Document:

Exhibit
4.2

 

DRAGONWAVE INC.

 

 

Fifth
Amended and Restated Key Employee Stock Option Plan

 

(as adopted
and effective on April 3, 2000 and amended and restated on

May 27, 2002, November 10, 2003, June 20, 2005, March 23,
2007 and May 6, 2010)

 

 

 

DRAGONWAVE
INC.

 

FIFTH AMENDED AND RESTATED KEY EMPLOYEE STOCK OPTION PLAN

 

(as adopted and effective
on April 3, 2000 and amended and restated

on May 27, 2002 on November 10, 2003, June 20, 2005, March 23,
2007 and May 6, 2010)

 

ARTICLE ONE:

GENERAL PROVISIONS

 

1.1                                                                                 Definitions.  In the Plan:

 

(a)                                  “Acquirer” means the successor
to all or substantially all of the assets or capital shares of the Corporation,
or any other successor of the business of the Corporation as determined by the
Board, in either case pursuant to a Corporate Event, and includes the
affiliated entities of any such successor;

 

(b)                                 “Black Out Period” means a
period during which a Participant is prohibited by the Corporation from
exercising Options pursuant to the Corporation’s Insider Trading Policy, as in
effect from time to time;

 

(c)                                  “Board” means the board of
directors of the Corporation;

 

(d)                                 “Code” means the United States
Internal Revenue Code of 1986, as amended, and applicable regulations
promulgated thereunder;

 

(e)                                  “Compensation Committee” means
the compensation committee of the Board;

 

(f)                                    “Consultant” means:

 

(i)                                     a person who: (A.) is engaged to provide services to the Corporation or
a Related Entity, other than services provided in relation to a distribution
(as such term is defined in the Securities Act); (B.) provides the services
under a written contract with the Corporation or a Related Entity; and (C.) in
the reasonable opinion of the Plan Administrator, spends or will spend a
significant amount of time and attention on the affairs and business of the
Corporation or a Related Entity, and includes, for an individual Consultant, a
Consultant Company or Consultant Partnership of such individual; and

 

(ii)                                  any person who is not a resident of Canada who is designated by the Plan
Administrator as a Consultant having regard to applicable securities laws;

 

(g)                                 “Consultant Company” means, for
an individual consultant, a company of which the individual consultant is an
employee or shareholder;

 

(h)                                 “Consultant Partnership” means,
for an individual consultant, a partnership of which the individual consultant
is an employee or partner;

 

(i)                                     “Corporate Event” means: (i) a
merger, amalgamation, consolidation, reorganization or arrangement of the
Corporation with or into another corporation (other than a merger,
amalgamation, consolidation, reorganization or arrangement of the Corporation
with one or more of its Related Entities); (ii) a tender offer for all or
substantially all of the outstanding 

 

 

Shares;
(iii) the sale of all or substantially all of the assets of the
Corporation; or (iv) any other acquisition of the business of the
Corporation as determined by the Board;

 

(j)                                     “Corporation” means DragonWave
Inc., a corporation incorporated under the Canada
Business Corporations Act, and includes any successor corporation
thereto;

 

(k)                                  “Date of Grant” means the date
specified by the Board as the date of grant of an Option, such date not to be
earlier than the date such grant is approved by the Board;

 

(l)                                     “Director” means a member of
the Board or a member of the board of directors of a Related Entity;

 

(m)                               “Employee” means a person
employed by the Corporation or a Related Entity, and, with respect to the grant
of any Incentive Stock Option, who is an employee for the purposes of Section 422
of the Code;

 

(n)                                 “Equity Award” means any
Option, restricted stock, deferred stock unit or other equity granted pursuant
to the Plan or otherwise, to a Non-Executive Director in his capacity as such,
other than equity granted or taken in lieu of cash fees;

 

(o)                                 “Executive Officer” has the
meaning ascribed to the term “executive officer” in NI 45-106;

 

(p)                                 “Incentive Stock Option” means
an Option that is labelled or described as an Incentive Stock Option and which
qualifies as an Incentive Stock Option within the meaning of Section 422(b) of
the Code;

 

(q)                                 “Insider” has the meaning set
forth in the Securities Act, but excludes a director or senior officer of a
Related Entity unless such director or senior officer:  (a) in the ordinary course receives or
has access to material facts or material changes concerning the Corporation
before the material facts or material changes are generally disclosed; (b) is
a director or senior officer of a major subsidiary (as such term is defined
under applicable securities laws) of the Corporation; or (c) is an insider
of the Corporation (within the meaning of the Securities Act) in a capacity
other than as a director or senior officer of a Related Entity;

 

(r)                                    “IPO” means the Corporation’s
initial public offering on the TSX;

 

(s)                                  “NI 45-106” means National
Instrument 45-106 — Prospectus and Registration Exemptions, promulgated under
the Securities Act, as such instrument may be amended from time to time, or any
successor instrument thereto;

 

(t)                                    “Non-Executive Director” means
any Director who is not also an employee of the Corporation or an employee of a
Related Entity;

 

(u)                                 “Non-Statutory Stock Option”
means an Option granted to a Participant who is a resident of the United States
which is not intended to be or does not qualify as an Incentive Stock Option;

 

(v)                                 “Officer” means an Executive
Officer of the Corporation or a Related Entity duly appointed by the Board or
the board of directors of a Related Entity, as applicable;

 

(w)                               “Option” means a contract
complying with the provisions of the Plan between the Corporation and a
Participant pursuant to which the Participant has a right to subscribe for
unissued Shares, and includes an Incentive Stock Option and a Non-Statutory
Stock Option;

 

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(x)                                   “Option Agreement” has the
meaning set forth in Section 2.3 below;

 

(y)                                 “Optioned Shares” means Shares
subject to issuance pursuant to an Option;

 

(z)                                   “Outstanding Issue” means the
number of Shares outstanding on a non-diluted basis immediately prior to the
issuance in question; excluding, for the purposes of Section 1.6(a)(i),
Shares issued by the Corporation as or under Share Compensation Arrangements
(including the Plan) during the preceding one (1) year period;

 

(aa)                            “Participant” means a Consultant,
Officer, Director or Employee, or former Consultant, Officer, Director or
Employee who continues to hold an Option;

 

(bb)                          “Plan” means this Fifth Amended
and Restated Key Employee Stock Option Plan, as the same may be amended from
time to time;

 

(cc)                            “Plan Administrator” means the
Compensation Committee, or if a Compensation Committee is not appointed, the
Board, in either case acting in the capacity as administrator of the Plan;

 

(dd)                          “Related Entity” has the
meaning ascribed to the term “related entity” in NI 45-106;

 

(ee)                            “Restricted Stock” means Shares
issued as “Restricted Stock” pursuant to the “Stock Issuance Program” in
previous iterations of the Plan;

 

(ff)                                “Securities
Act” means the Securities Act (Ontario), as the same may be amended from
time to time;

 

(gg)                          “Service Termination Date”
means:

 

(i)                                     in the event of the death of a Participant who is a natural person, the
date of such death;

 

(ii)                                  in the event of a termination with or without cause by the Corporation
or a Related Entity (whether such termination occurs with or without any or
adequate reasonable notice, or with or without any or adequate compensation in
lieu of such reasonable notice), of the employment of a Participant who is an
Officer or Employee, the date that actual notice of termination or dismissal is
given by the Corporation to the Participant (without reference to a “notice
period” or “severance period” or any other period after the date that actual
notice of termination is given) as determined by the Plan Administrator;

 

(iii)                               in the event of the voluntary resignation of a Participant who is a an
Officer, Employee or Director from his or her employment or term of office, the
date of such resignation;

