of August 1, 2001, Employee will be elected
to and will assume the additional position of Chief Executive Officer, with
no additional remuneration.  Employee shall perform these duties subject to
the direction and supervision of the Board of Directors of the Company.
Employee accepts such continued employment and agrees to devote his full time
and skills to the conduct of Company's business, performing to the best of
Employee's abilities such duties as may be reasonably requested by Company.
Employee agrees to serve Company diligently and faithfully so as to advance
Company's best interests and agrees to not take any action in conflict with
Company's interests.

     2.   Term.

          (a)  The term of employment of Employee hereunder shall be for a
period of three (3) years commencing on December 1, 2000, subject to the
conditions set forth herein.

          (b)  In the event that during the second year of this Agreement the
Company does not reach gross annual revenues of $5 million and net income
before taxes of $400,000, then the Company shall have the right to
renegotiate this Agreement with respect to the third year of its term.  In
the event that the parties cannot reach an agreement during such
renegotiation, the Company may terminate this Agreement and pay Employee a
severance payment equal to 30% of Employees base annual salary of $110,000,
or $33,000.

          (c)  This Agreement shall be automatically renewed at the end of
the initial Term for additional terms of one (1) year; provided, however,
either party may terminate this Agreement at the end of a term by providing
written notice to the other party no later than ninety (90) days prior to the
expiration of the then current term.

     3.   Compensation.

          (a)  Base Salary.  Employee shall receive as salary, during the
Term of this Agreement, the sum of One Hundred Ten Thousand Dollars
($110,000) per annum payable in accordance with the Company's regular payroll
schedule.

          (b)  Bonus.   The Company agrees to pay Employee the following
performance bonuses based on net income before Employee bonus and taxes:

     YEAR 1 of contract:
     $252,000 to $352,001 - 15% of excess over $252,000 and less than
$352,001      Above $352,001 -         3% of excess over $352,001

     YEAR 2 of contract:
     $302,000 to $402,001 - 15% of excess over $302,000 and less than
$402,001      Above $402,001 -         3% of excess over $402,001

     YEAR 3 of contract:
     $352,000 to $452,001 - 15% of excess over $352,000 and less than
$452,001      Above $452,001 -         3% of excess over $452,001

          (c)  Other Bonus.  Employee will also be eligible for cash bonuses,
stock bonuses and stock options for meeting profit goals and for exceeding
profit goals, and other such bonuses as determined by the Board of Directors
at the discretion of the Board of Directors.

          (d)  Reimbursement for Expenses.  Employee will receive
reimbursement from the Company for expenses reasonably incurred by Employee
on behalf of the Company.

     4.   Other Benefits During the Employment Period.

          (a)  Employee shall receive all other benefits made available to
executive      employees of the Company, from time to time, at its discretion
("Benefits"), which      currently includes, inter alia, health insurance,
New Jersey short term disability insurance,      and 401(k).

          (b)  The Company shall furnish Employee with such working
facilities and other      services as are suitable to Employee's position
with the Company and adequate to the      performance of his duties under
this Agreement.

          (c)  Employee shall be entitled to four weeks paid vacation per
calendar year in      accordance with the Company's policies then in effect
regarding vacations.
          (d)  Employee shall have the sole use of a Company car (a Toyota
Camry or      equivalent model of another manufacturer), with all normal
related expenses paid by the      Company.

          (e)  It is agreed between the parties that Employee may hire a
bookkeeper or      assistant, provided Employee obtains prior approval of the
Board of Directors.
     5.   Termination.   This Agreement is subject to termination prior to
the expiration of its initial term or any extended term as follows:

          (a)  Termination for Cause.  Company and Employee agree that no
salary or      other benefits (except for insurance benefits for disability
or death and health insurance      shall continue pursuant to the Company's
insurance policy for terminated employees, or as      provided by law) will
be payable to the Employee by the Company and the employment
relationship between the parties will terminate immediately following the
occurrence of      any one or more of the following events:

               (i)  Employee violates any material terms or conditions of
this Agreement;

               (ii) Employee commits a felony, gross misdemeanor or act of
        dishonesty or engages in material violations of the established
rules, regulations           and policies of Company;

