Document:

WWW.EXFILE.COM, INC. -- 888-775-4789 -- BOSTON SCIENTIFIC CORP. -- EXHIBIT 10.2 TO FORM 8-K

    EXHIBIT
      10.2

    

     

     

    THIRD
      AGREEMENT AND

    AMENDMENT
      TO TRUST AGREEMENT

    

    

    THIS
      THIRD AGREEMENT AND AMENDMENT to the Trust Agreement for the BOSTON SCIENTIFIC
      CORPORATION 401(k) RETIREMENT SAVINGS PLAN (the “Plan”) entered into by and
      between BOSTON SCIENTIFIC CORPORATION (the “Employer”) and VANGUARD FIDUCIARY
      TRUST COMPANY (the “Trustee”), is effective as of the _____day of December,
      2007.

    

    WITNESSETH

    

    WHEREAS,
      the Employer has adopted and
      is maintaining the Plan for the exclusive benefit of the employees of the
      Employer and its affiliates;

    

    WHEREAS,
      the Employer and the Trustee
      entered into the agreement of trust effective as of July 1, 1997 (the “Trust
      Agreement”); and

    

    WHEREAS,
      as provided for under Article
      X of the Trust Agreement, the Employer and Trustee deem it necessary and
      desirable to amend the Trust Agreement as provided herein.

    

    NOW,
      THEREFORE, in consideration of the mutual covenants contained herein, the
      parties hereto, intending to be legally bound, hereby agree and declare as
      follows:

    

    
      	
              1.   
                 

            	
              Article
                IV is replaced in its entirety with the
                following:

            

    

    

    “ARTICLE
      IV

    VOTING
      AND OTHER RIGHTS OF COMPANY STOCK

    

    Section
      4.1.  Each
      Participant or Beneficiary of a deceased Participant (referred to herein
      collectively as Participant) shall have the right to direct the Trustee as
      to
      the manner of voting and the exercise of all other rights which a shareholder
      of
      record has with respect to shares (and fractional shares) of Company Stock
      which
      have been allocated to the Participant’s separate account including, but not
      limited to, the right to sell or retain shares in a public or private tender
      offer.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
      4.2.  All shares (and
      fractional shares) of Company Stock for which the Trustee has not received
      timely Participant directions shall be voted or exercised by the Trustee in
      the
      same proportion as the shares (and fractional shares) of Company Stock for
      which
      the Trustee received timely Participant directions, except in the case where
      to
      do so would be inconsistent with the provisions of Title I of
      ERISA.  All reasonable efforts shall be made to inform each
      Participant that shares of Company Stock for which the Trustee does not receive
      Participant direction shall be voted pro rata in proportion to the shares for
      which the Trustee has received Participant direction.

    

    Section
      4.3.  Notwithstanding
      anything to the contrary, in the event of a tender offer for Company Stock,
      the
      Trustee shall interpret a Participant’s silence as a direction not to tender the
      shares of Company Stock allocated to the Participant’s separate account and,
      therefore, the Trustee shall not tender any shares (or fractional shares) of
      Company Stock for which it does not receive timely directions to tender such
      shares (or fractional shares) from Participants, except in the case where to
      do
      so would be inconsistent with the provisions of Title I of
      ERISA.  Furthermore, tender offer materials provided to Participants
      shall specifically inform Participants that the Trustee shall interpret a
      Participant’s silence as a direction not to tender the Participant’s shares of
      Company Stock.

    

    Section
      4.4.  Each
      Participant exercising his authority under this Article shall be considered
      a
      named fiduciary of the Plan within the meaning of ERISA section 402(a)(2) with
      respect to the voting directions or response to an offer provided by the
      Participant (including in the case where a Participant’s silence is treated by
      the Trustee as a direction not to tender as provided under Section 4.3
      hereof).

    

    Section
      4.5.  Information
      relating to the purchase, holding and sale of securities and the exercise of
      voting, tender and other similar rights with respect to Company Stock by
      Participants and beneficiaries shall be maintained in accordance with procedures
      that are designed to safeguard the confidentiality of such information, except
      to the extent necessary to comply with Federal laws or State laws not preempted
      by ERISA.  The Trustee shall be the fiduciary who is responsible for
      ensuring that such procedures are sufficient to safeguard the confidentiality
      of
      the information described above, and that such procedures are
      followed.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
      4.6.  Notwithstanding
      any provision contained in the Plan to the contrary, this Article IV shall
      govern the procedures to be followed in connection with the voting of Company
      Stock held by the Plan and the disposition of Company Stock pursuant to any
      tender or exchange offer therefor.  In the event of any conflict or
      inconsistency between the provisions of this Article IV and any other provisions
      of this Agreement, the provisions of this Article IV shall
      control.”

    

    
      	
              2.  
                 

            	
              Unless
                specifically defined herein, all terms with an initial capitalized
                letter
                shall have the meaning assigned to them in the Trust
                Agreement.

            

    

    

    IN
      WITNESS WHEREOF, the parties
      hereto have caused this Amendment to be executed on their behalf by their duly
      authorized officers as of the date first written above.

     

     

     

    
      	ATTEST:	 	 	BOSTON
              SCIENTIFIC
              CORPORATION	 
	 	 	 	 	 
	 	 	 	 	 
	
            	 	 	
              By:

            	 
	 	 	 	 	 
	 	 	 	 	 
	
            	 	 	
               

            	 
	
               

            	 	 	
              Title:

            	 

    

     

     

     

    
       

      
        	ATTEST:	 	 	VANGUARD
                FIDUCIARY TRUST
                COMPANY	 
	 	 	 	 	 
	 	 	 	 	 
	
              	 	 	
                By:

              	 
	 	 	 	 	 
	 	 	 	 	 
	
              	 	 	
                 

              	 
	
                 

              	 	 	
                Title:       
                  PrincipalCEO EXECUTIVE SERVICES AGREEMENT

                                     AMONG:

                      NATURALLY ADVANCED TECHNOLOGIES INC.

                                      AND :

                         MERIWETHER ACCELERATORS, LLC.

                      NATURALLY ADVANCED TECHNOLOGIES INC.
       1307 Venables Street, Vancouver, British Columbia, Canada, V5L 2G1

                     -- CEO EXECUTIVE SERVICES AGREEMENT --
                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

<PAGE>

                        CEO EXECUTIVE SERVICES AGREEMENT

         THIS CEO EXECUTIVE  SERVICES  AGREEMENT is made and dated for reference
effective as at August 24, 2007 (the "EFFECTIVE DATE") as fully executed on this
27 day of November, 2007.

BETWEEN:

         NATURALLY ADVANCED  TECHNOLOGIES INC., a company incorporated under the
         laws of the  Province  of  British  Columbia,  Canada,  and  having  an
         executive office and an address for notice and delivery located at 1307
         Venables Street, Vancouver, British Columbia, Canada, V5L 2G1

         (the "COMPANY");                                      OF THE FIRST PART

AND :

         MERIWETHER ACCELERATORS, LLC., a company incorporated under the laws of
         the State of  Oregon,  U.S.A.,  and  having an  address  for notice and
         delivery located at Suite 435, 2701 NW Vaughn Street, Portland, Oregon,
         U.S.A., 97210

         (the "EXECUTIVE'S COMPANY");
                                                              OF THE SECOND PART

         (the Executive's  Company and the Company being hereinafter  singularly
         also  referred  to as a "Party"  and  collectively  referred  to as the
         "PARTIES" as the context so requires).

