EXHIBIT 10.36
                                                                   -------------


                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT  AGREEMENT (the  "Agreement"),  made as of this 29th day of
March  2005,  is entered  into by  Nestor,  Inc.  a  Delaware  corporation  (the
"Company"), and Tadas A. Eikinas (the "Employee").

     The Company desires to employ the Employee,  and the Employee desires to be
employed by the Company.  In  consideration of the mutual covenants and promises
contained  in this  Agreement,  and other good and valuable  consideration,  the
receipt and sufficiency of which are hereby  acknowledged by the parties to this
Agreement, the parties agree as follows:

     1. TERM OF  EMPLOYMENT.  The Company  hereby agrees to employ the Employee,
and the Employee hereby accepts employment with the Company,  upon the terms set
forth in this  Agreement,  for the period  commencing  on the date  hereof  (the
"Commencement  Date") and ending on December 31, 2008 (such period, the "Initial
Employment Period" and as it may be extended,  the "Employment Period"),  unless
sooner  terminated in accordance  with the  provisions of Section 4. On December
31, 2008, if not previously terminated, this Agreement shall automatically renew
and the Employment Period be extended until December 31, 2009 unless the Company
shall elect not to so extend the Employment  Period and shall have given written
notice to the Employee of such election on or before October 1, 2008.

     2. TITLE;  CAPACITY. The Employee shall serve as Chief Operating Officer of
the Company or in such other  position as the Company's  Board of Directors (the
"Board") or its Chief  Executive  Officer may determine  from time to time.  The
Employee shall be based at the Company's headquarters in Rhode Island or at such
place or places in the  continental  United States as the Board and the Employee
shall mutually  determine.  The Employee shall be subject to the supervision of,
and shall have such  authority  as is delegated to the Employee by, the Board or
the Chief Executive Officer of the Company.

     The Employee  hereby  accepts such  employment  and agrees to undertake the
duties and responsibilities  inherent in such position and such other duties and
responsibilities  as the Board or the Chief Executive Officer shall from time to
time reasonably assign to the Employee. The Employee agrees to devote his entire
business  time,  attention  and energies to the  business  and  interests of the
Company during the Employment Period. The Employee agrees to abide by the rules,
regulations,  instructions,  personnel practices and policies of the Company and
any changes therein which may be adopted from time to time by the Company.

     3. COMPENSATION AND BENEFITS.

          3.1  SALARY.   The  Company  shall  pay  the  Employee,   in  periodic
installments in accordance with the Company's  customary payroll  practices,  an
annual base salary  $175,000.  Such salary  shall be subject to increase but not
decrease  thereafter  as  determined by the Board and shall be reviewed at least
annually by the Board..

          3.2 BONUS.

          (a) Upon the  satisfactory  delivery to a customer of a speed on green
product (other than to test sites in Cranston, RI or the State of Delaware),  as
reasonably determined by the Compensation  Committee,  the Company shall pay the

<PAGE>

Employee a bonus of $12,5000;  provided that such implementation is completed on
or before October 31, 2005.

          (b) Upon the  satisfactory  delivery to a customer  of a mobile  speed
product (other than to test sites in Cranston, RI or the State of Delaware),  as
reasonably determined by the Compensation  Committee,  the Company shall pay the
Employee a bonus of $12,5000;  provided that such implementation is completed on
or before October 31, 2005.

          (c) The Compensation Committee, in its sole discretion,  may award the
Employee other bonus or bonuses during the term hereof.

          3.3 EQUITY INCENTIVE.

          (a) The  Company  shall,  upon  the  execution  hereof,  grant  to the
Employee an option to purchase  30,000 shares of the common stock of the Company
("Common  Stock").  To the extent  permitted by the Internal  Revenue Code, said
options shall be incentive  stock options.  Said options shall be granted at the
fair market  value and expire on the eighth  anniversary  of their  grant.  Said
options shall vest as follows:

         Number of Shares                        Vesting Date
         -------------------                     ------------
             10,000                         On the date of grant
             10,000                    On the first anniversary hereof
             10,000                   On the second anniversary hereof


Such  grants  shall  provide  that after a change in control of the  Company (as
defined in Schedule A hereto),  all  restrictions on the exercise  thereof shall
lift and such options shall vest upon (a) the  termination by the Company of the
Employee's  employment,  unless  such  termination  is for Cause (as  defined in
Section 4.2) or (b) the  resignation  of Employee for Good Reason (as defined in
Section 4.3).