               (iii)     Employee engages in a general course of conduct of
non-           cooperation, disorganization, gross negligence or other gross
misconduct           adversely affecting the welfare, continuity or future of
Company's business.
          (b)  Death or Disability.  If Employee should die or become totally
and      permanently disabled during the term of employment, the parties
agree that the      employment relationship and this Agreement will terminate
automatically.  "Total      disability" means the continuous inability of
Employee, resulting from disease or injury, to      perform substantially all
the services pertaining to his employment under this Agreement.       Such
total disability will be deemed "permanent" if Employee has not recovered and
     returned to render the full services of his employment hereunder within
six (6) months of      becoming totally disabled.

     6.   Key Person Insurance.  Employee agrees that during the term of this
Agreement, the Company may purchase key person life insurance covering the
life of Employee  in the amount of $500,000, with the Company to be named as
the sole beneficiary.  The Company shall pay the premiums on such policy as
they become due out of the funds of the corporation. Employee represents and
warrants that Employee has no knowledge of any condition which would prevent
such key person life insurance from being obtained at rates for a healthy
male of his age.  For purposes of such key person insurance, Employee agrees
to submit to reasonable medical examinations and shall cooperate with
reasonable information requests.

     7.   Confidential Information/Trade Secrets.  Employee acknowledges that
during the course and as a result of his employment, Employee may receive or
otherwise have access to, or contribute to the production of, Confidential
Information or Trade Secrets.  Confidential Information or Trade Secrets
means information that is proprietary to or in the unique knowledge of
Company (including information discovered or developed in whole or in part by
Employee); or information that derives independent economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.  Confidential Information
shall also include all terms and conditions of this Agreement.

     Employee understands and acknowledges that all such information that he
obtains in the course of Employee's employment with Company constitutes
Confidential Information or Trade Secrets.  In particular, Employee agrees
that this information includes among other things, procedures, manuals,
confidential reports, lists of clients, customers, suppliers, or products,
and information concerning the prices of charges paid by the Company's
customers to the Company, or by the Company to its suppliers.

     Employee further acknowledges and appreciates that any Confidential
Information or Trade Secrets constitutes a valuable asset of Company and that
Company intends any such information to remain secret and confidential.
Employee therefore specifically agrees that except to the extent required by
Employee's duties to Company or as permitted by the express written consent
of the Company's Board of Directors,, Employee shall never, either during
employment with Company or at any time thereafter, directly or indirectly
use, discuss or disclose any Confidential Information or Trade Secrets of
Company or otherwise use such information to his own or a third party's
benefit.

     8.   Return of Property.  Employee agrees that upon the termination of
his employment with Company that he will immediately return to Company the
originals and all copies of any and all documents (including computer data,
disks, programs, or printouts) that contain any customer information,
financial information, product information, or other information that in any
way relates to Company, its products or services, its clients, its suppliers,
or other aspects of its business.  Employee further agrees to not retain any
summary of such information.

     9.   Non-competition.  Employee understands and agrees that, in addition
to Employee's above-described exposure to Company's Confidential Information
or Trade Secrets, Employee may, in his capacity as an employee, at times meet
with Company's customers and/or suppliers on behalf of Company, and that as a
consequence of using or associating himself with Company's name, goodwill,
and professional reputation, Employee's employment will place him in a
position where Employee can further develop personal and professional
relationships with Company's current and prospective customers and/or
suppliers.  Employee further acknowledges that during the course and as a
result of his employment Employee may be provided certain specialized
training or know-how.  Employee understands and agrees that this goodwill and
reputation, as well as Employee's knowledge of Confidential Information or
Trade Secrets and specialized training and know-how, could be used unfairly
in competition against Company.
     Accordingly, Employee agrees that, during the course of Employee's
employment with Company and for eighteen (18) months from the date of
Employee's voluntary termination of employment, involuntary termination of
employment, or the termination of this Agreement at the end of its initial
term or any renewal term, Employee shall not:

          (a)  Directly or indirectly, individually or collectively in
conjunction with      others, engage in competition with the Company or any
of its subsidiaries.

