EMPLOYMENT AGREEMENT


     This Employment Agreement ("Agreement") is made and effective this 1st day
of August 2003, by and between Perma-Tune Electronics, Inc., a Texas
corporation, and any successor corporation (the "Company") and Paul M. Cervino
(the "Employee").

     WHEREAS, the Company recognizes the Employee's potential or future
contribution to the growth and success of the Company and desires to provide for
his continued employment by reinforcing and encouraging his continued attention
and dedication to the Company; and

     WHEREAS, the Company wishes to retain Employee's services and access to the
Employee's experience and knowledge; and

     WHEREAS, the Employee wishes to furnish financial and accounting services
to the Company upon the terms, provisions and conditions herein provided; and

     WHEREAS, the Employee is willing to commit himself to continue to serve as
an Employee of the Company on the terms and conditions herein provided;

     NOW, THEREFORE, in consideration of the foregoing and the agreements
hereinafter contained, the parties hereby agree as follows:

1.     Recitals.  The "Whereas" clauses recited above are hereby incorporated by
reference as though they were fully set forth herein.

2.     Employment.  The Company hereby agrees to initially employ the Employee
as its Chief Financial Officer and the Employee hereby accepts such employment
in accordance with the terms of this Agreement and the terms of employment
applicable to regular employees of the Company.  In the event of any conflict or
ambiguity between the terms of this Agreement or the terms of employment
applicable to regular employees, the terms of this Agreement shall control.
Election or appointment of Employee to another office or position, regardless of
whether such office or position is inferior to Employee's initial office or
position, shall not be a breach of this Agreement.

3.     Duties of Employee.  During the term of this Agreement (as hereinafter
defined), Employee will, upon reasonable request, serve as Chief Financial
Officer of the Company as follows:
a.   Services hereunder shall be provided as an employee of the Company;
b.   Employee may be required to devote up to forty (40) hours per week to the
     Company; and
c.   Employee may oversee the Company's financial and accounting matters as
     requested by the Company.

Employee shall devote his entire productive time, ability and attention to the
business of the Company and shall perform all duties in a professional, ethical
and businesslike manner.  Employee will not, during the term of this Agreement,
directly or indirectly engage in any other business, either as an employee,
employer, consultant, principal, officer, director, advisor or in any other
capacity, either with or without compensation, without the prior written consent
of the Company.

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4.     Compensation.  Beginning August 1, 2003, the Employee will be paid
compensation as follows:
a.   A base salary of $125,000 (One Hundred Twenty Five Thousand Dollars) per
     year, and after six months time the Company will review and may increase
     such salary or maintain the status quo.
b.   As additional consideration for signing this Agreement and for agreeing to
     abide and be bound by its terms, provisions and restriction, and in
     addition to all other benefits described in this Agreement, Employee shall
     receive shares of restricted Company common stock (the "Shares"). Employee
     shall earn 10,417 shares per month for each full month services are
     provided by Employee to the Company until such time as Employee receives an
     aggregate of 250,000 shares of Company common stock. The Shares shall be
     issued and delivered to Employee on a monthly basis. The Company grants
     Employee piggy-back registration rights and agrees to register the resale
     of Employee's Shares on the first registration statement filed by the
     Company.
c.   The Company agrees, at its option and when feasible, to institute an
     Executive Compensation Plan which will include the following: a stock
     option plan, a bonus plan and a deferred compensation plan. Participation
     in any or all of these plans (plus any future Executive Compensation Plans
     are at the sole discretion of the Board of Directors.

5.     Exemption from Registration.  The Shares have not been registered under
the Securities Act of 1933, as amended, and certificates representing same shall
bear the following restrictive legend:

"The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended, or applicable state securities laws, and
may not be sold, transferred, pledged or hypothecated without either: i)
registration under the Securities Act of 1933, as amended, and applicable state
securities laws, or ii) submission to the Company of an opinion of counsel,
satisfactory to the Company that said securities and the transfer thereof are
exempt from the registration requirements of the Securities Act of 1933 and
applicable state securities laws."

