MEMORANDUM OF AGREEMENT made and entered this 24th day of October, 1997.


BY AND BETWEEN:             NORMAN A. GARDNER, Executive, of the City of Wayne,
                            Pennsylvania;

                            hereinafter referred to as

                            "EXECUTIVE"

                                  OF THE FIRST PART


AND:                        NOCOPI TECHNOLOGIES INC., a company incorporated
                            under the laws of the State of Maryland,

                            hereinafter referred to as

                            "COMPANY"

                                  OF THE SECOND PART


     WHEREAS the EXECUTIVE presently serves as President and Chief Executive
Officer of the COMPANY and has served the COMPANY and its predecessors
continuously during the past fifteen (15) years as its principal executive; and

     WHEREAS the leadership of the EXECUTIVE has constituted a major factor in
the development of the COMPANY and the COMPANY is greatly in need of the
EXECUTIVE's continued leadership so that the further and uninterrupted progress
of the COMPANY will be assured; and

     WHEREAS the COMPANY acknowledges and recognizes the value of the
EXECUTIVE's services, including the capacity for service of special, unique and
extraordinary character; and

     WHEREAS the COMPANY desires to employ, retain and make secure for itself
the experience and outstanding abilities and services of the EXECUTIVE for the
period of at least three (3) years from the effective date hereof and thereafter
to employ, retain and make secure for the COMPANY his services in an advisory
and consultative capacity for two years so as to prevent any other competitive
business from securing the services of the EXECUTIVE and from utilizing the
EXECUTIVE's experience, background and "know-how"; and


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     WHEREAS both parties desire to embody the terms and conditions of
employment of the EXECUTIVE and of the Stock Option granted to him in connection
therewith into a written agreement; and

     WHEREAS all of the terms, conditions and undertakings of this agreement,
including without limitations those of the Stock Option embodied herein and the
execution of this agreement, were duly fixed, stated, approved, authorized and
directed for and on behalf of the COMPANY by resolution of its Board of
Directors at a meeting of such Board held at the office of the COMPANY on
October 7, 1997, at which a quorum of Directors was present and voted,
exclusive of the EXECUTIVE, and to which resolution reference is hereby made,
and which resolution by this reference is incorporated herein as though fully
and at length repeated;

     NOW, THEREFORE, for valuable consideration, it is mutually agreed by and
between the parties hereto as follows:

1.  EMPLOYMENT PERIOD AND DUTIES

1.1 The COMPANY agrees to and does hereby employ the EXECUTIVE as Chairman and
the EXECUTIVE agrees to serve the COMPANY in such capacity for a period
commencing on the effective date of this agreement and continuing for three (3)
years thereafter (the "Employment Period"). This agreement shall become
effective when the COMPANY will have received not less than $500,000 pursuant to
a financing commitment which commitment shall be in form and substance
satisfactory to Executive.

1.2 The COMPANY agrees and undertakes to nominate the EXECUTIVE as a Director of
the COMPANY during each year of the Employment Period and further agrees that
they will support the EXECUTIVE's nomination in the COMPANY's annual proxy
statement. In addition and provided that the EXECUTIVE is elected as a Director
of the COMPANY, the COMPANY agrees that it will elect the EXECUTIVE as Chairman
of the Board during the Employment Period.


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2.  COMPENSATION

2.1 Subject to the provisions of Clause 2.3, the COMPANY shall pay to said
EXECUTIVE, and said EXECUTIVE shall accept from the COMPANY as basic payment for
his services during the Employment Period, (the "BASIC PAYMENT") compensation at
the rate of One hundred seventy-five thousand and 00/100 ($175,000.00) Dollars
per annum, payable in weekly or semi-monthly installments.

2.2 In addition to the BASIC PAYMENT during the Employment Period, the EXECUTIVE
shall receive a sum, with respect to any fiscal year of the COMPANY during the
Employment Term, in which the net income of the COMPANY before taxes and as
determined solely by the firm of public accountants of the COMPANY shall exceed
Two hundred and fifty thousand 00/100 ($250,000.00) Dollars equal to ten percent
(10%) of such excess, the amount of any such additional sum shall not exceed One
hundred twenty-five thousand 00/100 ($125,000.00) Dollars in any fiscal year.