          (b)  Cause or attempt to cause any existing or prospective
customer, client,      or account who then has a relationship with the
Company or any of its subsidiaries      for current or prospective business
to divert, terminate, limit or in any manner      modify, or fail to enter
into any actual or potential business relationship with      Company or any
of its subsidiaries.

          (c)  Directly or indirectly solicit, employ or conspire with others
to employ      any of Company's or Company's subsidiary's employees or
subcontractors.  The      term "employ" for purposes of this paragraph means
to enter into an arrangement      for services as a full-time or part-time
employee, independent contractor, agent or      otherwise.

     Employee further agrees during the above-stated eighteen (18) month
period to inform any new employer or other person or entity with whom
Employee enters into a business relationship, before accepting employment or
entering into a business relationship, of the existence of this Agreement and
give such employer, person or other entity a copy of this Paragraph 9,
Non-competition.

     10.  Consideration.  Employee and Company agree that the provisions of
this Agreement are reasonable and necessary for the protection of Company.

     11.  Remedies for Breach.  Employee acknowledges that breach by him of
the provisions of this Agreement will cause Company irreparable harm that is
not fully remedied by monetary damages.  Accordingly, Employee agrees that
Company shall, in addition to any relief afforded by law, be entitled to
injunctive relief.  Employee agrees that both damages at law and injunctive
relief shall be proper modes of relief and are not to be considered
alternative remedies.  Employee further agrees that Company shall be entitled
to recover costs of litigation and reasonable attorney fees incurred in
enforcing this Agreement.

     12.  General Provisions.  Employee and Company acknowledge and agree as
follows:

          (a)  This Agreement contains the entire understanding of the
parties with regard      to all matters contained herein.  There are no other
agreements, conditions, or      representations, oral or written, express or
implied, with regard to such matters.  This      Agreement supersedes and
replaces any prior agreement between the parties generally      relating to
the same subject matter.

          (b)  This Agreement may be amended or modified only by a writing
signed by      both parties.

          (c)  Waiver by either Company or Employee of a breach of any
provision, term      or condition hereof shall not be deemed or construed as
a further or continuing waiver      thereof or a waiver of any breach of any
other provision, term or condition of this      Agreement.

          (d)  The rights and obligations of Company hereunder may be
transferred or      assigned to any successor, representative or assign of
Company.  The term "Company" as      used herein is intended to include
Dynasil Corporation of America, its successors,      affiliates, or assigns,
if any.  No assignment of this Agreement shall be made by Employee,      and
any purported assignment shall be null and void.

          (e)  Except as set forth herein, Employee's obligations under
paragraphs 7, 8      and 9 of this Agreement shall survive any change in
Employee's employment status with      Company, by promotion or otherwise, or
the termination of Employee's employment with      Company.

          (f)  If any Court finds any provision or part of this Agreement to
be      unreasonable, in whole or in part, such provision shall be deemed and
construed to be      reduced to the maximum duration, scope or subject matter
allowable under applicable law.       Any invalidation of any provision or
part of this Agreement will not invalidate any other      part of this
Agreement.

          (g)  This Agreement will be construed and enforced in accordance
with the      laws and legal principles of the State of New Jersey.

          (h)  This Agreement may be executed in any number of counterparts,
including      counterparts transmitted by telecopier or FAX, any one of
which shall constitute an      original of this Agreement.  When counterparts
of facsimile copies have been executed by      all parties, they shall have
the same effect as if the signatures to each counterpart or copy      were
upon the same document and copies of such documents shall be deemed valid as
     originals.  The parties agree that all such signatures may be
transferred to a single      document upon the request of any party.

     This Agreement is intended to be a legally binding document fully
enforceable in accordance with its terms.

DYNASIL CORPORATION OF AMERICA

                                    /s/ James Saltzman, Chairman of the Board
By:

                                    /s/ John Kane
                                    JOHN KANE<PAGE>

                                                                     Exhibit 4.2

                      1997 NON-EMPLOYEE STOCK OPTION PLAN
                       as amended on September 14, 2000

          1.  Purpose of the Plan.
              -------------------

              1.1  The purpose of the Plan is to assist non-employee directors
and non-employee senior officers of the Corporation and its Affiliates, and
Service Providers, in participating in the growth and development of the
Corporation and its Affiliates by providing such persons with the opportunity,
through share options, to acquire a proprietary interest in the Corporation.