 

(iv)                              in the event of the termination by the Corporation or a Related Entity of
the term of office of a Participant who is a Director (other than a Director
who is also an Officer), the date of the Participant’s last day of service as a
director;

 

(v)                                 in the event of the termination of the consulting agreement or
arrangement of a Participant who is a Consultant, the last day of the
Consultant’s service to the Corporation as a Consultant (whether or not the
termination of the Participant’s consulting agreement or arrangement is
effected in compliance with any termination provisions contained in the
Participant’s consulting agreement or arrangement) as determined by the Plan
Administrator; or

 

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(vi)                              in the event of the termination of the Participant’s service as a
Consultant, Officer, Director or Employee for any reason not listed above
(including the retirement or disability of the Participant), the date of such
termination of service as determined by the Plan Administrator;

 

(hh)                          “Share Compensation Arrangement”
means a plan or program established or maintained by the Corporation providing
for the acquisition of securities of the Corporation by persons described in
the definition of “Participant” as compensation or as an incentive or benefit
for services provided by such persons, and including all “security based
compensation arrangements” as such term is used in the TSX Company Manual;

 

(ii)                                  “Shareholder Approval” has the
meaning set forth in Section 3.3;

 

(jj)                                  “Shareholder Approval Date”
means June 15, 2010 or such other date that the calculation of the maximum
number of Shares issuable under the Plan as provided in Section 1.4 is
approved by the shareholders of the Corporation at a duly constituted meeting
as required by the rules of the TSX;

 

(kk)                            “Shares” means the Common
Shares without nominal or par value in the capital of the Corporation, and, in
the event of an adjustment contemplated by Section 1.9 hereof, such other
shares or securities to which a Participant may be entitled as a result of such
adjustment;

 

(ll)                                  “Ten Percent Shareholder Participant”
means a Participant to whom an Incentive Stock Option is granted pursuant to
the provisions of the Plan who is, on the date of the grant, the owner of stock
(as determined under Section 424(d) of the Code) possessing more than
10% of the total combined voting power of all classes of stock of the
Corporation or its parent, if any, or its subsidiary corporations (as defined
in Code Section 424(e)); and

 

(mm)                      “TSX” means the Toronto Stock
Exchange.

 

1.2                                 Amendment and Restatement.  The DragonWave
Inc. Fourth Amended and Restated Key Employee Stock Option/Stock Issuance Plan
is hereby amended and restated in the form hereof effective as of and from the
Shareholder Approval Date.

 

1.3                                 Purpose.  The purpose of
the Plan is to provide Consultants, Officers, Directors and Employees with a
proprietary interest in the Corporation in order to:

 

(a)                                  increase the interest in the Corporation’s welfare of those individuals
who share primary responsibility for the management, growth and protection of
the business of the Corporation;

 

(b)                                 furnish an incentive to such individuals to continue providing their
services to the Corporation and its Related Entities; and

 

(c)                                  provide a means through which the Corporation and its Related Entities
may attract qualified persons to engage as Consultants, Officers, Directors and
Employees.

 

1.4                                 Shares Subject to the Plan. 
The Shares subject to
Options under the Plan shall be authorized but unissued Shares.  The maximum aggregate number of Shares
issuable, calculated from the Shareholder Approval Date, pursuant to the terms
of the Plan shall be equal to ten percent (10%) of the number of issued and
outstanding Shares from time to time, provided that Shares which by reason of
the expiration, cancellation or termination of an unexercised Option are no
longer subject to purchase pursuant to an Option granted under the Plan shall
be returned to the pool of Shares issuable hereunder and may be made subject to
additional Options granted pursuant to the Plan.

 

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For
greater certainty, the maximum aggregate number of Shares issuable pursuant to
the Plan shall not be decreased by: (i) the number of Shares issued
pursuant to any Options exercised prior to the Shareholder Approval Date; or (ii) the
number of Shares issued as Restricted Stock prior to the Shareholder Approval
Date.

 

1.5                                 Administration.  The Plan shall
be administered by the Plan Administrator. 
No Director shall take any action with respect to Options granted to
such Director.  The Corporation shall pay
all costs associated with the administration of the Plan.  The Plan Administrator shall have full and
final authority in its discretion, but subject to the provisions of the Plan:

 

(a)                                  to determine from time to time the individuals to whom Options shall be
granted;

 

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

 

(c)                                  subject to Section 1.8 below, to determine the time or times at
which Options shall be granted and shall vest and/or become exercisable;

 

(d)                                 to designate Options as Incentive Stock Options or Non-Statutory
Options, as applicable; and

 

(e)                                  to make all other determinations with regard to the Option Grant Program
and the grant of Options, and the terms and conditions of such Options,
permitted pursuant to the Plan;

 

(f)                                    to interpret the Plan;

 

(g)                                 to make, amend and rescind rules and regulations relating to the
Plan;

 

(h)                                 to determine the terms and provisions of the instruments by which
Options shall be evidenced and Shares shall be issued;  and

 

(i)                                     to make all other determinations necessary or advisable for the
administration of the Plan.

 

Notwithstanding the foregoing, no amendment to
the Plan that materially and adversely affects the rights and privileges
pursuant to the terms of the Plan of any Option granted or Shares issued under
the Plan may be effected without the consent, in writing, of the affected
Participant (provided, that, amendments to the Plan referred to in Article 4,
Section 3.3(a), (c), (d), (e), (h), (i) and (j) shall be deemed
to not materially or adversely amend such rights and privileges).

 

The Plan Administrator may act upon
recommendations received from senior management of the Corporation.

 

Subject to obtaining the prior approval of the
TSX if required by the rules, regulations and policies of the TSX, nothing
contained in the Plan or any Option shall be construed in any way so as to
prevent the Corporation or any Related Entity from taking any corporate action
that is deemed by the Corporation or the Related Entity to be appropriate or in
its best interest, even if such action would have an adverse effect on the
Plan.

 

No member of the Board, and no member of the
compensation committee appointed as Plan Administrator, shall be liable for any
action or determination relating to or under the Plan made in good faith.  All decisions made by the Plan Administrator
shall be made in the Plan Administrator’s sole discretion (but in accordance
with the terms and provisions of the Plan) and shall be final and binding on
all persons having or claiming any interest in the Plan or in any Option.

 

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1.6                                 Restrictions.

 

(a)                                  No Option shall be granted at any time to any Insider if such Option,
together with all of the Corporation’s previously established or proposed Share
Compensation Arrangements, including the Plan, could result, at any time, in:

 

(i)                                     the number of Shares issued to Insiders pursuant to the Plan, together
with all of such other Share Compensation Arrangements, within any one (1) year
period exceeding ten percent (10%) of the Outstanding Issue; or

 

(ii)                                  the number of Shares issuable to Insiders at any time pursuant to the
Plan and all such other Share Compensation Arrangements exceeding ten percent
(10%) of the Outstanding Issue.

 

(b)                                 No fractional Shares may be purchased or issued under the Plan.

 

1.7                                 Pricing
of Optioned Shares.  The purchase price of Shares subject to
Options granted pursuant to the Plan shall be determined by the Plan
Administrator on the Date of Grant, as follows:

 

(a)                                  the purchase price of Shares subject to an Option granted under the Plan
shall, subject to any other requirement of the TSX and any other stock exchange
or market on which the Shares are then listed or admitted, be equal to at least
the volume weighted average trading price for a Share (calculated by dividing
the total value of Shares traded by the total volume of Shares traded for the
relevant period) as quoted on such exchange or market (or, if such Shares are
listed on more than one exchange or market, the exchange or market where the
majority of the trading volume and value of the Shares occurs) for the five (5) market
trading days immediately prior to the Date of Grant; and

 

(b)                                 notwithstanding sub-section (a) above, the purchase price of Shares
subject to an Incentive Stock Option granted under the Plan to a Ten Percent
Shareholder Participant shall be not less than 110% of the fair market value of
the Shares on the Date of Grant as determined in good faith by the Board at the
Date of Grant.

