Document:

EX-4.6

 

EXHIBIT 4.6

Metal Storm Ltd

James Michael O’Dwyer

Separation Agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

© Corrs Chambers
Westgarth

 

 

	 	 	 	 	 	 	 
	Contents	 	 
	 
	 	 	 	 	 	 
	1	 	Interpretation	 	1
	 
	 
	 	 	 	 	 	 
	 
	 	1.1	 	Definitions	 	1
	 
	 	1.2	 	Construction	 	3
	 
	 	1.3	 	Headings	 	4
	 
	 	 	 	 	 	 
	2	 	Termination	 	4
	 
	 
	 	 	 	 	 	 
	 
	 	2.1	 	Employment & Consultancy	 	4
	 
	 	2.2	 	Transfer of Assets	 	4
	 
	 	2.3	 	Resignation of Directorship	 	4
	 
	 	 	 	 	 	 
	3	 	Advisory and Consultancy Services	 	5
	 
	 
	 	 	 	 	 	 
	 
	 	3.1	 	O’Dwyer to provide certain advisory and consultancy services	 	5
	 
	 	3.2	 	Payment of Reasonable Expenses	 	5
	 
	 	 	 	 	 	 
	4	 	Release	 	5
	 
	 
	 	 	 	 	 	 
	 
	 	4.1	 	Release	 	5
	 
	 	4.2	 	This document a bar	 	5
	 
	 	 	 	 	 	 
	5	 	IP Rights	 	5
	 
	 
	 	 	 	 	 	 
	 
	 	5.1	 	Acknowledgement–existing rights	 	5
	 
	 	5.2	 	Assignment–existing rights	 	6
	 
	 	5.3	 	Acknowledgement–future rights	 	6
	 
	 	5.4	 	Assignment–future rights	 	6
	 
	 	5.5	 	Other entities	 	6
	 
	 	5.6	 	Further assurance and power of attorney	 	6
	 
	 	5.7	 	Warranties	 	6
	 
	 	 	 	 	 	 
	6	 	Confidentiality	 	7
	 
	 
	 	 	 	 	 	 
	 
	 	6.1	 	Acknowledgement	 	7
	 
	 	6.2	 	Confidentiality	 	7
	 
	 	 	 	 	 	 
	7	 	Restraint	 	7
	 
	 
	 	 	 	 	 	 
	 
	 	7.1	 	Restraint	 	7
	 
	 	7.2	 	Construction of restraint clause	 	8
	 
	 	7.3	 	Exception	 	8
	 
	 	7.4	 	No adverse public statements	 	8
	 
	 	 	 	 	 	 
	8	 	Acknowledgement	 	8
	 
	 
	 	 	 	 	 	 
	9	 	Availability of injunction proceedings	 	8
	 
	 
	 	 	 	 	 	 
	10	 	Consideration	 	9
	 
	 
	 	 	 	 	 	 
	11	 	Notices	 	9
	 
	 
	 	 	 	 	 	 
	 
	 	11.1	 	General	 	9
	 
	 	11.2	 	How to give a communication	 	9
	 
	 	11.3	 	Particulars for delivery of notices	 	9
	 
	 	11.4	 	Communications by post	 	9
	 
	 	11.5	 	Communications by fax	 	9

Page i

 

	 	 	 	 	 	 	 
	 
	 	11.6	 	After hours communications	 	10
	 
	 	11.7	 	Process service	 	10
	 
	 	 	 	 	 	 
	12	 	General	 	10
	 
	 
	 	 	 	 	 	 
	 
	 	12.1	 	GST	 	10
	 
	 	12.2	 	Legal costs	 	10
	 
	 	12.3	 	Amendment	 	10
	 
	 	12.4	 	Waiver and exercise of rights	 	10
	 
	 	12.5	 	Rights cumulative	 	11
	 
	 	12.6	 	Consents	 	11
	 
	 	12.7	 	Further steps	 	11
	 
	 	12.8	 	Governing law and jurisdiction	 	11
	 
	 	12.9	 	Assignment	 	11
	 
	 	12.10	 	Liability	 	11
	 
	 	12.11	 	Counterparts	 	11
	 
	 	12.12	 	Entire understanding	 	11
	 
	 	12.13	 	Relationship of parties	 	12
	 
	 	 	 	 	 	 
	Schedule 1 - ASSETS	 	13
	 

Page ii

 

	   	Date
	 
	   	Parties
	 
	   	Metal Storm Ltd ACN 064 270 006 of Level 34, Central Plaza One, 345 Queen Street,
Brisbane Qld 4000 (Metal Storm)
	 
	   	James Michael O’Dwyer of Unit 162, Admiralty Quays, 32 Macrossan Street, Brisbane Qld
4000 (O’Dwyer)
	 
	   	

Background
	 
	A   	O’Dwyer has been an employee of, and is a consultant to and
director of, Metal Storm.
	 
