Employment Agreement




Exhibit 10.5


EMPLOYMENT AGREEMENT


          This EMPLOYMENT AGREEMENT (this “Agreement”) is made as of the first day
of January, 2001, by and between Illinois Superconductor Corporation, a
Delaware corporation (the “Company”), and Amr Abdelmonem (the “Employee”).


W I T N E S S E T H :


          WHEREAS, the Employee is now employed by the Company as the Chief
Technology Officer;


          WHEREAS, the Company wishes to ensure that it will continue to have the
benefits of the Employee’s services on the terms and conditions hereinafter set
forth; and


          WHEREAS, the Employee desires to continue to work for the Company on the
terms and conditions hereinafter set forth;


          NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties hereto hereby agree as follows:


              1.    Employment; Term. The Company hereby employs the Employee, and the
Employee hereby accepts employment with the Company, in accordance with and
subject to the terms and conditions set forth herein. The term of this
Agreement shall commence on the date hereof (the “Effective Date”) and, unless
earlier terminated in accordance with Paragraph 5, shall end on December 31,
2003, with the term of employment being that period between the Effective Date
and December 31, 2003 (that period, as extended pursuant to the following
sentence, the “Term”). As of January 1, 2004, and as of each subsequent
January 1st, (each an “Automatic Renewal Date”), unless either party shall have
given to the other written notice of non-extension at least sixty (60) days
prior to such Automatic Renewal Date, the Term shall, unless earlier terminated
in accordance with Paragraph 5, extend automatically for a period of one (1)
year to the anniversary of the then otherwise scheduled expiration date of this
Agreement. If there is a “Change of Control” (as defined in Paragraph 6(e)
below), the Term shall, unless earlier terminated in accordance with Paragraph
5, extend automatically to the second anniversary of the date of the Change of
Control, provided that the second anniversary of the date of the Change of
Control is later than the last day of the Term as determined without regard to
the Change of Control. Certain provisions of this Agreement shall continue in
effect after the Term as specifically set forth herein.


              2.    Employment.











                     (a)    The Employee shall serve as the Company’s Chief Technology Officer.
The Employee shall report to the Chief Executive Officer of the Company.


                     (b)    The Employee shall have such authority and responsibility as may
reasonably be assigned by the Chief Executive Officer or the Board of Directors
of the Company (the “Board”).


                     (c)    During the period the Employee is employed by the Company, the
Employee shall devote the Employee’s normal full business time and attention to
the business and affairs of the Company and use the Employee’s best efforts to
perform faithfully the duties and responsibilities of the Employee’s position
as described herein.


              3.    Compensation.


                     (a)    The Company shall pay the Employee a base salary (the “Base Salary”)
of not less than Two Hundred Thousand Dollars ($200,000) per annum, payable at
least monthly, in accordance with the Company’s payroll practices less such
deductions as shall be required to be withheld by applicable law and
regulations. The Board shall conduct an annual review of the Employee’s Base
Salary and Bonus (as defined in Paragraph 3(b)below), but in no event shall the
Base Salary be decreased without the consent of the Employee. Any increase in
the Base Salary or change in the Bonus shall be in the sole discretion of the
Board.


                     (b)    Subject to Paragraph 6(c) hereof, for each calendar year completed
during the Term, the Employee shall be eligible to receive a bonus (the
“Bonus”) of an amount up to 50% of the Base Salary for such year. The amount
of the Bonus payable to the Employee for a particular year, if any, shall be
based on the accomplishment of corporate and individual performance goals as
determined by the Board. The corporate and individual performance goals
referenced in the preceding sentence shall be established by the Board and
communicated to the Employee before the end of the first quarter of the
applicable year. In the event of a disagreement over the attainment of such
goals and objectives, the Compensation Committee of the Board shall have final
authority to determine the award of the Bonus. The Bonus payable for a
particular year, if any, shall be paid no later than March 15th of the
following year and may be paid in cash, Company stock or a combination of the
two as determined by the Board in its sole discretion.


              4.    Benefits.


                     (a)    The Company agrees to reimburse the Employee for all reasonable and
necessary travel, business entertainment and other business expenses incurred
by the Employee in connection with the performance of the Employee’s duties
under this Agreement. Such reimbursements shall be made by the Company within
a reasonable time after submission

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by the Employee of vouchers in accordance with the Company’s standard
policies and procedures.