          (b) Upon the  satisfactory  delivery to a customer of a speed on green
product (other than to test sites in Cranston, RI or the State of Delaware),  as
reasonably determined by the Compensation Committee, the Company shall grant the
Employee an option to purchase  25,000 shares of the common stock of the Company
("Common  Stock");  provided that such  implementation is completed on or before
October 31, 2005. To the extent  permitted by the Internal  Revenue  Code,  said
options shall be incentive  stock options.  Said options shall be granted at the
fair market value and expire on the eighth anniversary of their grant.

          (c) Upon the  satisfactory  delivery  to a  customer  of  mobile  peed
product (other than to test sites in Cranston, RI or the State of Delaware),  as
reasonably determined by the Compensation Committee, the Company shall grant the
Employee an option to purchase  25,000 shares of the common stock of the Company
("Common  Stock");  provided that such  implementation is completed on or before


                                      -2-
<PAGE>


October 31, 2005. To the extent  permitted by the Internal  Revenue  Code,  said
options shall be incentive  stock options.  Said options shall be granted at the
fair market value and expire on the eighth anniversary of their grant.

          (d) Upon the  successful  development  and testing of a  CrossingGuard
system  that  uses  all  digital  imaging,  as  reasonably   determined  by  the
Compensation  Committee,  the  Company  shall  grant the  Employee  an option to
purchase  25,000  shares of the common  stock of the Company  ("Common  Stock");
provided that such  implementation  is completed on or before December 31, 2005.
To the extent  permitted by the Internal  Revenue  Code,  said options  shall be
incentive stock options.  Said options shall be granted at the fair market value
and expire on the eighth anniversary of their grant.

          3.4 FRINGE BENEFITS.  The Employee shall be entitled to participate in
all bonus and benefit programs that the Company  establishes and makes available
to its  employees,  if any,  to the extent  that  Employee's  position,  tenure,
salary, age, health and other qualifications make him eligible to participate.

          3.5  REIMBURSEMENT  OF  EXPENSES.  The  Company  shall  reimburse  the
Employee for all reasonable travel, entertainment and other expenses incurred or
paid by the Employee in connection  with, or related to, the  performance of his
duties,  responsibilities  or services under this Agreement,  in accordance with
policies and procedures, and subject to limitations, adopted by the Company from
time to time.

          3.6 WITHHOLDING.  All salary,  bonus and other compensation payable to
the Employee shall be subject to applicable withholding taxes.

          4. TERMINATION OF EMPLOYMENT PERIOD. The employment of the Employee by
the Company  pursuant to this Agreement  shall  terminate upon the occurrence of
any of the following:

          4.1 EXPIRATION OF THE EMPLOYMENT PERIOD;

          4.2 At the  election of the  Company,  for Cause (as  defined  below),
immediately  upon written  notice by the Company to the  Employee,  which notice
shall identify the Cause upon which the  termination is based.  For the purposes
of this Section 4.2,  "Cause" shall mean (a) a good faith finding by the Company
that (i) the  Employee  has  failed  in any  material  respect  to  perform  his
reasonably assigned duties for the Company and has failed to remedy such failure
within  10 days  following  written  notice  from the  Company  to the  Employee
notifying him of such failure,  or (ii) the Employee has engaged in  dishonesty,
gross  negligence  or  misconduct  with  respect  to the  Company,  or  (b)  the
conviction  of the  Employee  of, or the entry of a  pleading  of guilty or nolo
contendere  by the  Employee  to, any crime  involving  moral  turpitude  or any
felony;

          4.3 At the  election  of the  Employee,  for Good  Reason (as  defined
below),  immediately  upon written notice by the Employee to the Company,  which
notice shall identify the Good Reason upon which the  termination is based.  For
the purposes of this Section 4.3, "Good Reason" for termination shall mean (i) a
material  adverse change in the  Employee's  authority,  duties or  compensation
without  the prior  consent of the  Employee  or (ii) a  material  breach by the
Company of the terms of this  Agreement,  which  breach is not  remedied  by the


                                      -3-
<PAGE>


Company within 10 days following written notice from the Employee to the Company
notifying it of such breach.