         WHEREAS:

A.    The Company  is a  reporting company  incorporated  under  the laws of the
Province of British Columbia,  Canada,  whose common shares are presently listed
for trading on the United States Over-the-counter Bulletin Board market;

B.    Ken Barker, the  present Chief  Executive  Officer  and a  Director of the
Company  (the  "EXECUTIVE"),  and the  Executive's  Company,  which is owned and
controlled by the Executive (the Executive and the Executive's  Company,  being,
collectively,  the "EXECUTIVE GROUP" herein),  have experience in and specialize
in providing  reporting and  non-reporting  companies  with  valuable  corporate
management services;

C.    The Company and its  various  subsidiaries  are  involved  in the product-
focused  business  of  specializing  in the  market  and  sale  of  sustainable,
environmentally  friendly  apparel  and  fabrics as well as the  development  of
proprietary   technology   for  the   production  of  bast  fibers  and  fabrics
(collectively,  the "BUSINESS");  and, as a consequence  thereof, the Company is
hereby  desirous of continuing  to retain the  Executive as the Chief  Executive
Officer of the Company, together with the Executive's Company as a consultant to
the Company and to any or all of the Company's subsidiaries, as the case may be,
and the Executive  Group is hereby desirous of accepting such positions in order
to

                     -- CEO EXECUTIVE SERVICES AGREEMENT --
                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

<PAGE>

                                      -2-

provide  such  corporate  management  related  services  to the  Company and its
various  subsidiaries  as may be  necessary  for  the  ongoing  maintenance  and
development of the Company's and its various  subsidiaries'  respective Business
interests during the continuance of this agreement  (collectively,  the "GENERAL
SERVICES");

D.    Since  the  introduction  of  the  Parties  hereto   the  Parties   hereby
acknowledge  and agree that there have been various  discussions,  negotiations,
understandings  and agreements between them relating to the terms and conditions
of the General Services and, correspondingly,  that it is their intention by the
terms and conditions of this agreement (the  "AGREEMENT") to hereby replace,  in
their entirety,  all such prior  discussions,  negotiations,  understandings and
agreements with respect to the General Services; and

E.    The  Parties  hereto  have  agreed  to  enter  into  this  Agreement which
replaces,   in  its  entirety,   all  such  prior   discussions,   negotiations,
understandings and agreements,  and,  furthermore,  which necessarily  clarifies
their  respective  duties and  obligations  with  respect to the within  General
Services  to be  provided  hereunder,  all in  accordance  with  the  terms  and
conditions of this Agreement;

         NOW THEREFORE THIS AGREEMENT  WITNESSETH  that, in consideration of the
mutual  covenants and provisos  herein  CONTAINED,  THE PARTIES  HERETO AGREE AS
FOLLOWS:

                                    ARTICLE 1
                         DEFINITIONS AND INTERPRETATION

1.1   DEFINITIONS.  For all  purposes  of this  Agreement, except  as  otherwise
expressly provided or unless the context otherwise requires, the following words
and phrases shall have the following meanings:

         (a)      "AGREEMENT"  means this CEO  Executive  Services  Agreement as
                  from  time  to time  supplemented  or  amended  by one or more
                  agreements entered into pursuant to the applicable  provisions
                  hereof, together with any Schedules attached hereto;

         (b)      "BOARD  OF  DIRECTORS"  means the  Board of  Directors  of the
                  Company as duly constituted from time to time;

         (c)      "BUSINESS"  has the  meaning  ascribed  to it in recital  "C."
                  hereinabove.

         (d)      "BUSINESS DAY" means any day during which  Canadian  Chartered
                  Banks are open for business in the City of Vancouver, Province
                  of British Columbia, Canada;

         (e)      "COMPANIES" means the Company and each of its subsidiaries;

         (f)      "COMPANY"  means  Naturally  Advanced   Technologies  Inc.,  a
                  company incorporated under the laws of the Province of British
                  Columbia,  Canada, or any successor  company,  however formed,
                  whether as a result of merger, amalgamation or other action;

         (g)      "COMPANY'S  NON-RENEWAL NOTICE" has the meaning ascribed to it
                  in section "3.2" hereinbelow;

         (h)      "DATE OF GRANT"  has the  meaning  ascribed  to it in  section
                  "4.3" hereinbelow;

                     -- CEO EXECUTIVE SERVICES AGREEMENT --
                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

<PAGE>

                                      -3-

         (i)      "DELIVERABLES" has the meaning ascribed to it in section "4.3"
                  hereinbelow;

         (j)      "EFFECTIVE  DATE" has the meaning ascribed to on the face page
                  of this Agreement;

         (k)      "EFFECTIVE TERMINATION DATE" has the meaning ascribed to it in
                  each  of  sections  "3.3",   "3.4",  "3.5",  "3.6"  and  "5.6"
                  hereinbelow;

         (l)      "EXCHANGE ACT" has the meaning ascribed to it in section "4.3"
                  hereinbelow;

         (m)      "EXECUTIVE" means Ken Barker;

         (n)      "EXECUTIVE  GROUP"  means the  Executive  and the  Executive's
                  Company;

         (o)      "EXECUTIVE  GROUP MATERIALS" has the meaning ascribed to it in
                  section "5.7" hereinbelow;

         (p)      "EXECUTIVE'S COMPANY" means Meriwether  Accelerators,  LLC., a
                  company  incorporated  under the laws of the State of  Oregon,
                  U.S.A.,, or any successor company,  however formed, whether as
                  a result of merger, amalgamation or other action;

         (q)      "EXERCISE  TERM" has the  meaning  ascribed  to it in  section
                  "4.3" hereinbelow;

         (r)      "EXPENSES"  has the meaning  ascribed  to it in section  "4.2"
                  hereinbelow;

         (s)      "FEE"  has  the  meaning  ascribed  to  it  in  section  "4.1"
                  hereinbelow;

         (t)      "FORM S-8 REGISTRATION  STATEMENT" has the meaning ascribed to
                  it in section "4.3" hereinbelow;

         (u)      "GENERAL  SERVICES" has the meaning  ascribed to it in section
                  "2.1" hereinbelow;

         (v)      "INDEMNIFIED  PARTY" has the meaning ascribed to it in section
                  "6.1" hereinbelow;

         (w)      "INITIAL  VESTING  DATE"  has the  meaning  ascribed  to it in
                  section "4.3" hereinbelow;

         (x)      "NOTICE OF TERMINATION" has the meaning ascribed to it in each
                  of sections "3.3", "3.4", "3.5" and "5.6" hereinbelow;

         (y)      "OPTION"  has the  meaning  ascribed  to it in  section  "4.3"
                  hereinbelow;

         (z)      "OPTION PLAN" has the meaning  ascribed to it in section "4.3"
                  hereinbelow;

         (aa)     "OPTION  SHARES"  has the  meaning  ascribed  to it in section
                  "4.3" hereinbelow;

         (ab)     "PARTIES" or "PARTY" means, individually and collectively, the
                  Company,  and/or the  Executive  and the  Executive's  Company
                  hereto,  as the  context so  requires,  together  with each of
                  their  respective  successors  and  permitted  assigns  as the
                  context so requires;

         (ac)     "PROPERTY"  has the meaning  ascribed  to it in section  "5.7"
                  hereinbelow;

                     -- CEO EXECUTIVE SERVICES AGREEMENT --
                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

<PAGE>

                                      -4-

         (ad)     "REGISTRATION  STATEMENT"  has the  meaning  ascribed to it in
                  section "4.3" hereinbelow;

         (ae)     "REGULATORY  APPROVAL"  means the  acceptance  for filing,  if
                  required,  of the transactions  contemplated by this Agreement
                  by the Regulatory Authorities;

         (af)     "REGULATORY  AUTHORITIES"  and "REGULATORY  AUTHORITY"  means,
                  either  singularly or collectively as the context so requires,
                  such  regulatory  agencies  who  have  jurisdiction  over  the
                  affairs of either of the Companies  and/or the Executive Group
                  and including,  without limitation, all regulatory authorities
                  from whom any such authorization,  approval or other action is
                  required to be obtained or to be made in  connection  with the
                  transactions contemplated by this Agreement;

         (ag)     "SEC"  has  the  meaning  ascribed  to  it  in  section  "4.3"
                  hereinbelow;

         (ah)     "SECURITIES  ACT" has the  meaning  ascribed  to it in section
                  "4.3" hereinbelow; and

         (ai)     "SUBSIDIARY" means any company or companies of which more than
                  50% of the  outstanding  shares  carrying  votes at all  times
                  (provided  that the ownership of such shares confers the right
                  at all times to elect at least a majority of the  directors of
                  such company or companies)  are for the time being owned by or
                  held  for  that  company  and/or  any  other  company  in like
                  relation  to that  company  and  includes  any company in like
                  relation to the subsidiary.