          2.  Defined Terms.
              -------------

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

              2.1  "Affiliate" means any corporation which is an affiliate, as
such term is used in Subsection 2(2) of the Business Corporations Act (Ontario),
of the Corporation;

              2.2  "Board" means the board of directors of the Corporation or,
if established and duly authorized to act, the executive committee of the board
of directors of the Corporation;

              2.3  "Committee" shall have the meaning attributed thereto in
Section 3.1 hereof;

              2.4  "Corporation" means Genesis Microchip Inc. and includes any
successor corporation thereof;

              2.5  "Eligible Person" means any non-employee director or non-
employee senior officer of the Corporation or any Affiliate, or any Service
Provider.

              2.6  "Insider" means any insider, as such term is defined in
Subsection 1(1) of the Securities Act (Ontario), of the Corporation, other than
a person who falls within that definition solely by virtue of being a director
or senior officer of an Affiliate, and includes any associate, as such term is
defined in Subsection 1(1) of the Securities Act (Ontario), of any such insider;

              2.7  "Market Price" at any date in respect of the Shares means the
closing sale price of such Shares on the stock exchange or market on which such
Shares are listed and posted for trading on the trading day immediately
preceding such date. In the event that such Shares did not trade on such trading
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 trading day. In the event that
such Shares are not listed and for posted trading on a stock exchange or market,
the Market Price shall be the fair market value of such Shares as determined by
the Board in its sole discretion;

              2.8  "Option" means an option to purchase Shares granted to an
Eligible Person under the Plan;
<PAGE>

               2.9  "Option Price" means the price per Share at which Shares may
be purchased under an Option, as the same may be adjusted from time to time in
accordance with Article 8 hereof;

               2.10  "Optioned Shares" means the Shares issuable pursuant to an
exercise of Options;

               2.11  "Optionee" means an Eligible Person to whom an Option has
been granted and who continues to hold such Option;

               2.12  "Plan" means the Genesis Microchip Inc, 1997 Non-Employee
Stock Option Plan, as the same may be amended or varied from time to time;

               2.13  "Service Provider" means any person engaged to provide
ongoing management or consulting services for the Corporation or for any entity
controlled by the Corporation;

               2.14  "Share Compensation Arrangement" means a stock option,
stock option plan, employee stock purchase plan or any other compensation or
incentive mechanism of the Corporation involving the issuance or potential
issuance of shares to one or more employees or Insiders of the Corporation or
any Affiliate or to one or more Service Providers, including a share purchase
from treasury which is financially assisted by the Corporation by way of a loan,
guaranty or otherwise; and

               2.15  "Shares" means the common shares of the Corporation or, in
the event of an adjustment contemplated by Article 8 hereof, such other shares
or securities to which an Optionee may be entitled upon the exercise of an
Option as a result of such adjustment.

          3.   Administration of the Plan.
               --------------------------

               3.1  The Plan shall be administered by the Board or by any
committee (the "Committee") of the Board established by the Board for that
purpose.

               3.2  The Board or Committee 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 rules and regulations
for carrying out the purposes, provisions and administration of the Plan;

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

                    (c) to determine the number of Shares covered by and terms
and conditions of each Option;

                    (d)  to determine the Option Price of each Option;

                                      -2-
<PAGE>

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

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

                    (g) to prescribe the form of the instruments relating to the
grant, exercise and other terms of Options; and

                    (h) subject to receipt of any required approvals, to modify
or amend each Option.

              3.3   The Board or the Committee may, in its discretion, require
as conditions to the grant or exercise of any Option that the Optionee shall
have:

                    (a) represented, warranted and agreed in form and substance
satisfactory to the Corporation that he or she is acquiring and will acquire
such Option and the Shares to be issued upon the exercise thereof or, as the
case may be, is acquiring such Shares, for his or her own account, for
investment and not with a view to or in connection with any distribution, that
he or she has had access to such information as is necessary to enable him or
her to evaluate the merits and risks of such investment and that he or she is
able to bear the economic risk of holding such Shares for an indefinite period;

                    (b) agreed to restrictions on transfer in form and substance
satisfactory to the Corporation and to an endorsement on any option agreement or
certificate representing the Shares making appropriate reference to such
restrictions; and

                    (c) agreed to indemnify the Corporation in connection with
the foregoing.