	B   	O’Dwyer and Metal Storm have agreed to end all of their
commercial relationships (except the shareholding allowed by
clause 6.3 and the advisory role allowed in clause 3.1) on the
Effective Date, and O’Dwyer has agreed to resign as a director of
Metal Storm on the Effective Date, on the terms of this document.

Agreed terms

	 
	1  	Interpretation
	 
	1.1  	Definitions
	 
	   	In this document:
	 
	   	Business Day means a day which is not a Saturday, Sunday or bank or public holiday in
Brisbane.
	 
	   	Confidential Information means all information (whether or not in a material form) that
is not public and that relates in any way to:

	 	(a)  	the business interests, methodology or affairs of Metal Storm or any of
its Related Bodies Corporate, or any person or entity with which it deals or is
concerned; or
	 
	 	(b)  	the Technical Field,

including (but not limited to) inventions, technical data, research and development
information, business records, information, notes, products, know how, trade secrets,
engineering or other data, designs, specifications, processes, formulae, manufacturing,
planning or marketing procedures,

 

 

techniques or information, accounting procedures or financial information, names and
details of consumers, customers, suppliers, agents, alliance partners and joint
venturers, and employee details.

Consultancy Contract means a contract between O’Dwyer (or an entity Controlled by
O’Dwyer) and Metal Storm (or any of its Related Bodies Corporate) under which O’Dwyer is
or was obliged to provide (or an entity was obliged to procure the provision by O’Dwyer
of) consultancy services to Metal Storm (or any of its Related Bodies Corporate), but for
the avoidance of doubt does not include the unpaid advisory and consulting services
referred to in clause 3.1.

Control has the meaning given in the Corporations Act 2001 (Cth).

Effective Date means 8 February 2005.

IP Rights means any and all industrial and intellectual property rights of any kind
including but not limited to:

	 	(a)  	patents, copyright, registered or unregistered trade marks, designs and
EL rights;
	 
	 	(b)  	any application or right to apply for registration of any of the rights
in paragraph (a);
	 
	 	(c)  	rights associated with confidential information and know-how; and
	 
	 	(d)  	rights associated with business reputation and goodwill.

Projectile includes a container loaded with any substance or material that may or may not
be explosive or kinetic.

Related Bodies Corporate has the meaning given in the Corporations Act 2001 (Cth).

Restrained Activity means:

	 	(a)  	seeking or attempting to seek the custom of any existing or potential
Metal Storm client, customer, supplier, subcontractor or collaborator for a purpose
in the Technical Field;
	 
	 	(b)  	soliciting, interfering with or endeavouring to entice away any director,
manager, officer, employee, servant of Metal Storm or its Related Bodies Corporate;
	 
	 	(c)  	providing or acquiring or offering to provide or acquire any product or
service in the Technical Field;
	 
	 	(d)  	carrying on any research and development activity in the Technical Field
(other than for the benefit of Metal Storm);
	 
	 	(e)  	carrying on any business or activity in the Technical Field which is
competitive with a business or activity which is, at the Effective Date or at any
time after the Effective Date, carried on by Metal Storm or any of its Related
Bodies Corporate; or
	 
	 	(f)  	exercising any influence with any past or present customer of, supplier
to, subcontractor of, or collaborator of, Metal Storm or its Related Bodies

Page 2

 

	 	   	Corporate which is in any way detrimental to the interests of Metal Storm or any
of its Related Bodies Corporate.

Restraint Area means each of the following geographic areas determined by reference to
circumstances prevailing on the Effective Date:

	 	(a)  	the world;
	 
	 	(b)  	the United States of America, Canada, the European Union, Australia and
the member nations of the North Atlantic Treaty Organisation;
	 
	 	(c)  	the United States of America, Canada, the European Union and Australia;
	 
	 	(d)  	the United States of America, Canada and Australia; and
	 
	 	(e)  	Australia.

Restraint Period means, starting from the Effective Date:

	 	(a)  	48 months;
	 
	 	(b)  	36 months;
	 
	 	(c)  	24 months; and
	 
	 	(d)  	12 months.

Technical Field means all or any of the following:

	 	(a)  	sequentially loading Projectiles and propellant in a barrel;
	 
	 	(b)  	preventing propellant burn leaking past following Projectiles which might
otherwise cause uncontrolled ignition of the following propellant;
	 
	 	(c)  	maintaining Projectile separation between sequentially loaded Projectiles
during firing;
	 
	 	(d)  	loading multiple Projectiles sequentially in one cartridge; and
	 
	 	(e)  	firing sequentially loaded Projectiles by electronic or other non
mechanical means; and
	 
	 	(f)  	any technology which is similar to or analogous to Metal Storm’s bullets
and barrels technology.

	   	Voting Power has the meaning given to it in the Corporations Act 2001 (Cth).
	 