1.2   INTERPRETATION.   For  the purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:

         (a)      the words  "HEREIN",  "HEREOF" and "HEREUNDER" and other words
                  of similar  import refer to this  Agreement as a whole and not
                  to any  particular  Article,  section or other  subdivision of
                  this Agreement;

         (b)      any  reference to an entity shall  include and shall be deemed
                  to be a reference to any entity that is a permitted  successor
                  to such entity; and

         (c)      words in the  singular  include  the  plural  and words in the
                  masculine gender include the feminine and neuter genders,  and
                  VICE VERSA.

                                    ARTICLE 2
               GENERAL SERVICES AND DUTIES OF THE EXECUTIVE GROUP

2.1   GENERAL SERVICES.  During the continuance  of this  Agreement  the Company
hereby  agrees to retain the  Executive  as the Chief  Executive  Officer of the
Company,  together with the  Executive's  Company as a consultant to the Company
and to any or all of the Company's subsidiaries,  as the case may be, and as may
be determined by the Board of Directors in its sole and absolute discretion from
time to time,  and the  Executive  Group  hereby  agrees  to be  subject  to the
direction and  supervision  of, and to have the authority as is delegated to the
Executive Group by, the Board of Directors  consistent with such positions,  and
the  Executive  Group also agrees to accept such  positions  in order to provide
such corporate management related services as the Board of Directors shall, from
time to time,  reasonably  assign to the Executive Group and as may be necessary
for the ongoing  maintenance and development of the Companies'  various Business
interests during the continuance of this Agreement  (collectively,  the "GENERAL
Services");  it being  expressly  acknowledged  and agreed by the Parties hereto
that the  Executive  Group  shall  commit and provide to the Company the General
Services  for which the Company,  as more  particularly  set forth  hereinbelow,

                     -- CEO EXECUTIVE SERVICES AGREEMENT --
                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

<PAGE>

                                      -5-

hereby  agrees to pay and provide to the order and  direction  of the  Executive
Group each of the  proposed  compensation  amounts as set forth in Articles  "4"
hereinbelow.

         In this regard it is hereby  acknowledged and agreed that the Executive
Group shall be entitled to  communicate  with and shall rely upon the  immediate
advice, direction and instructions of the Board of Directors, or upon the advice
or  instructions  of such  director  or officer  of the  Company as the Board of
Directors  shall,  from  time to  time,  in order to  initiate,  coordinate  and
implement the General Services as contemplated  herein subject, at all times, to
the final direction and supervision of the Board of Directors.

2.2   ADDITIONAL DUTIES RESPECTING THE GENERAL  SERVICES.  Without in any manner
limiting the  generality of the General  Services to be provided as set forth in
section  "2.1"  hereinabove,  it is hereby  also  acknowledged  and agreed  that
Executive Group will, during the continuance of this Agreement,  provide for the
performance of said General Services faithfully,  diligently, to the best of the
Executive  Group's  abilities and in the best  interests of the  Companies  and,
furthermore,  that the Executive  Group's time will be  prioritized at all times
for the Companies in that regard.

2.3   ADHERENCE TO  RULES AND  POLICIES  OF THE  COMPANIES.  The Executive Group
hereby  acknowledges and agrees to abide by the reasonable  rules,  regulations,
instructions,  personnel  practices  and policies of the Company and any changes
therein  which  may be  adopted  from  time to time by the  same as such  rules,
regulations,  instructions,  personnel  practices and policies may be reasonably
applied to the  Executive as the Chief  Executive  Officer of the Company and to
the Executive's Company as a consultant to the Companies.

                                    ARTICLE 3
              EFFECTIVENESS, INITIAL TERM, RENEWAL AND TERMINATION

3.1   EFFECTIVENESS  AND INITIAL TERM OF THE AGREEMENT.  This Agreement  becomes
effective on the Effective Date hereinabove,  however, is subject, at all times,
to the Company's prior receipt, if required, of Regulatory Approval from each of
the Regulatory  Authorities to the terms and conditions of and the  transactions
contemplated  by this  Agreement.  The initial  term of this  Agreement is for a
period  commencing  on the  Effective  Date  hereof  and  ending at the close of
business  (Vancouver,  British Columbia,  Canada, time) on the date which is one
year from the Effective Date hereof (the "INITIAL TERM").

3.2   RENEWAL BY THE  COMPANY  AFTER THE INITIAL  TERM.  Subject at all times to
sections "3.3",  "3.4", "3.5" and "5.6" hereinbelow,  this Agreement shall renew
automatically  if not  specifically  terminated in accordance with the following
provisions.  The Company agrees to notify the Executive's  Company in writing at
least 30 calendar days prior to the end of the Initial Term of its intent not to
renew this Agreement (the "COMPANY'S  NON-RENEWAL  NOTICE").  Should the Company
fail  to  provide  a  Company's   Non-Renewal   Notice  this   Agreement   shall
automatically  renew on a  month-to-month  term renewal  basis after the Initial
Term until  otherwise  specifically  renewed  in writing by each of the  Parties
hereto for the next one-month  term of renewal or,  otherwise,  terminated  upon
delivery  by the  Company of a  corresponding  and  follow-up  30  calendar  day
Company's  Non-Renewal  Notice in  connection  with and within 30 calendar  days
prior to the end of any such one-month term renewal period.  Any such renewal on
a one-month  basis shall be on the same terms and  conditions  contained  herein
unless modified and agreed to in writing by the Parties in advance.

3.3   TERMINATION WITHOUT CAUSE BY THE EXECUTIVE'S  COMPANY. Notwithstanding any
other  provision of this  Agreement,  this  Agreement  may be  terminated by the
Executive's  Company at any time after the Effective Date and during the Initial

                     -- CEO EXECUTIVE SERVICES AGREEMENT --
                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

<PAGE>

                                      -6-

Term and during the continuance of this Agreement upon the Executive's Company's
to the Company of prior written notice of its intention to do so (the "NOTICE OF
TERMINATION"  herein) at least 30 calendar days prior to the  effective  date of
any  such  termination  (the end of such  30-day  period  from  such  Notice  of
Termination being the "EFFECTIVE  TERMINATION  DATE" herein).  In any such event
the Executive  Group's ongoing  obligation to provide the General  Services will
continue  only  until  the  Effective  Termination  Date  and,  subject  to  the
following,  the  Company's  ongoing  obligation  to  provide  and  to pay to the
Executive  Group all of the amounts  otherwise  payable to the  Executive  Group
under Article "4" hereinbelow will continue only until the Effective Termination
Date.

3.4   TERMINATION  WITHOUT  CAUSE  BY  THE  COMPANY.  Notwithstanding  any other
provision of this Agreement,  this Agreement may be terminated by the Company at
any time after the  Effective  Date and during the  Initial  Term and during the
continuance  of this Agreement  upon the Company's  delivery to the  Executive's
Company  of prior  written  notice of its  intention  to do so (the  "NOTICE  OF
TERMINATION"  herein) at least 30 calendar days prior to the  effective  date of
any  such  termination  (the end of such  30-day  period  from  such  Notice  of
Termination being the "EFFECTIVE  TERMINATION  DATE" herein).  In any such event
the Executive  Group's ongoing  obligation to provide the General  Services will
immediately  cease  upon the date of the  Notice of  Termination,  however,  the
Company  shall  continue to be obligated to provide and to pay to the  Executive
Group all of the amounts  otherwise payable to the Executive Group under Article
"4"  hereinbelow  until the Effective  Termination  Date and including,  without
limitation,  the Executive  Group's then right to exercise any vested portion of
the Option (as hereinafter determined) outstanding until the end of the exercise
term of the Option as set forth under Article "4" hereinbelow.