              3.4   Any Option granted under the Plan shall be subject to the
requirement that, if at any time counsel to the Corporation shall determine that
the listing, registration or qualification of the Shares subject to such Option
upon any securities exchange or under any law or regulation of any jurisdiction,
or the consent or approval of any securities exchange or any governmental or
regulatory body, is necessary as a condition of, or in connection with, the
grant or exercise of such Option or the issuance or purchase of Shares
thereunder, such Option may not be accepted or exercised in whole or in part
unless such listing, registration, qualification, consent or approval shall have
been effected or obtained on conditions acceptable to the Board or the
Committee. Nothing herein shall be deemed to require the Corporation to apply
for or obtain such listing, registration, qualification, consent or approval.

          4.  Shares Subject to the Plan.
              --------------------------

              4.1   Options may be granted in respect of authorized and unissued
Shares, provided that the aggregate number of Shares which may be issued
pursuant to the exercise of Options, subject to any adjustment of such number
pursuant to the provisions of Article 8 hereof, is 500,000 or such greater
number of Shares as may be determined by the Board and approved, if required, by
the shareholders of the Corporation and by any relevant stock exchange or other

                                      -3-
<PAGE>

regulatory authority. Optioned Shares in respect of which Options are not
exercised shall be available for subsequent Options. No fractional Shares may be
purchased or issued under the Plan.

          5.   Eligibility: Grant: Terms of Options.
               ------------------------------------

               5.1

                    (a) Options may be granted by the Board, in its discretion,
to any Eligible Person; provided, however, that Options may only be granted to
non-employee directors of the Corporation (each a "Director") pursuant to the
provisions of Subsections 5.1(b), (c) and (d) hereof.

                    (b) Subject to the restrictions contained in Sections 4.1,
5.5 and 5.7 hereof, each Director shall automatically be granted and receive,
without any action on the part of the Board, Options to purchase 15,000 Shares
effective immediately upon such Director first being appointed or elected a
Director. The Option Price of such Options shall be equal to the Market Price on
the date of such appointment or election (the "Commencement Date") and the
expiration date of such Options shall be 10 years from the Commencement Date.
Such Options shall vest in amounts as follows: (i) at any time subsequent to the
date which is 12 months after the Commencement Date, such Options may be
exercised to the extent of 5,000 of the Shares covered by such Options; (ii) at
any time subsequent to the date which is 24 months after the Commencement Date,
such Options may be exercised to the extent of an additional 5,000 of the Shares
covered by such Options, and to the extent the right to exercise such Options
theretofore shall not have been exercised, and (iii) at any time subsequent to
the date which is 36 months after the Commencement Date until the expiry of such
Options, such Options may be exercised in full, except to the extent such
Options theretofore shall have been exercised.

                    (c) Subject to the restrictions contained in Sections 4.1,
5.5 and 5.7 hereof, on the first day of the calendar month following the annual
general meeting of the Corporation in each year, each person who is then a
Director and who has been a Director for at least 12 months shall automatically
be granted and receive, without any action on the part of the Board, (a) Options
to purchase 5,000 Shares, and (b) for each committee of the Board such Director
serves on, Options to purchase 2,500 Shares. The Option Price of such Options
shall be equal to the Market Price on the first day of the calendar month
following the annual general meeting of the Corporation in the applicable year
(the "Date of Grant") and the expiration date of such Options shall be 10 years
from the Date of Grant. The Optionee may purchase not more than one-twelfth of
the Shares covered by such Options during each of the first 12 months following
the Date of Grant, provided, however, that if the number of Shares purchased
under such Options during any such month is less than one-twelfth of the Shares
covered by such Options, the Optionee shall have the right, at any time or from
time to time during the remainder of the term of such Options, to purchase such
number of Shares that were purchaseable, but not purchased by the Optionee,
during such month.