                     (b)    The Employee shall be entitled to participate in any and all medical
insurance, group health, disability insurance, pension and other similar
benefit plans which are made generally available by the Company to its senior
executives, which shall not be less favorable than those available to any other
group of employees of the Company. The Company, in its sole discretion, may at
any time amend or terminate its benefit plans or programs.


                     (c)    The Employee shall be entitled to receive four (4) weeks of annual
paid vacation in accordance with the Company’s vacation policy for its senior
executives. The Employee shall be entitled to all paid holidays the Company
makes available to its employees.


              5.    Termination. The Employee’s employment hereunder may be terminated
prior to the end of the Term under the following circumstances:


                     (a)    Death. The Employee’s employment hereunder shall terminate upon the
Employee’s death.


                     (b)    Total Disability. The Company may terminate the Employee’s employment
hereunder at any time after the Employee’s “Total Disability.” “Total
Disability” means (i) the Employee becomes entitled to receive disability
benefits under the Company’s long-term disability plan, or, in the absence of
such a plan, (ii) the Employee’s inability to perform the duties and
responsibilities contemplated under this Agreement for a period of more than
one hundred eighty (180) consecutive days due to physical or mental incapacity
or impairment. Such termination shall become effective five (5) business days
after the Company gives notice of such termination to the Employee, or to the
Employee’s spouse or legal representative (in case of mental incapacitation).


                     (c)    Termination by the Company With or Without Cause. The Company may
terminate the Employee’s employment hereunder with or without Cause at any time
after the Company provides thirty (30) days’ written notice (or a shorter
period of time, to be determined in good faith by the Board to be essential to
prevent serious damage to the Company) to the Employee to such effect. The
term “Cause” shall mean any of the following: (i) willful malfeasance or
willful misconduct by the Employee in connection with the Employee’s
employment; (ii) the Employee’s gross negligence in performing any of the
Employee’s duties under this Agreement; (iii) the Employee’s conviction of, or
entry of a plea of guilty to, or entry of a plea of nolo contendere with
respect to any crime other than a traffic violation or infraction which is a
misdemeanor; (iv) the Employee’s willful and continuing breach of any written
policy applicable to all employees adopted by the Company concerning

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conflicts of interest, political contributions, standards of business
conduct or fair employment practices, procedures with respect to compliance
with securities laws or any similar matters, or adopted pursuant to the
requirements of any government contract or regulation; or (v) any other
material breach by the Employee of this Agreement after the Company provides
written notification to the Employee of such breach and the Employee fails
within five (5) days of receipt of such notification to cure the circumstances
which gave rise to such breach.


                     (d)    Termination by the Employee With or Without Good Reason. The
Employee’s employment hereunder may be terminated by the Employee as specified
below with, or upon thirty (30) days’ prior notice without, Good Reason. For
purposes of this Agreement, “Good Reason” means any of the following, without
the consent of the Employee: (i) any change in, or diminution of, the
Employee’s duties or responsibilities that is inconsistent in any material and
adverse respect with the Employee’s duties and responsibilities as contemplated
under Section 2 of this Agreement, provided that changes in reporting
relationships of other employees to the Employee, including those which occur
as a result of strategic business developments such as the sale of a business
unit or the outsourcing of a business function, shall not be construed as
“adverse” to the Employee for purposes of determining whether Good Reason
exists; (ii) any reduction of the Employee’s Base Salary or maximum Bonus
level; (iii) any other material breach by the Company of this Agreement after
the Employee provides written notification to the Company of such breach and
the Company fails within thirty (30) days of receipt of such notification to
cure the circumstances which gave rise to such breach, or (iv) any requirement
by the Company that the Employee relocate the Employee’s principal office
(currently located in Mount Prospect, Illinois) to a location more than
thirty-five (35) miles from the Employee’s principal office at the time the
Company makes such request. Notwithstanding the foregoing, no act or omission
by the Company shall constitute Good Reason hereunder unless the Employee
gives the Company written notice thereof within thirty (30) days after he has
actual knowledge of such act or omission, and the Company fails to remedy such
act or omission within thirty (30) days after receiving such notice.