6.     Benefits.
a.   Holidays. Employee will be entitled to at least eleven (11) paid holidays
     and five (5) personal days each calendar year. The Company will notify
     Employee on or about the beginning of each calendar year with respect to
     the holiday schedule for the upcoming year. Personal days, if any, will be
     scheduled in advance subject to the requirements of the Company. Such
     personal days must be taken during the calendar year and cannot be carried
     forward into the next year.

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b.   Vacation. After six (6) months of continuous employment, Employee shall be
     entitled to three (3) weeks of paid vacation each year.
c.   Sick Leave. Employee shall be entitled to sick leave and emergency leave
     according to the regular policies and procedures of the Company. Additional
     sick leave or emergency leave over and above paid leave provided by the
     Company, if any, shall be unpaid and shall be granted at the discretion of
     the board of directors of the Company.
d.   Medical Insurance. The Employee and his dependents (eligible to receive
     coverage) shall be entitled to participate in the Company's health
     insurance program. The Company shall pay premiums for said insurance for
     the Employee and any dependents eligible to receive coverage under plans
     adopted by the Company, if any, pursuant to the Company's policies for said
     insurance. In addition to paying the premiums for medical insurance for
     Employee and his dependents, the Company shall reimburse Employee for all
     medical expenses incurred out of pocket, with the exception of elective
     medical procedures or treatment.
e.   Pension and Profit Sharing Plans. Employee shall be entitled to participate
     in any pension or profit sharing plan or other type of plan adopted by the
     Company for the benefit of its officers and/or regular employees.
f.   Expense Reimbursement. Employee shall be entitled to reimbursement for all
     reasonable expenses, including travel and entertainment, incurred by
     Employee in the performance of Employee's duties. Employee will maintain
     records and written receipts as required by the Company policy and
     reasonably requested by the board of directors to substantiate such
     expenses.
g.   Car allowance. The Company will provide to Employee a car allowance of $750
     per month and reimburse employee for annual car insurance. Employee is
     responsible for all automobile operating expenses incurred by Employee in
     the performance of any of Employee's Company duties.

7.     Term.  The term of this Agreement (the "Term") shall begin August 1, 2003
and end on July 31, 2005.  The term shall be for twenty-four (24) months.
Thereafter, the Agreement shall be renewed upon the mutual agreement of the
Employee and the Company. If the Company fails to renew the contract, for
reasons other than cause, the Employee is entitled to three (3) months
compensation at the rate in effect at the time of the non renewal. If Employee
fails to renew, then Employee is bound by the terms of section 10.

In the event the Company is acquired or is the non-surviving party in a merger,
or sells all or substantially all of its assets, this Agreement shall remain in
full force and effect and all Shares will be treated as earned by Employee.

8.     Termination by the Company.
a.   With Cause. The Company may terminate the Employee's employment under this
     Agreement at any time for cause. For purposes of this Agreement, the term
     "cause" shall include one or more of the following: (i) misconduct and
     failure by the Employee to observe or perform any of his duties, as
     contemplated in this Agreement, as Employee; (ii) conviction of a crime
     involving moral turpitude, theft, embezzlement or continuing alcohol or
     drug abuse; (iii) fraudulent conduct by the Employee or any act of
     dishonesty in connection with the Company's business; or (iv) unauthorized
     competition with the Company, including the unauthorized use or disclosure
     of trade secrets, confidential or proprietary business information or the
     substantial breach of any material covenants. It is understood and
     acknowledged by the Company that the Company shall provide thirty (30) days
     written notice to Employee for those items referenced in (i), (iii), and
     (iv) above specifying the cause for termination and provide Employee an
     opportunity to cure such default before such default will serve as cause
     for termination.