                    (d) Subject to the restrictions contained in Section 4.1,
5.5 and 5.7 hereof, the Board may, in its discretion, grant Options to any
Director who has entered into an agreement to provide consulting services to the
Corporation in addition to Options granted in accordance with Subsections 5.1(b)
and (c). Such additional Options may be granted upon terms consistent with the
provisions of the Plan and as determined by the Board in its discretion.

                                      -4-
<PAGE>

          5.2  Subject as herein and otherwise specifically provided in this
Article 5, the number of Shares subject to each Option, the Option Price of each
Option, 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. The
Board or the Committee may, in their entire discretion, subsequent to the time
of granting Options hereunder, permit an Optionee who is not a Director to
exercise any or all of the unvested options then outstanding and granted to the
Optionee under this Plan, in which event all such unvested Options then
outstanding and granted to the Optionee shall be deemed to be immediately
exercisable during such period of time as may be specified by the Board or the
Committee.

          5.3  Subject to Section 5.1 hereof and any adjustments pursuant to the
provisions of Article 8 hereof, the Option Price of any Option shall in no
circumstances be lower than the Market Price on the date on which the grant of
the Option is approved by the Board. If, as and when any Shares have been duly
purchased and paid for under the terms of an Option, such Shares shall be
conclusively deemed allotted and issued as fully paid non-assessable Shares at
the price paid therefor.

          5.4  The term of an Option shall not exceed 10 years from the date of
the grant of the Option.

          5.5  No Options shall be granted to any Optionee if the total number
of Shares issuable to such Optionee under this Plan, together with any Shares
reserved for issuance to such Optionee under options for services or any other
stock option plans, would exceed 5% of the issued and outstanding Shares.

          5.6  An Option is personal to the Optionee and non-assignable (whether
by operation of law or otherwise), except as provided for herein. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of an
Option contrary to the provisions of the Plan, or upon the levy of any
attachment or similar process upon an Option, the Option shall, at the election
of the Corporation, cease and terminate and be of no further force or effect
whatsoever.

          5.7  No Options shall be granted to any Optionee if such grant could
result, at any time, in:

               (a) the number of Shares reserved for issuance pursuant to
Options or other stock options granted to Insiders exceeding 10% of the issued
and outstanding Shares;

               (b) the issuance to Insiders, within a one-year period, of a
number of Shares exceeding 10% of the issued and outstanding Shares; or

               (c) the issuance to any one Insider and such Insider's
associates, within a one-year period, of a number of Shares exceeding 5% of the
issued and outstanding Shares.

          For the purposes of Subsections 5.7(b) and (c), the phrase "issued and
outstanding Shares" excludes any Shares issued pursuant to the Plan or other
Share Compensation Arrangements over a

                                      -5-
<PAGE>

preceding one-year period, and, for the purpose of Subsection 5.7(c),
"associate" means any person associated with such Insider within the meaning of
the Securities Act (Ontario).

          6.   Ceasing to be an Eligible Person; Bankruptcy; Death.
               ---------------------------------------------------

               6.1  Subject to Sections 6.2 and 6.3 hereof and to any express
resolution passed by the Committee or the Board with respect to an Option, an
Option and all rights to purchase Shares pursuant thereto shall expire and
terminate immediately upon the Optionee who holds such Option ceasing to be an
Eligible Person.

               6.2  The Committee or the Board may, in their entire discretion,
at the time of the granting of Options hereunder, determine that provisions to
the following effect shall be contained in the written option agreement between
the Corporation and the Optionee;

                    (a) If an Optionee shall retire while holding an Option
which has not been fully exercised, such Optionee may exercise the Option at any
time within thirty (30) days of the date of such retirement, but only to the
same extent to which the Optionee could have exercised the Option immediately
before the date of such retirement.

                    (b) If an Optionee ceases to serve the Corporation or any
Affiliate, as the case may be, as an officer or director for cause, no Option
held by such Optionee may be exercised following the date on which such Optionee
ceases to serve the Corporation or any Affiliate, as the case may be, in such
capacity. If an Optionee ceases to serve the Corporation or any Affiliate as an
officer or director for any reason other than for cause, unless otherwise
provided for in this Plan, no Option held by such Optionee at the effective date
thereof may be exercised by the Optionee following the date which is ninety (90)
days after the date on which the Optionee ceases to serve the Corporation or any
Affiliate, as the case may be, in such capacity.