          4.4 Upon the  death or  disability  of the  Employee.  As used in this
Agreement,  the term "disability" shall mean the inability of the Employee,  due
to a  physical  or mental  disability,  for a period of 90 days,  whether or not
consecutive,  during any  360-day  period to perform the  services  contemplated
under this Agreement,  with or without reasonable  accommodation as that term is
defined under state or federal law. A determination  of disability shall be made
by a physician satisfactory to both the Employee and the Company,  provided that
if the Employee  and the Company do not agree on a  physician,  the Employee 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;

          4.5 At the election of either party, upon not less than 30 days' prior
written notice of termination.

          5. EFFECT OF TERMINATION.

          5.1 AT-WILL  EMPLOYMENT.  If the Employment Period expires pursuant to
Section  1 hereof,  then,  unless  the  Company  notifies  the  Employee  to the
contrary,  the  Employee  shall  continue  his  employment  on an at-will  basis
following  the  expiration of the  Employment  Period.  Such at-will  employment
relationship  may be  terminated  by  either  party at any time and shall not be
governed by the terms of this Agreement.

          5.2 PAYMENTS UPON TERMINATION.

          (a) In the event the Employee's  employment is terminated  pursuant to
Section 4.1, Section 4.2 or by the Employee pursuant to Section 4.5, the Company
shall pay to the Employee the compensation and benefits otherwise payable to him
under Section 3 through the last day of his actual employment by the Company.

          (b) In the  event  the  Employee's  employment  is  terminated  by the
Employee  pursuant to Section 4.3 or by the Company pursuant to Section 4.5, the
Company  shall  continue to pay to the  Employee  his salary as in effect on the
date of  termination  and continue to provide to the Employee the other benefits
owed to him under  Section 3.4 (to the extent such  benefits  can be provided to
non-employees,   or  to  the  extent  such   benefits   cannot  be  provided  to
non-employees,  then the cash equivalent  thereof) until the date one year after
the date of  termination  and for the  purposes  of the  vesting  of  options to
purchase  common  stock  granted to the  Employee  pursuant to Section  3.3, the
Employee  shall be deemed to be employed by the Company  until the date one year
after the date of  termination.  The  payment  to the  Employee  of the  amounts
payable under this Section 5.2(b) (i) shall be contingent  upon the execution by
the  Employee of a release in a form  reasonably  acceptable  to the Company and
(ii)  shall  constitute  the  sole  remedy  of the  Employee  in the  event of a
termination of the Employee's  employment in the circumstances set forth in this
Section 5.2(b).

          (c) In the event the Employee's  employment is terminated  pursuant to
Section 4.4, the Company  shall  continue to pay to the Employee (or his estate)
his salary as in effect on the date of termination  and the amount of the annual
bonus  paid  to him  for the  fiscal  year  immediately  preceding  the  date of


                                      -4-
<PAGE>


termination   (payable  in  annualized   monthly   installments)  and,  if  such
termination  was on account of  disability,  continue to provide to the Employee
the other  benefits  owed to him under  Section 3.4 (to the extent such benefits
can be  provided to  non-employees,  or to the extent  such  benefits  cannot be
provided to non-employees,  then the cash equivalent thereof) until the date one
year  after the date of  termination  and for the  purposes  of the  vesting  of
options to purchase  common stock  granted to the  Employee  pursuant to Section
3.3, the Employee  shall be deemed to be employed by the Company  until the date
one year after the date of  termination.  The  amounts  payable to the  Employee
under  this  Section  5.2(c)  shall be reduced  by the  aggregate  amount of all
insurance  proceeds  paid  to the  Employee  or his  beneficiaries  pursuant  to
insurance policies paid for by the Company.

          5.3  SURVIVAL.  The  provisions of Sections 5.2, 6 and 7 shall survive
the termination of this Agreement.


          6. NON-COMPETITION AND NON-SOLICITATION.

          6.1  RESTRICTED  ACTIVITIES.  While the  Employee  is  employed by the
Company and for a period of one year after the  termination or cessation of such
employment for any reason, the Employee will not directly or indirectly:

          (a) Engage in any business or enterprise  (whether as owner,  partner,
officer, director, employee,  consultant,  investor, lender or otherwise, except
as the holder of not more than 1% of the  outstanding  stock of a  publicly-held
company) that develops,  manufactures,  markets, licenses, sells or provides any
product  or  service  that  competes  with any  product  or  service  developed,
manufactured,  marketed, licensed, sold or provided, or planned to be developed,
manufactured,  marketed,  licensed,  sold or provided,  by the Company while the
Employee was employed by the Company; or