2.3 The COMPANY and the EXECUTIVE acknowledge that as of the date of signing
this agreement, the EXECUTIVE's salary as well as other salaries being paid to
personnel of the COMPANY are being disbursed at reduced rates because of cash
flow constraints. The COMPANY and the EXECUTIVE agree that notwithstanding the
provisions of Clause 2.1 hereof that the EXECUTIVE's salary shall remain at the
presently reduced rate until such time as the COMPANY's cash flow from
operations is positive for two consecutive quarters at which time the
EXECUTIVE's salary shall revert to the rate of One hundred seventy-five thousand
00/100 ($175,000.00) Dollars set out in Clause 2.1. The COMPANY and the
EXECUTIVE acknowledge that the reduced salary of the EXECUTIVE is One hundred
fifty-six thousand 00/100 ($156,000.00) Dollars per annum.

3.  EXPENSES

3.1 During the Employment Period the COMPANY will pay all reasonable business
related expenses incurred by the EXECUTIVE in furtherance of or in connection
with the business of the COMPANY and its subsidiaries.


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3.2 The EXECUTIVE shall be supplied with a leased car by the COMPANY provided
that the annual lease monthly payments do not exceed the sum of Nine hundred
00/100 ($900.00) Dollars per month. The COMPANY shall pay or reimburse the
EXECUTIVE for all operating costs of this vehicle including leasing costs (to
the extent only ot the anount heretofore mentioned), insurance, maintenance, gas
and oil.


4.   SERVICES

4.1 The EXECUTIVE agrees to devote his full time and efforts during the
Employment Period to the business of the COMPANY and its subsidiaries, if any,
and to serve as a Director and Chairman of the Board of the COMPANY, if elected
as such, provided, however, that he shall be entitled to a minimum vacation
period totally at least one (1) month each year which he may take, at his
option, either in whole or in part, consecutively or not, in any given year, and
which vacation periods shall be cumulative over the term of the Employment
Period.

4.2 The EXECUTIVE shall perform his duties faithfully, diligently, and to the
best of his ability during the Employment Period. These duties shall include
sales and marketing activities to promote and increase sales of the COMPANY's
products and services. If he is not elected as Chairman of the Board of the
COMPANY, he shall be obliged to perform only such duties, services and tasks as
he performed prior to his being elected, and he shall be extended by the COMPANY
such courtesies, privileges and rights as are consistent with the title of
Chairman of a public company of comparable size.

5.  RESTRICTIVE COVENANT

5.1 The EXECUTIVE agrees that so long as this agreement is in full force and
effect, he will not, directly or indirectly, either as principal, agent,
stockholder, or in any other capacity, engage in or


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<PAGE>


have a financial interest in, any business which is competitive to the business
of the COMPANY and its subsidiaries, (except that nothing contained herein shall
preclude the EXECUTIVE from purchasing or owning stock in any such business,
providing that his holdings do not exceed one (1%) percent of the issued and
outstanding capital stock.) For the purpose hereof, a business will be deemed
competitive if it involves the production, manufacture or distribution of any
product similar to those produced, manufactured or distributed by the COMPANY or
any of its subsidiaries. The EXECUTIVE expressly agrees that upon a breach or
violation of the foregoing provision of this agreement, the COMPANY in addition
to all other remedies shall be entitled, as a matter of right, to injunctive
relief in any court of competent jurisdiction.

6.  SECRET PROCESSES

6.1 The EXECUTIVE will not divulge, furnish or make accessible to any one
(otherwise than in the regular course of the business of the COMPANY or any of
its subsidiaries) any knowledge or information with respect to confidential or
secret processes, formula, machinery, plans, devices or material of the COMPANY
or any of its subsidiaries, with respect to any confidential or secret
engineering, development or research work of the COMPANY or any of its
subsidiaries, or with respect to any other confidential or secret aspect of the
business of the COMPANY or any of its subsidiaries.

7.  DEATH

7.1 In the event of the death of the EXECUTIVE the COMPANY shall pay to his
surviving spouse an amount equal to one (1) year compensation calculated on the
basis of the compensation payable to the EXECUTIVE under this agreement at the
date of his death. Such payments shall be made in equal monthly installments
over a period of two (2) years from the date of the death of the EXECUTIVE. If
the EXECUTIVE has no surviving spouse, then such amount shall be paid to the
Executive's estate in a lump sum. If the Executive's spouse survives him but
dies before all of the forementioned monthly payments have been made, then the
balance of such payments shall be paid to the Executive's estate in a lump sum.