                    (c) In the event that an Optionee commits an act of
bankruptcy or any proceeding is commenced against the Optionee under the
Bankruptcy and Insolvency Act (Canada) or other applicable bankruptcy or
insolvency legislation in force at the time of such bankruptcy and such
proceeding remains undismissed for a period of thirty (30) days, no Option held
by such Optionee may be exercised following the date on which such Optionee
commits such act of bankruptcy or such proceeding remains undismissed, as the
case may be.

               6.3  If any Optionee shall die holding an Option which has not
been fully exercised, his personal representatives, heirs or legatees may, at
any time within three months from the date of grant of probate of the will or
letters of administration of the estate of the decedent or within one year after
the date of such death, whichever is the lesser time, exercise the Option with
respect to the unexercised balance of the Shares subject to the Option but only
to the same extent to which the decedent could have exercised the Option
immediately before the date of such death.

               6.4  For greater certainty, Options shall not be affected by any
change of office of the Optionee or by the Optionee ceasing to be a Director
provided that the Optionee continues to be an Eligible Person.

                                      -6-
<PAGE>

               6.5 For the purposes of this Article 6, a determination by the
Corporation that an Optionee was discharged for "cause" shall be binding on the
Optionee.

          7.   Exercise of Options.
               -------------------

               7.1  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, by cash or certified cheque,
of the Option Price of the Shares then being purchased. Subject to any
provisions of the Plan to the contrary, certificates for such Shares shall be
issued and delivered to the Optionee within a reasonable time following the
receipt of such notice and payment.

               7.2  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 any 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 the Corporation shall determine to be necessary or advisable in
connection with the authorization, issuance or sale thereof;

                    (b) the admission of such Shares to listing on any stock
exchange on which the Shares may then be listed;

                    (c) the receipt from the Optionee of such representations,
warranties, agreements and undertakings, as the Corporation determines to be
necessary or advisable in order to safeguard against the violation of the
securities laws of any jurisdiction; and

                    (d) the satisfaction of any conditions on exercise
prescribed pursuant to Article 3 hereof.

               7.3  Options shall be evidenced by a share option agreement,
instrument or certificate in such form not inconsistent with this Plan as the
Committee or the Board may from time to time determine provided that the
substance of Article 5 be included therein.

          8.   Certain Adjustments.
               -------------------

               8.1  Subject to any required action by the shareholders of the
Corporation, the number of Shares covered by each outstanding Option, the number
of Shares which have been authorized for issuance under the Plan but as to which
no Options have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option, as well as the Option Price of each
such outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Shares, or
any other increase or decrease in the number of issued Shares effected without
receipt of consideration by the Corporation; provided, however, that conversion
of any convertible securities of the Corporation shall not be deemed to have
been "effected without receipt of consideration." Such adjustment shall be made
by the Board, whose

                                      -7-
<PAGE>

determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issuance by the Corporation of shares of any
class, or securities convertible into shares of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number of Shares
subject to and Option Price of an Option.

               8.2  In the event of the proposed dissolution or liquidation of
the Corporation, the Board shall notify each Optionee as soon as practicable
prior to the effective date of such proposed transaction. The Board in its
discretion may provide for an Optionee to have the right to exercise his or her
Option until twenty (20) days prior to such transaction as to all of the
Optioned Shares covered thereby, including Shares as to which the Option would
not otherwise be exercisable. To the extent it has not been previously
exercised, an Option will terminate immediately prior to the consummation of
such proposed action.

