Exhibit 4.10============ UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THESE SECURITIES SHALL NOT TRADE THE SECURITIES NOR ANY SECURITIES INTO WHICH THEY MAY BE CONVERTED BEFORE SEPTEMBER 30, 2005. USD$175,000 ——- DYNAMOTIVE ENERGY SYSTEMS CORPORATION DEMAND secured CONVERTIBLE NOTETHIS NOTE is one of a duly authorized issue of Notes of DYNAMOTIVE ENERGYSYSTEMS CORPORATION, a corporation duly organized and existing under the lawsof the Province of British Columbia (the “Corporation”)which are designatedas its Convertible Secured Notes in an aggregate principal amount notexceeding USD$2,000,000.FOR VALUE RECEIVED, the Corporation promises to pay to Paul Hughes, theregistered holder hereof (the “Holder”), the principal sum of one hundredseventy five thousand Dollars ($175,000 USD) together with interest thereonwithin 10 days of demand made on or after May 31, 2006 (such tenth day beingthe “Maturity Date”). The principal so payable will be paid on the MaturityDate to the person in whose name this Note (or one or more predecessor Notes)is registered on the records of the Corporation regarding registration andtransfers of the Notes (the “Note Register”) on the tenth day after theMaturity Date. The principal of this Note is payable in currency of the at the time of payment is legal tender for payment of public and privatedebts, at the address last appearing on the Note Register of the Corporationas designated in writing by the Holder from time to time. The Corporationwill pay the principal upon this Note on the Maturity Date, less any amountsrequired by law to be deducted for withholding taxes, to the registeredholder of this Note as of the tenth day prior to the Maturity Date andaddressed to such holder at the last address appearing on the Note Register.The forwarding of such cheque shall constitute a payment and shall satisfyand discharge the liability for the principal on this Note to the extent ofthe sum represented by such cheque plus any amounts so deducted unless suchcheque is not paid at par.This Note shall bear interest at the rate of 10% per annum from the date ofadvance of funds until repayment in full. The Corporation shall pay theHolder’s costs of collection and enforcement if this note is dishonoured.Interest shall be paid at the time the principal on the Maturity date.This Note is subject to the additional terms and conditions in paragraphs 1to 12 attached hereto and forming a part hereof.IN WITNESS WHEREOF, the Corporation has caused this instrument to be dulyexecuted by an officer hereunto duly authorized. DYNAMOTIVE ENERGY SYSTEMS CORPORATION 2 Per: “ROBERT ANDREW KINGSTON”Dated: May 31, 2005. 31. The Notes are issuable in denominations of Ten Thousand Dollars ($10,000USD) and integral multiples thereof. The Notes are exchangeable for an equalaggregate principal amount of Notes of different authorized denominations, asrequested by the Holders surrendering the same. No service charge will bemade for such registration of transfer or exchange.2. Notwithstanding that the Maturity Date has not occurred, the Holdershall be entitled to demand earlier repayment of this Note at the time and tothe extent the Corporation receives contribution funds from the Government ofCanada under its Technology Partnerships Canada (“TPC”) program agreementwith the Corporation. The Holder shall be entitled to priority in such TPCreceivable The Holder shall be kept apprised of the status of thecontribution application and the related such receivable which theCorporation covenants it shall direct TPC to send to its Canadian legalcounsel, Lang Michener LLP, 1500 1055 West Georgia Street, Vancouver, BC,Canada, V6E 4N7 attn B. Zinkhofer (604 691 7483; to beheld by said counsel for the Holder(s) of the Note(s). The Holder shall beentitled to notice of the receipt of the contribution funding and maythereafter elect with 10 days to have the amount paid to it as repaymenthereunder failing which the funds shall be paid over to the Corporation.3. This Note has been issued subject to investment representations of theoriginal purchaser hereof. Prior to due presentment for transfer of thisNote, the Corporation and any agent of the Corporation may treat the personin whose name this Note is duly registered on the Company’s Note Register asthe owner hereof for the purpose of receiving payment as herein provided andfor all other purposes, whether or not this Note be overdue, and neither theCorporation nor any such agent shall be affected by notice to the contrary.4. The Holder of this Note is entitled, at its option, at any time, untilrepayment hereof to convert the principal and interest amount of this Note orany portion of the principal amount hereof which is at least Ten ThousandDollars ($10,000 USD) or, if at the time of such election to convert theaggregate principal amount of all Notes registered to the Holder is less thanTen Thousand Dollars ($10,000 USD), then the whole amount thereof, intoCommon Shares of the Corporation at the Conversion Price (“Conversion Price”)which is USD$0.40 for each Common Share.5. The “Conversion Price” was established using a 15% discount to the”Market Price” which is defined as the weighted average closing price of theCommon Shares during the 5 day period prior to advancement of funds underthis Note (subject to a floor of $0.40) on the over the counter market, NASDOTC BB. The Market Price was determined by multiplying each daily publishedclosing trade price for such 5 days by the number of Common Shares traded oneach day during such 5 consecutive trading days and summing such products anddividing the resultant sum by the aggregate of the daily volumes in thatperiod .6. In addition to the Common Shares issuable on conversion hereof, theCorporation will also allot and issue 0.50 of a three-year share purchasewarrant (the “Warrants”) per Common Share issued as a result of anyconversion hereunder exercisable at any time and from time to time prior tothe Maturity Date or