EMPLOYMENT
      AGREEMENT

     

     

    AGREEMENT
      dated as of May 2, 2005 by and between Advance Nanotech, Inc., a Colorado
      corporation (the "Company"), and Magnus R. Gittins (the
      "Executive").

     

    In
      consideration of the mutual covenants herein contained and of the mutual
      benefits herein provided, the Company and the Executive agree as
      follows:

     

    1. Representations
      and Warranties.
      The
      Executive represents and warrants to the Company that Executive is not bound
      by
      any restrictive covenants and has no prior or other obligations or commitments
      of any kind that would in any way prevent, restrict, hinder or interfere with
      Executive's acceptance of continued employment or the performance of all duties
      and services hereunder to the fullest extent of the Executive's ability and
      knowledge. The Executive agrees to indemnify and hold harmless the Company
      for
      any liability the Company may incur as the result of the existence of any such
      covenants, obligations or commitments.

     

    2. Term
      of Employment.
      The
      Company will continue to employ the Executive and the Executive accepts
      continued employment by the Company on the terms and conditions herein contained
      for a period (the "Employment Period") provided in paragraph 5.

     

    3. Duties
      and Functions.

     

    (a) (1) The
      Executive shall be employed as President & Chief Executive Officer of the
      Company. The Executive shall report directly to the Chairman and to the Board
      of
      Directors (the “Board”) of the Company.

     

    (2) The
      Executive agrees to undertake the duties and responsibilities inherent in the
      position of President & Chief Executive Officer of the Company. The
      Executive agrees to abide by the rules, regulations, instructions, personnel
      practices and policies of the Company of which the Executive has notice and
      any
      change thereof which may be adopted at any time by the Company.

     

    (b) During
      the Employment Period, the Executive will not engage in consulting work or
      any
      trade or business that is a competitor of the Company or to the extent that
      the
      same significantly interferes with the performance of the Executive’s duties
      hereunder, it being understood, however, that the Executive will be performing
      assignments for, and may be an officer or director of, entities in which the
      Company has an equity interest, without additional compensation unless otherwise
      specifically agreed. In no event shall it be a violation of this Agreement
      for
      the Executive to (i) serve on corporate, civic or charitable boards or
      committees or perform functions for such organizations, (ii) deliver lectures,
      fulfill speaking engagements or teach at educational institutions, or (iii)
      manage personal investments, so long as such activities do not significantly
      interfere with the performance of the Executive's responsibilities to the
      Company in accordance with this Agreement and the entity is not a competitor
      of
      the Company. Subject to customary business travel, the Executive's duties
      ordinarily will be performed by the Executive in the course of the Executive's
      regular presence during normal working hours on business days Monday through
      Friday the Company’s principal executive offices at 30 Rockefeller Plaza,
      27th
      Floor,
      New York, New York 10112, or at such other location to which the same may be
      relocated within a 40 mile radius.

     

    
      
         

      

      
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    4. Compensation.

     

    (a) Base
      Salary:
      As
      compensation for the Executive’s services to the Company hereunder, during the
      Executive's employment as Chief Executive Officer of the Company, the Company
      agrees to pay the Executive a base salary at the rate of Two Hundred Thousand
      Dollars ($200,000) per annum (pro rata for periods of less than an entire
      calendar year), payable in equal installments in accordance with the Company's
      normal payroll schedule but in no event less often than once per month on
      substantially the same day each month. The Company may withhold from any amounts
      payable under this Agreement such federal, state, local or other taxes as shall
      be required to be withheld pursuant to any applicable law or regulation.


     

    (b) Options:
      Executive shall be eligible to receive stock options/equity grants in securities
      of the Company from time to time, which grants, if any, shall be at the
      discretion of the Board or its designee (including, without limitation, the
      Compensation Committee), provided that the Board or its designee shall consider
      the granting of such compensation at least annually. The terms and conditions
      governing eligibility for, entitlement to, and receipt of any options or other
      form of equity in the Company shall be governed by the Company’s incentive
      compensation programs, as the same may exist in writing from time to time.
      Unless otherwise agreed in writing, such options, and the shares underlying
      such
      options, are not registered under federal, state or other securities laws,
      and
      shall be “restricted” within the meaning of applicable securities laws, and
      legended accordingly. The Company shall have no obligation to register such
      options, and shall have no obligation to register the shares underlying such
      options; provided,
      that
      the Executive shall have registration rights with respect to the shares
      underlying such options which are substantially the same as the registration
      rights of any other Executive or director of the Company in respect of the
      Company’s shares. 

     

    (c) Other
      Expenses:
      In
      addition to the compensation provided for above, the Company agrees to pay
      or to
      reimburse the Executive in timely fashion for all reasonable, ordinary and
      necessary, properly vouchered, client-related business or entertainment expenses
      incurred in the performance of the Executive’s services hereunder in accordance
      with Company policy in effect from time to time, provided, however, that the
      amount available to the Executive for such travel, entertainment and other
      expenses may require advance approval by President or Chief Executive Officer
      of
      the Company or such officer’s designee(s) in accordance with the Company’s
      reimbursement policies, as the say may be established by the Company’s Board of
      Directors from time to time. The Executive shall submit reasonable
      substantiation in the form of vouchers and receipts for all expenses for which
      reimbursement is sought. 

     

    (d) Relocation
      Benefits:
      The
      Company will pay the Executive up to Four Thousand Dollars ($4,000) per month,
      as a non-accountable reimbursement for relocation expenses, including the cost
      of temporary housing in New York.

     

    
      
         

      

      
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    (e) Vacation:
      The
      Executive shall be allowed up to the greater of Four (4) weeks of paid vacation
      during each calendar year or such greater amount of paid vacation as is
      generally permitted by the Company to its senior executives, with no carry-over
      of accrued vacation from year to year.

     

    (f) Medical
      and Dental Insurance:
      

     

    (i) As
      promptly as practicable and, in any event, within 45 days of the date of this
      Agreement, the Company, at its expense, subject to availability, shall
      establish, and shall thereafter maintain insurance plans to provide the
      Executive and the Executive’s spouse, if any, and the Executive’s children of
      age 25 or younger with medical (including such customary items as preventive
      care, diagnostic services, hospital care, physician charges, emergency care,
      maternity, infertility/sterilization, organ transplants, extended care services,
      mental health and substance abuse, miscellaneous items and prescription drugs)
      and dental insurance. Subject to availability, it is contemplated that the
      medical insurance shall be on a Preferred Provider Organization (PPO) basis,
      with a small annual deductible and payment of 100% of the allowed benefit amount
      after payment of a small copay (approximately $25-$50 in most cases) for
      in-network matters, and a small annual deductible and payment of approximately
      60-80% of the allowed benefit amount for out-of-network matters, with no
      requirement to select a primary care physician or obtain a referral to see
      a
      specialist. Notwithstanding the foregoing, coverage shall be subject to
      customary required physicals to the extent required by the plan provider and
      to
      customary determinations of insurability by providers. Subject to availability,
      it is contemplated that the dental insurance shall be on a Passive Preferred
      Provider Organization basis, with a small annual deductible, with no office
      visit copay and an annual benefit maximum of $2000 or less, with insurance
      reimbursements ranging up to approximately 100% for preventive, up to
      approximately 80% for basic procedures, and up to approximately 50% for major
      procedures. Furthermore, in no event during the term of this Agreement shall
      the
      Company be required to pay premiums per month for such medical and dental
      coverage of the Executive and the Executive’s family group in excess of One
      Hundred Fifty Percent (150%) of the premiums paid by the Company at the
      inception of such coverage pursuant to this Agreement. By way of example, if
      the
      Company paid One Dollar ($1.00) in premiums at the outset, it would not be
      obligated to pay more than One Dollar and Fifty Cents ($1.50) in premiums per
      month during this term of this Agreement.