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8.   TERMINATION

     a) Death. Employment of the Executive hereunder shall terminate upon his
     death, subject to the payments to be made to his surviving spouse pursuant
     to Section 7 hereof.

     b) Disability. In the event that during the Employment Period the EXECUTIVE
     shall be disabled from rendering services hereunder as Chief Executive
     Officer to the COMPANY for three (3) consecutive months, the Board of
     Directors of the COMPANY may terminate the Employment Period after sixty
     (60) days written notice.

     c) Termination for cause. The Company may, in its sole discretion,
     terminate Executive's Employment Period under the following circumstances:

          (l) Executive breaches his obligations under the terms of this
          agreement; or

          (2) the Executive has committed an act of dishonesty, moral turpitude
          or theft or has breached his duties of loyalty to the Company or an
          act of insubordination to its Board of Directors or the Chief
          Executive Officer.

It is specifically understood that during the Employment Period, Executive shall
not be terminated pursuant to either 8(c) (1) or (2) unless and until (a)
Executive has received reasonable written notice from the Company of the
applicable reasons for termination and Executive has had a reasonable
opportunity to remedy such a breach of duties or act of insubordination;
however, the Company may immediately terminate Executive in the event of the
commission of an act of dishonesty, moral turpitude or theft.

In the event of the termination of Executive under this section 8(c)
Executive's right to the compensation and benefits provided herein shall
immediately terminate and/or cease to accrue, provided, however, that Executive
shall receive (i) the unpaid portion, if any, of his base salary computed on a
pro-rated basis to the date of termination of employment and (ii) any unpaid
accrued benefits owed to the Executive in accordance with the term of any Plan
or Program in which he is a participant.

     d) Termination other than for cause. The Company may terminate the
     employment of Executive during the Employment Period for reasons other than
     those enumerated in Section 8(c); however, in such event the Company shall
     be liable to Executive for compensation for the remainder of the Employment
     Period and, to the extent not inconsistent with applicable law and/or the
     terms and conditions of any Plan or Program, all other remaining benefits
     shall continue to accrue until the end of the Employment Period, which
     shall constitute the full liquidated damages to which Executive is
     entitled.

     e) In the event of termination of this agreement for any reason other than
     death, Executive shall be entitled to purchase any life insurance policies
     on his life then owned by the Company for the cash value thereof or, if
     such policies have no cash value, upon payment of $100.


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9.  STOCK OPTION

9.1 As a further inducement to the EXECUTIVE to enter into this agreement and to
provide a means of enhancing the EXECUTIVE's proprietary interest in the COMPANY
and to increase the EXECUTIVE's incentive, the COMPANY hereby grants to the
EXECUTIVE the right and option to purchase from the COMPANY up to two hundred
thousand (200,000) shares of its par value common stock, exercisable upon the
following terms and conditions and in accordance with the amended and restated
non-qualified Stock Option Plan of the COMPANY:

     a)   The option price shall be one hundred and fifty (150%) percent of the
          highest price at which said common stock is sold on the open market on
          the date that the execution of this agreement was authorized by the
          Board of Directors;

     b)   Subject to the provisions hereof, this option shall be exercisable as
          follows:

          (i)  After the expiration of one (1) year from the effective date
               hereof this option may be exercised with respect to all or any
               part of one hundred thousand (100,000) of the said two hundred
               thousand (200,000) shares;

          (ii) After the expiration of two (2) years from the effective date
               hereof, this option may be exercised with respect to all or any
               part of two hundred thousand (200,000) of the said two hundred
               thousand (200,000) shares less such number of shares as may have
               been taken down by the EXECUTIVE hereunder prior thereto;


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     c)   This option shall not be transferable by the Executive otherwise than
          by will or the laws of descent and distribution, and shall be
          exercisable during his lifetime only by him (and in no event later
          than eight (8) years from the effective date hereof);

     d)   In the event of the death of the EXECUTIVE, this option may be
          exercised by the estate of the EXECUTIVE or by any person who
          hereafter acquires the right to exercise such option by bequest or
          inheritance or by reason of the death of the EXECUTIVE, within the
          period of two (2) years after the date of death or such shorter period
          as may then be required under applicable provisions of the United
          States Internal Revenue Code relating to Stock Options;

     e)   Subject to the requirements for restricted stock options of the United
          States Internal Revenue Code, as now in effect or as hereafter
          amended:

          (i)   In case the COMPANY shall hereafter declare or pay to the
                holders of its par value common stock a dividend or dividends in
                stock of the COMPANY, the EXECUTIVE upon any purchase thereafter
                of Option Shares as herein provided, shall be entitled, without
                additional payment, to receive in addition to the Option Shares
                purchased such additional share or shares of stock, disregarding
                fractions, as the EXECUTIVE would have received in the form of
                such dividend or dividends if, on the effective date hereof, he
                had been the holder of record of the Option Shares purchased and
                had continued to hold such shares and all shares received as
                stock dividends;