3.5   TERMINATION FOR CAUSE BY ANY PARTY. Notwithstanding any other provision of
this Agreement, this Agreement may be terminated by any of the Parties hereto at
any time upon written notice to the other Party of such Party's  intention to do
so (the "NOTICE OF  TERMINATION"  herein) at least 10 calendar days prior to the
effective date of any such termination (the end of such ten-day period from such
Notice of  Termination  being the  "EFFECTIVE  TERMINATION  DATE"  herein),  and
damages sought, if:

         (a)      the  other  Party  fails  to  cure a  material  breach  of any
                  provision of this  Agreement  within 10 calendar days from its
                  receipt  of  written  notice  from  said  Party  (unless  such
                  material  breach  cannot be  reasonably  cured  within said 10
                  calendar days and the other Party is actively pursuing to cure
                  said material breach);

         (b)      the other Party is willfully  non-compliant in the performance
                  of its  respective  duties  under  this  Agreement  within ten
                  calendar  days from its  receipt of written  notice  from said
                  Party (unless such willful non-compliance cannot be reasonably
                  corrected  within said 10 calendar days and the other Party is
                  actively pursuing to cure said willful non-compliance);

         (c)      the other Party commits fraud or serious neglect or misconduct
                  in the discharge of its respective  duties  hereunder or under
                  the law; or

         (d)      the other Party  becomes  adjudged  bankrupt or a petition for
                  reorganization  or  arrangement  under  any  law  relating  to
                  bankruptcy,  and where any such  involuntary  petition  is not
                  dismissed within 10 calendar days.

         In any such event the Executive  Group's ongoing  obligation to provide
the General  Services will continue  only until the Effective  Termination  Date
and, subject to the following,  the Company's ongoing  obligation to provide and
to pay to the  Executive  Group  all of the  amounts  otherwise  payable  to the

                     -- CEO EXECUTIVE SERVICES AGREEMENT --
                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

<PAGE>

                                      -7-

Executive under Article "4"  hereinbelow  will continue only until the Effective
Termination Date.

3.6   DISABILITY OR DEATH.Notwithstanding any other provision of this Agreement,
this  Agreement  may be  terminated  at any time by any Party within 10 calendar
days  after  the  death or  disability  of the  Executive,  as a  without  fault
termination (the resulting  effective date of any such termination  being herein
also the "EFFECTIVE  TERMINATION  DATE"). For the purposes of this Agreement the
term "DISABILITY" shall mean the Executive shall have been unable to provide the
General Services  contemplated  under this Agreement for a period of 30 calendar
days,  whether or not consecutive,  during any 360 calendar day period, due to a
physical or mental disability.  A determination of disability shall be made by a
physician  satisfactory to both the Executive and the Company;  provided that if
the Executive and the Company do not agree on a physician, the Executive and the
Company  shall each select a physician  and these two  together  shall  select a
third physician  whose  determination  as to disability  shall be binding on all
Parties.  In the event that the  Executive's  position is terminated by death or
because of disability  pursuant to this Agreement,  the Company shall pay to the
estate of the  Executive  or to the  Executive  Group,  as the case may be,  all
amounts to which the Executive  Group would  otherwise be entitled under Article
"4" hereinbelow until the Effective Termination Date.

3.7   EFFECT OF TERMINATION.  Terms of this  Agreement relating  to  accounting,
payments,  confidentiality,  accountability  for damages or claims and all other
matters  reasonably  extending  beyond  the terms of this  Agreement  and to the
benefit of the Parties  hereto or for the  protection  of the  various  Business
interests of the Companies shall survive the termination of this Agreement,  and
any matter of  interpretation  thereto  shall be given a wide  latitude  in this
regard. In addition, and without limiting the foregoing, each of sections "3.2",
"3.3",  "3.4",  "3.5",  "3.6"  hereinabove and section "5.6"  hereinbelow  shall
survive the termination of this Agreement.

                                    ARTICLE 4
                       COMPENSATION OF THE EXECUTIVE GROUP

4.1   FEE. It is hereby acknowledged and agreed that the  Executive  Group shall
render the General Services as defined  hereinabove  during the Initial Term and
during the  continuance of this  Agreement and shall thus be compensated  during
the  continuance of this Agreement to the  termination of the same by way of the
payment by the  Company  to the  Executive  Group,  or to the  further  order or
direction of the Executive  Group as the Executive  Group may determine,  in the
Executive Group's sole and absolute discretion,  and advise the Company of prior
to such payment, of the gross monthly fee of U.S. $12,500.00 (the "FEE");  (with
the acknowledgement  that an additional fee of U.S. $2,500.00 per month has been
paid, and continues to be payable, by the Company to the Executive Group, or its
affiliate or  associate,  under a  pre-existing  services  arrangement  with the
same);  with all  such  Fees  being be due and  payable  by the  Company  to the
Executive's Company, or to the further order or direction of the Executive Group
as the Executive Group may determine, in the Executive Group's sole and absolute
discretion, and advise the Company of prior to any such Fee payment,  bi-monthly
and on or  about  the  fifteenth  and  thirtieth  day of each  month of the then
monthly period of General Services during the continuance of this Agreement.

4.2   REIMBURSEMENT OF EXPENSES.  It is hereby  acknowledged and agreed that the
Executive  Group shall also be reimbursed  for all direct,  reasonable  expenses
actually and  properly  incurred by the  Executive  Group for the benefit of the
Company  (collectively,  the  "EXPENSES");  and  which  Expenses,  it is  hereby
acknowledged and agreed, shall be payable by the Company to the order, direction
and account of the  Executive  Group as the  Executive  Group may  designate  in
writing,  from  time  to  time,  in the  Executive  Group's  sole  and  absolute

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                                      -8-

discretion,  as soon as  conveniently  possible  after the prior delivery by the
Executive Group to the Company of written substantiation on account of each such
reimbursable Expense.

4.3   VESTING OPTION PREDICATED ON CERTAIN DELIVERABLES.Subject to the following
pre-delivery and vesting provisions, and as soon as reasonably practicable after
the prior and ongoing  attainment by the Company,  with the direct assistance of
the Executive Group, of certain pre-determined  corporate development milestones
by the Company  (collectively,  the "DELIVERABLES");  a complete listing of such
Deliverables  having been  agreed  upon by the Parties  hereto in advance and in
writing with the execution of this  Agreement (in each case herein being a "DATE
OF GRANT"),  it is hereby  acknowledged and agreed that the Executive Group will
be granted,  subject to the rules and policies of the Regulatory Authorities and
applicable  securities  legislation,  the terms and  conditions of the Company's
existing  stock  option  plan  (the  "OPTION  PLAN")  and  subject  to the final
determination of the Board of Directors, acting reasonably, the right and option
(the "OPTION") to purchase an aggregate of up to 1,000,000  common shares of the
Company (each an "OPTION SHARE") immediately upon the Date of Grant in each such
instance;  which is again to occur as soon as reasonably  practicable  after the
attainment by the Company of the stated  Deliverables;  at an exercise  price of
U.S.  $0.75 per Option  Share and for a period of up to three years for the Date
of Grant in each such instance on the following vesting terms and conditions:

         (a)      subject to the  following  provisions  for the  potential  and
                  ongoing  acceleration  of the Option,  the  Executive  Group's
                  right to purchase an  aggregate  of up to an  aggregate  of an
                  initial  500,000  Option  Shares  under the Option  shall only
                  vest,  from time to time, at the sole and absolute  discretion
                  of the Board of Directors who may,  from time to time,  and in
                  its sole and absolute discretion, acting reasonably, determine
                  to accelerate the Executive  Group's right and  entitlement to
                  exercise  all or any portion of said  initial  500,000  Option
                  Shares under the Option at any time should the  Company,  with
                  the direct  assistance  of the Executive  Group,  successfully
                  achieve,   in  any  manner,  any  or  all  of  the  first  six
                  Deliverables as agreed to by the Parties with the execution of
                  this Agreement; and

         (b)      subject to the  following  provisions  for the  potential  and
                  ongoing  acceleration  of the Option,  the  Executive  Group's
                  right to purchase an  aggregate  of up to an  aggregate of the
                  final 500,000  Option Shares under the Option shall only vest,
                  from time to time, at the sole and absolute  discretion of the
                  Board of Directors who may, from time to time, and in its sole
                  and  absolute  discretion,  acting  reasonably,  determine  to
                  accelerate  the  Executive  Group's right and  entitlement  to
                  exercise  all or any  portion  of said  final  500,000  Option
                  Shares under the Option at any time should the  Company,  with
                  the direct  assistance  of the Executive  Group,  successfully
                  achieve,  in any manner, the final and seventh  Deliverable as
                  agreed to by the  Parties  hereto with the  execution  of this
                  Agreement.