expiry of the warrants at a price which is 105% of theMarket Price. The Warrant will be in the Corporation’s usual form of non-transferable Warrant.7. A conversion may be in whole or in part and from time to time, subjectto the limits herein, and shall be effectuated by surrendering the Notes tobe converted to the Corporation at 230, 1700 West 75th Avenue, Vancouver,British Columbia, V6P 6G2, Canada, facsimile (604) 267-6039 with the form ofconversion notice attached hereto as Exhibit “A”, executed by the Holder ofthis Note evidencing such Holder’s intention to convert this Note or aspecified portion (as above provided) hereof, and accompanied, if such sharesare to be issued in a name other than Holder, by proper assignment hereof inblank. No fractions of shares will be issued on conversion, but the numberof shares issuable shall be rounded to the nearest whole share. The date onwhich notice of conversion is given shall be deemed to be the date on whichthe Holder has delivered this Note, with the conversion notice duly executed,to the Company, or, if earlier, the date set forth in such notice ofconversion if this Note is received by the Corporation within two businessdays’ thereafter. Unless there has occurred an Event of Default or a demandfor repayment in cash, any Note outstanding on the Maturity Date shall be, atthe Corporation’s election, converted into Shares at the conversion pricewhich would be in effect if the notice of conversion were given on theMaturity Date. 48. No provision of this Note shall alter or impair the obligation of theCompany, which is absolute and unconditional, to prepay the principal of thisNote at any time, and at the place and rate, herein prescribed, on 5 businessdays notice sent to the Holder by prepaid registered mail. This Note and allother Notes now or hereafter issued of similar terms are direct obligationsof the Company. This Note ranks equally and rateably with all other Notesnow or hereafter issued under the terms set forth herein.9. Upon the occurrence of an Event of Default that has occurred and iscontinuing the principal sum may be immediately demanded to be due. Each ofthe following shall constitute an Event of Default: (a) if a proceeding or case shall be commenced against the Corporation in any court of competent jurisdiction, seeking (i) its reorganization, liquidation, termination or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a receiver, custodian, examiner, liquidator or the like of the Corporation or all or any substantial part of its property, or (iii) similar relief in respect of the Corporation under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 30 or more days, or an order for relief against the Corporation shall be entered in an involuntary case under the Companies Creditors Arrangement Act (Canada) or the Bankruptcy and Insolvency Act (Canada); (b) if the Corporation shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, examiner, liquidator or the like of itself or of all or any substantial part of its property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Companies Creditors Arrangement Act (Canada) or the Bankruptcy and Insolvency Act, or (iv) institute any proceeding or file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, termination, winding-up or composition or readjustment of debts; (c) if the Corporation shall cease to carry on the ordinary course of its business or a substantial part thereof; and (d) if the Corporation shall purport to redirect its TPC contribution entitlements to any person other than the Holder as contemplated above.10. No recourse shall be had for the payment of the principal of this Note,or for any claim based hereon, or otherwise in respect hereof, against anyincorporator, shareholder, officer or director, as such, past, present orfuture, of the Corporation or any successor corporation, whether by virtue ofany constitution, statute or rule of law, or by the enforcement of anyassessment or penalty or otherwise, all such liability being, by theacceptance hereof and as part of the consideration for the issue hereof,expressly waived and released. 511. The Holder of this Note, by acceptance hereof, agrees that this Note isbeing acquired for investment and that such Holder will not offer, sell orotherwise dispose of this Note or the Shares of Common Stock issuable uponexercise thereof except under circumstances which will not result in aviolation of applicable law relating to the sale of securities. The Holder ofthis Note acknowledges that any Common Shares acquired on the conversionhereof will bear a restrictive legend if the Holder is, or appears to be, aUS Person. Whether or not the Holder is a US Person the Holder acknowledgesthat the Common Shares issued on conversion of the Notes will be restrictedunder Canadian and US securities laws.12. This Note is secured by the additional rights and charges provided toHolders of the Notes in the Security Agreement executed by the Companycontemporaneously with the making of this Note a copy of which SecurityAgreement is available on request of the Company.13. This Note shall be governed by and construed in accordance with the lawsof the Province of British Columbia, Canada. EXHIBIT A NOTICE OF CONVERSION (To be executed by the Registered Holder in order to Convert the Note) The undersigned hereby irrevocably elects to convert the above Note No._____ or $_____________ of such Note into Common Shares and Warrants ofDynaMotive Energy Systems Corporation according to the conditions hereof, asof the date written below. ——————————– Date of Conversion ——————————– Signature The Securities are to registered and delivered as follows: ——————————– Name ——————————– Address ——————————– AddressThis original Note and Notice of Conversion should be received by theCorporation by the third business day following the Date of Conversion andthe Corporation will continue to hold the Common Shares and Warrants for theHolder until the original is received.8