	1.2  	Construction
	 
	   	Unless expressed to the contrary, in this document:

	 	(a)  	words in the singular include the plural and vice versa;
	 
	 	(b)  	any gender includes the other genders;
	 
	 	(c)  	if a word or phrase is defined its other grammatical forms have
corresponding meanings;
	 
	 	(d)  	“includes” means includes without limitation;

Page 3

 

	 	(e)  	no rule of construction will apply to a clause to the disadvantage of a
party merely because that party put forward the clause or would otherwise benefit
from it;
	 
	 	(f)  	a reference to:

	 	(i)  	a person includes a partnership, joint venture,
unincorporated association, corporation and a government or statutory body or
authority;
	 
	 	(ii)  	a person includes the person’s legal personal
representatives, successors, assigns and persons substituted by novation;
	 
	 	(iii)  	any legislation includes subordinate legislation under it
and includes that legislation and subordinate legislation as modified or
replaced; and
	 
	 	(iv)  	an obligation includes a warranty or representation and a
reference to a failure to comply with an obligation includes a breach of
warranty or representation; and

	 	(g)  	if the date on or by which any act must be done under this document is
not a Business Day, the act must be done on or by the next Business Day.

	1.3  	Headings
	 
	   	Headings do not affect the interpretation of this document.
	 
	2  	Termination
	 
	2.1  	Employment & Consultancy
	 
	   	On the Effective Date, any then existing:

	 	(a)  	contract of employment of O’Dwyer by Metal Storm; and
	 
	 	(b)  	Consultancy Contract;

	   	terminates, without any liability as between the parties to those contracts arising from
that termination, and subject in any event to the release in clause 3.
	 
	2.2  	Transfer of Assets
	 
	   	Metal Storm shall, within 5 Business Days after the Effective Date, transfer
ownership of the assets referred to in Schedule 1 by delivery to O’Dwyer in full and
final satisfaction of Metal Storm’s obligation to pay salary or other fees to O’Dwyer in
respect of the period from 1 January 2005 to the Effective Date.
	 
	2.3  	Resignation of Directorship
	 
	   	O’Dwyer resigns as a director of Metal Storm with effect from the Effective Date.

Page 4

 

	3  	Advisory and Consultancy Services
	 
	3.1  	O’Dwyer to provide certain advisory and consultancy services
	 
	   	For a period of 2 years from the Effective Date, Metal Storm may request O’Dwyer
to provide advisory and consultancy services to it from time to time and O’Dwyer shall,
to the extent that the request is reasonable and within his capability, provide those
services on an unpaid basis. The parties acknowledge that if Metal Storm wishes to
engage Mr O’Dwyer to provide services that will require a significant amount of O’Dwyer’s
time, the parties will discuss the commercial terms (including payments) on which they
will do so.
	 
	3.2  	Payment of Reasonable Expenses
	 
	   	Where O’Dwyer performs unpaid services at the request of Metal Storm under clause
3.1, Metal Storm will pay the reasonable expenses incurred by O’Dwyer with the prior
consent of Metal Storm (which shall not be unreasonably withheld) in the course of
performing those services. Metal Storm will pay such expenses within a reasonable time
after receipt of evidence reasonably satisfactory to Metal Storm of the incurring of the
expenses.
	 
	4  	Release
	 
	4.1  	Release
	 
	   	On the Effective Date, O’Dwyer releases and discharges Metal Storm, its Related
Bodies Corporate, employees, officers, directors, servants and agents (Those Released)
from any claims which O’Dwyer has or which but for this document could, would or might at
any time hereafter have or have had against any of Those Released in relation to:

	 	(a)  	his employment by Metal Storm;
	 
	 	(b)  	his directorship of Metal Storm;
	 
	 	(c)  	any Consultancy Contract; or
	 
	 	(d)  	any IP Rights or Confidential Information referred to in this document.

	4.2  	This document a bar
	 
	   	This document may be pleaded by any of Those Released in bar to any action by
O’Dwyer for enforcement of any of the rights or claims which are in this document
released.
	 
	5  	IP Rights
	 
	5.1  	Acknowledgement–existing rights
	 
	   	O’Dwyer acknowledges that all of the IP Rights developed by O’Dwyer:

	 	(a)  	relating to the Technical Field at any time prior to the Effective Date,
(whether prior to, during or after O’Dwyer’s employment or engagement by Metal
Storm); or

Page 5

 

	 	(b)  	pursuant to or in the course of O’Dwyer’s employment by, directorship of
or consultancy to Metal Storm or its Related Bodies Corporate,

	   	are the sole and exclusive property of Metal Storm.
	 
	5.2  	Assignment–existing rights
	 
	   	For the sake of clarity, to the extent he has not previously done so, O’Dwyer
hereby assigns to Metal Storm, without the need for further assurance, the IP Rights
referred to in clause 5.1;
	 
	5.3  	Acknowledgement–future rights
	 
	   	O’Dwyer acknowledges that any and all IP Rights developed by O’Dwyer, in the
Technical Field, at any time after the Effective Date, will be the sole and exclusive
property of Metal Storm.
	 
	5.4  	Assignment–future rights
	 
	   	O’Dwyer hereby assigns to Metal Storm, without the need for further assurance, the
IP Rights referred to in clause 5.3.
	 