          (b) Either alone or in association with others (i) solicit,  or permit
any organization  directly or indirectly  controlled by the Employee to solicit,
any employee of the Company to leave the employ of the Company,  or (ii) solicit
for employment or permit any organization  directly or indirectly  controlled by
the  Employee to solicit  for any person who was  employed by the Company at any
time during the term the Employee's employment with the Company;  PROVIDED, that
this clause (ii) shall not apply to the  solicitation,  hiring or  engagement of
any  individual  whose  employment  with the Company has been  terminated  for a
period of six months or longer.

          6.2 EXTENSION. If the Employee violates the provisions of Section 6.1,
the Employee shall continue to be bound by the restrictions set forth in Section
6.1 until a period  of two  years has  expired  without  any  violation  of such
provisions.

          6.3  INTERPRETATION.  If any  restriction  set forth in Section 6.1 is
found by any court of  competent  jurisdiction  to be  unenforceable  because it
extends for too long a period of time or over too great a range of activities or
in too broad a geographic  area, it shall be interpreted to extend only over the
maximum  period of time,  range of activities or geographic  area as to which it
may be enforceable.

                                      -5-
<PAGE>


          6.4 Equitable Remedies.  The restrictions  contained in this Section 6
are necessary for the protection of the business and goodwill of the Company and
are considered by the Employee to be reasonable  for such purpose.  The Employee
agrees  that any  breach  of this  Section  6 is  likely  to cause  the  Company
substantial and irrevocable damage which is difficult to measure.  Therefore, in
the event of any such breach or threatened  breach, the Employee agrees that the
Company,  in addition to such other remedies which may be available,  shall have
the right to  obtain an  injunction  from a court  restraining  such a breach or
threatened  breach and the right to specific  performance  of the  provisions of
this Section 6 and the Employee hereby waives the adequacy of a remedy at law as
a defense to such relief.

          7. PROPRIETARY INFORMATION AND DEVELOPMENTS.

          7.1 PROPRIETARY INFORMATION.

          (a) The  Employee  agrees  that  all  information,  whether  or not in
writing,  of a private,  secret or confidential  nature concerning the Company's
business,   business   relationships   or   financial   affairs   (collectively,
"Proprietary  Information")  is and  shall  be  the  exclusive  property  of the
Company. By way of illustration, but not limitation, Proprietary Information may
include  inventions,   products,  processes,   methods,  techniques,   formulas,
compositions,  compounds, projects, developments, plans, research data, clinical
data, financial data,  personnel data, computer programs,  customer and supplier
lists, and contacts at or knowledge of customers or prospective customers of the
Company.  The  Employee  will not disclose any  Proprietary  Information  to any
person or entity  other than  employees  of the  Company or use the same for any
purposes  (other  than in the  performance  of his duties as an  employee of the
Company) without written approval by an officer of the Company, either during or
after  his  employment  with the  Company,  unless  and until  such  Proprietary
Information has become public knowledge without fault by the Employee.

          (b) The Employee agrees that all files, letters,  memoranda,  reports,
records, data, sketches,  drawings,  laboratory notebooks,  program listings, or
other written,  photographic,  or other tangible material containing Proprietary
Information,  whether  created by the Employee or others,  which shall come into
his  custody  or  possession,  shall be and are the  exclusive  property  of the
Company to be used by the Employee only in the performance of his duties for the
Company.  All such materials or copies thereof and all tangible  property of the
Company in the custody or possession  of the Employee  shall be delivered to the
Company, upon the earlier of (i) a request by the Company or (ii) termination of
his  employment.  After such  delivery,  the Employee  shall not retain any such
materials or copies thereof or any such tangible property.

          (c) The Employee  agrees that his obligation not to disclose or to use
information  and  materials  of the types set  forth in  paragraphs  (a) and (b)
above, and his obligation to return materials and tangible  property,  set forth
in paragraph (b) above, also extends to such types of information, materials and
tangible  property of  customers  of the Company or  suppliers to the Company or
other third parties who may have  disclosed or entrusted the same to the Company
or to the Employee.