     

    (ii) During
      any period from the commencement date of the term of employment under this
      Agreement in which the medical and dental plans have not yet been established
      or
      are not being maintained by the Company, the Company shall reimburse the
      Executive for the monthly premiums paid by the Executive for comparable
      coverage, up to $1200.00 per month. In no event shall the Company be obligated
      to reimburse the Executive for such monthly premiums in excess of One Hundred
      Fifty Percent (150%) of such amount.

     

    (g) Other
      Company Benefits:
      In
      addition to the Executive’s compensation provided by the foregoing, the
      Executive shall be entitled to participate in the other benefit programs, if
      any, available generally to executives of the Company generally pursuant to
      Company programs, including, by way of illustration, personal leave, paid
      holidays, sick leave, bonus, profit-sharing, stock option plans, retirement,
      401K, disability, dental, vision, group sickness, accident, life or health
      insurance programs of the Company which may now or, if not terminated, shall
      hereafter be in effect, or in any other or additional such programs which may
      be
      established by the Company, as and to the extent any such programs are or may
      from time to time be in effect, as determined by the Company and
      the
      terms hereof, subject to the applicable terms and conditions of the benefit
      plans in effect at that time. 

     

    
      
         

      

      
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    5. Employment
      Period; Termination.

     

    (a) Commencement.
      The
      Executive's employment shall be subject to the Executive being granted a work
      visa (e.g. L1-A) based upon the company’s petition to the U.S. NIS Office. A
      proposed commencement date is June 1, 2005 (the “Commencement Date”), and shall
      continue thereafter unabated until terminated by either party pursuant to the
      terms of this Agreement.

     

    (b) Employment
      Period.
      The
      Employment Period shall commence on the Commencement Date, subject to the above
      immigration and visa requirements, and shall continue until terminated upon
      the
      earlier to occur of the following events: (i) the close of business on the
      Second (2nd) anniversary of the Commencement Date (the “Initial Term”) or (ii)
      the death or permanent disability (as defined in Paragraph 5 (f)) of the
      Executive, provided,
      however,
      that,
      on the Second (2nd) anniversary of the Commencement Date, and on every
      subsequent annual anniversary, and unless either party has given the other
      party
      written notice at least ninety (90) days prior to the such anniversary date,
      the
      term of this Agreement and the Employment Period shall be renewed for a term
      ending one (1) year subsequent to such date, unless sooner terminated as
      provided herein (the “Renewal Term”)may be renewed by mutual agreement of the
      parties (any such renewal period being hereinafter referred to as a “Renewal
      Term”). The Initial Term plus any Renewal Terms shall be included in the
“Employment Period.”

     

    (c) Termination
      By Executive Without Good Reason.
      Notwithstanding the provisions of paragraphs 5(a) and (b) above, the Executive
      may terminate the employment relationship at any time pursuant to this paragraph
      5(c) for any reason or no reason by giving the Company written notice at least
      one hundred eighty (180) days prior to the effective date of termination. The
      Company, at its election, may (i) require Executive to continue to perform
      the
      Executive’s duties hereunder for the full one hundred eighty (180) day notice
      period, or (ii) terminate Executive’s employment at any time during such one
      hundred eighty (180) day notice period. An election by the Company to terminate
      Executive’s employment at any time during such one hundred eighty (180) day
      notice period shall not be deemed to be a termination of Executive’s employment
      by the Company without Cause or a termination of Executive’s employment by the
      Company for Cause, but shall be treated as a Termination by Executive Without
      Good Reason. If the Executive's employment is terminated by the Company pursuant
      to this paragraph 5(c) before the one hundred eighty (180) day notice period
      has
      expired without cause, the Executive shall continue to receive the Executive’s
      base salary and bonus, and the Company shall continue medical and dental
      benefits for the Executive and the Executive’s family, by paying the premium for
      health insurance continuation coverage under COBRA for the Executive and the
      Executive’s eligible family to the extent the Executive elects COBRA coverage
      (or continue to contribute the employer portion of the premium normally paid
      by
      the Company for its current employees), for a period of time (the “Severance
      Period”) which shall be determined as set forth in the next sentence. The
      Severance Period under those circumstances shall consist of the unexpired
      balance of the one hundred eighty day notice period pursuant to this paragraph
      5(c).  Notwithstanding
      the foregoing, the Executive shall only become eligible for a Severance Period
      if the Executive is terminated without cause at any time after Six (6) months
      from the date the Executive commenced employment under this Agreement. The
      sum,
      if any, payable to the Executive in respect of the Severance Period shall be
      payable in equal monthly installments on the Fifteenth (15th)
      day of
      each month in the Severance Period. All other compensation and benefits paid
      by
      the Company to the Executive shall cease upon the Executive’s last day of
      employment, except such benefits as may be required to be extended under
      applicable state or Federal law. The Executive acknowledges and agrees that
      the
      non-compete restrictions set forth in Section 7 of this Employment Agreement
      will remain in full force and effect for the six (6) month period after the
      termination of the Executive’s employment. Furthermore, the obligations imposed
      on Executive with respect to confidentiality, non-disclosure and assignment
      of
      rights to inventions or developments in this Agreement or any other agreement
      executed by the parties shall continue, notwithstanding the termination of
      the
      employment relationship between the parties.

     

    
      
         

      

      
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    The
      salary, bonus (if any) and health insurance benefits to be provided under this
      paragraph 5(c) are sometimes hereinafter referred to as "Termination
      Compensation." The Executive shall not be entitled to any Termination
      Compensation pursuant to this paragraph 5(c) unless the Executive executes
      and
      delivers to the Company after a notice of termination a release in form and
      substance reasonably satisfactory to the Company by which the Executive releases
      the Company from any obligations and liabilities of any type whatsoever under
      this Agreement, except for the Company's obligations with respect to the
      Termination Compensation, which release shall not affect the Executive’s right
      to indemnification, if any, for actions taken within the scope of the
      Executive’s employment or the Executive’s rights in respect of the Executive’s
      vested stock options, if any. The parties hereto acknowledge that the
      Termination Compensation to be provided under this paragraph 5(c) is to be
      provided in consideration for the above-specified release. The Executive will
      not be entitled to and shall not receive any other compensation or benefits
      of
      any type following the effective date of termination, except such benefits
      as
      may be required to be extended under applicable state or Federal
      law.