	5.5  	Other entities
	 
	   	O’Dwyer shall ensure that any entity over which he has Control, and which for any
reason comes to own any right, title or interest in any of the IP Rights referred to in
clauses 5.1 or 5.3, assigns any such rights forthwith to Metal Storm.
	 
	5.6  	Further assurance and power of attorney
	 
	   	O’Dwyer shall sign all documents and do all acts and things which are, in Metal
Storm’s reasonable opinion, necessary or desirable to achieve or perfect any of the
transactions referred to in clauses 5.1 to 5.5 inclusive.
	 
	   	O’Dwyer hereby appoints Metal Storm as his attorney to sign any document on his behalf,
or to do any other act or thing on his behalf, which, in Metal Storm’s reasonable
opinion, is necessary or desirable to achieve or perfect any of the transactions referred
to in clauses 5.1 to 5.5 inclusive.
	 
	5.7  	Warranties
	 
	   	O’Dwyer warrants to Metal Storm that:

	 	(a)  	he has not, and has not authorised or permitted any other person, to
charge, assign, licence, encumber or grant any interest in the IP Rights referred to
in this clause 5; and
	 
	 	(b)  	any copyright works created by O’Dwyer in the course of providing any
services to Metal Storm are original works which are not copied wholly or
substantially from any other works.

Page 6

 

	6  	Confidentiality
	 
	6.1  	Acknowledgement
	 
	   	O’Dwyer acknowledges that all Confidential Information is the sole and exclusive
property of Metal Storm.
	 
	6.2  	Confidentiality
	 
	   	O’Dwyer shall

	 	(a)  	within thirty Business Days after the Effective Date, deliver to Metal
Storm all Confidential Information which is in a material form and in his
possession, power or control;
	 
	 	(b)  	within thirty Business Days after the Effective Date, certify to Metal
Storm in writing that he has complied with paragraph (a), provided that, if O’Dwyer
has not provided such certification within the period allowed, he shall be deemed to
have provided it on the next Business Day after that period;
	 
	 	(c)  	keep confidential any Confidential Information;
	 
	 	(d)  	not disclose any Confidential Information to any person at any time after
the date of this document, except:

	 	(i)  	as required by law; or
	 
	 	(ii)  	with the prior written consent of Metal Storm; and

	 	(e)  	not use any Confidential Information at any time after the date of this
document for any purpose other than for the purpose of providing services to Metal
Storm.

	7  	Restraint
	 
	7.1  	Restraint
	 
	   	O’Dwyer agrees that he will not, directly or indirectly or through interposed
entities, in any capacity including on his own account or in partnership or joint venture
with any other person or as trustee or agent:

	 	(a)  	perform, undertake, carry on, or be concerned or engaged in; or
	 
	 	(b)  	in any way be interested in (whether as lender, investor, shareholder,
unit-holder, beneficiary or otherwise); or
	 
	 	(c)  	provide services in relation to (whether as an authorised representative,
employee, consultant, adviser or otherwise),

	   	a Restrained Activity during the Restraint Period in the Restraint Area, without the
prior written consent of Metal Storm (which may be granted, granted on conditions, or
withheld at Metal Storm’s complete discretion).

Page 7

 

	7.2  	Construction of restraint clause
	 
	   	In relation to the restraint referred to in clause 7.1, O’Dwyer acknowledges and
agrees that:

	 	(a)  	that clause shall be construed and have effect as if it was a number of
separate sub-clauses which results from combining its text with each separate
period, activity and area comprising the Restraint Period, Restrained Activity and
Restraint Area respectively, to the intent that each resulting combination will be
severable from each other such resulting combination and that, if any of the
resulting combinations shall be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not prejudice or in any way affect the validity
or enforceability of any other such resulting combination. The resulting
combinations are cumulative and not alternatives;
	 
	 	(b)  	each and every restriction in those clauses constitutes an independent
and separate restriction, severally enforceable as such; and
	 
	 	(c)  	the restraint is fair and reasonable to protect the legitimate interests
of Metal Storm and its Related Bodies Corporate, in light of:

	 	(i)  	the consideration to be paid by Metal Storm to O’Dwyer
pursuant to this agreement;
	 
	 	(ii)  	O’Dwyer’s shareholding in Metal Storm; and
	 
	 	(iii)  	O’Dwyer’s expressed intention not to work in the Technical
Field at any time in the future (except for the benefit of Metal Storm).

	7.3  	Exception
	 
	   	This clause 7 does not prohibit O’Dwyer (whether directly or through nominees)
from holding shares in Metal Storm.
	 
	7.4  	No adverse public statements
	 
	   	O’Dwyer shall not make any public statement which, in his reasonable opinion, is
adverse to the interests of Metal Storm.
	 
	8  	Acknowledgement
	 
	   	O’Dwyer acknowledges that clauses 3, 4, 5 and 6 of this document are reasonable
for the protection of the Confidential Information, IP Rights, goodwill and trade
connection of Metal Storm.
	 