         In this  regard,  and  subject  also  to the  following,  it is  hereby
acknowledged and agreed that the exercise of any of the Option shall be subject,
at all  times,  to  such  resale  provisions  as may  then be  contained  in the
Company's  Option  Plan  and as may  be  finally  determined  by  the  Board  of
Directors,  acting reasonably.  Notwithstanding  the foregoing,  however,  it is
hereby also  acknowledged  and agreed that, in the event that this  Agreement is
terminated in accordance  with either of sections "3.2",  "3.3",  "3.4" or "5.6"
herein,  such portion of the within and  remaining  Option which shall have then
not  been  exercised  on  the  determined  Effective   Termination  Date  shall,
notwithstanding  the  remaining  exercise  period  of any such  Option,  then be
exercisable by the Executive  Group for the balance of the Exercise Term of each
particular  portion of the Option which has vested on the Effective  Termination
Date. In this regard,  and in accordance  with the terms and  conditions of each
final form of Option agreement(s), the Parties hereby also acknowledge and agree
that:

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                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

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                                      -9-

         (A)      REGISTRATION  OF OPTION SHARES UNDER THE OPTIONS:  the Company
                  expects to file with the United States Securities and Exchange
                  Commission  (the "SEC") a  registration  statement on Form S-8
                  (the "FORM S-8  REGISTRATION  STATEMENT")  within 120 calendar
                  days of initial Date of Grant and covering the issuance of all
                  Option  Shares of the Company  underlying  the then vested and
                  issued Option, and such Form S-8 Registration  Statement shall
                  comply with all  requirements of the United States  SECURITIES
                  ACT OF 1933, as amended (the "SECURITIES ACT"). In this regard
                  the Company shall use its best efforts to ensure that the Form
                  S-8 Registration  Statement  remains effective as long as such
                  vested and issued  Option is  outstanding,  and the  Executive
                  Group fully  understands  and  acknowledges  that these Option
                  Shares will be issued in reliance upon the exemption  afforded
                  under the Form S-8  Registration  Statement which is available
                  only if the  Executive  Group  acquires such Option Shares for
                  investment and not with a view to distribution.  The Executive
                  Group hereby  acknowledged that it is familiar with the phrase
                  "acquired for investment and not with a view to  distribution"
                  as it relates to the  Securities  Act and the special  meaning
                  given to such term in various releases of the SEC;

         (B)      SECTION 16 COMPLIANCE:  only if applicable,  the Company shall
                  ensure  that all  grants  of the  Option  are  made to  ensure
                  compliance  with all  applicable  provisions  of the exemption
                  afforded under Rule 16b-3  promulgated under the United States
                  SECURITIES AND EXCHANGE ACT OF 1934, as amended (the "EXCHANGE
                  ACT"). Without limiting the foregoing,  the Company shall have
                  an  independent  committee of the Board of  Directors  approve
                  each  grant of the  Option  to the  Executive  Group  and,  if
                  required,  by the applicable  Regulatory  Authorities  and the
                  shareholders of the Company. The Company shall file, on behalf
                  of the Executive Group, all reports required to filed with the
                  SEC pursuant to the  requirements  of Section  16(a) under the
                  Exchange Act and applicable rules and regulations;

         (C)      DISPOSITION OF ANY OPTION SHARES:  the Executive Group further
                  acknowledges and understands that,  without in anyway limiting
                  the   acknowledgements   and   understandings   as  set  forth
                  hereinabove,  the  Executive  Group agrees that the  Executive
                  Group  shall in no event  make any  disposition  of all or any
                  portion of the Option  Shares  which the  Executive  Group may
                  acquire hereunder unless and until:

                  (i)      there is then in  effect a  "REGISTRATION  STATEMENT"
                           under  the  Securities  Act  covering  such  proposed
                           disposition   and   such   disposition   is  made  in
                           accordance with said Registration Statement; or

                  (ii)     (a) the  Executive  Group  shall  have  notified  the
                           Company of the  proposed  disposition  and shall have
                           furnished  the Company  with a detailed  statement of
                           the    circumstances    surrounding    the   proposed
                           disposition,  (B)  the  Executive  Group  shall  have
                           furnished   the  Company   with  an  opinion  of  the
                           Executive Group's own counsel to the effect that such
                           disposition will not require registration of any such
                           Option Shares under the  Securities  Act and (C) such
                           opinion of the Executive  Group's  counsel shall have
                           been  concurred in by counsel for the Company and the
                           Company  shall have  advised the  Executive  Group of
                           such concurrence; and

         (D)      PAYMENT  FOR  ANY  OPTION   SHARES:   it  is  hereby   further
                  acknowledged  and agreed that,  during the continuance of this
                  Agreement,  the Executive  Group shall be entitled to exercise
                  any portion of the vested Option granted hereunder and pay for
                  the same by way of the prior agreement of the Executive Group,
                  in the  Executive  Group's sole and absolute  discretion,  and

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                                      -10-

                  with  the  prior  knowledge  of the  Company,  to  settle  any
                  indebtedness  which may be due and owing by the Company  under
                  this Agreement in payment for the exercise price of any Option
                  Shares  acquired  thereunder.  In this regard,  and subject to
                  further  discussion  as between the Company and the  Executive
                  Group,  together  with  the  prior  approval  of the  Board of
                  Directors  and the  establishment  by the Company of an Option
                  Plan predicated upon the same, it is envisioned that, when the
                  Company is in a position  to afford the same,  the Company may
                  adopt  certain  additional   "cashless  exercise"   provisions
                  respecting  the  granting  and  exercise  of  incentive  stock
                  options during the continuance of this Agreement.

4.4   PAYMENT OF  COMPENSATION  AS  A  NON-TAXABLE  CONSULTANT.   It  is  hereby
acknowledged  and  agreed  that the  Executive  Group  will be  classified  as a
non-taxable  consultant of the Company for all purposes. In this regard, and for
all matters relating to this Agreement therefore,  the Executive Group will be a
consultant  of the  Company  under the  meaning  or  application  of any and all
applicable federal and state unemployment,  insurance and workers'  compensation
laws, and otherwise.

                                    ARTICLE 5
                  ADDITIONAL OBLIGATIONS OF THE EXECUTIVE GROUP

5.1   REPORTING.  At such time or  times  as may be  required  by the  Board  of
Directors,  acting  reasonably,  the  Executive  Group will provide the Board of
Directors with such information  concerning the results of the Executive Group's
General Services and activities hereunder for the previous month as the Board of
Directors reasonably require.

5.2   NON-COMPETITION. During the continuance of this Agreement,and for a period
of twelve months  following the termination of this Agreement in accordance with
either of sections "3.2",  "3.3",  "3.4",  "3.5", "3.6" or "5.6" hereunder,  the
Executive  Group shall not enter into any  agreement  with any third party whose
primary  business  is the  manufacture  and  distribution  of natural or organic
fibers to provide  services  similar to those provided by the Executive Group to
the Company under this Agreement.

5.3   CONFIDENTIALITY.  The Executive  Group will not,  except as  authorized or
required by the Executive  Group's  duties  hereunder,  reveal or divulge to any
person  or  entity  any  information  concerning  the  organization,   business,
finances,  transactions  or other affairs of the Companies which may come to the
Executive  Group's  knowledge during the continuance of this Agreement,  and the
Executive  Group will keep in  complete  secrecy  all  confidential  information
entrusted  to the  Executive  Group and will not use or  attempt to use any such
information  in any manner  which may injure or cause loss  either  directly  or
indirectly to the Business  interests.  This  restriction will continue to apply
after the termination of this Agreement  without limit in point of time but will
cease to apply to  information  or  knowledge  which  may come  into the  public
domain.