     In the event of termination for cause, the Employee shall only be entitled
     to receive base salary or benefits set forth in Section 4 and Section 6
     hereof, through the date of termination.

b.   Effect of Termination. In the event this Agreement is terminated for cause
     by the Company or Employee shall resign, Employee shall be entitled to
     maintain 10,417 Shares of the Shares issued to Employee pursuant to Section
     4(b) hereof for each full month in which services were provided by
     Employee.

9.     Confidential Information and Trade Secrets.  During the term of this
Agreement and thereafter, the Employee shall not, except as may be required to
perform his duties hereunder or as required by applicable law or court order,
disclose to others for use, whether directly or indirectly, any Confidential
Information regarding the Company.  The Employee acknowledges that such
Confidential Information is specialized, unique in nature and of great value to
the Company, and that such information gives the Company a competitive
advantage.  Upon the termination of his employment, the Employee will promptly
deliver to the Company all documents maintained in any format (including
electronic or print) and all copies thereof in his possession which contain any
Confidential Information.

The Employee agrees that all styles, designs, lists, materials, books, files,
reports, correspondence, records, and other documents ("Company Material") used,
developed or prepared by, provided to or made available to the Employee, shall
be and shall remain the property of the Company.  Upon the termination of his
employment and/or the expiration of this Agreement, all Company Materials shall
be returned immediately to the Company, and Employee shall not make or retain
any copies thereof.  The Employee understands and agrees that in the course of
employment with the Company, the Employee will obtain access to and/or acquire
Company trade secrets, including Confidential Information which are solely the
property of the Company.  Therefore, to protect such trade secrets, the Employee
promises and agrees that during the term of this Agreement, and for a period of
one (1) year thereafter, he will not influence or attempt to influence
employees, customers, vendors, landlords or suppliers of the Company or any
party in contract with the Company providing any services to the Company, either
directly or indirectly, to divert their employment or business to or with any
individual, partnership, firm, corporation or other entity then in competition
with the business of the Company.

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"Confidential Information" shall mean information about the Company, the
Company's respective clients and customers, and proprietary information as
defined herein, that is not available to the general public and that was learned
or developed by the Employee or developed, used or planned to be used by the
Company during the term of Employee's employment by the Company, including,
without limitation, any data, formulae, methods, information, proprietary
knowledge, trade secrets, client and customer lists and all papers, resumes,
records and other documents containing such Confidential Information.

10.     Non-Competition Covenant.  Except as otherwise provided herein, the
Employee agrees that during the term of this Agreement and for a period of one
(1) year after the termination of this Agreement, he will not directly or
indirectly, without the prior written consent of the Company, provide financial
and accounting services or other services with or without pay, or own, manage,
operate, join, control, participate in, or be connected as a stockholder,
partner, or otherwise, with any business, individual, partner, firm,
corporation, or other entity which is in competition with the Company.

11.     Notices.  For the purpose of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally, or by private
overnight courier or mail services, postage prepaid or (unless otherwise
specified) mailed by United States registered or certified mail, return receipt
requested, postage prepaid, and addressed as follows:

If to Company:     Perma-Tune Electronics, Inc.
                   199 Trade Zone Drive
                   Ronkonkoma, New York 11779

If to Employee:    Paul M. Cervino
                   103 Harrison Street
                   Garden City, NY 11530

12.     Modification.  No modification, change, addition, rescission, release,
amendment or waiver of this Agreement and no approval, consent, or authorization
required by any provision of this Agreement, may be made by any person except by
a written agreement by a duly authorized officer or partner of the Company and
the Employee.

13.     Waiver.  No delay, waiver, omission or forbearance (whether by conduct
or otherwise) by any party hereto at any time to exercise any right, option,
duty or power arising out of breach or default by the other party of any of the
terms, conditions, or provisions of this Agreement to be performed by such other
party shall constitute a waiver by such party or a waiver of such party's rights
to enforce any right, option or power as against the other party or as to
subsequent breach or default by such other party, and no explicit waiver shall
constitute a waiver of similar or dissimilar terms, provisions or conditions, at
the same time or at any prior or subsequent time.