	9  	Availability of injunction proceedings
	 
	   	O’Dwyer acknowledges that any breach of any of clauses 3, 4, 5 or 6 of this
document may not adequately be compensated by an award of damages, and will entitle Metal
Storm, in addition to any other remedies available at law or in equity, to seek an
injunction to restrain the commission of any breach or threatened breach.

Page 8

 

	10  	Consideration
	 
	   	On the Effective Date, Metal Storm shall pay by cheque to O’Dwyer the sums of:

	 	(i)  	[$500,000] as a retirement benefit taking into account
O’Dwyer’s past services rendered to Metal Storm and its Related Bodies
Corporate; and
	 
	 	(ii)  	AUD10.00 in consideration of the obligations and
undertakings contained in clause 5 and clause 7.

	11  	Notices
	 
	11.1  	General
	 
	   	A notice, demand, certification, process or other communication relating to this
document must be in writing in English and may be given by an agent of the sender.
	 
	11.2  	How to give a communication
	 
	   	In addition to any other lawful means, a communication may be given by being:

	 	(a)  	personally delivered;
	 
	 	(b)  	left at the party’s current address for notices;
	 
	 	(c)  	sent to the party’s current address for notices by pre-paid ordinary mail
or, if the address is outside Australia, by pre-paid airmail; or
	 
	 	(d)  	sent by fax to the party’s current fax number for notices.

	11.3  	Particulars for delivery of notices

	 	(a)  	The particulars for delivery of notices are initially as set out at page 1 of
this document.
	 
	 	(b)  	Each party may change its particulars for delivery of notices by notice
to each other party.

	11.4  	Communications by post
	 
	   	Subject to clause 11.6, a communication is given if posted:

	 	(a)  	within Australia to an Australian address, three Business Days after
posting; or
	 
	 	(b)  	in any other case, ten Business Days after posting.

	11.5  	Communications by fax
	 
	   	Subject to clause 11.6, a communication is given if sent by fax, when the sender’s
fax machine produces a report that the fax was sent in full to the addressee. That
report is conclusive evidence that the addressee received the fax in full at the time
indicated on that report.

Page 9

 

	11.6  	After hours communications
	 
	   	If a communication is given:

	 	(a)  	after 5.00 pm in the place of receipt; or
	 
	 	(b)  	on a day which is a Saturday, Sunday or bank or public holiday in the
place of receipt,

	   	it is taken as having been given at 9.00 am on the next day which is not a Saturday,
Sunday or public holiday in that place.
	 
	11.7  	Process service
	 
	   	Any process or other document relating to litigation, administrative or arbitral
proceedings relating to this document may be served by any method contemplated by this
clause 11 or in accordance with any applicable law.
	 
	12  	General
	 
	12.1  	GST

	 	(a)  	“GST Law” has the meaning given to that expression in the A New Tax System
(Goods and Services Tax) Act 1999 (Cth).
	 
	 	(b)  	Expressions used in this clause which are not defined, but which have a
defined meaning in the GST Law, have the same meaning.
	 
	 	(c)  	Unless otherwise expressly stated all consideration to be provided under
this document is inclusive of GST.
	 
	 	(d)  	A supplier will provide a recipient with a tax invoice in respect of any
supply made by the supplier to the recipient under this document. The tax invoice
shall be provided to the recipient before the recipient provides any consideration
to the supplier under this document for the supply.
	 
	 	(e)  	Where at any time an adjustment event arises in respect of any supply
made by the supplier under this document, the supplier shall provide the recipient
with an adjustment note in respect of the adjustment event as soon as practicable
after the occurrence of the adjustment event.

	12.2  	Legal costs
	 
	   	Except as expressly stated otherwise in this document, each party must pay its own
legal and other costs and expenses of negotiating, preparing, executing and performing
its obligations under this document.
	 
	12.3  	Amendment
	 
	   	This document may only be varied or replaced by a document executed by the
parties.
	 
	12.4  	Waiver and exercise of rights

	 	(a)  	A single or partial exercise or waiver by a party of a right relating to this
document does not prevent any other exercise of that right or the exercise of any
other right.

Page 10

 

	 	(b)  	A party is not liable for any loss, cost or expense of any other party
caused or contributed to by the waiver, exercise, attempted exercise, failure to
exercise or delay in the exercise of a right.

	12.5  	Rights cumulative
	 
	   	Except as expressly stated otherwise in this document, the rights of a party under
this document are cumulative and are in addition to any other rights of that party.
	 
	12.6  	Consents
	 
	   	Except as expressly stated otherwise in this document, a party may conditionally
or unconditionally give or withhold any consent to be given under this document and is
not obliged to give its reasons for doing so.
	 
	12.7  	Further steps
	 
	   	Each party must promptly do whatever any other party reasonably requires of it to
give effect to this document and to perform its obligations under it.
	 
	12.8  	Governing law and jurisdiction

	 	(a)  	This document is governed by and is to be construed in accordance with the
laws applicable in Queensland.
	 
	 	(b)  	Each party irrevocably and unconditionally submits to the non-exclusive
jurisdiction of the courts of Queensland and any courts which have jurisdiction to
hear appeals from any of those courts and waives any right to object to any
proceedings being brought in those courts.