5.4   COMPLIANCE WITH APPLICABLE  LAWS. The Executive Group will comply with all
Canadian,  U.S.  and  foreign  laws,  whether  federal,   provincial  or  state,
applicable to the Executive  Group's duties  hereunder and, in addition,  hereby
represents  and warrants  that any  information  which the  Executive  Group may
provide to any person or company  hereunder  will,  to the best of the Executive
Group's  knowledge,  information  and belief,  be accurate  and  complete in all
material  respects  and not  misleading,  and will not omit to state any fact or
information which would be material to such person or company.

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                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

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                                      -11-

5.5   OPINIONS, REPORTS AND ADVICE OF THE EXECUTIVE GROUP.  The Executive  Group
acknowledges and agrees that all written and oral opinions,  reports, advice and
materials  provided by the Executive  Group to the Companies in connection  with
the Executive Group's engagement hereunder are intended solely for the Company's
benefit  and for the  Company's  uses only,  and that any such  written and oral
opinions,  reports,  advice and information are, except as specifically provided
in section "5.7"  hereinbelow,  the exclusive  property of the Company.  In this
regard the Executive  Group  covenants and agrees that the Companies may utilize
any such opinion,  report, advice and materials for any other purpose whatsoever
and, furthermore, may reproduce,  disseminate, quote from and refer to, in whole
or in part, at any time and in any manner, any such opinion,  report, advice and
materials in the Company's  sole and absolute  discretion.  The Executive  Group
further covenants and agrees that no public references to the Executive Group or
disclosure of the Executive Group's role in respect of the Companies may be made
by the  Executive  Group  without  the  prior  written  consent  of the Board of
Directors in each  specific  instance  and,  furthermore,  that any such written
opinions,  reports,  advice or materials shall, unless otherwise required by the
Board of  Directors,  be provided by the  Executive  Group to the Companies in a
form and with such substance as would be acceptable for filing with and approval
by  any  Regulatory  Authority  having  jurisdiction  over  the  affairs  of the
Companies from time to time.

5.6   EXECUTIVE GROUP'S BUSINESS CONDUCT.  The Executive Group warrants that the
Executive  Group shall  conduct the  business and other  activities  in a manner
which is lawful and reputable and which brings good repute to the Companies, the
Business  interests and the Executive Group. In particular,  and in this regard,
the Executive Group  specifically  warrants to provide the General Services in a
sound and  professional  manner such that the same meets  superior  standards of
performance  quality  within  the  standards  of the  industry  or as set by the
specifications  of the  Company.  In the event that the Company has a reasonable
concern that the business as conducted by the Executive Group is being conducted
in a way  contrary  to law or is  reasonably  likely to bring  disrepute  to the
Business interests or to the Companies' or the Executive Group's reputation, the
Company  may  require  that the  Executive  Group make such  alterations  in the
Executive Group's business conduct or structure,  whether of management or Board
representation  or  employee  or  sub-licensee  representation,  as the Board of
Directors may reasonably require, in its sole and absolute  discretion,  failing
which the  Company,  in its sole and absolute  discretion,  may  terminate  this
Agreement upon prior written notice to the Executive Group to do so (the "NOTICE
OF TERMINATION" herein) at least 10 calendar days prior to the effective date of
any  such  termination  (the end of such  10-day  period  from  such  Notice  of
Termination being the "EFFECTIVE  TERMINATION  DATE" herein).  In any such event
the Executive  Group's ongoing  obligation to provide the General  Services will
continue  only  until  the  Effective  Termination  Date  and,  subject  to  the
following,  the  Company's  ongoing  obligation  to  provide  and  to pay to the
Executive  Group all of the amounts  otherwise  payable to the  Executive  under
Article "4" hereinabove will continue until the Effective  Termination  Date. In
the event of any  debate or  dispute  as to the  reasonableness  of the Board of
Directors' request or requirements, the judgment of the Board of Directors shall
be  deemed  correct  until  such  time as the  matter  has  been  determined  by
arbitration in accordance with Article "8" hereinbelow.

5.7   RIGHT  OF  OWNERSHIP TO  THE BUSINESS AND RELATED PROPERTY.  The Executive
Group  hereby  acknowledges  and  agrees  that any and all  Business  interests,
together with any products or improvements derived therefrom and any trade marks
or trade names used in connection with the same (collectively,  the "PROPERTY"),
are wholly owned and  controlled by the Company.  Correspondingly,  neither this
Agreement,   nor  the  General   Services  or  the  operation  of  the  Business
contemplated  by this  Agreement,  confers or shall be deemed to confer upon the
Executive Group any interest  whatsoever in and to any of the Property.  In this
regard the Executive Group hereby further covenants and agrees not to, during or
after the Initial Term and the continuance of this Agreement,  contest the title
to any of the Property  interests,  in any way dispute or impugn the validity of
the  Property  interests or take any action to the  detriment  of the  Company's

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                                      -12-

interests  therein.  The  Executive  Group  acknowledges  that, by reason of the
unique nature of the Property interests,  and by reason of the Executive Group's
knowledge of and association with the Property interests during the Initial Term
and during the  continuance  of this  Agreement,  the aforesaid  covenant,  both
during the Initial Term of this  Agreement and  thereafter,  is  reasonable  and
commensurate  for the  protection of the  legitimate  Business  interests of the
Companies.  As a final note, the Executive  Group hereby  further  covenants and
agrees to immediately  notify the Company of any infringement of or challenge to
the any of the Property  interests as soon as the Executive  Group becomes aware
of the infringement or challenge. Notwithstanding the Company's ownership of the
Property,  the  Parties  acknowledge  and agree that the  Property  may  contain
certain proprietary Executive Group materials or elements which shall remain the
property of the Executive Group (collectively, the "EXECUTIVE GROUP MATERIALS").
Executive  Group  Materials are generally used or provided to the clients of the
Executive  Group in the normal course of delivering its consulting  services and
include,  but are not limited to,  processes,  techniques  and know how, and all
intellectual property rights contained herein. The Executive Group grants to the
Company a  non-exclusive,  non-transferable  license to use the Executive  Group
Materials embodied within the Property.

         The  Executive  Group hereby  assigns to the Company,  exclusive of the
Executive Group Materials, its right, title and interest throughout the world in
and to all  work  performed,  writings,  formulas,  designs,  models,  drawings,
photographs,  design  inventions,  and other  inventions,  made,  conceived,  or
reduced to  practice  or authored  by the  Executive  Group or by the  Executive
Group's employees,  either solely or jointly with others, during the performance
of this  Agreement,  or which are made,  conceived,  or reduced to practice,  or
authored  with the use of  information  or  materials  of the  Companies  either
received or used by the Executive Group during the performance of this Agreement
or any extension or renewal thereof. The Executive Group shall promptly disclose
to the Company all works,  writings,  formulas,  designs,  models,  photographs,
drawings,  design inventions and other inventions made,  conceived or reduced to
practice,  or authored by the Executive Group or the Executive Group's employees
as set forth above. The Executive Group shall sign, execute and acknowledge,  or
cause  to be  signed,  executed  and  acknowledged,  at the  Company's  cost and
expense,  applicable patent,  trademark or copyright  protection  throughout the
world  upon all such  works,  writings,  formulas,  designs,  models,  drawings,
photographs,  design inventions and other inventions; title to which the Company
acquires in  accordance  with the  provisions  of this  section,  subject to the
Executive  Group's sole and exclusive  rights in the Executive Group  Materials.
The  Executive  Group has acquired or shall  acquire from each of the  Executive
Group's  employees,  if any, the necessary  rights to all such works,  writings,
formulas,  designs, models, drawings,  photographs,  design inventions and other
inventions  made by such employees  within the scope of their  employment by the
Executive  Group in performing the General  Services under this  Agreement.  The
Executive  Group shall seek to obtain the  reasonable  cooperation  of each such
employee to secure to the  Company's or its  nominee's the rights to such works,
writings,  formulas, designs, models, drawings,  photographs,  design inventions
and  other  inventions  as the  Company  may  acquire  in  accordance  with  the
provisions of this section.