     

    (d) Termination
      By Company For Cause.
      If the
      Executive's employment is terminated for “cause," the Executive will not be
      entitled to and shall not receive any compensation or benefits of any type
      following the effective date of termination, except such benefits as may be
      required to be extended under applicable state or Federal law. As used in this
      Agreement, the term "cause" shall include but not necessarily be limited to
      (i)
      conviction of, or plea of nolo contendere to, a felony or a crime involving
      moral turpitude; (ii) engagement in conduct which has the effect, or might
      reasonably be expected to have the effect of bringing disrepute to the Company’s
      reputation or hold the Company or the Executive up to public ridicule; (iii)
      fraud on or misappropriation of any funds or property of the Company, any
      affiliate, customer or vendor; (iv) willful violation of any law, rule or
      regulation (other than minor traffic violations or similar offenses); (v)
      personal dishonesty, willful misconduct, or breach of fiduciary duty which
      involves personal profit; (vi) gross incompetence in the performance of the
      Executive’s duties under this Agreement; (vii) willful misconduct in connection
      with the Executive’s duties or willful failure to perform the Executive’s
      responsibilities in the best interests of the Company; (vii) habitual
      absenteeism or inattention to the Executive’s duties; (ix) chronic use of
      alcohol, drugs or other similar substances (other than pursuant to medical
      prescriptions and under doctors’ supervision for treatment of legitimate
      illnesses or conditions) which affects the Executive’s work performance; (x)
      violation of any Company rule, regulation, procedure or policy which has, or
      may
      reasonably be expected to have, a material adverse effect on the Company; (xi)
      engaging in behavior that would constitute grounds for liability for harassment
      (as proscribed by the U.S. Equal Employment Opportunity Commission Guidelines
      or
      any other applicable state or local regulatory body) or other egregious conduct
      that violates laws governing the workplace; or (xii) material breach of any
      material provision of any employment, non-disclosure, non-competition,
      non-solicitation or other similar agreement executed by the Executive for the
      benefit of the Company (including, without limitation, such provisions within
      this Agreement) or of any material Company policy, all as determined by the
      Board, which determination will be conclusive. Notwithstanding anything to
      the
      contrary, employment may not be terminated for “cause” in the event that the
      Executive becomes permanently disabled as set forth in paragraph 5(e) or dies.
      Anything
      herein to the contrary notwithstanding, the Company shall give the Executive
      written notice prior to terminating the Executive's employment for “cause” under
      any circumstance in which the conduct constituting “cause is reasonably open to
      cure (for instance, by way of illustration, where the “cause” does not involve a
      violation of trust or otherwise adversely affect the relationship between the
      Executive and the Company on a going-forward basis or involve commission of
      an
      act, such as a felony, or an unauthorized disclosure of confidential material,
      or an act which may constitute illegal harassment under laws governing the
      workplace, which can’t be undone), setting forth in reasonable detail the nature
      of any alleged breach and the conduct required to cure such breach. If, and
      only
      if, the nature of the breach is such that the breach is reasonably open to
      cure,
      then the Executive shall have fourteen (14) days from the giving of such notice
      within which to cure.

     

    
      
         

      

      
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    The
      Executive acknowledges and agrees that the non-compete restrictions set forth
      in
      Section 7 of this Employment Agreement will remain in full force and effect
      for
      the Six (6) month period subsequent to the Executive’s termination for cause.
      Furthermore, the obligations imposed on Executive with respect to
      confidentiality, non-disclosure and assignment of rights to inventions or
      developments in this Agreement or any other agreement executed by the parties
      shall continue, notwithstanding the termination of the employment relationship
      between the parties.

     

    (e) Termination
      By Company Without Cause.
      The
      Company shall retain the right to terminate the Executive without cause or
      prior
      written notice, although the Company may give notice pursuant to this paragraph
      5(e) in its sole discretion. If the Executive's employment is terminated by
      the
      Company without cause pursuant to this paragraph 5(e), the Executive shall
      continue to receive the Executive’s base salary and bonus, and the Company shall
      continue medical and dental benefits for the Executive and the Executive’s
      family, by paying the premium for health insurance continuation coverage under
      COBRA for the Executive and the Executive’s eligible family to the extent the
      Executive elects COBRA coverage (or continue to contribute the employer portion
      of the premium normally paid by the Company for its current employees), for
      a
      Severance Period which shall be determined as set forth in the next sentence.
      The Severance Period shall consist of the lesser of one hundred eighty days
      from
      the earlier to occur of the date (i) notice of termination is given pursuant
      to
      this paragraph 5(e) or (ii) the date on which employment actually terminates
      pursuant to this paragraph 5(e). Notwithstanding the foregoing, the Executive
      shall only become eligible for a Severance Period if the Executive is terminated
      without cause at any time after Six (6) months from the date the Executive
      commenced employment under this Agreement. The Executive acknowledges and agrees
      that the non-compete restrictions set forth in Section 7 of this Employment
      Agreement will remain in full force and effect for the greater of the Severance
      Period or the Six (6) month period subsequent to the Executive’s termination.
      The sum, if any, payable to the Executive in respect of the Severance Period
      shall be payable in equal monthly installments on the Fifteenth (15th)
      day of
      each month in the Severance Period. Furthermore, the obligations imposed on
      Executive with respect to confidentiality, non-disclosure and assignment of
      rights to inventions or developments in this Agreement or any other agreement
      executed by the parties shall continue, notwithstanding the termination of
      the
      employment relationship between the parties.

     

    
      
         

      

      
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    The
      salary, bonus (if any) and health insurance benefits to be provided under this
      paragraph 5(e) are sometimes hereinafter referred to as "Termination
      Compensation." The Executive shall not be entitled to any Termination
      Compensation unless the Executive executes and delivers to the Company after
      a
      notice of termination a release in form and substance reasonably satisfactory
      to
      the Company by which the Executive releases the Company from any obligations
      and
      liabilities of any type whatsoever under this Agreement, except for the
      Company's obligations with respect to the Termination Compensation, which
      release shall not affect the Executive’s right to indemnification, if any, for
      actions taken within the scope of the Executive’s employment or the Executive’s
      rights in respect of the Executive’s vested stock options, if any. The parties
      hereto acknowledge that the Termination Compensation to be provided under this
      paragraph 5(e) is to be provided in consideration for the above-specified
      release. The Executive will not be entitled to and shall not receive any other
      compensation or benefits of any type following the effective date of
      termination, except such benefits as may be required to be extended under
      applicable state or Federal law.