	12.9  	Assignment

	 	(a)  	A party must not assign or deal with any right under this document without the
prior written consent of the other parties.
	 
	 	(b)  	Any purported dealing in breach of this clause is of no effect.

	12.10  	Liability
	 
	   	An obligation of two or more persons binds them separately and together.
	 
	12.11  	Counterparts
	 
	   	This document may consist of a number of counterparts and, if so, the counterparts
taken together constitute one document.
	 
	12.12  	Entire understanding

	 	(a)  	This document contains the entire understanding between the parties as to the
subject matter of this document.
	 
	 	(b)  	All previous negotiations, understandings, representations, warranties,
memoranda or commitments concerning the subject matter of this document are merged
in and superseded by this document and are of no effect. No party is liable to any
other party in respect of those matters.

Page 11

 

	 	(c)  	No oral explanation or information provided by any party to another:

	 	(i)  	affects the meaning or interpretation of this document; or
	 
	 	(ii)  	constitutes any collateral agreement, warranty or
understanding between any of the parties.

	12.13  	Relationship of parties
	 
	   	This document is not intended to create a partnership, joint venture or agency
relationship between the parties.

Page 12

 

Schedule 1

ASSETS

	(1)  	Computer
	 
	(2)  	HP Office Jet Printer/fax/Copier
	 
	(3)  	Sony Dual Layer DvD Drive
	 
	(4)  	Canon LIDE Scanner
	 
	(5)  	Fellowes PS80C-2 Shredder
	 
	(6)  	Brother 65 Label Maker

page 13

 

Executed as an agreement.

	 	 	 	 	 	 	 
	Executed by Metal Storm Ltd by its duly

	 	 	)	 	 	 
	appointed officer in the presence

	 	 	)	 	 	 
	of:

	 	 	)	 	 	 
	/s/ Andrew Mackenzie

	 	 	 	 	 	/s/ James D. MacDonald
	 

	 	 	 	 	 	 
	Witness

	 	 	 	 	 	Officer
	 
	 	 	 	 	 	 
	Andrew Mackenzie

	 	 	 	 	 	James D. MacDonald
	 

	 	 	 	 	 	 
	Name of Witness (print)

	 	 	 	 	 	Name of Officer (print)
	 
	 	 	 	 	 	 
	Executed by James Michael O’Dwyer in

	 	 	)	 	 	 
	the presence of:

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	/s/ Andrew Mackenzie

	 	 	 	 	 	/s/ James Michael O’Dwyer
	 

	 	 	 	 	 	 
	Witness

	 	 	 	 	 	James Michael O’Dwyer
	 
	 	 	 	 	 	 
	Andrew Mackenzie
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Name of Witness (print)
	 	 	 	 	 	 

page 14EX-4.8

 

EXHIBIT 4.8

Metal Storm Limited (acn 064 270 006)

(‘Company’)

Jim MacDonald

(‘Employee’)

EMPLOYMENT AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employment Agreement Page
1 of 8

 

 

EMPLOYMENT AGREEMENT

AGREEMENT dated 10 September 2004.

BETWEEN METAL STORM LIMITED(ACN 064 270 006) of 345 Queen Street, Brisbane, Queensland, 4001

(‘Company’)

AND Jim
MacDonald of 9 Cedar Street, Greenslopes, Queensland, 4120

(‘Employee’)

IT IS AGREED

	1.  	COMMENCEMENT OF EMPLOYMENT
	 
	1.1  	The Employee shall commence employment as specified in Item A of the Schedule.
	 
	1.2  	An initial probationary period of three (3) months shall apply effective from commencement of
the Employees’ employment. The main purpose of this probationary period is to give both the
Employee and Employer an opportunity to establish the Employees suitability for the position.
Should either party decide to terminate this agreement at the end of the three (3) month
probationary period, there will be no legal recourse from either party. If either party
chooses to terminate the employment during the probationary period either party will be
required to give the other party one (1) months notice in writing. The Employer may elect to
make a payment in lieu of notice for termination under this provision.
	 
	2.  	DUTIES
	 
	2.1  	The Employee must perform all the functions of the position set out in Item B of the Schedule
and such other duties as may be determined by the Company from time to time.
	 
	2.2  	The Employee must carry out the Employee’s duties as the Company may from time to time
reasonably direct to a standard the Company may reasonably require.
	 
	3.  	REMUNERATION
	 
	3.1  	The Company must pay to the Employee the Remuneration package specified in Item C of the
Schedule to this Agreement, the components of which may be varied from time to time by mutual
agreement.
	 
	3.2  	The Employee is not entitled to payment of overtime.
	 
	3.3  	The Employee’s Remuneration package will be reviewed by 31 December 2005 and thereafter at
the conclusion of each calendar year.
	 
	3.4  	From 1 January 2005 the Employee will be eligible to receive Share Options as specified in
Item D of the Schedule to this Agreement.