                                    ARTICLE 6
                      INDEMNIFICATION AND LEGAL PROCEEDINGS

6.1   INDEMNIFICATION.The Parties hereto hereby each agree to indemnify and save
harmless  the  other  Party  hereto  and  including,  where  applicable,   their
respective  subsidiaries and affiliates and each of their respective  directors,
officers,  employees,  consultants,  associates,  counsel and agents  (each such
party  being an  "INDEMNIFIED  PARTY")  harmless  from and  against  any and all
losses, claims, actions, suits, proceedings, damages, liabilities or expenses of
whatever nature or kind and including,  without  limitation,  any  investigation
expenses  incurred by any Indemnified  Party, to which an Indemnified  Party may

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                                      -13-

become subject by reason of the terms and conditions of this Agreement.

6.2   NO  INDEMNIFICATION.  This indemnity  will  not  apply  in  respect  of an
Indemnified  Party in the  event  and to the  extent  that a Court of  competent
jurisdiction in a final judgment shall determine that the Indemnified  Party was
grossly negligent or guilty of willful misconduct.

6.3   CLAIM OF INDEMNIFICATION. The Parties hereto agree to waive any right they
might  have of first  requiring  the  Indemnified  Party to  proceed  against or
enforce any other right, power, remedy, security or claim payment from any other
person before claiming this indemnity.

6.4   NOTICE OF CLAIM.In case any action is brought against an Indemnified Party
in  respect  of which  indemnity  may be sought  against  either of the  Parties
hereto,  the  Indemnified  Party will give both Parties  hereto  prompt  written
notice of any such action of which the  Indemnified  Party has knowledge and the
relevant Party will undertake the investigation and defense thereof on behalf of
the Indemnified Party,  including the prompt employment of counsel acceptable to
the  Indemnified  Party  affected and the relevant  Party and the payment of all
expenses.  Failure by the  Indemnified  Party to so notify shall not relieve the
relevant Party of such relevant Party's obligation of indemnification  hereunder
unless (and only to the extent that) such failure results in a forfeiture by the
relevant Party of substantive rights or defenses.

6.5   SETTLEMENT.  No  admission  of liability  and no  settlement of any action
shall be made without the consent of each of the Parties  hereto and the consent
of the Indemnified Party affected, such consent not to be unreasonable withheld.

6.6   LEGAL PROCEEDINGS.  Notwithstanding that the relevant Party will undertake
the  investigation and defense of any action, an Indemnified Party will have the
right to employ  separate  counsel  in any such  action and  participate  in the
defense  thereof,  but the  fees and  expenses  of such  counsel  will be at the
expense of the Indemnified Party unless:

         (a)      such counsel has been authorized by the relevant Party;

         (b)      the  relevant  Party has not assumed the defense of the action
                  within a reasonable  period of time after receiving  notice of
                  the action;

         (c)      the named  parties to any such action  include  that any Party
                  hereto and the  Indemnified  Party shall have been  advised by
                  counsel  that there may be a conflict of interest  between any
                  Party hereto and the Indemnified Party; or

         (d)      there  are  one  or  more  legal  defenses  available  to  the
                  Indemnified  Party which are different  from or in addition to
                  those available to any Party hereto.

6.7   CONTRIBUTION.  If for  any  reason  other than the gross negligence or bad
faith of the  Indemnified  Party  being  the  primary  cause of the loss  claim,
damage, liability, cost or expense, the foregoing indemnification is unavailable
to the Indemnified  Party or  insufficient  to hold them harmless,  the relevant
Party shall contribute to the amount paid or payable by the Indemnified Party as
a result of any and all such  losses,  claim,  damages  or  liabilities  in such
proportion as is appropriate to reflect not only the relative  benefits received
by the relevant  Party on the one hand and the  Indemnified  Party on the other,
but also the  relative  fault of relevant  Party and the  Indemnified  Party and
other  equitable  considerations  which  may be  relevant.  Notwithstanding  the
foregoing,  the relevant Party shall in any event  contribute to the amount paid
or payable by the  Indemnified  Party, as a result of the loss,  claim,  damage,
liability, cost or expense (other than a loss, claim, damage, liability, cost or
expenses, the primary cause of which is the gross negligence or bad faith of the

                     -- CEO EXECUTIVE SERVICES AGREEMENT --
                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

<PAGE>

                                      -14-

Indemnified  Party),  any  excess  of such  amount  over the  amount of the fees
actually received by the Indemnified Party hereunder.

                                    ARTICLE 7
                                  FORCE MAJEURE

7.1   EVENTS. If either Party hereto is at any time either during this Agreement
or  thereafter  prevented or delayed in complying  with any  provisions  of this
Agreement by reason of strikes,  walk-outs,  labour shortages,  power shortages,
fires, wars, acts of God, earthquakes,  storms, floods,  explosions,  accidents,
protests or demonstrations  by environmental  lobbyists or native rights groups,
delays in transportation,  breakdown of machinery, inability to obtain necessary
materials  in  the  open  market,  unavailability  of  equipment,   governmental
regulations  restricting normal operations,  shipping delays or any other reason
or reasons  beyond the  control of that  Party,  then the time  limited  for the
performance  by that  Party of its  respective  obligations  hereunder  shall be
extended  by a period  of time  equal  in  length  to the  period  of each  such
prevention or delay.

7.2   NOTICE.  A Party shall within three calendar days give notice to the other
Parties of each event of FORCE MAJEURE under section "7.1" hereinabove, and upon
cessation  of such event  shall  furnish the other  Parties  with notice of that
event together with  particulars of the number of days by which the  obligations
of that  Party  hereunder  have been  extended  by virtue of such event of FORCE
MAJEURE and all preceding events of FORCE MAJEURE.

                                    ARTICLE 8
                                   ARBITRATION

8.1   MATTERS FOR ARBITRATION. Except for matters of indemnity or in the case of
urgency to prevent  material harm to a substantive  right or asset,  the Parties
agree that all  questions or matters in dispute  with respect to this  Agreement
shall be submitted to arbitration  pursuant to the terms hereof.  This provision
shall not  prejudice a Party from seeking a Court order or assistance to garnish
or secure  sums or to seek  summary  remedy  for such  matters  as  counsel  may
consider amenable to summary proceedings.

8.2   NOTICE. It shall be a  condition  precedent  to the  right of any Party to
submit any matter to  arbitration  pursuant  to the  provisions  hereof that any
Party  intending  to refer any matter to  arbitration  shall have given not less
than five business  days' prior written  notice of its intention to do so to the
other  Parties  together  with  particulars  of the  matter in  dispute.  On the
expiration of such five business days the Party who gave such notice may proceed
to  refer  the  dispute  to   arbitration  as  provided  for  in  section  "8.3"
hereinbelow.

8.3   APPOINTMENTS. The Party desiring arbitration shall appoint one arbitrator,
and shall notify the other  Parties of such  appointment,  and the other Parties
shall,  within  five  business  days after  receiving  such  notice,  appoint an
arbitrator,  and the two arbitrators so named,  before proceeding to act, shall,
within five business days of the  appointment of the last appointed  arbitrator,
unanimously agree on the appointment of a third arbitrator, to act with them and
be  chairperson  of the  arbitration  herein  provided for. If the other Parties
shall fail to appoint an arbitrator  within five  business days after  receiving
notice of the  appointment of the first  arbitrator,  and if the two arbitrators
appointed  by the  Parties  shall be unable to agree on the  appointment  of the
chairperson,  the chairperson shall be appointed in accordance with the scope of
the rules of the  Arbitration  Service of Portland;  whose rules and regulations
shall govern the applicable arbitration.  The chairperson,  or in the case where
only one arbitrator is appointed,  the single  arbitrator,  shall fix a time and
place in Portland,  Oregon,  U.S.A., for the purpose of hearing the evidence and

                     -- CEO EXECUTIVE SERVICES AGREEMENT --
                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

<PAGE>

                                      -15-

representations  of the  Parties,  and the  chairperson  shall  preside over the
arbitration  and  determine  all  questions of procedure not provided for by the
Arbitration Act or this section.  After hearing any evidence and representations
that the Parties may submit, the single arbitrator,  or the arbitrators,  as the
case may be, shall make an award and reduce the same to writing, and deliver one
copy thereof to each of the  Parties.  The expense of the  arbitration  shall be
paid as specified in the award.