               8.3  In the event of a merger of the Corporation with or into
another corporation, or the sale of substantially all of the assets of the
Corporation, each outstanding Option shall be assumed or an equivalent option or
right substituted by the successor corporation or an affiliate (within the
meaning of the Ontario Business Corporations Act (the "OBCA") of the successor
corporation. In the event that the successor corporation refuses to assume or
substitute for the Option, the Optionee shall fully vest in and have the right
to exercise the Option as to all of the Optioned Shares, including Shares as to
which it would not otherwise be vested or exercisable. If an Option becomes
fully vested and exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Board shall notify the Optionee in writing or
electronically that the Option shall be fully vested and exercisable for a
period of twenty (20) days from the date of such notice, and the Option shall
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option shall be considered assumed if, following the merger or
sale of assets, the option or right confers the right to purchase or receive,
for each Share of Optioned Shares subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether shares, cash, or other
securities or property) received in the merger or sale of assets by holders of
Shares for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding Shares); provided, however, that
if such consideration received in the merger or sale of assets is not solely
common shares of the successor corporation or its affiliate (within the meaning
of the OBCA), the Board may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option,
for each Share of Optioned Shares subject to the Option, to be solely common
shares of the successor corporation or its affiliate (within the meaning of the
OBCA) equal in fair market value to the per share consideration received by
holders of Shares in the merger or sale of assets.

          9.  Amendment or Discontinuance of the Plan.
              ---------------------------------------

              9.1  The Board may amend the Plan at any time, provided, however,
that no such amendment may materially and adversely affect any Option previously
granted to an Optionee without consent of the Optionee, except to the extent
required by law. Any such amendment shall, if required, be subject to the prior
approval of, or acceptance by, any stock exchange or market on which the Shares
are listed and posted for trading.

                                      -8-
<PAGE>

               9.2  Notwithstanding anything contained to the contrary in this
Plan or in any resolution of the Board in implementation thereof:

                    (a) subject to the rules of any relevant stock exchange or
other regulatory authority, the Board may, by resolution, advance the date on
which any Option may be exercised or extend the expiration date of any Option.
The Board shall not, in the event of any such advancement or extension, be under
any obligation to advance or extend the date on or by which Options may be
exercised by any other Optionee; and

                    (b) the Board may, by resolution, but subject to applicable
regulatory requirements, decide that any of the provisions hereof concerning the
effect of termination of the Optionee's office or directorship shall not apply
to any Optionee for any reason acceptable to the Board.

               9.3  Notwithstanding the provisions of this Article 9, should
changes be required to the Plan by any securities commission, stock exchange or
other governmental or regulatory body of any jurisdiction to which the Plan or
the Corporation now is or hereafter becomes subject, such changes shall be made
to the Plan as are necessary to confirm with such requirements and, if such
changes are approved by the Board, the Plan, as amended, shall be filed with the
records of the Corporation and shall remain in full force and affect in its
amended form as of the date of its adoption by the Board.

               9.4  Notwithstanding any other provision of this Plan, the Board
may at any time by resolution terminate this Plan. In such event, all Options
then outstanding and granted to an Optionee may be exercised by the Optionee for
a period of thirty (30) days after the date on which the Corporation shall have
notified all Optionees of the termination of this Plan, but only to the same
extent as the Optionee could have exercised such Options immediately prior to
the date of such notification.

          10.  Miscellaneous Provisions.
               ------------------------

               10.1  An Optionee shall not have any rights as a shareholder of
the Corporation with respect to any of the Shares covered by such Option until
the date of issuance of a certificate for Shares upon the exercise of such
Option, in full or in part, and then only with respect to the Shares represented
by such certificate or certificates. Without in any way limiting the generality
of the foregoing, no adjustment shall be made for dividends or other rights for
which the record date is prior to the date such share certificate is issued.

               10.2  Nothing in the Plan or any Option shall confer upon an
Optionee any right to continue or be re-elected as a director of the Corporation
or any Affiliate or any right to continue as an officer of the Corporation or
any Affiliate.

               10.3  The Plan and all matters to which reference is made herein
shall be governed by and interpreted in accordance with the laws of the Province
of [Ontario] and the laws of Canada applicable therein.

                                      -9-
<PAGE>

               11.  Shareholder and Regulatory Approval.
                    -----------------------------------

                    11.1  The Plan shall be subject to ratification by the
shareholders of the Corporation to be effected by a resolution passed at a
meeting of the shareholders of the Corporation, and to acceptance by any
relevant regulatory authority. Any Options granted prior to such ratification
and acceptance shall be conditional upon such ratification and acceptance being
given and no such Options may be exercised unless and until such ratification
and acceptance are given.

                                      -10-

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