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14.     Cumulative Rights.  The rights of the Company hereunder are cumulative
and no exercise or enforcement by the Company of any right or remedy hereunder
will preclude the exercise or enforcement by the Company of any other right or
remedy hereunder or which the Company is entitled by law to enforce.

15.     No Assignment.  The right of the employee or any other beneficiary under
this Agreement to receive payments may not be assigned, pledged or encumbered,
except by will or by the laws of descent and distribution, without the
permission of the Company which it may withhold in its sole and absolute
discretion.

16.     Review of Agreement.  The Employee has had full and adequate opportunity
to read and review this Agreement and to be thoroughly advised of the terms and
conditions of this Agreement by an attorney or other personal representative.

17.     Binding Agreement.  This Agreement and all rights of the Employee
hereunder shall inure to the benefit of and be enforceable by the Employee's
personal or legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees.  In addition, this Agreement and the
obligations and rights of the Company hereunder shall be binding on any person,
firm, or corporation which is a successor-in-interest to the Company.

18.     Final Agreement.  This Agreement supersedes and terminates all prior
agreements, either oral or in writing, between the parties and therefore,
representations, inducements, promises or agreements alleged by either the
Company or the Employee that are not contained in this Agreement will not be
enforceable.  There are no other oral or written understandings or agreements
between the Company and the Employee relating to the subject matter of this
Agreement.  This Agreement will not supersede any written agreements or
contracts that are signed concurrently with this Agreement.

19.     Governing Law.  This Agreement shall be construed and enforced in
accordance with the laws of the State of New York.

20.     Headings.  Headings used in this Agreement are provided for convenience
only and shall not be used to construe meaning or intent.

21.     Number and Gender.  Whenever used, the singular shall include the
plural, the plural the singular, and the use of any gender shall be applicable
to all genders.

22.     Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

23.     Severability.  All provisions of this Agreement are severable and this
Agreement will be interpreted and enforced as if all completely invalid or
unenforceable provisions were not contained herein and partially valid and
enforceable provisions will be enforced to the extent valid and enforceable.  If
any applicable law or rule of any jurisdiction requires a greater prior notice
of the termination of this Agreement than is required hereunder or the taking of
some other action not required hereunder, or if under any applicable law or rule
of any jurisdiction, any provision of this Agreement or any specification,
standard or operating procedure prescribed by the Company is invalid or
unenforceable under applicable law then the prior notice or other action
required by such law or rule will be substituted for the notice requirements
hereof, or such invalid or unenforceable provision, specification, standard or
operating procedure will be modified to the extent required to be valid and
enforceable.  Such modifications to this Agreement will be effective only in
such jurisdiction.

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24.     Arbitration.  The parties agree that they will use their best efforts to
amicably resolve any dispute arising out of or relating to this Agreement.  Any
controversy, claim, or dispute that cannot be so resolved shall be settled by
final binding arbitration in accordance with the rules of the American
Arbitration Association and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.  Any such
arbitration shall be conducted in Suffolk County, New York or such other place
as may be mutually agreed upon by the parties.  Within fifteen (15) days after
the commencement of the arbitration, each party shall select one person to act
as arbitrator, and the two arbitrators so selected shall select a third
arbitrator within ten (10) days of their appointment.  Each party shall bear an
equal share of the arbitrator's expenses and administrative fees of arbitration,
and the losing party shall reimburse the winning party for attorney's fees,
arbitrator fees, and any other out of pocket expenses.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.


PERMA-TUNE ELECTRONICS, INC.

By: /s/ Peter Mergenthaler
   ----------------------------

Its: Chief Executive Officer
   ----------------------------


EMPLOYEE

/s/ Paul M. Cervino
-------------------------------
Paul M. Cervino
Employee


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