          (ii)  In case the shares of outstanding par value common stock of the
                COMPANY shall be reclassified or changed into the same or a
                different number of shares of the same or a different class,
                then the appropriate number of shares, disregarding fractions,
                resulting from such reclassification or change shall be
                substituted for the Option Shares for all purposes hereof;

          (iii) In case pursuant to any reorganization or recapitalization of
                the COMPANY, or its liquidation or partial liquidation or
                spin-off, voluntary or otherwise, or its consolidation or merger
                into or with another corporation, or the sale,


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               conversion, lease or other transfer by the COMPANY of all or
               substantially all of its property, pursuant to which the then
               outstanding shares of par value common stock of the COMPANY
               become exchangeable for other shares of stock, the EXECUTIVE,
               upon his purchase of Option Shares pursuant to the terms hereof,
               shall be entitled to receive in lieu of the shares of stock of
               the COMPANY to which he would otherwise be entitled, the shares
               of stock, disregarding fractions, which the EXECUTIVE would have
               received upon such reorganization, recapitalization, liquidation,
               partial liquidation, spin-off, consolidation, merger, or
               transfer, if immediately prior thereto he had owned the shares of
               stock of the COMPANY at that time issuable to him pursuant to
               such purchase and had exchanged such shares, disregarding
               fractions, in accordance with terms of such reorganization,
               recapitalization, liquidation, partial liquidation, spin-off,
               consolidation, merger, or transfer;

          f)   This option shall be exercised by written notice or notices
               delivered to the COMPANY's principal place of business;

          g)   Delivery of the certificates representing the shares of stock as
               to which this option shall be exercised at any given time, shall
               be made promptly after receipt of such notice by the COMPANY
               against the payment of the purchase price of the shares with
               respect to which the option is exercised at such time;

          h)   The EXECUTIVE, on behalf of himself, his legal representative and
               any other person who may become entitled to act hereunder by
               reason of the EXECUTIVE's death, undertakes and agrees that, in
               conjunction with each purchase of stock hereunder, the purchaser
               will deliver to the COMPANY his written representation that such
               shares are being purchased with the then present intention of
               holding the same for investment and not with a view to the
               distribution thereof;

          i)   Nothing contained in this Agreement is intended, or shall be
               construed, to deprive the EXECUTIVE of the full benefits of this
               option for two hundred thousand


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               (200,000) shares in the event of the discharge of the EXECUTIVE
               by the COMPANY or other reach of this agreement by the COMPANY;

          j)   The COMPANY agrees that it now holds and will hold available a
               sufficient number of shares of its par value common stock to
               satisfy the requirements of this option;

          k)   It is specifically understood that the Stock Option hereby
               granted to the EXECUTIVE is instead of, and meant to be a
               replacement of any stock options heretofore granted by the
               COMPANY to the EXECUTIVE.


10. EXECUTIVE'S RIGHTS UNDER CERTAIN PLANS

10.1 The COMPANY agrees that nothing contained herein is intended to or shall be
deemed to be granted to the EXECUTIVE in lieu of any rights and privileges which
the EXECUTIVE may be entitled to as an employee of the COMPANY under any
retirement, pension, insurance, hospitalization, or other plans which may now be
in effect or which may hereafter be adopted, it being understood that the
EXECUTIVE shall have the same rights and privileges to participate in such plans
or benefits as any other employee.

11. SUCCESSORS, ETC. OF THE COMPANY

11.1 This agreement shall inure to the benefit of and be binding upon the
COMPANY, its successors and assigns, including without limitation any person,
partnership or corporation which may acquire all or substantially all of the
COMPANY's asets and business, or into which the COMPANY may be consolidated or
merged, and this provision shall apply in the event of any subsequent merger,
consolidation or transfer, and the EXECUTIVE, his heirs, assigns, executors and
personal representatives.


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12. ENTIRE AGREEMENT

12.1 The parties hereto agree that this agreement supersedes any employment
agreement between the EXECUTIVE and the COMPANY and contains the entire
understanding and agreement between the parties and cannot be amended, modified
or supplmented in any respect, except by a subsequent written agreement entered
into by both parties hereto.

13. APPLICABLE LAW

13.1 This Agreement shall be construed according to the laws of the State of
Pennsylvania.

     IN WITNESS WHEREOF, the parties hereto have executed this agreement the day
and year first above mentioned.


                                            NOCOPI TECHNOLOGIES, INC.


                                            Per:
                                                 ------------------------------

                                            NORMAN A. GARDNER



                                            Per:
                                                 ------------------------------


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