     

    (f) Termination
      for Executive’s Permanent Disability.
      To the
      extent permissible under applicable law, in the event the Executive becomes
      permanently disabled during employment with the Company, the Company may
      terminate this Agreement by giving thirty (30) days notice to the Executive
      of
      its intent to terminate, and unless the Executive resumes performance of the
      duties set forth in Paragraph 3 within five (5) days of the date of the notice
      and continues performance for the remainder of the notice period, this Agreement
      shall terminate at the end of the thirty (30) day period. "Permanently disabled"
      for the purposes of this Agreement means the inability, due to physical or
      mental ill health, to perform the essential functions of Executive's job, with
      or without a reasonable accommodation, for ninety (90) days during any one
      employment year irrespective of whether such days are consecutive. In the event
      of any dispute under this paragraph 5(f), the Executive shall submit to a
      physical examination by a licensed physician mutually satisfactory to the
      Company and the Executive, the cost of such examination to be paid by the
      Company, and the determination of such physician shall be
      determinative.

     

    
      
         

      

      
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    If
      the
      Executive's employment is terminated by the Company for Executive’s permanent
      disability in accordance with this section, the Executive shall continue to
      receive the Executive’s base salary and bonus, and the Company shall continue
      medical and dental benefits for the Executive and the Executive’s family, by
      paying the premium for health insurance continuation coverage under COBRA for
      the Executive and the Executive’s eligible family to the extent the Executive
      elects COBRA coverage (or continue to contribute the employer portion of the
      premium normally paid by the Company for its current employees), for the
      applicable Severance Period. The Severance Period shall consist of one hundred
      eighty (180) days from the date on which employment actually terminates pursuant
      to this paragraph 5(f). Notwithstanding the foregoing, the Executive shall
      only
      become eligible for a Severance Period if the Executive is terminated for
      permanent disability in accordance with this paragraph 5(f) at any time after
      Six (6) months from the date the Executive commenced employment under this
      Agreement. The Executive acknowledges and agrees that the non-compete
      restrictions set forth in Section 7 of this Employment Agreement will remain
      in
      full force and effect for the Severance Period. The sum, if any, payable to
      the
      Executive in respect of the Severance Period shall be payable in equal monthly
      installments on the Fifteenth (15th)
      day of
      each month in the Severance Period. Furthermore, the obligations imposed on
      Executive with respect to confidentiality, non-disclosure and assignment of
      rights to inventions or developments in this Agreement or any other agreement
      executed by the parties shall continue, notwithstanding the termination of
      the
      employment relationship between the parties.

     

    The
      salary, bonus (if any) and health insurance benefits to be provided under this
      Section 5(f) are sometimes hereinafter referred to as "Termination
      Compensation." The Executive shall not be entitled to any Termination
      Compensation unless the Executive executes and delivers to the Company after
      a
      notice of termination a release in form and substance reasonably satisfactory
      to
      the Company by which the Executive releases the Company from any obligations
      and
      liabilities of any type whatsoever under this Agreement, except for the
      Company's obligations with respect to the Termination Compensation, which
      release shall not affect the Executive’s right to indemnification, if any, for
      actions taken within the scope of the Executive’s employment or the Executive’s
      rights in respect of the Executive’s vested stock options, if any. The parties
      hereto acknowledge that the Termination Compensation to be provided under this
      Section 5(f) is to be provided in consideration for the above-specified release.
      The Executive will not be entitled to and shall not receive any other
      compensation or benefits of any type following the effective date of
      termination, except such benefits as may be required to be extended under
      applicable state or Federal law.

     

    (g) Termination
      Due To Executive’s Death.
      This
      Agreement will terminate immediately upon the Executive's death and the Company
      shall not have any further liability or obligation to the Executive, the
      Executive’s executors, heirs, assigns or any other person claiming under or
      through the Executive’s estate, except as set forth in this paragraph
      5(g).

     

    
      
         

      

      
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    The
      Company shall pay any accrued but unpaid salary or bonuses through the date
      of
      termination to Executive’s estate. If the Executive's employment is terminated
      by the Company for Executive’s death in accordance with this section, the
      Executive’s estate shall continue to receive the Executive’s base salary and
      bonus, and the Company shall continue medical and dental benefits for the
      Executive’s family, by paying the premium for health insurance continuation
      coverage under COBRA for the Executive’s eligible family to the extent the
      Executive’s estate elects COBRA coverage (or continue to contribute the employer
      portion of the premium normally paid by the Company for its current employees),
      for the Severance Period. The Severance Period shall consist of one hundred
      eighty (180) days from the the date on which employment actually terminates
      pursuant to this paragraph 5(g). Notwithstanding the foregoing, the Executive’s
      estate and the Executive’s family shall only become eligible for the
      compensation and benefits of a Severance Period if the Executive is terminated
      for death in accordance with this Section at any time after Six (6) months
      from
      the date the Executive commenced employment under this Agreement. The sum,
      if
      any, payable to the Executive’s estate in respect of the Severance Period shall
      be payable in equal monthly installments on the Fifteenth (15th)
      day of
      each month in the Severance Period. Furthermore, the obligations imposed on
      Executive with respect to confidentiality, non-disclosure and assignment of
      rights to inventions or developments in this Agreement or any other agreement
      executed by the parties shall continue, notwithstanding the termination of
      the
      employment relationship between the parties.

     

    The
      salary, bonus (if any) and health insurance benefits to be provided under this
      paragraph 5(g) are sometimes hereinafter referred to as "Termination
      Compensation." The Executive’s estate and the Executive’s family shall not be
      entitled to any Termination Compensation unless the Executive’s estate executes
      and delivers to the Company after a notice of termination a release in form
      and
      substance reasonably satisfactory to the Company by which the Executive’s estate
      releases the Company from any obligations and liabilities of any type whatsoever
      under this Agreement, except for the Company's obligations with respect to
      the
      Termination Compensation, which release shall not affect the Executive’s
      estate’s right to indemnification, if any, for actions taken within the scope of
      the Executive’s employment or the Executive’s estate’s rights in respect of the
      Executive’s vested Restricted Stock. The parties hereto acknowledge that the
      Termination Compensation to be provided under this paragraph 5(g) is to be
      provided in consideration for the above-specified release. The Executive’s
      estate and the Executive’s family will not be entitled to and shall not receive
      any other compensation or benefits of any type following the effective date
      of
      termination, except such benefits as may be required to be extended under
      applicable state or Federal law.

     

    (h) Termination
      by Executive for “Good Reason”.
      Subject
      to the provisions outlined below, at
      any
      time after the date Executive commences employment under this Agreement, upon
      One Hundred Eighty (180) days’ written notice to the Company of the Executive’s
      intent to terminate the Agreement, Executive shall have the right to terminate
      the Executive’s employment under this Agreement for “Good Reason” (as defined
      below). For purposes of this Agreement, “Good Reason” is defined as any one of
      the following: (i) Company’s material breach of this Agreement (including,
      without limitation, the Company’s covenant in Section 18(e)); or (ii) relocation
      of the Company’s headquarters and/or Executive’s regular work address to a
      location which is more than Forty (40) miles from the current principal address
      at which the Executive is required to perform the Executive’s duties without
      Executive’s prior written consent; provided,
      however,
      that it
      shall not constitute Good Reason unless Executive shall have provided the
      Company with written notice of its alleged actions constituting Good Reason
      (which notice shall specify in reasonable detail the particulars of such Good
      Reason) and Company has not cured any such alleged Good Reason or substantially
      commenced its effort to cure such breach within Seven (7) days of Company’s
      receipt of such written notice and thereafter continues to pursue such cure
      with
      reasonable diligence. A
      termination for Good Reason shall be treated for all severance purposes as
      a
      Termination by the Company “Without Cause,” and Executive shall entitled to
      receive all of the payments and benefits identified in paragraph 5(e) on the
      terms and conditions set forth in paragraph 5(e).