              6.    Compensation Following Termination Prior to the End of the Term. In
the event that the Employee’s employment hereunder is terminated prior to the
end of the Term, the Employee shall be entitled only to the following
compensation and benefits upon such termination:


                     (a)    Termination by Reason of Death or Total Disability. In the event that
the Employee’s employment is terminated prior to the expiration of the Term by
reason of the Employee’s death or Total Disability, pursuant to Paragraph 5(a)
or 5(b) hereof, respectively, the Employee (or the Employee’s spouse or estate,
as the case may be) shall be entitled to the following amounts or benefits:


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	    	i.	 	any accrued but unpaid Base Salary (as determined pursuant to
Paragraph 3(a) hereof) for services rendered to the date of
termination in accordance with the Company’s standard payroll
practices and any unpaid Bonus previously awarded by the Board in
respect of a completed calendar year pursuant to Paragraph 3(b)
hereof;
	 
	    	ii.	 	any incurred but unreimbursed expenses required to be
reimbursed pursuant to Paragraph 4(a) hereof; and
	 
	    	iii.	 	the benefits to which the Employee and/or the Employee’s
family may be entitled upon such termination pursuant to the plans,
programs and arrangements referred to in Paragraph 4 hereof, as
determined and paid in accordance with the terms of such plans,
programs and arrangements.



                     (b)    Termination by the Company Without Cause or Termination by the
Employee With Good Reason. In the event that the Employee’s employment is
terminated by the Company without Cause pursuant to Paragraph 5(c) hereof, or
by the Employee with Good Reason pursuant to Paragraph 5(d) hereof, the
Employee shall be entitled to the following amounts or benefits:



	    	i.	 	any accrued but unpaid Base Salary (as determined pursuant to
Paragraph 3(a) hereof) for services rendered to the date of
termination in accordance with the Company’s standard payroll
practices and any unpaid Bonus previously awarded by the Board
pursuant to Paragraph 3(b) hereof;
	 
	    	ii.	 	any incurred but unreimbursed expenses required to be
reimbursed pursuant to Paragraph 4(a) hereof;
	 
	    	iii.	 	subject to Paragraph 6(e) hereof, continued payment of the
Base Salary (as determined under Paragraph 3(a) hereof) in
accordance with the Company’s standard payroll practices for one (1)
year following the date of such termination; provided that such
continued payments shall be offset by any salary, wage, or similar
payments paid or payable, directly or indirectly, to the Employee
during the year following the date of termination from another
employer or recipient of the Employee’s services (such payments
being determined without regard to any individual waivers or other
similar arrangements).
	 
	    	iv.	 	the benefits to which the Employee and/or the Employee’s
family may be entitled upon such termination pursuant to the plans,
programs and arrangements referred to in Paragraph 4 hereof, as
determined and paid in accordance with the terms of such plans,
programs and arrangements; and



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	    	v.	 	subject to Paragraph 6(e) hereof, continuation of health and
insurance benefits (other than disability insurance benefits) for
one (1) year following the date of such termination on the same
terms and conditions as in effect immediately prior to the
termination; provided that the Company shall not be required to
provide benefits otherwise required by this clause (v) after such
time as the Employee becomes entitled to receive benefits of the
same type from another employer or recipient of the Employee’s
services (such entitlement being determined without regard to any
individual waivers or other similar arrangements).



                     (c)    Termination by the Company for Cause or Termination by the Employee
Without Good Reason. In the event that the Employee’s employment is terminated
prior to the expiration of the Term of this Agreement by the Company for Cause
pursuant to Paragraph 5(c) hereof or by the Employee without Good Reason
pursuant to Paragraph 5(d) hereof, the Employee shall be entitled to the
following amounts or benefits:



	    	i.	 	any accrued but unpaid Base Salary (as determined pursuant to
Paragraph 3(a) hereof) for services rendered to the date of
termination in accordance with the Company’s standard payroll
practices;
	 
	    	ii.	 	any incurred but unreimbursed expenses required to be
reimbursed pursuant to Paragraph 4(a) hereof; and
	 
	    	iii.	 	the benefits to which the Employee and/or the Employee’s
family may be entitled upon such termination pursuant to the plans,
programs and arrangements referred to in Paragraph 4 hereof, as
determined and paid in accordance with the terms of such plans,
programs and arrangements.