 

 

 

 

 

 

Employment Agreement Page 2 of 8

 

 

	4.  	ANNUAL LEAVE
	 
	4.1  	The Employee is entitled to be paid annual leave of 4 weeks pursuant to the Industrial
Relations Act 1999.
	 
	4.2  	Annual leave is to be taken within 12 months of it accruing.
	 
	4.3  	The Employee is not entitled to leave loading.
	 
	4.4  	The Company may request the Employee to take accrued annual leave on 14 days’ written notice
to the Employee.
	 
	5.  	SICK LEAVE
	 
	5.1  	The Employee is entitled to paid sick leave of 8 working days for each 12 months of service.
	 
	5.2  	Any sick leave accrued but not taken in one year may be taken in another year.
	 
	5.3  	The Employee may use up to 5 days of sick leave to care for and support members of the
Employee’s immediate family or members of the Employee’s household when they are ill.
	 
	5.4  	When the absence due to sickness (including that specified in 5.3) exceeds 2 days, the
Employee must provide a doctor’s certificate or other evidence of the need for sick leave.
	 
	6.  	GENERAL OBLIGATIONS
	 
	6.1  	The Employee must:

	 	(a)  	devote the whole of the Employee’s time during usual business hours to the
Company’s business except where otherwise approved in advance; and
	 
	 	(b)  	diligently and faithfully devote himself to the business of the Company.

	7.  	TERMINATION OF EMPLOYMENT
	 
	7.1  	The employment is terminated automatically on the Employee’s death or Significant Disability.
	 
	7.2  	The term ‘Significant Injury’ means any injury or illness which would preclude the Employee
from performing the inherent requirements of the Employee’s job and,

	 	(a)  	if the illness or injury arises out of a work-related activity, at least 6
months has elapsed since the Employee first became ill or incapacitated;
	 
	 	(b)  	in any other case, the Employee has been absent for a period of more than 3
months in any period of 12 consecutive months.

	7.3  	The employment may be terminated immediately by the Company if the Employee:

	 	(a)  	is guilty of any criminal or indictable offence or of any dishonesty in
relation to the affairs of the Company;
	 
	 	(b)  	is guilty of any serious breach of faith, or serious neglect or default or
wilful disregard of directions or serious professional misconduct or gross misconduct;

Employment Agreement Page 3 of 8

 

 

	 	(c)  	is precluded or suspended from acting in the role of a Director pursuant to
Corporations Law.

	7.4  	The Company may at any time terminate employment (other than for reasons described in clauses
7.1 and 7.3) on 90 days notice or payment in lieu or part thereof if termination occurs within
12 months of the completion of the Probationary Period, thereafter on 30 days notice or
payment in lieu or part thereof.
	 
	8.  	COMPLIANCE WITH OBLIGATIONS ON TERMINATION
	 
	8.1  	The Company will pay the Employee all statutory and contractual entitlements accrued to the
date of termination.
	 
	8.2  	The Employee agrees that any amounts owing to the Company may be deducted from any
entitlements to be paid under clause 8.1.
	 
	8.3  	Termination of the employment does not relieve the Employee from payment in full of all sums
then owing to the Company or which may become owing in respect of any period prior to
termination and is without prejudice to the rights of the Company to sue for antecedent breach
by the Employee of the terms and conditions of this agreement.
	 
	9.  	DUTY TO DELIVER UP
	 
	9.1  	The Employee must:

	 	(a)  	whenever requested by the Company;
	 
	 	(b)  	without demand as soon as no longer needed; and
	 
	 	(c)  	immediately on termination

deliver up to the Company all papers, writings, disks, access keys (including computer and
other information technology access codes and passwords) and any other material which are in
the possession or custody or under the control of the Employee relating in whole or in part
to the affairs of the Company or its business.

	10.  	INTELLECTUAL PROPERTY
	 
	10.1  	The Employee assigns to the Company:

	 	(a)  	all inventions, discoveries and novel designs, whether or not registrable as
designs under the Designs Act 1906, patents under the Patents Act 1990 and trademarks
under the Trade Marks Act 1995; and
	 
	 	(b)  	the entire copyright in all works, including but not limited to all literary
and other works as defined in the Copyright Act 1968;

created by the Employee as a result of and/or in the course of employment, either solely or
jointly with others.

	10.2  	The assignment under clause 10.1 does not restrict the Employee’s right to utilise the
general expertise and knowledge accumulated by the Employee in the performance of services
under this agreement, and the Employee is entitled to use routine procedures developed by the
Employee in the performance of those services, but the Employee may not,

Employment Agreement Page 4 of 8

 

 

subject to clause 10.3, make any reproduction or substantial reproduction of any of the
intellectual property assigned by clause 10.1 without the written licence of the Company.

	10.3  	Where the Employee makes a design as a result of and in the course of the performance of the
Employee’s services, the design is owned by the Company.
	 
	10.4  	Where the Employee makes any patentable process or article as a result of and in the course
of the performance of the Employees services, the patent is owned by the Company.
	 