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    (i) Termination
      of Employment; Expiration of the Agreement. 

     

    (1) At
      any
      time after notice to terminate this Agreement has been served or received by
      the
      Company, the Company, without being deemed in breach of this Agreement or being
      deemed to be taken steps which would constitute grounds for a different kind
      of
      termination under this Agreement, may require the Executive to do the following
      during the applicable notice period concluding on the effective date of
      termination of employment under this Agreement:

     

    (i) work
      in a
      capacity consistent with the Executive’s then applicable position and status
      other than that in which the Executive is employed under this Agreement but
      without affecting the Executive’s fixed salary, including benefits;
      and

     

    (ii) remain
      away from work and, although the Executive will continue to receive the
      Executive’s salary and benefits provided for under this Agreement during such
      period, and the Company will not be obliged to provide the Executive with any
      work although the Company may, in its absolute discretion, assign to the
      Executive during this period, from time to time, such appropriate tasks or
      projects as may be carried out by the Executive away from the Company’s
      offices.

     

    (2) Upon
      termination of the Executive’s employment under this Agreement, the Executive
      shall do the following:

     

    (i) forthwith
      surrender to the Company, in good condition and working order (ordinary wear
      and
      tear excepted), all Company property in the Executive’s possession including,
      without limitation, all books, papers and other documents (of whatever nature
      and in whatever media) belonging to the Company or its subsidiary or associated
      company or relating to the business of the Company or its subsidiary or
      associated companies;

     

    (ii) if
      the
      Executive is a director of the Company or of any subsidiary or associated
      company, or if the Executive is an officer of any subsidiary or any associated
      company, and is so requested by the Company, resign as an officer or director,
      as the case may be, within forty-eight (48) hours of being so requested and,
      should the Executive fail to do so within forty-eight (48) hours of being so
      requested, the Executive irrevocably authorizes the Company to appoint an agent
      in the Executive’s name and on the Executive’s behalf to execute and deliver any
      documents and to take any and all actions reasonably deemed by the Company
      to be
      necessary or appropriate to give effect to such resignation(s) by the Executive;
      and

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    (iii) immediately
      repay all outstanding debts or loans due to the Company and/or any subsidiary
      or
      associated company, the Company being expressly authorized, for purposes of
      clarity, to deduct the same from any wages or other payment due or which may
      become due to the Executive a sum in repayment of all or any part of any such
      debts or loans.

     

    (3) Termination
      of this Agreement as a consequence of the expiration of the Employment Period
      (whether at the end of the initial term or any renewal term) shall not
      constitute a termination by the Executive or by the Company, with or without
      cause, and Executive shall not be entitled to severance or other continuation
      benefits whatsoever (other than as may be required by law) where the Agreement
      expires by its own terms. If the Agreement expires at the end of the Initial
      Term or any Renewal Term after proper advance notice by either party of the
      Company’s or the Executive’s intent not to renew, the Agreement shall expire and
      Executive shall not be entitled to any Termination Compensation or severance
      of
      any kind, except as required by law.

    


    6. Company
      Property. All
      programs, files, correspondence, memoranda, notes, records, reports, documents,
      software, programs, promotional materials, and other Company property, including
      all copies, in whatever media the same may be prepared or retained, which come
      into Executive’s possession by, through or in the course of Executive’s
      employment, regardless of the source and whether created by Executive, are
      the
      sole and exclusive property of the Company. Executive agrees and covenants
      that
      Executive shall not remove or copy any such programs, files, correspondence,
      memoranda, notes, records, reports, documents, software, programs, promotional
      materials, and other Company property, including all copies, in whatever media
      the same may be prepared or retained, or any of the information contained
      therein or otherwise pertaining to the business of the Company without the
      express written consent of the Company, who in all events shall be considered
      to
      be the owner and possessor of all such property. Executive covenants and agrees
      that Executive shall in no way utilize any such information in Executive’s
      possession for the gain or advantage of Executive and/or to the detriment of
      the
      Company. Upon termination or lapse of this Employment Agreement, or at such
      earlier date as the Company may request, in any case upon written notice to
      the
      Executive, Executive immediately shall deliver to the Company all such programs,
      files, correspondence, memoranda, notes, records, reports, documents, software,
      programs, promotional materials, and other Company property, including all
      copies, in whatever media the same may be prepared or retained. Notwithstanding
      the foregoing, the Executive may keep, for Executive’s reference, a copy of all
      memoranda, notes and documents prepared by Executive.

    


    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    7. Non-Competition.
      

     

    (a) The
      Executive agrees and acknowledges that, in connection with the Executive’s
      employment with the Company, the Executive will be provided with access to
      and
      become familiar with confidential and proprietary information and trade secrets
      belonging to the Company. Executive further acknowledges and agrees that, given
      the nature of this information and trade secrets, it is likely that such
      information and trade secrets would inevitably be used or revealed, either
      directly or indirectly, in any subsequent employment with a competitor of the
      Company in any position comparable to the position the Executive holds with
      the
      Company under this Agreement. Accordingly, in consideration of the Executive’s
      employment with the Company pursuant to this Agreement, and other good and
      valuable consideration, the receipt of which is hereby acknowledged, Executive
      agrees that, while the Executive is in the employ of the Company and for a
      period equal to the greater of the Severance Period and Six (6) Months after
      the
      termination of the Executive’s employment, except with the prior written
      agreement of the Company (not to be unreasonably withheld) the Executive shall
      not, either on the Executive’s own behalf or on behalf of any third party,
      except on behalf of the Company or any affiliate of the Company, directly or
      indirectly:

     

    (1) Other
      than through the Executive’s ownership of stock of the Company, if at all,
      directly or indirectly, own, manage, operate, join, control, finance or
      participate in the ownership, management, operation, control, or financing
      of,
      or be connected as a proprietor, partner, stockholder, officer, director,
      principal, agent, representative, joint venturer, investor, lender, consultant
      or otherwise with, or use or permit the Executive’s name to be used in
      connection with, any Business. For purposes of this Agreement, the term
“Business” shall include any business or enterprise engaged directly or
      indirectly in the acquisition, licensing, development, manufacturing, marketing
      and distribution of microelectromechanical systems, nanotechnology, products
      or
      services incorporating or utilizing the same or products or services resulting
      from collaborations of the Company with Universities and research institutions
      to develop products or services incorporating or utilizing
      microelectromechanical systems or nanotechnology, and any other business engaged
      in by the Company that Executive is or has been directly involved with at any
      time during the Twelve (12) month period leading up to the end of the Employment
      Term. Notwithstanding the foregoing, the Executive may perform services for
      a
      competitive business if both of the following conditions are fulfilled: (i)
      such
      competitive business is also engaged in other lines of business and (ii)
      Executive's services are restricted to employment in such other lines of
      business. It is recognized by the Executive and the Company that the Business
      is
      and is expected to continue to be conducted throughout the United States and
      the
      world, and that more narrow geographical limitations of any nature on this
      non-competition covenant (and the non-solicitation provisions set forth in
      clauses (2) and (3) below) are therefore not appropriate. The foregoing
      restriction shall not be construed to prohibit the ownership by Executive as
      a
      passive investment of not more than One percent (1%) percent of any class of
      securities of any corporation which is engaged in any Business having a class
      of
      securities registered pursuant to the Securities Exchange Act of 1934, as
      amended.