Notwithstanding the foregoing, in no event shall any unpaid Bonus previously
awarded by the Board pursuant to Paragraph 3(b) hereof be paid following a
termination by the Company for Cause pursuant to Paragraph 5(c) hereof or by
the Employee without Good Reason pursuant to Paragraph 5(d) hereof.


                     (d)    Termination due to Company’s Notice of Non-Extension. In the event
that during the Term the Company provides the Employee with a notice of
non-extension as described in Section 1 hereof, upon the termination of the
Employee’s employment by the Company pursuant to such notice, the Employee
shall be entitled to the following amounts or benefits:



	    	i.	 	any accrued but unpaid Base Salary (as determined pursuant to
Paragraph 3(a) hereof) for services rendered to the date of
termination in accordance with the



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	    	 	 	Company’s standard payroll practices and any unpaid Bonus
previously awarded by the Board pursuant to Paragraph 3(b) hereof;
	 
	    	ii.	 	any incurred but unreimbursed expenses required to be
reimbursed pursuant to Paragraph 4(a) hereof;
	 
	    	iii.	 	continued payment of the Base Salary (as determined under
Paragraph 3(a) hereof) in accordance with the Company’s standard
payroll practices for six (6) months following the date of such
termination; provided that such continued payments shall be offset
by any salary, wage, or similar payments paid or payable, directly
or indirectly, to the Employee during the year following the date of
termination from another employer or recipient of the Employee’s
services (such payments being determined without regard to any
individual waivers or other similar arrangements);
	 
	    	iv.	 	the benefits to which the Employee and/or the Employee’s
family may be entitled upon such termination pursuant to the plans,
programs and arrangements referred to in Paragraph 4 hereof, as
determined and paid in accordance with the terms of such plans,
programs and arrangements; and
	 
	    	v.	 	continuation of health and insurance benefits (other than
disability insurance benefits) for six (6) months following the date
of such termination on the same terms and conditions as in effect
immediately prior to the termination; provided that the Company
shall not be required to provide benefits otherwise required by this
clause (v) after such time as the Employee becomes entitled to
receive benefits of the same type from another employer or recipient
of the Employee’s services (such entitlement being determined
without regard to any individual waivers or other similar
arrangements).



                     (e)    Termination Upon or Following a Change of Control. If there is a
“Change of Control” (as defined below) and the Employee’s employment is
terminated by the Company without Cause or by the Employee with Good Reason
prior to the expiration of the Term of this Agreement and within two (2) years
following a Change of Control, the words “two (2) years” shall replace the
words “one (1) year” in clauses (iii) and (v) of Paragraph 6(b). For purposes
of this Agreement, a Change of Control shall be deemed to have occurred if:



	    	i.	 	the stock of the Company ceases to be registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended; or
	 
	    	ii.	 	the stockholders of the Company approve a definitive
agreement (A) to merge or consolidate the Company with or into
another corporation other than a majority-



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	    	 	 	owned subsidiary of the Company, pursuant to which (x) the Company
is not the surviving or resulting entity or (y) the persons who
were the members of the Board prior to such approval do not
represent a majority of the directors of the surviving, resulting
or acquiring entity or the parent thereof, or (B) to sell or
otherwise dispose of all or substantially all of the Company’s
assets; or
	 
	    	iii.	 	during any period of two (2) consecutive years, individuals
who at the beginning of such period constitute the Board and any new
director whose election by the Board or nomination for election by
the Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of such period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board.



                     (f)    No Other Benefits or Compensation. Except as may be specifically
provided under this Agreement or under the terms of any incentive compensation,
employee benefit or fringe benefit plan applicable to the Employee at the time
of the termination of the Employee’s employment prior to the end of the Term,
the Employee shall have no right to receive any other compensation, or to
participate in any other plan, arrangement or benefit, with respect to any
future period after such termination.


                     (g)    Waiver of Personal Liability. To the extent permitted by applicable
law, Executive hereby acknowledges that he shall have recourse only to the
Company (and its successors-in-interest) with respect to any claims he may have
for compensation or benefits arising in connection with his employment, whether
or not under this Agreement or under any other plan, program, or arrangement,
including, but not limited to any agreement relating to the grant or exercise
of stock options or other equity rights in the Company. To the extent
permitted by applicable law, the Executive hereby waives any such claims for
compensation, benefits and equity rights against officers, directors,
stockholders or other representatives in their personal or separate capacities.