                                      -6-
<PAGE>


          7.2 DEVELOPMENTS.

          (a) The Employee  will make full and prompt  disclosure to the Company
of all inventions,  improvements,  discoveries, methods, developments, software,
and works of authorship,  whether  patentable or not,  which are created,  made,
conceived  or reduced to practice by him or under his  direction or jointly with
others  during his  employment  by the  Company,  whether  or not during  normal
working  hours or on the premises of the Company (all of which are  collectively
referred to in this Agreement as "Developments").

          (b) The  Employee  agrees  to  assign  and does  hereby  assign to the
Company (or any person or entity designated by the Company) all his right, title
and  interest  in  and to all  Developments  and  all  related  patents,  patent
applications, copyrights and copyright applications. However, this paragraph (b)
shall not apply to Developments  which do not relate to the business or research
and development  conducted or planned to be conducted by the Company at the time
such  Development is created,  made,  conceived or reduced to practice and which
are made and conceived by the Employee not during normal working  hours,  not on
the Company's premises and not using the Company's tools, devices,  equipment or
Proprietary  Information.  The  Employee  understands  that,  to the extent this
Agreement  shall be  construed  in  accordance  with the laws of any state which
precludes a requirement in an employee  agreement to assign  certain  classes of
inventions  made by an employee,  this paragraph (b) shall be interpreted not to
apply to any  invention  which a court  rules  and/or the Company  agrees  falls
within such classes.  The Employee also hereby waives all claims to moral rights
in any Developments.

          (c) The  Employee  agrees to cooperate  fully with the  Company,  both
during  and  after  his  employment  with  the  Company,  with  respect  to  the
procurement,  maintenance  and  enforcement  of  copyrights,  patents  and other
intellectual  property rights (both in the United States and foreign  countries)
relating to Developments. The Employee shall sign all papers, including, without
limitation, copyright applications,  patent applications,  declarations,  oaths,
formal  assignments,  assignments  of priority  rights,  and powers of attorney,
which the Company may deem necessary or desirable in order to protect its rights
and  interests  in any  Development.  The  Employee  further  agrees that if the
Company is unable,  after  reasonable  effort,  to secure the  signature  of the
Employee on any such  papers,  any  executive  officer of the  Company  shall be
entitled to execute any such papers as the agent and the attorney-in-fact of the
Employee,  and the Employee  hereby  irrevocably  designates  and appoints  each
executive  officer of the Company as his agent and  attorney-in-fact  to execute
any such  papers on his  behalf,  and to take any and all actions as the Company
may deem  necessary or desirable in order to protect its rights and interests in
any Development, under the conditions described in this sentence.

          7.3 UNITED STATES GOVERNMENT  OBLIGATIONS.  The Employee  acknowledges
that the Company  from time to time may have  agreements  with other  parties or
with the United States Government, or agencies thereof, which impose obligations
or  restrictions on the Company  regarding  inventions made during the course of
work under such  agreements or regarding the  confidential  nature of such work.
The Employee agrees to be bound by all such obligations and  restrictions  which
are made known to the Employee and to take all appropriate  action  necessary to
discharge the obligations of the Company under such agreements.

                                      -7-
<PAGE>


          7.4 EQUITABLE REMEDIES.  The restrictions  contained in this Section 7
are necessary for the protection of the business and goodwill of the Company and
are considered by the Employee to be reasonable  for such purpose.  The Employee
agrees  that any  breach  of this  Section  7 is  likely  to cause  the  Company
substantial and irrevocable damage which is difficult to measure.  Therefore, in
the event of any such breach or threatened  breach, the Employee agrees that the
Company,  in addition to such other remedies which may be available,  shall have
the right to  obtain an  injunction  from a court  restraining  such a breach or
threatened  breach and the right to specific  performance  of the  provisions of
this Section 7 and the Employee hereby waives the adequacy of a remedy at law as
a defense to such relief.

          8. OTHER AGREEMENTS.  The Employee  represents that his performance of
all the terms of this Agreement and the performance of his duties as an employee
of the Company do not and will not breach any agreement  with any prior employer
or other party to which the Employee is a party  (including  without  limitation
any  nondisclosure  or  non-competition  agreement).  Any agreement to which the
Employee   is  a   party   relating   to   nondisclosure,   non-competition   or
non-solicitation  of  employees  or  customers  is listed on SCHEDULE B attached
hereto.