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    (2) Attempt
      in any manner to solicit from a current client or customer of the Company at
      the
      time of the Executive’s termination, business of the type performed by the
      Company or to persuade any client of the Company to cease to do business or
      change the nature of the business or to reduce the amount of business which
      any
      such client has customarily done or actively contemplates doing with the
      Company; or 

     

    (3) Recruit,
      solicit or induce, or attempt to induce, any person or entity which, at the
      time
      of the termination of the Executive’s employment or at any time during the Six
      (6) month period prior to such termination was an employee of the Company or
      its
      affiliates, to terminate such employee’s employment with, or otherwise cease
      such employee’s relationship with the Company or its affiliates. As used in this
      Agreement, an affiliate of the Company is any person or entity that, directly
      or
      indirectly, through one or more intermediaries, controls, or is controlled
      by,
      or is under common control with, the Company.

     

    (b) The
      parties agree that the relevant public policy aspects of covenants not to
      compete have been discussed, and that every effort has been made to limit the
      restrictions placed upon the Executive to those that are reasonable and
      necessary to protect the Company's legitimate interests. Executive acknowledges
      that, based upon the Executive’s education, experience, and training, this
      non-compete provision will not prevent the Executive from earning a livelihood
      and supporting himself and the Executive’s family during the relevant time
      period.

     

    (c) If
      any
      restriction set forth in Section 7 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 geographic area, it shall be
      interpreted to extend over the maximum period of time, range of activities
      or
      geographic areas as to which it may be enforceable.

     

    (d) The
      restrictions contained in Section 7 are necessary for the protection of the
      business and goodwill of the Company and/or its affiliates and are considered
      by
      the Executive to be reasonable for such purposes. The Executive agrees that
      any
      material breach of Section 7 will cause the Company and/or its affiliates
      substantial and irrevocable damage and therefore, in the event of any such
      breach, in addition to such other remedies which may be available, the Company
      shall have the right to seek specific performance and injunctive relief.


     

    (e) The
      provisions of Section 7 shall survive termination or expiration of this
      Agreement.

     

    (f) The
      existence of a claim, charge, or cause of action by Executive against the
      Company shall not constitute a defense to the enforcement by the Company of
      the
      foregoing restrictive covenants.

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    8. Protection
      of Confidential Information. The
      Executive agrees that all information, whether or not in writing, with regard
      to
      the assets, property, business, technical or financial affairs of the Company
      and that is generally understood in the industry as being confidential and/or
      proprietary information (“Proprietary Information”) including, but not limited
      to, ideas, concepts, inventions, improvements, processes, products, services,
      designs, original works of authorship, formulas, compositions of matter,
      compounds, computer software programs, Internet products and services, testing
      and other data, databases, mask works, trade secrets, treatments, product
      improvements, product ideas, new products, discoveries, methods, software,
      uniform resource locators or proposed uniform resource locators (“URLs”), domain
      names or proposed domain names, any trade names, trademarks or slogans, identity
      of customers, contracts, technical and production know-how, developments,
      formulae, devices, inventions, administrative procedures, source code and
      financial information, is the exclusive property of the Company. The Executive
      agrees to hold in a fiduciary capacity for the sole benefit of the Company
      all
      such Proprietary Information and any other secret, confidential or proprietary
      information, knowledge, data, or trade secrets relating to the Company or any
      of
      its affiliates or their respective clients (the foregoing being hereinafter
      referred to as "Confidential Information"), which Confidential Information
      shall
      have been obtained during the Executive’s employment with the Company. The
      Executive agrees that the Executive will not at any time, either during the
      Term
      of this Agreement or after its termination, disclose to anyone any Confidential
      Information, or utilize such Confidential Information for the Executive’s own
      benefit, or for the benefit of third parties without written approval by the
      appropriate executive officer of the Company. Executive further agrees that
      all
      memoranda, notes, records, data, schematics, sketches, computer programs,
      prototypes, or written, photographic, magnetic or other documents or tangible
      objects compiled by the Executive or made available to the Executive during
      the
      Employment Period concerning the property, business, technical or financial
      affairs of the Company and/or its clients, including any copies of such
      materials, shall be the property of the Company and shall be delivered to the
      Company on the termination of the Executive’s employment, or at any other time,
      upon the written request of the Company. Notwithstanding the foregoing, the
      Executive may keep, for Executive’s reference, a copy of all memoranda, notes
      and documents prepared by Executive.

     

    In
      the
      event Executive is questioned by anyone not employed by the Company or by an
      employee of or a consultant to the Company not authorized to receive such
      information, in regard to any Confidential Information or any other secret
      or
      confidential work of the Company, or concerning any fact or circumstance
      relating thereto, or in the event that Executive becomes aware of the
      unauthorized use of Confidential Information by any party, whether competitive
      with the Company or not, Executive will promptly
      notify
      the appropriate executive officer of the Company
      designated to receive such notifications. Until further written notice, such
      person shall be the Senior Vice President for Strategic Transactions and
      Planning or, in the absence of such person, the President or Chief Executive
      Officer of the Company. Notwithstanding the foregoing, the Executive may discuss
      any fact or circumstances relating to any Confidential Information with
      attorneys the Executive may retain in connection with this Agreement or with
      the
      subject matter thereof, provided that said attorneys shall agree in writing
      reasonably satisfactory in form and substance to the Company to maintain the
      confidentiality of such information in accordance with this Agreement and to
      not
      use or disclose the same except as permitted hereunder.

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

    In
      the
      event that, at any time during the Executive’s employment with the Company or at
      any time thereafter, Executive receives a request to disclose all or any part
      of
      the Confidential Information under the terms of a subpoena or order issued
      by a
      court or by a governmental body, Executive agrees to notify the Company
      immediately of the existence, terms, and circumstances surrounding such request,
      to consult with the Company on the advisability of taking legally available
      steps to resist or narrow such request; and, if disclosure of such trade
      secrets and other proprietary and confidential information
      is
      required to prevent Executive from being held in contempt or subject to other
      penalty, to furnish only such portion of the trade
      secrets and other proprietary and confidential information as,
      in
      the written opinion of counsel reasonably satisfactory to the Company, Executive
      is legally compelled to disclose, and to exercise Executive’s best efforts to
      obtain an order or other reliable assurance that confidential treatment will
      be
      accorded to the disclosed trade
      secrets and other proprietary and confidential information.
      The
      Company covenants and agrees to reimburse the Executive for all reasonable
      attorneys’ fees and expenses incurred by the Executive in complying with this
      paragraph.