              7.    Confidentiality, Ownership, and Covenants of Non-Competition and
Non-Solicitation.


                     (a)    Confidentiality. The Employee recognizes that the Company’s business
interests require the fullest practical protection and confidential treatment
of all information not generally known within the relevant trade group or by
the public, including all documents, writings, memoranda, business plans,
illustrations, designs, plans, processes, programs, inventions, computer
software, reports, sources of supply, customer lists, supplier lists, trade
secrets and all other valuable or unique information and techniques acquired,
developed or used by the Company relating to its businesses, operations,
employees and

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customers (hereinafter collectively termed “Protected Information”). The
Employee expressly acknowledges and agrees that Protected Information
constitutes trade secrets and confidential and proprietary business information
of the Company. No Protected Information shall include information which is or
becomes part of the public domain through no breach of this Agreement by the
Employee. The Employee agrees that Protected Information is essential to the
success of the Company’s business, and it is the policy of the Company to
maintain as secret and confidential Protected Information which gives the
Company a competitive advantage over those who do not know the Protected
Information and is expressly and implicitly protected by the Company from
unauthorized disclosure. Accordingly, the Employee agrees to keep secret
Protected Information and to treat confidentially and not to knowingly permit
any other entity to, directly or indirectly, appropriate, divulge, disclose or
otherwise disseminate to any other entity nor use in any manner for the
Employee, and not to intentionally use or aid others in using any such
Protected Information in competition with the Company or its Affiliates except
to the extent that disclosure is required by law; provided, however, that the
Employee shall provide the Company with notice as far in advance of any
required disclosure as is practicable in order for the Company to obtain an
order for the assurance that any information required to be disclosed will be
treated as Protected Information and the Employee shall use all reasonable
efforts to cooperate with the Company in connection therewith and in
furtherance thereof. The obligation of non-disclosure of information shall
continue to exists for so long as such information remains Protected
Information. For purposes of this Agreement, trade secrets are subject to the
protection of the Illinois Trade Secret Act. The provisions of this Paragraph
7(a) are not intended to supersede or limit the effect of any prior
confidentiality or proprietary rights agreements previously executed by the
Employee including the Confidential Information, Proprietary Rights and
Non-Competition Agreement between the Company and the Employee, a copy of which
is attached hereto as Exhibit B. However, if there is any conflict between the
terms and conditions of this Agreement and the Confidential Information,
Proprietary Rights and Non-Competition Agreement attached hereto as Exhibit B,
then the terms and conditions of this Agreement, as interpreted by the Board,
shall govern.


                     (b)    Ownership. The Employee hereby assigns to the Company all of the
Employee’s right (including patent rights, copyrights, trade secret rights, and
all other rights throughout the world), title and interest in and to
Inventions, whether or not patentable or registrable under copyright or similar
statutes, made or conceived or reduced to practice or learned by the Employee,
either alone or jointly with others, during the course of the performance of
services for the Company. The Employee shall also assign to, or as directed
by, the Company, all of the Employee’s right, title and interest in and to any
and all Inventions, the full title to which is required to be in the United
States government by a contract between the Company and the United States
government or any of its agencies. For the purpose of this Agreement, the term
“Inventions” collectively refers to any and all inventions, trade secrets,
improvements, ideas, processes, formulas, source and object codes, data,
programs, other works

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of authorship, know-how, improvements, discoveries, developments, designs,
and techniques regarding any of the foregoing. The provisions of this
Paragraph 7(b) are not intended to supersede or limit the effect of any prior
confidentiality or proprietary rights agreements previously executed by the
Employee including the Confidential Information, Proprietary Rights and
Non-Competition Agreement between the Company and the Employee, a copy of which
is attached hereto as Exhibit B. However, if there is any conflict between the
terms and conditions of this Agreement and the Confidential Information,
Proprietary Rights and Non-Competition Agreement attached hereto as Exhibit B,
then the terms and conditions of this Agreement, as interpreted by the Board,
shall govern.