 

1.8                                 Vesting.  Unless
otherwise approved by the Board, and subject to any earlier termination of the
Options as provided in the Plan, all Options granted under the Plan shall vest,
as to twenty-five percent (25%) of the Optioned Shares, on the one-year anniversary
of the Date of Grant, and thereafter, 1/36th of the remaining Optioned Shares
shall vest at the end of each month, such that all Optioned Shares subject to
issuance pursuant to the Option shall be vested on that date which is four (4) years
after the Date of Grant.

 

1.9                                 Adjustments.  Subject to Section 1.4,
the Plan Administrator may adjust the number and kind of Shares available for
grants of Options, and the number and kind of Shares subject to outstanding
Options and the exercise price of Options granted hereunder, to effect a change
in capitalization of the Corporation, such as a stock dividend, stock split,
reverse stock split, share combination, exchange of shares, merger,
consolidation, reorganization, liquidation, or the like, of or by the Corporation.

 

1.10                           Changes
in Service.  Notwithstanding any other term or provision
of this Plan, unless the Plan Administrator, in its discretion, otherwise
determines, at any time and from time to time, Options are not affected by a
change of employment or office or consulting arrangement within or among the
Corporation or a Related Entity for so long as the Participant continues to be
a Consultant, Officer, Director or Employee of the Corporation or a Related
Entity.

 

1.11                           Lock-up.  If requested
in writing by the Corporation or any underwriter of the securities of the
Corporation, each Participant shall agree not to sell or otherwise transfer or
dispose of the Shares held by the Participant (including any Shares issued as
Restricted Stock) for a period not to exceed 180 days 

 

6

 

following the effective date of a registration statement or receipt date
of a (final) prospectus of the Corporation and, at the Corporation or such
underwriter’s request, shall sign a lock-up agreement to such effect.

 

ARTICLE TWO:

STOCK OPTION TERMS

 

2.1                                 Stock
Option Program Restrictions.  No Option
shall extend for a period of more than seven (7) years from the Date of
Grant, provided that Options granted prior to June 15, 2010 shall expire,
subject to accelerated terms as provided for in this Plan, in accordance with
the terms of such Option and the applicable Option Agreement as approved by the
Board.  No Incentive Stock Option may be
granted after ten (10) years from the Shareholder Approval Date.  Unless otherwise approved by the Board, the
term and expiry date of any Option granted after the date of this Plan shall be
five (5) years from Date of Grant of such Option.

 

2.2                                 Participants.

 

(a)                                  Subject to clause (b) and (c) below, the Plan Administrator
may, from time to time, select particular Consultants, Officers, Directors and
Employees to whom Options are to be granted or issued, and upon the grant or
issuance of such Options, the selected individuals shall become Participants under
the Plan.

 

(b)                                 Grants of Options to Non-Executive Directors in their capacity as such
shall be limited for each Non-Executive Director to a grant in each fiscal year
of the Corporation of Options with an award value, together with any other
Equity Award in that fiscal year, not exceeding Cdn.$100,000, calculated using
the Black-Scholes methodology or, in the discretion of the Committee, such
other methodology as may be prescribed under generally accepted accounting
principles, at the Date of Grant.

 

(c)                                  In addition to the limit set out in Section 2.2(b) above, for
each financial year of the Corporation, the maximum number of common shares
issuable pursuant to Options granted to a Director by virtue of his or her
service as a Director in that financial year, is that number of common shares
equal to 0.05% of the Outstanding Issue as at the last day of such financial
year.

 

2.3                                 Grant of Options.  Options may be
granted by the Corporation pursuant to the recommendations of the Plan
Administrator.  All grants of Options
shall be approved by the Board. Options granted hereunder shall be evidenced by
a written stock option agreement (the “Option Agreement”)
(which may be in the form of the confirmation letter annexed hereto as Schedule
A) executed by the Corporation and the Participant, containing such terms and
provisions as are recommended and approved from time to time by the Plan
Administrator, but subject to and not more favourable than the terms of the
Plan.  The Plan Administrator may from
time to time require additional terms which the Plan Administrator deems
necessary or advisable.  The Corporation
shall execute Option Agreements upon instruction from the Plan Administrator.

 

2.4                                 Incentive Stock Options.  The maximum
number of Shares subject to Options that may be characterized as Incentive
Stock Options shall be  2,071,916  Shares. Incentive Stock Options may only be granted to
Employees who are resident in the United States.  To the extent that Options designated as
Incentive Stock Options become exercisable by a Participant for the first time
during any calendar year for Shares having a fair market value greater than
US$100,000, the portion of such Options which exceeds such amount shall not be
treated as Incentive Stock Options but instead shall be treated as
Non-Statutory Stock Options.  For the
purposes of this Section 2.4, Options designated as Incentive Stock
Options shall be taken into account in the order in which they were granted,
and the fair market value of Shares shall be determined as of the Date of Grant
of the Option with respect to such Shares. 
If the

 

7

 

Code is amended to provide for a different limitation than that set
forth in this Section 2.4, such different limitation shall be deemed
incorporated herein effective as of the date and with respect to such Options
as may be required or permitted by such amendment to the Code.  If an Option is treated as a Non-Statutory
Option in part by reason of the limitation set forth in this Section 2.4,
the Participant may designate which portion of such Option the Participant is
exercising at any given time.  In the
absence of such designation, the Participant shall be deemed to have exercised
the Incentive Stock Option portion of the Option first.  The Corporation shall have no liability to a
Participant, or any other party, if any Option (or any part thereof) intended
to be an Incentive Stock Option is not an Incentive Stock Option.

 

2.5                                 Restrictions.  The Plan
Administrator may at the time of granting an Option or at any subsequent time
impose such restrictions, if any, on issuance, voluntary disposition and release
from escrow of any Options including, without limitation, permitting exercise
of Options only in instalments over a period of years.

 

2.6                                 Exercise and Payment.  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.  Full payment for Shares purchased upon the exercise
of an Option shall be delivered to the Corporation either by: (i) cash or
by certified cheque or money order, or (ii) subject to applicable
securities laws, the rules of the TSX or any stock exchange or market on
which the Shares are then listed or admitted to trading, and any other
requirements of the Plan Administrator, by the actual delivery or deemed
delivery or assignment to the Corporation of Shares having a fair market value
(as determined by the Plan Administrator) equal to the purchase price, or (iii) by
such other consideration and method of payment approved by the Plan
Administrator, or (iv) by any combination of the foregoing. No Shares
shall be issued until full payment has been made and a Participant shall have
none of the rights of a shareholder of the Corporation in respect of the Shares
subject to an Option until such Shares have been taken up, paid for in full as
provided above and issued to the Participant and the Participant has executed
such other documents as may be required under the Plan and the Option Agreement
governing the granted Option.

 

2.7                                 Transferability of Options.  An Incentive
Stock Option shall not be assignable or transferable by any Participant and,
subject to Section 2.8(a) hereof, may be exercised during the life of
the Participant only by the Participant. 
An Option other than an Incentive Stock Option is assignable or
transferable only: (a) by will or by the laws of descent and distribution
or otherwise for estate settlement purposes; or (b) with the prior written
consent of the Plan Administrator and subject to such conditions as the Plan
Administrator may designate, to a registered retirement savings plan (RRSP),
registered retirement income fund (RRIF) or tax-free savings account (TFSA), or
similar plan, fund or account that is (i) established by the individual,
or (ii) under which the individual is a beneficiary.  The obligations of each Participant pursuant
to the Plan and any Option shall be binding on his or her heirs, executors,
administrators, successors and permitted assigns.