     

    (b) The
      parties agree that the relevant public policy aspects of confidentiality
      agreements have been discussed, and that every effort has been made to limit
      the
      restrictions placed upon the Executive to those that are reasonable and
      necessary to protect the Company's legitimate interests.

     

    (c) If
      any
      restriction set forth in Section 8 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 geographic area, it shall be
      interpreted to extend over the maximum period of time, range of activities
      or
      geographic areas as to which it may be enforceable.

     

    (d) The
      restrictions contained in Section 8 are necessary for the protection of the
      business, assets and goodwill of the Company and/or its affiliates and are
      considered by the Executive to be reasonable for such purposes. The Executive
      agrees that any material breach of Section 8 will cause the Company and/or
      its
      affiliates substantial and irrevocable damage and therefore, in the event of
      any
      such breach, in addition to such other remedies which may be available, the
      Company shall have the right to seek specific performance and injunctive relief.
      

     

    (e) The
      provisions of Section 8 shall survive termination or expiration of this
      Agreement.

     

    (f) The
      existence of a claim, charge, or cause of action by Executive against the
      Company shall not constitute a defense to the enforcement by the Company of
      the
      foregoing restrictive covenants.

    


    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

    9. Intellectual
      Property. 

     

    (a) Disclosure
      of Inventions; Assignment of Ownership to Company.
      Executive
      acknowledges and agrees that as part of Executive’s employment pursuant to this
      Employment Agreement Executive is expected to make new contributions of value
      to
      the Company, and Executive agrees that Executive will promptly disclose in
      confidence to the Company all ideas, concepts, inventions, improvements,
      processes, products, designs, original works of authorship, formulas, processes,
      compositions of matter, compounds, computer software programs, Internet products
      and services, e-commerce products and services, e-entertainment products and
      services, testing and other data, databases, mask works, trade secrets,
      treatments, product improvements, product ideas, new products, discoveries,
      methods, software, uniform resource locators or proposed uniform resource
      locators (“URLs”), domain names or proposed domain names, any trade names,
      trademarks or slogans, which may or may not be subject to or able to be
      patented, copyrighted, registered, or otherwise protected by law, which relate
      directly or indirectly to the Company's business or current or anticipated
      research and development or the business of any of its affiliates or their
      respective clients, or which were developed by the Executive through the use
      of
      trade secrets of the Company or material use of equipment, supplies or
      facilities of the Company (the “Inventions”) that Executive makes, conceives or
      first reduces to practice or creates, either alone or jointly with others,
      during the period of the Executive’s employment, whether or not in the course of
      the Executive’s employment, and whether or not such Inventions are patentable,
      copyrightable or able to be protected as trade secrets, or otherwise able to
      be
      registered or protected by law. The Executive agrees that all such Inventions
      shall be the sole and exclusive property of the Company and are hereby assigned
      by Executive to the Company from the moment of their creation and fixation
      in
      tangible media. Furthermore, the Executive agrees that the Executive will,
      at
      the Company's request and cost, do whatever is reasonably necessary to secure
      for the Company the rights thereto by patent, copyright or otherwise. Executive
      acknowledges and agrees that the Executive’s obligations with respect to Company
      property discussed in this paragraph shall survive the termination or expiration
      of this Agreement.

     

    (b) Work
      for Hire.
      Executive
      acknowledges and agrees that any copyrightable works prepared by the Executive
      within the scope of the Executive’s employment are “works for hire” under the
      Copyright Act and that the Company will be considered the author and owner
      of
      such copyrightable works. The Executive agrees that the Executive will, at
      the
      Company's request and cost, do whatever is reasonably necessary to secure for
      the Company the rights thereto. Executive acknowledges and agrees that the
      Executive’s obligations with respect to Company property discussed in this
      paragraph shall survive the termination or expiration of this
      Agreement.

     

    (c) Assignment
      of Other Rights.
      In
      addition to the foregoing assignment of Inventions to the Company, Executive
      hereby irrevocably transfers and assigns to the Company: (i) all worldwide
      patents, patent applications, copyrights, mask works, trade secrets and other
      intellectual property rights in any Invention; and (ii) any and all “Moral
      Rights” (as defined below) that Executive may have in or with respect to any
      Invention. Executive also hereby forever waives and agrees never to assert
      any
      and all Moral Rights Executive may have in or with respect to any Invention,
      even after termination of the Executive’s work on behalf of the Company. “Moral
      Rights” mean
      any
      rights to claim authorship of an Invention, to object to or prevent the
      modification of any Invention, or to withdraw from circulation or control the
      publication or distribution of any Invention, and any similar right, existing
      under judicial or statutory law of any country in the world, or under any
      treaty, regardless of whether or not such right is denominated or generally
      referred to as a “moral right.”

     

    (d) Assistance.
      Executive
      agrees to assist the Company in every proper way to obtain for the Company
      and
      enforce patents, copyrights, mask work rights, trade secret rights and other
      legal protections for the Company’s Inventions in any and all countries.
      Executive will execute any documents that the Company may reasonably request
      for
      use in obtaining or enforcing such patents, copyrights, mask work rights, trade
      secrets and other legal protections. The Executive’s obligations under this
      Section will continue beyond the termination of the Executive’s employment with
      the Company, provided that the Company will compensate the Executive at a
      reasonable rate after such termination for time or expenses actually spent
      by
      the Executive at the Company’s request on such assistance. Executive appoints
      the Secretary of the Company as the Executive’s attorney-in-fact to execute
      documents on the Executive’s behalf for this purpose.

    


    
      
         

      

      
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    10. Publicity.
      Neither
      party shall issue, without consent of the other party, which consent shall
      not
      be unreasonably withheld, any press release or make any public announcement
      with
      respect to this Agreement or the employment relationship between them
provided,
      that
      nothing herein shall preclude the Company from making such disclosures as may
      be
      reasonably necessary or appropriate in order to comply with applicable
      securities laws, rules and regulations. Following the date of this Agreement
      and
      regardless of any dispute that may arise in the future, the Executive and the
      Company jointly and mutually agree that they will not disparage, criticize
      or
      make statements which are negative, detrimental or injurious to the other to
      any
      individual, company or client, including within the Company.

    


    11. Binding
      Agreement.
      This
      Agreement shall be binding upon and inure to the benefit of the parties hereto,
      their heirs, personal representatives, successors and assigns. In the event
      the
      Company is acquired, is a non surviving party in a merger, or transfers
      substantially all of its assets, this Agreement shall not be terminated and
      the
      transferee or surviving company shall be bound by the provisions of this
      Agreement. The parties understand that the obligations of the Executive are
      personal and may not be assigned by the Executive.