9. Miscellaneous.

          9.1  NOTICES.  Any notices  delivered  under this  Agreement  shall be
deemed duly  delivered  four  business  days after it is sent by  registered  or
certified mail, return receipt requested,  postage prepaid,  or one business day
after it is sent for  next-business  day  delivery  via a  reputable  nationwide
overnight  courier  service,  in each case to the address of the  recipient  set
forth in the introductory  paragraph hereto. Either party may change the address
to which  notices  are to be  delivered  by giving  notice of such change to the
other party in the manner set forth in this Section 9.1.

          9.2 PRONOUNS.  Whenever the context may require,  any pronouns used in
this Agreement  shall include the  corresponding  masculine,  feminine or neuter
forms,  and the singular  forms of nouns and pronouns  shall include the plural,
and vice versa.

          9.3 ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement
between the parties and  supersedes  all prior  agreements  and  understandings,
whether  written or oral,  relating  to the  subject  matter of this  Agreement;
provided,  however,  that it is  acknowledged  and agreed by the Company and the
Employee  that stock  option  grants made by the  Company to the  Employee on or
prior to the date hereof are not  superseded  hereby and each such grant remains
in full force and effect in accordance with its terms.

          9.4  AMENDMENT.  This  Agreement  may be amended or modified only by a
written instrument executed by both the Company and the Employee.

          9.5 GOVERNING LAW. This  Agreement  shall be governed by and construed
in accordance with the laws of the State of Rhode Island  (without  reference to
the  conflicts  of laws  provisions  thereof).  Any action,  suit or other legal
proceeding arising under or relating to any provision of this Agreement shall be
commenced  only in a court of the State of Rhode Island (or, if  appropriate,  a
federal court  located  within Rhode  Island),  and the Company and the Employee


                                      -8-
<PAGE>


each consents to the  jurisdiction of such a court. The Company and the Employee
each hereby  irrevocably waive any right to a trial by jury in any action,  suit
or other legal  proceeding  arising  under or relating to any  provision of this
Agreement.

          9.6 SUCCESSORS AND ASSIGNS.  This Agreement  shall be binding upon and
inure to the  benefit  of both  parties  and  their  respective  successors  and
assigns, including any corporation with which, or into which, the Company may be
merged or which may  succeed  to the  Company's  assets or  business,  provided,
however,  that the  obligations  of the  Employee  are personal and shall not be
assigned by him. Notwithstanding the foregoing, if the Company is merged with or
into a third party which is engaged in multiple lines of business, or if a third
party engaged in multiple lines of business  succeeds to the Company's assets or
business, then for purposes of Section 6.1(a), the term "Company" shall mean and
refer to the  business  of the Company as it existed  immediately  prior to such
event  and as it  subsequently  develops  and  not to the  third  party's  other
businesses.

          9.7  WAIVERS.  No delay or omission by the Company in  exercising  any
right under this Agreement shall operate as a waiver of that or any other right.
A waiver or consent given by the Company on any one occasion  shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.

          9.8 CAPTIONS.  The captions of the sections of this  Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.

          9.9  SEVERABILITY.  In case any provision of this  Agreement  shall be
invalid,  illegal  or  otherwise  unenforceable,   the  validity,  legality  and
enforceability  of the  remaining  provisions  shall  in no way be  affected  or
impaired thereby.



                     [Signatures appear on following page.]




                                      -9-
<PAGE>





          THE  EMPLOYEE   ACKNOWLEDGES  THAT  HE/SHE  HAS  CAREFULLY  READ  THIS
AGREEMENT AND UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.

                                     NESTOR, INC.

                                     By: /s/ William B. Danzell
                                        -------------------------------------
                                        William B. Danzell
                                        President and Chief Executive Officer


                                     EMPLOYEE

                                         /s/ Tadas A. Eikinas
                                        -------------------------------------
                                        Tadas A. Eikinas













                                      -10-
<PAGE>



                                   SCHEDULE A

                          Change in Control Definition
                          ----------------------------


A    "Change in Control Event" shall mean:

     (i)  the acquisition by an individual,  entity or group (within the meaning
          of Section  13(d)(3) or 14(d)(2) of the Exchange  Act) (a "Person") of
          beneficial  ownership  of any capital  stock of the Company if,  after
          such acquisition, such Person beneficially owns (within the meaning of
          Rule 13d-3  promulgated  under the Exchange Act) 30% or more of either
          (x) the  then-outstanding  shares of common  stock of the Company (the
          "Outstanding  Company Common Stock") or (y) the combined  voting power
          of the  then-outstanding  securities  of the Company  entitled to vote
          generally  in the  election of  directors  (the  "Outstanding  Company
          Voting  Securities");  PROVIDED,  HOWEVER,  that for  purposes of this
          subsection  (i), the  following  acquisitions  shall not  constitute a
          Change in Control Event: (A) any acquisition directly from the Company
          (excluding  an  acquisition  pursuant to the  exercise,  conversion or
          exchange  of  any  security   exercisable  for,  convertible  into  or
          exchangeable  for common  stock or voting  securities  of the Company,
          unless the Person  exercising,  converting or exchanging such security
          acquired such security  directly from the Company or an underwriter or
          agent of the Company),  (B) any  acquisition  by any employee  benefit
          plan (or related trust)  sponsored or maintained by the Company or any
          corporation  controlled  by the Company,  (C) any  acquisition  by any
          corporation  pursuant to a Business  Combination  (as  defined  below)
          which  complies with clauses (x) and (y) of  subsection  (iii) of this
          definition,  or (D) any  acquisition by Silver Star Partners I, LLC or
          its  affiliates  (each such party is  referred to herein as an "Exempt
          Person") of any shares of capital stock of the Company; or

     (ii) such  time as the  Continuing  Directors  (as  defined  below)  do not
          constitute  a majority of the Board (or, if  applicable,  the Board of
          Directors of a successor  corporation to the Company),  where the term
          "Continuing  Director" means at any date a member of the Board (x) who
          was a member of the Board on the date hereof or (y) who was  nominated
          or  elected  subsequent  to such  date by at least a  majority  of the
          directors who were Continuing Directors at the time of such nomination
          or election or whose election to the Board was recommended or endorsed
          by at least a majority of the directors who were Continuing  Directors
          at the time of such nomination or election;  PROVIDED,  HOWEVER,  that
          there shall be  excluded  from this  clause (y) any  individual  whose
          initial  assumption  of  office  occurred  as a result of an actual or
          threatened election contest with respect to the election or removal of
          directors or other  actual or  threatened  solicitation  of proxies or
          consents, by or on behalf of a person other than the Board; or

    (iii) the   consummation   of  a  merger,   consolidation,   reorganization,
          recapitalization  or share exchange involving the Company or a sale or
          other  disposition  of all or  substantially  all of the assets of the
          Company (a "Business Combination"), unless, immediately following such
          Business  Combination,   each  of  the  following  two  conditions  is


                                      -11-
<PAGE>


          satisfied:  (x)  all  or  substantially  all of  the  individuals  and
          entities who were the  beneficial  owners of the  Outstanding  Company
          Common Stock and  Outstanding  Company Voting  Securities  immediately
          prior to such  Business  Combination  beneficially  own,  directly  or
          indirectly,  more  than 50% of the  then-outstanding  shares of common
          stock and the combined voting power of the then-outstanding securities
          entitled to vote generally in the election of directors, respectively,
          of the resulting or acquiring corporation in such Business Combination
          (which shall include,  without  limitation,  a corporation  which as a
          result of such transaction  owns the Company or  substantially  all of
          the  Company's   assets  either   directly  or  through  one  or  more
          subsidiaries) (such resulting or acquiring  corporation is referred to
          herein  as the  "Acquiring  Corporation")  in  substantially  the same
          proportions as their ownership of the Outstanding Company Common Stock
          and Outstanding Company Voting Securities,  respectively,  immediately
          prior to such Business Combination and (y) no Person (excluding Exempt
          Persons,  the Acquiring  Corporation or any employee  benefit plan (or
          related  trust)  maintained  or  sponsored  by the  Company  or by the
          Acquiring Corporation) beneficially owns, directly or indirectly,  30%
          or  more  of  the  then-outstanding  shares  of  common  stock  of the
          Acquiring  Corporation,  or  of  the  combined  voting  power  of  the
          then-outstanding  securities  of  such  corporation  entitled  to vote
          generally in the election of directors (except to the extent that such
          ownership existed prior to the Business Combination).
















                                      -12-
<PAGE>





                                   SCHEDULE B

                                Prior Agreements
                                ----------------


                                      None.





















                                      -13-