                     (c)    Covenants of Non-Competition and Non-Solicitation. The Employee
acknowledges that the Employee’s services pursuant to this Agreement are unique
and extraordinary, that the Company will be dependent upon the Employee for the
development and growth of its business and related functions, and that the
Employee will continue to develop personal relationships with significant
customers of the Company and to have control of confidential information
concerning, and lists of customers of, the Company. The Employee further
acknowledges that the business of the Company is international in scope and
cannot be confined to any particular geographic area of the United States. For
the foregoing reasons, the Employee covenants and agrees that at no time during
the Restriction Period (as defined below) shall the Employee either alone or as
a stockholder, partner, consultant, owner, agent, creditor, co-venturer of any
other entity or in any other capacity, directly or indirectly, engage in the
Business (as defined below); provided that nothing herein shall prohibit the
Employee from being an owner of not more than 5% of the outstanding stock of
any class of a corporation which is publicly traded, so long as the Employee
does not actively participate in the business of such corporation. For the
purpose of this Paragraph 7(c), the “Business” means the business of
developing, manufacturing and marketing high temperature superconductivity
products designed to enhance the quality, capacity, coverage and flexibility of
cellular, personal communication services and other wireless telecommunications
services.


          For the reasons acknowledged by the Employee at the beginning of this
Paragraph 7(c), the Employee additionally acknowledges, covenants, and agrees
that at no time during the Term nor during the period commencing on the date of
termination of the Employee’s employment with the Company and ending the day
following the first anniversary of the date of termination of the Employee’s
employment with the Company for any reason, shall the Employee, directly or
indirectly, either alone or as a stockholder, partner, consultant, adviser,
owner, agent, creditor, co-venturer of any other entity, or in any other
capacity, (i) knowingly sell to or solicit sales of products produced in the
Business to any customer or account which was a customer or account of the
Company during the Employee’s employment with the Company, or (ii) (other than
through general, non targeted advertisements) intentionally solicit, hire,
knowingly attempt to solicit or hire, or knowingly participate in any attempt
to solicit or

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hire any person who was an employee of the Company or any of its
Affiliates during the Employee’s employment with the Company.


          For purposes of this Agreement, the Restriction Period means the Term and
the period commencing on the date of termination of the Employee’s employment
with the Company and ending the day following the first anniversary of the date
of termination of the Employee’s employment with the Company for any reason;
provided that the Company may elect to extend the Restriction Period for up to
one (1) year beyond the first anniversary of the date of termination of the
Employee’s employment with the Company if (A) the Company provides written
notice of its intent to so extend the Restriction Period at least six (6)
months prior to the date on which the Restriction Period would otherwise expire
and (B) the Company pays to the Employee the Base Salary, without offset for
salary, wages or similar payments from another employer during such extended
period, at the rate such Base Salary was being paid to the Employee at the time
of termination, for one (1) year beyond the period for which the Company would
otherwise be obligated to continue the Base Salary pursuant to this Agreement
in the absence of the extension of the Restriction Period.


                     (d)    Equitable Remedies. The Employee acknowledges, covenants and agrees
that, in the event the Employee shall violate any provisions of this Section 8,
the Company will have the right to enforce this Agreement by all remedies that
may be available at law or in equity.


              8.    Assignability; Binding Effect. This Agreement is a personal contract
calling for the provision of unique services by the Employee, and the
Employee’s rights and obligations hereunder may not be sold, transferred,
assigned or pledged. In the event of any attempted assignment or transfer of
rights hereunder by the Employee contrary to the provisions hereof (other than
as may be required by law), the Company will have no further liability for
payments hereunder. The rights and obligations of the Company hereunder will
be binding upon and run in favor of the successors and assigns of the Company
and, in connection therewith, and notwithstanding any other provision of this
Agreement to the contrary, in the event that there is such a successor or
assign, on and after the date of such succession or assignment, “Company” shall
thereupon instead refer to such successor or assign, as the case may be. This
Agreement does not create, and shall not be interpreted or construed to create,
any rights enforceable by any person not a party to this Agreement, except as
specifically provided herein.