 

2.8                                 Rights
in Event of Termination.

 

(a)                                  Death.  If a
Participant who is a natural person dies while a Consultant, Officer, Director
or Employee, then any Options held by the Participant that are exerciseable on
the date of death shall continue to be exerciseable by the executor or the
administrator of the Participant’s estate until the earlier of:  (A) the date which is one hundred and
twenty (120) days after the date of the Participant’s death; and (B) the
date on which the particular Option otherwise expires.  Any Options held by the Participant that were
not exerciseable at the date of the Participant’s death shall immediately
expire and be cancelled on such date.

 

(b)                                 Without
Cause Termination/Voluntary Resignation — Officers and Employees.  Where, in the
case of a Participant who is an Officer (including a Director who is also an
Officer) or an 

 

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Employee,
the Participant’s employment or term of office terminates by reason of:  (i) termination by the Corporation or a
Related Entity without cause (whether such termination occurs with or without
any or adequate reasonable notice, or with or without any or adequate
compensation in lieu of such reasonable notice), or (ii) voluntary resignation
by the Participant, then any Options held by the Participant that are
exercisable at the Service Termination Date (as defined in Section 1.1(gg),
(ii) or (iii), respectively) shall continue to be exerciseable by the
Participant until the earlier of:  (A) the
date which is thirty (30) days after such Service Termination Date; and (B) the
date on which the particular Option otherwise expires.  Any Options held by the Participant that are
not exercisable at such Service Termination Date shall immediately expire and
be cancelled on such Service Termination Date.

 

(c)                                  Termination
Other than by Reason of Breach of Fiduciary Duty/Termination by Voluntary
Resignation — Directors.  Where, in the case of a Participant that is a
Director (other than a Director who is also an Officer), the Director’s term of
office terminates by reason of:  (i) termination
by the Corporation or a Related Entity other than for breach of fiduciary duty;
or (ii) voluntary resignation by the Participant, then any Options held by
the Participant that are exercisable at the Service Termination Date (as
defined in Section 1.1(gg), (iii) or (iv), respectively) continue to
be exercisable by the Participant until the earlier of:  (A) the date which is thirty (30) days
after such Service Termination Date; and (B) the date on which the
particular Option otherwise expires.  Any
Options held by the Participant that are not exercisable at such Service
Termination Date shall immediately expire and be cancelled on such Service Termination
Date.

 

(d)                                 Termination
by Reason of Breach of Fiduciary Duty/For Cause Termination.  Where a
Participant’s service to the Corporation or a Related Entity as an Officer,
Director or Employee is terminated by the Corporation or a Related Entity for
cause or for breach of fiduciary duty, then any Options held by the
Participant, whether or not exercisable on the date of such termination,
immediately expire and are cancelled on such date at a time determined by the
Plan Administrator, in its sole discretion.

 

(e)                                  Termination
of Consulting Arrangements.  Where, in the case of a Participant who is a
Consultant:

 

(i)                                     the Participant’s consulting agreement or arrangement terminates by
reason of:  (A) termination by the
Corporation or a Related Entity for any reason whatsoever other than for breach
of the consulting agreement or arrangement (whether or not such termination is
effected in compliance with any termination provisions contained in the
Participant’s consulting agreement or arrangement), or (B) voluntary
termination by the Participant, then any Options held by the Participant that
are exercisable at the Service Termination Date (as defined in Section 1.1(gg)(v)),
continue to be exercisable by the Participant until the earlier of:  (A) the date that is thirty (30) days
from such Service Termination Date; and (B) the expiry date of the
particular Option.  Any Options held by
the Participant that are not exercisable at such Service Termination Date shall
immediately expire and be cancelled on such date; and

 

(ii)                                  the Participant’s consulting agreement or arrangement is terminated by
the Corporation or a Related Entity for breach of the consulting agreement or
arrangement then any Options held by the Participant, whether or not such
Options are exercisable at such Service Termination Date, immediately expire
and are cancelled on such Service Termination Date at a time determined by the
Plan Administrator, in its discretion.

 

(f)                                    Other Termination of Service.  If the
Participant’s service as a Consultant, Officer, Director or Employee terminates
for any reason not referred to above (including retirement or disability), 

 

9

 

then
any Options held by the Participant that are exercisable at the Service
Termination Date (as defined in Section 1.1(gg)(vi)) continue to be
exerciseable by the Participant until the earlier of:  (A) the date which is thirty (30) days
after such Service Termination Date; and (B) the date on which the
particular Option otherwise expires.  Any
Options held by the Participant that are not exercisable at such Service
Termination Date shall immediately expire and be cancelled on such Service
Termination Date.

 

2.9                                 Black
Out Periods.  Notwithstanding the foregoing, except in the
case of Incentive Stock Options, if an Option expires, terminates or is
cancelled (other than an expiry, termination or cancellation pursuant to Section 2.8(d) or
2.8(e) above) within or immediately after a Black Out Period, the
Participant may elect for the term of such Option to be extended to the date
which is then (10) business days after the last day of the Black Out
Period; provided, that, the expiration date as extended by this sub-section 2.9
will not in any event be beyond the later of: (i) December 31 of the
calendar year in which the Option was otherwise due to expire; and (ii) the
15th day of the third month following the month in which the Option was
otherwise due to expire.

 

2.10                           Liquidation
or Dissolution.  In the event of the proposed dissolution,
liquidation or winding-up of the Corporation, to the extent that an Option has
not been previously exercised, it will terminate immediately prior to the
consummation of such proposed action.

 

ARTICLE THREE:

MISCELLANEOUS

 

3.1                                 Merger, Amalgamations, Sale
of Assets, Winding-Up, etc.  In the event of a Corporate
Event, the Board in its sole discretion (but subject to obtaining the prior
approval of the TSX if required by the rules, regulations and policies of the
TSX) may, without any action or consent of the Participants, provide for: (a) the
continuation or assumption of outstanding Options by or to the Acquirer; (b) the
substitution of Options for options and/or shares of restricted stock and/or
other securities of the Acquirer; (c) the substitution of Options with a
cash incentive program of the Acquirer; (d) the acceleration of the
vesting of Options to a date prior to or on the date of the Corporate Event,
and the expiration of outstanding Options to the extent not timely exercised by
the date of the Corporate Event or such other date as may be designated by the
Board; (e) the cancellation of all or any portion of the outstanding
Options by a cash payment and/or other consideration receivable by the holders
of Shares of the Corporation as a result of the Corporate Event equal to the
excess, if any, of the fair market value (as determined by the Board), on the
date of the Corporate Event, over the exercise price of the Shares subject to
the outstanding Options or portion thereof being cancelled (provided, that, for
greater certainty, if the purchase price of the Options exceeds such fair
market value, the Board shall have the ability to cancel such Options without
any payment of consideration to the Participant); or (f) such other
actions or combinations of the foregoing actions as it deems fair and
reasonable in the circumstances.  Upon
the occurrence of a Corporate Event, to the extent that an Acquirer has by
appropriate action assumed the Corporation’s obligations under the Plan, the
vesting and other rights of the Corporation under each outstanding Option and
any related agreement shall inure to the benefit of the Acquirer and shall
apply to the cash, securities or other property into which the Shares were
converted or exchanged for pursuant to such Corporate Event in the same manner
and to the same extent as they applied to the Shares subject to the Option.