8.4   AWARD. The Parties agree that the award of a majority of the  arbitrators,
or in the case of a single  arbitrator,  of such arbitrator,  shall be final and
binding upon each of them.

                                    ARTICLE 9
                               GENERAL PROVISIONS

9.1   ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement to date
between the Parties hereto and supersedes every previous agreement, expectation,
negotiation,  representation or understanding,  whether oral or written, express
or implied,  statutory  or  otherwise,  between the Parties  with respect to the
subject matter of this Agreement.

9.2   NO ASSIGNMENT.   This  Agreement  may not  be assigned by any Party hereto
except with the prior written consent of the other Parties.

9.3   NOTICE.  Each  notice, demand or other communication required or permitted
to be given  under  this  Agreement  shall be in  writing  and  shall be sent by
prepaid  registered  mail deposited in a recognized post office and addressed to
the Party  entitled  to receive the same,  or  delivered  to such Party,  at the
address for such Party specified on the front page of this  Agreement.  The date
of receipt of such notice,  demand or other  communication  shall be the date of
delivery  thereof if delivered,  or, if given by  registered  mail as aforesaid,
shall be deemed  conclusively  to be the third business day after the same shall
have been so mailed,  except in the case of  interruption of postal services for
any reason  whatsoever,  in which case the date of receipt  shall be the date on
which the notice,  demand or other  communication  is  actually  received by the
addressee.  Any  Party may at any time and from  time to time  notify  the other
Parties in writing of a change of address  and the new  address to which  notice
shall be given to it thereafter until further change.

9.4   TIME OF THE ESSENCE.   Time will be of the essence of this Agreement.

9.5   ENUREMENT. This Agreement will enure to the benefit of and will be binding
upon the Parties hereto and their respective  heirs,  executors,  administrators
and assigns.

9.6   CURRENCY.  Unless otherwise  stipulated, all payments  required to be made
pursuant to the  provisions of this  Agreement  and all money amount  references
contained herein are in lawful currency of the United States of America.

9.7   FURTHER ASSURANCES. The Parties will from time to time after the execution
of this  Agreement  make,  do,  execute  or cause or permit to be made,  done or
executed, all such further and other acts, deeds, things, devices and assurances
in law whatsoever as may be required to carry out the true intention and to give
full force and effect to this Agreement.

9.8   REPRESENTATION AND COSTS. It is hereby acknowledged by each of the Parties
hereto that Lang Michener LLP, Lawyers - Patent & Trade Mark Agents, acts solely
for the  Company,  and,  correspondingly,  that  the  Executive  Group  has been
required  by each of Lang  Michener  LLP and the  Company to obtain  independent
legal advice with  respect to its review and  execution  of this  Agreement.  In
addition,  it is hereby  further  acknowledged  and agreed by the Parties hereto

                     -- CEO EXECUTIVE SERVICES AGREEMENT --
                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

<PAGE>

                                      -16-

that  Lang  Michener  LLP,  and  certain  or  all  of its  principal  owners  or
associates,  from  time to  time,  may have  both an  economic  or  shareholding
interest in and to Company  and/or a  fiduciary  duty to the same  arising  from
either a directorship,  officership or similar  relationship  arising out of the
request of the Company for certain of such persons to act in a similar  capacity
while acting for the Company as counsel.  Correspondingly,  and even where, as a
result of this  Agreement,  the  consent  of each  Party  hereto to the role and
capacity of Lang Michener LLP, and its principal  owners and associates,  as the
case may be, is deemed to have been  received,  where any  conflict or perceived
conflict  may arise,  or be seen to arise,  as a result of any such  capacity or
representation,  each Party hereto acknowledges and agrees to, once more, obtain
independent  legal advice in respect of any such conflict or perceived  conflict
and,  consequent  thereon,  Lang Michener LLP,  together with any such principal
owners or  associates,  as the case may be,  shall be at  liberty at any time to
resign any such  position  if it or any Party  hereto is in any way  affected or
uncomfortable  with any such  capacity  or  representation.  Each  Party to this
Agreement  will  also  bear  and pay its own  costs,  legal  and  otherwise,  in
connection  with  its  respective  preparation,  review  and  execution  of this
Agreement and, in particular, that the costs involved in the preparation of this
Agreement,  and  all  documentation  necessarily  incidental  thereto,  by  Lang
Michener LLP, shall be at the cost of the Company.

9.9   APPLICABLE LAW. This Agreement shall be governed by the laws of  the State
of Oregon, U.S.A., and applicable United States federal law.

9.10  SEVERABILITY AND CONSTRUCTION. Each Article, section,  paragraph, term and
provision  of this  Agreement,  and any  portion  thereof,  shall be  considered
severable,  and if, for any reason,  any portion of this Agreement is determined
to be invalid,  contrary to or in conflict with any applicable present or future
law,  rule or  regulation  in a final  unappealable  ruling issued by any court,
agency or tribunal  with valid  jurisdiction  in a proceeding to which any Party
hereto is a party,  that ruling shall not impair the  operation  of, or have any
other effect upon, such other portions of this Agreement as may remain otherwise
intelligible  (all of which shall remain  binding on the Parties and continue to
be given full  force and  effect as of the date upon  which the  ruling  becomes
final).

9.11  CAPTIONS. The captions,  section numbers and Article numbers  appearing in
this  Agreement are inserted for  convenience  of reference only and shall in no
way define,  limit,  construe or describe the scope or intent of this  Agreement
nor in any way affect this Agreement.

9.12  COUNTERPARTS.  This Agreement may  be signed  by the Parties hereto  in as
many counterparts as may be necessary,  and via facsimile if necessary,  each of
which so signed being deemed to be an original  and such  counterparts  together
constituting  one and the  same  instrument  and,  notwithstanding  the  date of
execution,  being  deemed to bear the  Effective  Date as set forth on the front
page of this Agreement.

9.13  NO PARTNERSHIP OR AGENCY.  The Parties have not created a partnership  and
nothing  contained in this Agreement shall in any manner  whatsoever  constitute
any Party the partner,  agent or legal  representative of the other Parties, nor
create any fiduciary relationship between them for any purpose whatsoever.

9.14  CONSENTS AND WAIVERS.  No consent or waiver expressed or implied by either
Party in respect of any  breach or  default by the other in the  performance  by
such other of its obligations hereunder shall:

         (a)      be valid unless it is in writing and stated to be a consent or
                  waiver pursuant to this section;

                     -- CEO EXECUTIVE SERVICES AGREEMENT --
                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

<PAGE>

                                      -17-

         (b)      be relied  upon as a consent to or waiver of any other  breach
                  or default of the same or any other obligation;

         (c)      constitute a general waiver under this Agreement; or

         (d)      eliminate or modify the need for a specific  consent or waiver
                  pursuant to this section in any other or subsequent instance.

         IN WITNESS WHEREOF each of the Company and the Executive's  Company has
duly  executed  this   Agreement  as  of  the  Effective   Date  first  provided
hereinabove.

The COMMON SEAL of                                   )
NATURALLY ADVANCED                                   )
TECHNOLOGIES INC.,                                   )
the Company herein,                                  )
was hereunto affixed in the presence of:             )                     (C/S)
                                                     )
                                                     )
_____________________________________________________)
Authorized Signatory                                 )

The COMMON SEAL of                                   )
MERIWETHER ACCELERATORS, LLC                         )
the Executive's Company herein,                      )
was hereunto affixed in the presence of:             )                     (C/S)
                                                     )
                                                     )
_____________________________________________________)
Authorized Signatory                                 )

                     -- CEO EXECUTIVE SERVICES AGREEMENT --
                   -- NATURALLY ADVANCED TECHNOLOGIES INC. --

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