              9.    Entire Agreement. This Agreement represents the entire agreement
between the parties concerning the Employee’s employment with the Company and
supersedes all prior negotiations, discussions, understandings and agreements,
whether written or oral, between the Employee and the Company relating to the
subject matter of this Agreement. All prior employment agreements, between the
Company and the Employee shall remain in full

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force and effect with respect all matters addressed in such prior
employment agreements occurring on or before the effective date of this
Agreement.


              10.    Amendment or Modification, Waiver. No provision of this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing
signed by the Employee and by a duly authorized officer of the Company other
that the Employee. No waiver by any party to this Agreement of any breach by
another party of any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of a similar or dissimilar
condition or provision at the same time, any prior time or any subsequent time.


              11.    Notices. All notices, demands or other communications of any kind to
be given or delivered under this Agreement shall be in writing and shall be
deemed to have been properly given if (a) delivered by hand, (b) delivered by a
nationally recognized overnight courier service, (c) sent by registered or
certified United States Mail, return receipt requested and first class postage
prepaid, or (d) facsimile transmission followed by a confirmation copy
delivered by a nationally recognized overnight courier service. Such
communications shall be sent to the parties at their respective addresses as
follows:



	 	 	 
	If to the Employee		Mr. Amr Abdelmonem
	
	
	
	

			1746 Hintz Road
	
	
	
	

			Arlington Heights, IL 60004
	
	
	
	

	
	
	
	

	
	
	
	

	
	
	
	


	If to the Company:		Illinois Superconductor Corporation
	
	
	
	

			451 Kingston Court
	
	
	
	

			Mount Prospect, IL 60056
	
	
	
	

			Attention: Vice President of Human Resources
	
	
	
	

	
	
	
	

	
	
	
	

	
	
	
	

	with a copy to:		Barry M. Abelson, Esquire
	
	
	
	

			Pepper Hamilton LLP
	
	
	
	

			3000 Two Logan Square
	
	
	
	

			18th & Arch Streets
	
	
	
	

			Philadelphia, PA 19103-2799
	
	
	
	

			FAX: 215-981-4750



Either party may change such address for delivery to the other party by
delivery of a notice in conformity with the provisions of this Section
specifying such change. Notice shall be deemed to have been properly given (i)
on the date of delivery, if delivery is by hand, (ii) three (3) days after the
date of mailing if sent by certified or registered mail, (iii) one (1) day
after date of

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delivery to the overnight courier if sent by overnight courier, or (iv) the
next business day after the date of transmission by facsimile.


              12.    Severability. If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable shall not be affected, and each provision of this
Agreement shall be validated and shall be enforced to the fullest extent
permitted by law. If for any reason any provision of this Agreement containing
restrictions is held to cover an area or to be for a length of time that is
unreasonable or in any other way is construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and
of no effect; instead, it is the intention and desire of both the Company and
the Employee that, to the extent that the provision is or would be valid or
enforceable under applicable law, any court of competent jurisdiction shall
construe and interpret or reform this Agreement to provide for a restriction
having the maximum enforceable area, time period and such other constraints or
conditions (although not greater than those currently contained in this
Agreement) as shall be valid and enforceable under the applicable law.


              13.    Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.


              14.    Headings. All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience of reference, and no provision of
this Agreement is to be construed by reference to the heading of any section or
paragraph.


              15.    Withholding Taxes. All salary, benefits, reimbursements and any other
payments to the Employee under this Agreement shall be subject to all
applicable payroll and withholding taxes and deductions required by any law,
rule or regulation of any federal, state or local authority.


[THIS SPACE INTENTIONALLY LEFT BLANK]


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              16.    Applicable Law/Jurisdiction. The laws of the State of Illinois shall
govern the interpretation, validity and performance of the terms of this
Agreement, without reference to rules relating to conflicts of law. The
parties select and irrevocably submit to the exclusive jurisdiction of a court
of competent jurisdiction located in the State of Illinois for any action to
enforce, construe or interpret this Agreement. The Employee and the Company
each hereby waives any objection to venue in such state on the basis of forum
non-conveniens.


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



	 	 
		ILLINOIS SUPERCONDUCTOR CORPORATION




	 	 
		By: /s/ George Calhoun                                  


     GEORGE CALHOUN

     Chief Executive Officer
	 
		     /s/ Amr Abdelmonem                             
     

     AMR ABDELMONEM




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