 

3.2                                 Withholding
Taxes.  The
Corporation’s obligation to deliver Shares issuable on the exercise of an
Option shall be subject to the Participant’s satisfaction of all applicable
income, employment and non-resident withholding tax obligations.  Without limiting the generality of the
foregoing, if the Corporation or any of its Related Entities determines in its
sole discretion that under the requirements of applicable taxation laws or
regulations of any governmental authority whatsoever it is obliged to withhold
for remittance to a taxing authority any amount upon exercise of an Option, the
Corporation or any of its Related Entities may take any steps it considers
necessary or appropriate in the circumstances 

 

10

 

to withhold in connection with any Option or other benefit under the
Plan including, without limiting the generality of the foregoing:

 

(a)                                  requiring the Participant exercising the Option to pay the Corporation
or any of its Related Entities, in addition to any in the same manner as the
exercise price for the Option Shares, such amount as the Corporation or its
Related Entity is obliged to remit to such taxing authority in respect of the
exercise of the Option, with any such additional payment, in any event, being
due no later than the date as of which any amount with respect to the Option
exercised first becomes included in the gross income of the Participant for tax
purposes;

 

(b)                                 issuing the Option Shares to an agent on behalf of the Participant and
directing the agent to sell a sufficient number of the Option Shares on behalf
of the Participant to satisfy the amount of any such withholding obligation,
with the agent paying the proceeds of any such sale to the Corporation or any
of its Related Entities for this purpose; or

 

(c)                                  to the extent permitted by law, deducting the amount of any such
withholding obligation from any payment of any kind otherwise due to the
Participant.

 

3.3                                 Amendment or Discontinuation.  Subject to Section 1.5
above, the Plan may be amended, altered or discontinued by the Board at any
time, subject to obtaining: (i) any necessary approval of any applicable
regulatory authority including, without limitation, the TSX if the Shares are
listed on the TSX or any other stock exchange or market on which the Shares are
then listed or admitted to trading; and (ii) if required by the rules of
the TSX if the Shares are listed on the TSX, the approval of the shareholders
of the Company in accordance with the rules, regulations and policies of the
TSX at a duly constituted meeting of shareholders, or such other shareholder
approval as may be required by the rules of any other stock exchange or
market on which the Shares are then listed or admitted to trading (“Shareholder Approval”).  Notwithstanding the foregoing, the following
amendments to the Plan may be made by the Board without Shareholder Approval:

 

(a)                                  amendments of a technical, clerical or “housekeeping” nature, or to
clarify any provision of the Plan, including without limiting the generality of
the foregoing, any amendment for the purpose of curing any ambiguity, error or
omission in the Plan or to correct or supplement any provision of the Plan that
is inconsistent with any other provision of the Plan;

 

(b)                                 suspension or termination of the Plan;

 

(c)                                  amendments to respond to changes in legislation, regulations,
instruments (including NI 45-106), stock exchange rules (including the
rules, regulations and policies of the TSX or NASDAQ) or accounting or auditing
requirements;

 

(d)                                 amendments respecting administration of the Plan;

 

(e)                                  any amendment to the definition of “Consultant”, “Officer”, “Director”
or “Employee” or otherwise relating to the eligibility of any service provider
of the Corporation or a Related Entity to receive a Option;

 

(f)                                    changes to the vesting provisions for any outstanding Option, except
with respect to Options held by any Insider;

 

(g)                                 amendments to termination provisions of the Plan or any outstanding
Option, provided no such amendment may result in an extension of any
outstanding Option held by an insider beyond its original expiry date;

 

11

 

(h)                                 adjustments to reflect stock dividends, stock splits, reverse stock
splits, share combinations or other alterations of the capital stock of the
Corporation;

 

(i)                                     amendments to permit Options granted under the Plan to be transferable
or assignable for estate settlement purposes;

 

(j)                                     amendments necessary to qualify any or all Incentive Stock Options for
such favourable federal income tax treatment (including deferral of taxation
upon exercise) as may be afforded incentive stock options under Section 422
of the Code; and

 

(k)                                  any other amendment, whether fundamental or otherwise, not requiring
shareholder approval under applicable law (including, without limitation, the
rules, regulations and policies of the TSX).

 

The approval of the shareholders of the Company
at a duly constituted meeting of shareholders will be required for the
following types of amendments:

 

(i)                                     amendments to the number of Shares issuable under the Plan, including an
increase to a maximum percentage of Shares or a change from a maximum
percentage of Shares to a fixed maximum number;

 

(ii)                                  amendments to the limitations on grants of Options to Non-Executive
Directors in Section 2.2(b) of the Plan;

 

(iii)                               amendments (a) reducing the exercise price or purchase price of an
Option (which for such purpose shall include a cancellation of outstanding
Options and contemporaneous re-grant of Options having a lower exercise price
or purchase price), or (b) extending the term of an Option;

 

(iv)                              amendments to permit Options to be transferable or assignable other than
for estate settlement purposes;

 

(v)                                 amendments to this Section 3.3; and

 

(vi)                              amendments required to be approved by shareholders under applicable law
(including, without limitation, the rules, regulations and policies of the
TSX).

 

In the event of any conflict between
subsections (a) to (k) and subsections (i) to (vi), above, the
latter shall prevail to the extent of any conflict.

 

3.4                                 Employment.  The Plan and
any Option granted under the Plan do not confer upon the Participant any right
to be employed or engaged or to continued employment or engagement by the
Corporation or any Related Entity.

 

3.5                                 No Right to be Granted an
Option.  Nothing in the Plan shall be
construed so as to give any Consultant, Director, Officer or Employee any right
to receive an Option.

 

3.6                                 No Obligation to Exercise
Option.  The granting of an Option
pursuant to the Plan shall not impose any obligation upon the Participant to
exercise such Option.

 

3.7                                 Regulatory Requirements.  While the Plan
is intended to satisfy SEC Rule 701 and NI 45-106, Options may be made
under the Plan in reliance upon other securities law exemptions, as applicable,
and to the extent another exemption is relied upon, the terms of the Plan which
are required only 

 

12

 

because of SEC Rule 701 or NI 45-106, as applicable, need not
apply.  The Corporation’s obligation to
issue and deliver Shares pursuant to any Option is subject to the availability,
on terms and conditions reasonably satisfactory to the Corporation, of an
exemption from prospectus and registration requirements in respect of the
issuance, sale and delivery of such Shares under applicable securities and “blue
sky” laws.

 

3.8                                 Gender and Number.  Words
importing gender shall include the masculine, feminine and neuter genders.  Words importing the singular include the
plural and vice versa.

 

3.9                                 Governing Law.  The Plan shall be construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein, with regard to the conflict of laws principles of such
jurisdiction.

 

13

 

SCHEDULE A

TO THE STOCK OPTION PLAN

 

[LETTERHEAD OF DRAGONWAVE INC.]

 

PERSONAL AND CONFIDENTIAL

 

[Address
of Participant]

 

Dear [Name of
Participant];

 

I am pleased to advise that you have been
granted an option (the “Option”) to purchase Common Shares of DragonWave Inc. (“Dragonwave”)
under the Fifth Amended and Restated Key Employee Stock Option Plan (the “Plan”).  This letter sets forth the terms and
conditions of the Option, which are as follows:

 

	
  Number of Common Shares subject to the
  Option:

  	
   

  	
  [ ] (the “Optioned Shares”)

  
	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
  [ ]

  
	
   

  	
   

  	
   

  
	
  Vesting Start Date:

  	
   

  	
  [ ]

  
	
   

  	
   

  	
   

  
	
  Exercise price (per share):

  	
   

  	
  [ ]

  
	
   

  	
   

  	
   

  
	
  Date approved by the Board:

  	
   

  	
  [ ]

  
	
   

  	
   

  	
   

  
	
  Vesting:

  	
   

  	
  Twenty-five percent (25%) of the Optioned
  Shares shall vest on the one-year anniversary of the Vesting Start Date, and
  thereafter, 1/36th of the remaining Optioned Shares shall vest
  at the end each month, such that all Optioned Shares shall be vested on that
  date which is four (4) years after the Vesting Start Date.