	11.  	FURTHER ASSURANCES AS TO INTELLECTUAL PROPERTY
	 
	11.1  	The Employee must during and after the term of this agreement do all acts and things and sign
all documents which the Company may reasonably request to secure the Company’s ownership of
rights in the intellectual property referred to in clause 10.
	 
	12.  	RESTRAINT DURING EMPLOYMENT
	 
	12.1  	Without the prior consent of the Company, the Employee must not during employment by the
Company:

	 	(a)  	act as an officer or Employee of or as a consultant or adviser to any other
corporation, firm or person;
	 
	 	(b)  	take up any other position with any other corporation, firm or person; or
	 
	 	(c)  	hold any shares or securities which create or may create a conflict between the
interests of the Company and the interests of the Employee.

	13.  	CONFIDENTIALITY
	 
	13.1  	The Employee must not directly or indirectly make use of any intellectual property of the
Company except with the authority and for the benefit of the Company.
	 
	13.2  	The Employee must not without the written consent of the Company publish or disclose any
information concerning the business, transactions, or affairs of the Company or of any related
body corporate of the Company within the meaning of the Corporations Law unless such
publication or disclosure is made in the normal course of employment.
	 
	13.3  	The information referred to in clause 13 includes information disclosed to the Company or the
Employee by any existing or potential customer, supplier, contractor, agent, licensor or
licensee of the Company.
	 
	13.4  	The Employee must at the request of the Company sign a confidentiality agreement containing
provisions similar to the provisions in this clause 13 in favour of any person referred to in
clause 13.3.
	 
	13.5  	The Employee acknowledges that:

	 	(a)  	a breach of clause 13.1 or clause 13.2 of this agreement would be harmful to
the business of the Company;
	 
	 	(b)  	monetary damages alone would not be a sufficient remedy for the breach; and

Employment Agreement Page 5 of 8

 

 

	 	(c)  	in addition to any other remedy which may be available in law or equity, the
Company is entitled to interim, interlocutory and permanent injunctions or any of them
to prevent the breach.

	14.  	FURTHER ASSURANCE
	 
	14.1  	Each party must promptly at its own cost do all things (including executing all documents)
necessary or desirable to give full effect to this agreement.
	 
	15.  	SEVERABILITY
	 
	15.1  	If anything in this agreement is unenforceable, illegal or void then it is severed and the
rest of this agreement remains in force.
	 
	16.  	ENTIRE UNDERSTANDING
	 
	16.1  	This agreement:

	 	(a)  	is the entire agreement and understanding between the parties on everything
connected with the subject matter of this agreement; and
	 
	 	(b)  	supersedes any prior agreement or understanding on anything connected with that
subject matter.

	16.2  	Each party has entered into this agreement without relying on any representation by any other
party or any person purporting to represent that party.
	 
	17.  	VARIATION
	 
	17.1  	An amendment or variation to this agreement is not effective unless it is in writing and
signed by the parties.
	 
	18.  	WAIVER
	 
	18.1  	A party’s failure or delay to exercise a power or right does not operate as a waiver of that
power or right.
	 
	18.2  	The exercise of a power or right does not preclude either its exercise in the future or the
exercise of any other power or right.
	 
	18.3  	A waiver is not effective unless it is in writing.
	 
	18.4  	Waiver of a power or right is effective only in respect of the specific instance to which it
relates and for the specific purpose for which it is given.
	 
	19.  	GOVERNING LAW AND JURISDICTION
	 
	19.1  	The law of Queensland governs this agreement.

	 
	19.2  	The parties submit to the non-exclusive jurisdiction of the courts of Queensland and the
Federal Court of Australia.

Employment Agreement Page 6 of 8

 

EXECUTED as an agreement in Queensland.

 

 

THE SCHEDULE

	 	 	 	 	 
	Item A:

	 	Commencement Date:
	 	4 October 2004
	 
	 	 	 	 
	Item B:

	 	Position:
	 	Chief Financial Officer
	 
	 	 	 	 
	Item C:

	 	Remuneration:
	 	a) Initial Base Salary of $180,000 per annum.
	 
	 	 	 	 
	

	 	 	 	b) Employee may sacrifice a portion of Base Salary to
finance a novated Motor Vehicle lease.
	 
	 	 	 	 
	

	 	 	 	c) Performance Bonus as per Item E
	 
	 	 	 	 
	

	 	 	 	d) Superannuation at 9% of Base Salary.
	 
	 	 	 	 
	

	 	 	 	e) Share Options as per Item D.
	 
	 	 	 	 
	Item D

	 	Share Options:
	 	a) ......TBA........ Share Options at $0.40 per share
granted quarterly in arrears over 2 years, exercisable
within 5 years of grant.
	 
	 	 	 	 
	Item E

	 	Performance Bonus:
	 	Up to 30% of Base Salary annually based on the Chief
Executive Officer’s evaluation of the Employee’s performance against KPI’s defined as to
outcome and weighted as to the % each successful outcome will attract. KPI’s will be set at
the commencement of employment and thereafter at the commencement of each calendar year.

Employment Agreement Page
8 of 8

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