     

    12. Entire
      Agreement.
      This
      Agreement contains the entire understanding of the Executive and the Company
      with respect to employment of the Executive and supersedes any and all prior
      understandings, written or oral. This Agreement may not be amended, waived,
      discharged or terminated orally, but only by an instrument in writing,
      specifically identified as an amendment to this Agreement, and signed by all
      parties. By entering into this Agreement, the Executive certifies and
      acknowledges that the Executive has carefully read all of the provisions of
      this
      Agreement and that the Executive voluntarily and knowingly enters into said
      Agreement.

     

    13. Severability.
      Any
      provision of this Agreement which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be deemed severable from the
      remainder of this Agreement, and the remaining provisions contained in this
      Agreement shall be construed to preserve to the maximum permissible extent
      the
      intent and purposes of this Agreement. 

     

    14. Tax
      Consequences.
      Company
      will have no obligation to any person or entity entitled to the benefits of
      this
      Agreement with respect to any tax obligation any such person or entity incurs
      as
      a result of or attributable to this Agreement, including all supplemental
      agreements and employee benefits plans incorporated by reference therein, or
      arising from any payments made or to be made under this Agreement or
      thereunder.

     

    
      
         

      

      
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    15. Governing
      Law.
      This
      Agreement shall be governed by, and construed and enforced in accordance with,
      the laws of the State of New York applicable to contracts negotiated, executed
      and to be performed wholly within the State of New York, without giving effect
      to the principles of conflicts of law or choice of law thereof. 

     

    16. Submission
      to Jurisdiction.
      Each of
      the parties hereto hereby irrevocably and unconditionally submits to the
      exclusive jurisdiction of the State and Federal Courts sitting in New York,
      New
      York for purposes of any suit, action or other proceeding arising out of this
      Agreement and agrees not to commence any action, suit or proceedings relating
      hereto except in such courts. Each of the parties hereto agrees that service
      of
      any process, summons, notice or document by U.S. registered mail at its address
      set forth herein shall be effective service of process for any action, suit
      or
      proceeding brought against it in any such court. Each of the parties hereto
      hereby irrevocably and unconditionally waives any objection to the laying of
      venue of any action, suit or proceeding arising out of this Agreement, which
      is
      brought by or against it, in such courts, and hereby further irrevocably and
      unconditionally waives and agrees not to plead or claim in any such court that
      any such action, suit or proceeding brought in any such court has been brought
      in an inconvenient forum.

     

    17. Notices.
      Any
      notice provided for in this Agreement shall be provided in writing. Properly
      addressed notices shall be effective from the date of service, if served
      personally on the party to whom notice is to be given, on the date of delivery
      if delivered to the appropriate address by in-person delivery or courier or
      by
      an overnight courier (including, without limitation, Federal Express, UPS and
      Express Mail), or on the fifth (5th)
      day
      after mailing via the U.S. Postal Service, if mailed by First Class mail,
      postage prepaid. Notices shall be properly addressed to the parties at their
      respective addresses or to such other address as either party may later specify
      by notice to the other.

     

    18. Indemnification. 

     

    (a) The
      Company shall indemnify and hold harmless the Executive to the fullest extent
      permitted by law from and against any and all claims, damages, expenses
      (including reasonable attorneys' fees), judgments, penalties, fines,
      settlements, and all other liabilities incurred or paid by the Executive in
      connection with the investigation, defense, prosecution, settlement or appeal
      of
      any threatened, pending or completed action, suit or proceeding, whether civil,
      criminal, administrative or investigative and to which the Executive was or
      is a
      party or is threatened to be made a party by reason of the fact that the
      Executive is or was an officer, employee or agent of the Company, or by reason
      of anything done or not done by the Executive in any such capacity or
      capacities, provided that the Executive acted in good faith, in a manner that
      was not grossly negligent and did not constitute willful misconduct and in
      a
      manner the Executive reasonably believed to be in or not opposed to the best
      interests of the Company, and, with respect to any criminal action or
      proceeding, had no reasonable cause to believe the Executive's conduct was
      unlawful. The Company also shall pay any and all reasonable expenses (including
      attorney's fees) incurred by the Executive as a result of the Executive being
      called as a witness in connection with any matter involving the Company and/or
      any of its officers or directors (other than an action or suit by the Company
      against the Executive).

     

    
      
         

      

      
        -18-

        
          

        

      

      
         

      

    

    (b) The
      Company shall pay any reasonable expenses (including attorneys' fees),
      judgments, penalties, fines, settlements, and other liabilities incurred by
      the
      Executive in investigating, defending, settling or appealing any action, suit
      or
      proceeding described in this Section 18 (other than an action or proceeding
      by
      the Company against the Executive) in advance of the final disposition of such
      action, suit or proceeding. The Company shall promptly pay the amount of such
      expenses to the Executive, but in no event later than ten (10) days following
      the Executive's delivery to the Company of a written request for an advance
      pursuant to this Section 18, together with a reasonable accounting of such
      expenses.

     

    (c) The
      Executive hereby undertakes and agrees to repay to the Company any advances
      made
      pursuant to this Section 18 if and to the extent that it shall ultimately be
      agreed by the parties or determined by a court that the Executive is not
      entitled to be indemnified by the Company for such amounts.

     

    (d) The
      Company shall make the advances contemplated by this Section 18 regardless
      of
      the Executive's financial ability to make repayment, and regardless of whether
      indemnification of the Indemnitee by the Company will ultimately be required.
      Any advances and undertakings to repay pursuant to this Section 18 shall be
      unsecured and interest-free. 

     

    19. Miscellaneous.

     

    (a) No
      delay
      or omission by either party to this Agreement in exercising any right of such
      party under this Agreement shall operate as a waiver of that or any other right
      by such party. A waiver or consent given by a party to this Agreement 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.

     

    (b) 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.

     

    (c) The
      language in all parts of this Agreement will be construed, in all cases,
      according to its fair meaning, and not for or against either party hereto.
      The
      parties acknowledge that each party and its counsel have reviewed and revised
      this Agreement and that the normal rule of construction to the effect that
      any
      ambiguities are to be resolved against the drafting party will not be employed
      in the interpretation of this Agreement.

     

    20. Counterparts.
      This
      Agreement may be signed in any number of counterparts, each of which shall
      be
      deemed an original, with the same effect as if the signatures thereto and hereto
      were upon the same instrument. Facsimile signatures shall be treated as if
      the
      same were original signatures.

     

    
      
         

      

      
        -19-

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
      duly
      executed and delivered by its authorized officers or individually, as of the
      date first written above.

     

    
      	 	 	 
	 	ADVANCE
              NANOTECH,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
	 	Officer’s
              Title:


    

     

    
      	 	 	 
	 	
              EXECUTIVE:

            
	 
 	 
 	 
 
	 	 	 
	 	
              
Name:
              Magnus R. Gittins
	 	 


    

    


    
      
         

      

        -20-