  
	
   

  	
   

  	
   

  
	
  Exercise:

  	
   

  	
  The Option shall only be exercisable with
  respect to vested Optioned Shares.

  
	
   

  	
   

  	
   

  
	
  Expiry Date:

  	
   

  	
  [ ]

  
	
   

  	
   

  	
   

  
	
  Type of Option

  (U.S. Employees only):

  	
   

  	
  o Incentive Stock Option

  o Non-Statutory Stock Option

  

 

The Option shall be subject in all respects to
the terms and conditions of the Plan, a copy of which is attached, as the same
may be amended from time to time.  We
encourage you to review the Plan in detail.

 

As a condition to the grant of your Option, you
are required to indicate your agreement to comply with the terms and conditions
of the Plan by signing the acknowledgement at the foot of this letter.  Please return one original signed copy of
this letter to DragonWave, and retain a second copy, together with the Plan,
for your files.

 

14

 

The Option is intended to provide you with an
opportunity to share in the potential future growth of DragonWave.  It recognizes your value to DragonWave and
the significant impact that your ideas, enthusiasm and hard work will have in
making DragonWave a success.

 

It is through working together as a team that
we can make DragonWave a leader in our field.

 

Yours very truly,

 

 

	
   

  	
  DRAGONWAVE INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

I understand and agree that my Option is
subject in all respects to the terms and conditions of the Plan, as the same
may be amended from time to time. I have read, understood and agree to comply
with the Plan.

 

 

	
   

  	
   

  	
   

  
	
  [Name of Participant]

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  

 

15Unassociated Document

    Exhibit
10.1

     

    EMPLOYMENT
AGREEMENT

     

    

    This EMPLOYMENT AGREEMENT is made and
entered into as of the 11th day of
May, 2010 (the “Agreement”), by and
between CHINA GREEN AGRICULTURE, INC., a Nevada corporation (the “Company”), having its
principal place of business at 3rd Floor,
Borough A, Block A. No.181, South Taibai Road, Xi’an, Shaanxi Province, People’s
Republic of China 710065, and Ken Ren (the “Executive”), having
PRC National ID No. (or Passport No.) G41541364 and having an address at 8610 EP
True Pkwy, West Des Moines, IA 50266 (collectively the “Parties”).

    

    WITNESSETH:

     

    WHEREAS,
the Company is engaged in the business of research, development, production and
distribution of humic acid organic liquid compound fertilizer (the “Business”);
and

     

    WHEREAS,
Executive has represented that he has the experience, background and expertise
necessary to enable him to be the Company’s Chief Financial Officer;
and

     

    WHEREAS,
based on such representation, and the Company’s reasonable due diligence, the
Company wishes to employ Executive as its Chief Financial Officer, and Executive
wishes to be so employed, in each case, upon the terms hereinafter set
forth.

     

    NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
and agreements herein contained, and other good and valuable consideration, the
Parties agree as follows:

     

    1.      DEFINITIONS.  As
used herein, the following terms shall have the following meanings:

     

    1.1 “Affiliate” means any
Person controlling, controlled by or under common control with the
Company.

     

    1.2 “Board” means the
Board of Directors of the Company.

     

    1.3 “Common Stock” means
the Company’s $.001 par value per share common stock.

     

    1.4 “Cause” means (i)
conviction of any crime whether or not committed in the course of his employment
by the Company; (ii) Executive’s refusal to carry out instructions of the Chief
Executive Officer or the Board which are consistent with Executive’s role as
Chief Financial Officer; or (iii) the breach of any representation, warranty or
agreement between Executive and Company.

     

    1.5 “Date of Termination”
means (a) in the case of a termination for which a Notice of Termination (as
hereinafter defined in Section 5.3) is required, 30 days from the date of actual
receipt of such Notice of Termination or, if later, the date specified therein,
as the case may be, and (b) in all other cases, the actual date on which the
Executive’s employment terminates during the Term of Employment (as hereinafter
defined in Section 3) (it being understood that nothing contained in this
definition of “Date of Termination” shall affect any of the cure rights provided
to the Executive or the Company in this Agreement).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    1.6 “Disability” means
Executive’s inability to render, for a period of three consecutive months,
services hereunder due to his physical or mental incapacity.

     

    1.7 “Effective Date”
means  May 11, 2010.

     

    1.8 “Person(s)” means any
individual or entity of any kind or nature, including any other person as
defined in Section 3(a)(9) of the Securities Exchange Act of 1934, and as used
in Sections 13(d) and 14(d) thereof.

     

    1.9 “Prospective Customer”
shall mean any Person which has either (a) entered into a nondisclosure
agreement with the Company or any Company subsidiary or Affiliate or (b) has
within the preceding 12 months received a currently pending and not rejected
written proposal in reasonable detail from the Company or any of the Company’s
subsidiary or Affiliate.

     

    2.      EMPLOYMENT.

     

    2.1 Agreement to Employ.
Effective as of the Effective Date, the Company hereby agrees to employ
Executive, and Executive hereby agrees to serve, subject to the provisions of
this Agreement, as an officer and employee of the Company.

     

    2.2 Duties and Schedule.
Executive shall serve as the Company’s Chief Financial Officer and shall have
such responsibilities as designated by the Company’s Chief Executive Officer or
the Board that are not inconsistent with applicable laws, regulations and
rules.  Executive shall report directly to the Company’s Chief
Executive Officer or the Board, or the Audit Committee thereof, as circumstances
may require.

     

    3.      TERM OF EMPLOYMENT.
Unless Executive’s employment shall sooner terminate pursuant to Section 5, the
Company shall employ Executive for a term commencing on the Effective Date and
ending on the first anniversary thereof (the “Term”).  The
term shall automatically renew for an additional year unless either Party
provides notice to the other that the Term shall not continue within 60 days
prior to the end of the prior Term.  The period during which Executive
is employed pursuant to this Agreement shall be referred to as the “Term” or the “Term of
Employment”.

     

    4.      COMPENSATION.

     

    4.1 Salary. Executive’s
salary during the Term shall be $120,000 per year (the “Salary”), payable in
twice-monthly payments and in US Dollars. All applicable withholding taxes shall
be deducted from such payments.  The Board will review Executive’s
Salary at least once per year and may, in its discretion, increase or decrease
the Salary in accordance with the Company’s compensation policies. A
discretionary bonus, if any, may be paid each year as determined solely by the
Board.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    4.2 Vacation. Executive
shall be entitled to fifteen (15) days of paid vacation per year taken at such
times so as to not materially impede his duties hereunder. Executive shall be
entitled to a pro rata
number of days of paid vacation during the period beginning on the Effective
Date through the end of the first fiscal year.  Vacation days that are
not taken may not be carried over into future years.  Illness days
shall be consistent with the Company’s standard policies and applicable U.S.
law.  Executive should be entitled to standard U.S. federal government
holidays in addition to vacation or illness days.

     

    4.3 Business Expenses.
Executive shall be reimbursed by the Company for all ordinary and necessary
expenses incurred by Executive in the performance of his duties hereunder on
behalf of the Company, such expenses not to exceed $500 per month without the
prior written approval of the Company.

     

    4.4 Section 409A
Compliance.  The Executive and the Company intend that any
compensation under this Agreement shall be paid in compliance with Section 409A
of the Internal Revenue Code such that there are no adverse tax consequences,
interest, or penalties as a result of the payments.  Notwithstanding any
other provisions of this Agreement to the contrary, any payment or benefits
otherwise due to the Executive upon the Executive’s termination from employment
with the Company shall not be made until and unless such termination from
employment constitutes a “Separation from Service”, as such term is defined
under Section 409A of the Internal Revenue Code.  This provisions shall
have no effect on payments or benefits otherwise due or payable to the Executive
or on the Executive’s behalf, which are not on account of the Executive’s
termination from employment with the Company, including as a result of the
Executive’s death.  Furthermore, if the Company reasonably determines that
the Executive is a “Specified Employee” as defined by Section 409A, upon
termination of Executive’s employment for any reason other than death (whether
by resignation or otherwise), no amount may be paid to the Executive earlier
than six months after the date of termination of Executive’s employment if such
payment would violate Section 409A and the regulations issued thereunder, and
payment shall be made, or commence to be made, as the case may be, on the date
that is six months and one day after the termination of Executive’s
employment.  Each payment made under this Agreement shall be designated as
a “separate payment” within the meaning of Section 409A. 

     

    5.      TERMINATION.

     

    5.1 Termination Due to Death or
Disability.

     

    5.1.1
Death. This
Agreement shall terminate immediately upon the death of
Executive.  Upon Executive’s death, Executive’s estate or Executive’s
legal representative, as the case may be, shall be entitled to Executive’s
accrued and unpaid Salary and vacation as of the date of Executive’s death, plus
all other compensation and benefits that were vested through the date of
Executive’s death.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    5.1.2
Disability. In
the event of Executive’s Disability, this Agreement shall terminate and
Executive shall be entitled to (a) accrued and unpaid vacation through the first
date that a Disability is determined; and (b) all other compensation and
benefits that were vested through the first date that a Disability has been
determined.

     

    5.2  Termination
.  Both the Company and the Executive may terminate the
employment hereunder by delivery of written notice to the other party at least
thirty (30) days prior to termination date or with a shorter notice period if
agreed upon by the Parties. At Company’s sole discretion, it may substitute
thirty (30) days salary in lieu of such written notice. However, that in the
event of a breach of this Agreement by the Executive or an event which would
constitute “Cause”, the Company may immediately terminate this Agreement upon
written notice with no waiting period or substituting salary.  Upon
the effective date of termination under this Section 5.2, Executive shall be
entitled to (a) accrued and unpaid vacation through such effective date; and (b)
all other compensation and benefits that were vested through such effective
date.

     

    5.3  Notice of
Termination.  Any termination of the Employment by the Company
or the Executive shall be communicated by a notice in accordance with Section
8.4 of this Agreement (the “Notice of
Termination”).

     

    5.4  Payment. The
Executive shall not be entitled to severance payments upon any termination
provided in Section 5 herein. Except as otherwise provided in this Agreement,
any payments to which the Executive shall be entitled under this Section 5,
including, without limitation, any economic equivalent of any benefit, shall be
made as promptly as possible following the Date of Termination, but in no event
more than 30 days after the Date of Termination.  If the amount of any
payment due to the Executive cannot be finally determined within thirty (30)
days after the Date of Termination, such amount shall be reasonably estimated on
a good faith basis by the Company and the estimated amount shall be paid no
later than thirty (30) days after such Date of Termination.  As soon
as practicable thereafter, the final determination of the amount due shall be
made and any adjustment requiring a payment to Executive shall be made as
promptly as practicable.  The payment of any amounts under this
Section 5 shall not affect Executive’s rights to receive any workers’
compensation benefits.

     

    6.      EXECUTIVE’S
REPRESENTATION. The Executive represents and warrants to the Company
that: (a) he is subject to no contractual, fiduciary or other obligation which
may affect the performance of his duties under this Agreement; (b) he has
terminated, in accordance with their terms, any contractual obligation which may
affect his performance under this Agreement; and (c) his employment with the
Company will not require him to use or disclose proprietary or confidential
information of any other person or entity.

     

    7.      NON-COMPETITION:
NON-DISCLOSURE; INVENTIONS.

     

    7.1 Trade
Secrets. Executive acknowledges that his employment position with
the Company is one of trust and confidence. Executive further understands and
acknowledges that, during the course of Executive's employment with the Company,
Executive will be entrusted with access to certain confidential information,
specialized knowledge and trade secrets which belong to the Company, or its
subsidiaries, including, but not limited to, their methods of operation and
developing customer base, its manner of cultivating customer relations, its
practices and preferences, current and future market strategies, formulas,
patterns, patents, devices, secret inventions, processes, compilations of
information, records, and customer lists, all of which are regularly used in the
operation of their business and which Executive acknowledges have been acquired,
learned and developed by them only through the expenditure of substantial sums
of money, time and effort, which are not readily ascertainable, and which are
discoverable only with substantial effort, and which thus are the confidential
and the exclusive Property of the Company and its subsidiaries (hereinafter
“Trade Secrets”). Executive covenants and agrees to use his best efforts and
utmost diligence to protect those Trade Secrets from disclosure to third
parties.  Executive further acknowledges that, absent the protections
afforded the Company and its subsidiaries in Section 7, Executive would not be
entrusted with any of such Trade Secrets. Accordingly, Executive agrees and
covenants (which agreement and covenant shall survive the termination of this
Agreement regardless of the reason) as follows:

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    7.1.1    
Executive will at no time take any action or make any statement that will
disparage or discredit the Company, any of its subsidiaries or their products or
services;

     

    7.1.2    
During the period of Executive's employment with the Company and for sixty (60)
months immediately following the termination of such employment, Executive will
not disclose or reveal to any person, firm or corporation other than in
connection with the business of the Company and its subsidiaries or as may be
required by law, any Trade Secret used or useable by the Company or any of its
subsidiaries, divisions or Affiliates (collectively the “Companies”) in
connection with their respective businesses, known to Executive as a result of
his employment by the Company, or other relationship with the Companies, and
which is not otherwise publicly available. Executive further agrees that during
the term of this Agreement and at all times thereafter, he will keep
confidential and not disclose or reveal to any person, firm or corporation other
than in connection with the business of the Companies or as may be required by
applicable law, any information received by him during the course of his
employment with regard to the financial, business, or other affairs of the
Companies, their respective officers, directors, customers or suppliers which is
not publicly available;

     

    7.1.3    
Upon the termination of Executive's employment with the Company, Executive will
return to the Company all documents, customer lists, customer information,
product samples, presentation materials, drawing specifications, equipment and
other materials relating to the business of any of the Companies, which
Executive hereby acknowledges are the sole and exclusive property of the
Companies or any one of them.  Nothing in this Agreement shall
prohibit Executive from retaining, at all times any document relating to his
personal entitlements and obligations, his rolodex, his personal correspondence
files; and any additional personal property;

     

    7.1.4    
During the term of the Agreement and, for a period of three (3) months
immediately following the termination of the Executive's employment with the
Company, Executive will not: compete, or participate as a shareholder, director,
officer, partner (limited or general), trustee, holder of a beneficial interest,
employee, agent of or representative in any business competing directly with the
Companies without the prior written consent of the Company, which may be
withheld in the Company’s sole discretion; provided, however, that nothing
contained herein shall be construed to limit or prevent the purchase or
beneficial ownership by Executive of less than five percent of any security
registered under Section 12 or 15 of the Securities Exchange Act of
1934;

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    7.1.5    
During the term of the Agreement and, for a period of eighteen (18) months
immediately following the termination of the Executive's employment with the
Company, Executive will not:

     

    7.1.5.1    
solicit or accept competing business from any customer of any of the Companies
or any person or entity known by Executive to be or have been, during the
preceding 18 months, a customer or Prospective Customer of any of the Companies
without the prior written consent of the Company;

     

    7.1.5.2    
encourage, request or advise any such customer or Prospective Customer of any of
the Companies to withdraw or cancel any of their business from or with any of
the Companies; or

     

    7.1.6    
Executive will not during the period of his employment with the Company and,
subject to the provisions hereof for a period of eighteen (18) months
immediately following the termination of Executive's employment with the
Company,

     

    7.1.6.1    
conspire with any person employed by any of the Companies with respect to any of
the matters covered by this Section 7;

     

    7.1.6.2    
encourage, induce or solicit any person employed by any of the Companies to
facilitate Executive's violation of the covenants contained in this Section
7;

     

    7.1.6.3    
assist any entity to solicit the employment of any employee of any of the
Companies; or

     

    7.1.6.4    
employ or hire any employee of any of the Companies, or solicit or induce any
such person to join the Executive as a partner, investor, coventurer, or
otherwise encourage or induce them to terminate their employment with any of the
Companies.

     

    7.2    
Executive expressly acknowledges that all of the provisions of this Section 7 of
this Agreement have been bargained for and Executive's agreement hereto is an
integral part of the consideration to be rendered by the Executive which
justifies the rate and extent of the compensation provided for
hereunder.

     

    7.3    
Executive acknowledges and agrees that a violation of any one of the covenants
contained in this Section 7 shall cause irreparable injury to the Company, that
the remedy at law for such a violation would be inadequate and that the Company
shall thus be entitled to temporary injunctive relief to enforce that covenant
until such time that a court of competent jurisdiction either (a) grants or
denies permanent injunctive relief or (b) awards other equitable remedy(s) as it
sees fit.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    7.4 Successors.

     

    7.4.1
Executive. This
Agreement is personal to Executive and, without the prior express written
consent of the Company, shall not be assignable by Executive, except that
Executive’s rights to receive any compensation or benefits under this Agreement
may be transferred or disposed of pursuant to testamentary disposition,
intestate succession or a qualified domestic relations order or in connection
with a Disability.  This Agreement shall inure to the benefit of and
be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal
representatives.

     

    7.4.2
The Company.
This Agreement shall inure to the benefit of and be binding upon the Company and
its successors and assigns.

     

    7.5 Inventions and
Patents. The Company shall be entitled to the sole benefit and exclusive
ownership of any inventions or improvements in products, processes, or other
things that may be made or discovered by Executive while he is in the service of
the Company, and all patents for the same. During the Term, Executive shall do
all acts necessary or required by the Company to give effect to this section
and, following the Term, Executive shall do all acts reasonably necessary or
required by the Company to give effect to this section.  In all cases,
the Company shall pay all costs and fees associated with such acts by
Executive.

     

    8.      MISCELLANEOUS.

     

    8.1 Indemnification. The
Company and each of its subsidiaries shall, to the maximum extent provided under
applicable law, indemnify and hold Executive harmless from and against any
expenses, including reasonable attorney’s fees, judgments, fines, settlements
and other legally permissible amounts (“Losses”), incurred in
connection with any proceeding arising out of, or related to, Executive’s
employment by the Company, other than any such Losses incurred as a result of
Executive’s negligence or willful misconduct.  The Company shall, or
shall cause a subsidiary thereof to, advance to Executive any expenses,
including attorney’s fees and costs of settlement, incurred in defending any
such proceeding to the maximum extent permitted by applicable
law.  Such costs and expenses incurred by Executive in defense of any
such proceeding shall be paid by the Company or applicable subsidiary in advance
of the final disposition of such proceeding promptly upon receipt by the Company
of (a) written request for payment; (b) appropriate documentation evidencing the
incurrence, amount and nature of the costs and expenses for which payment is
being sought; and (c) an undertaking adequate under applicable law made by or on
behalf of Executive to repay the amounts so advanced if it shall ultimately be
determined pursuant to any non-appealable judgment or settlement that Executive
is not entitled to be indemnified by the Company or any subsidiary
thereof.  the Company will provide Executive with coverage under all
director’s and officer’s liability insurance policies which is has in effect
during the Term, with no deductible to Executive.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    8.2 Applicable Law.
Except as may be otherwise provided herein, this Agreement shall be governed by
and construed in accordance with the laws of the State of New York, applied
without reference to principles of conflict of laws.

     

    8.3 Amendments. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors or legal
representatives.

     

    8.4 Notices. All
notices and other communications hereunder shall be in writing and shall be
given by hand-delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:

     

    If to the Executive:

    

    Ken Ren

    8610 EP True Pkwy

                                    West
Des Moines, IA 50266

    Telephone:  530-220-3026

    E-mail: kencren@gmail.com

    

    If to the Company:

    

    3rd Floor, Borough A, Block A.
No.181

    South Taibai Road, Xi’an, Shaanxi
Province,

    People’s Republic of China
710065

    Attn:  Mr. Tao Li, Chief
Executive Officer

    Tel: (86-29) 8826-6368

    

    With a copy to (which shall not
constitute notice):

    

    Elizabeth F. Chen, Esq.

    Pryor Cashman LLP

    7 Times Square

    New York, New
York 10036

    Tel: 212-326-0199

    

    Or to
such other address as either party shall have furnished to the other in writing
in accordance herewith.  Notices and communications shall be effective
when actually received by the addressee.

    

    8.5 Withholding. The
Company may withhold from any amounts payable under the Agreement, such federal,
state and local income, unemployment, social security and similar employment
related taxes and similar employment related withholdings as shall be required
to be withheld pursuant to any applicable law or regulation.

     

    8.6 Severability. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
and any such provision which is not valid or enforceable in whole shall be
enforced to the maximum extent permitted by law.

     

    
      
        
        

      

      
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    8.7 Captions. The
captions of this Agreement are not part of the provisions and shall have no
force or effect.

     

    8.8 Entire
Agreement. This Agreement contains the entire agreement among the
parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the parties with respect thereto.

     

    8.9 Survivorship. The
respective rights and obligations of the parties hereunder shall survive any
termination of this Agreement or the Executive’s employment hereunder to the
extent necessary to the intended preservation of such rights and
obligations.

     

    8.10
Waiver. 
Either Party's failure to enforce any provision or provisions of this Agreement
shall not in any way be construed as a waiver of any such provision or
provisions, or prevent that party thereafter from enforcing each and every other
provision of this Agreement.

     

    8.11
Joint
Efforts/Counterparts. Preparation of this Agreement shall be deemed to be
the joint effort of the parties hereto and shall not be construed more severely
against any party.  This Agreement may be signed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

     

    8.12
Representation by
Counsel. Each Party hereby represents that it has had the opportunity to
be represented by legal counsel of its choice in connection with the negotiation
and execution of this Agreement.

     

    --
Signature page follows --

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above
written.

    

     

    
      
        	EMPLOYEE:	 	 	CHINA GREEN AGRICULTURE,
      INC.	 
	 	 	 	 	 
	 	 	 	 	 
	
                /s/
      Ken Ren

              	 	 	
                /s/
      Tao Li

              	 
	
                Ken
      Ren

              	 	 	
                Tao
      Li

              	 
	
                 

              	 	 	
                Chief
      Executive Officer

              	 

      

       

      
        
          
          

        

        
          10

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