EMPLOYMENT
      AGREEMENT OF ANTONIO GONCALVES, JR.

    


    AGREEMENT
      dated as of August 11, 2006 (“Effective Date”) by and between Advance Nanotech,
      Inc., a Delaware corporation (the "Company"), and Antonio Goncalves, Jr. (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)

            	
              The
                Executive shall be employed as Chief Operating Officer of the Company.
                The
                Executive shall report directly to the Chief Executive Officer and
                to the
                Board of Directors of the Company (the
“Board”).

            


    

    


    
      	
              (b)

            	
              The
                Executive agrees to undertake the duties and responsibilities inherent
                in
                the position of Chief Operating 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.

            


    

    


    
      	
              (c)

            	
              The
                Executive agrees that as soon as reasonably practicable following
                the
                Effective Date, but in no event later than December 31, 2006, the
                Executive shall prepare a market-comparable revised incentive structure
                for senior management of the Company to participate in the success
                of the
                Company’s commercialization efforts of its subsidiaries and portfolio of
                technologies. 

            


    

    


    
      	
              (d)

            	
              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:

            


    

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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.

            


    

    


    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 600 Lexington Avenue, 29th
      Floor,
      New York, NY 10022, or at such other location mutually agreed upon by the
      parties.

    


    
      	
              (f)

            	
              Six
                (6) months following the Effective Date, the Executive and the Chief
                Executive Officer shall review the performance of the Executive from
                the
                Effective Date. At such time, the Chief Executive Officer shall,
                in good
                faith, make the determination of whether the Executive shall be appointed
                President of the Company in addition to maintaining the position
                and
                responsibilities of Chief Operating
                Officer.

            


    

    


    4. Compensation.

    


    
      	
              (a)

            	
              Base
                Salary:
                As compensation for the Executive’s services to the Company hereunder,
                during the Executive's employment as Chief Operating Officer of the
                Company, the Company agrees to pay the Executive a base salary at
                the rate
                of Two Hundred Fifty Thousand Dollars ($250,000) 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)

              	
                
                  Inducement
                    Grant:
                    As
                    an inducement to Executive to enter into this Agreement, the
                    Company shall
                    grant to Executive the following (“Inducement Grants”), unless otherwise
                    agreed by the parties in
                    writing:

                

              


      

       

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

    

    1)  Inducement
      grant payable in eight fiscal-year quarterly installments over the first two
      years of employment with immediate vesting at the end of months 3, 6, 9, 12,
      15,
      18, 21 and 24 of Executive’s employment with a total aggregate value of $250,000
      payable by equity grant with a cash value on the grant date of 1/8 of
      $250,000.

    


    2)  $100,000
      signing bonus payable by cash or equity grant or any combination thereof to
      be
      paid by January 15, 2007. Any portion of such signing bonus granted in equity
      shall be in accordance with the terms and conditions of the yet to be
      implemented executive trading plan which shall govern the sale of shares of
      Company stock. If the Executive either (i) terminates employment under this
      Agreement for “Good Reason” (as defined in section 5(d) of this Agreement) or
      (ii) is terminated by Company for cause (as defined in section 5(e) and
      is not
      employed by Company on the first anniversary of the Commencement Date, the
      Executive shall return to Company one-half of the signing bonus set forth in
      this section. 

    


    3)  If
      the
      Inducement Grants are not made pursuant to a plan covered by a registration
      statement declared effective by the Securities and Exchange Commission (“SEC”),
      the Company agrees to file with the SEC, as soon as reasonably practicable
      after
      the Effective Date, a Form S-8 registration statement covering such shares
      of
      Company stock.

    


    
      	
              (c)

            	
              Equity
                Incentive Plan:
                As compensation for the Executive’s services to the Company hereunder, the
                Company, for purposes of a performance based bonus, agrees to enroll
                the
                Executive in the Company’s Equity Incentive Plan with a bonus target of
                $250,000 for the first year of performance in stock grants. Such
                grants
                shall be based on 50% personal performance and 50% corporate performance
                (metrics to be determined). One quarter of the actual bonus amount
                (as
                determined by the compensation committee of the Board of Directors
                based
                upon the recommendations of the CEO at the end of Executive’s first year
                of service) shall be granted at the end of fiscal quarters, months
                15, 18,
                21 and 24 of the Executive’s employment in stock grants with immediate
                vesting. 

            


    

    


    
      	
              (d)

            	
              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.

            


    

     

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    
    

     

    
      	
              (e)

            	
              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 same 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. 

            


    

    


    
      	
              (f)

            	
              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.

            


    

    


    
      	
              (g)

            	
              Medical
                and Dental Insurance:
                The executive is entitled to join the company’s medical and dental plan
                effective on the first day of the month following the executives
                first day
                of employment. The company currently pays for 95% of the company’s health
                and dental plan coverage and employees contribute 5% to the plan
                on a
                pre-tax basis. Enrollment in the plan is optional but must be declared
                within 30 days of the executives first day of employment.
                

            


    

    


    
      	
              (h)

            	
              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.


            


    

     

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    
    

     

    
      	
              (i)

            	
              Commuting
                Allowance: The
                Executive is entitled to a non-accountable commuting allowance of
                $500 per
                month, paid quarterly in arrears.

            


    

     

    5. Employment
      Period; Termination.

    


    
      	
              (a)

            	
              Commencement.
                The Executive's employment shall commence on August 21, 2006 (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 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 (h)) 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 eligible 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 by continuing
      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 (180) notice period pursuant to this paragraph 5(c). 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 twelve (12) 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.

    


    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    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 general 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
      including those under this Agreement, except for the Company's obligations
      with
      respect to the Termination Compensation, which general 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 general 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 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:

            


    

     

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (i)

            	
              Company’s
                material breach of this Agreement;
                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 be entitled to
      receive all of the payments and benefits identified in paragraph 5(f) on the
      terms and conditions set forth in paragraph 5(f).

    


    
      	
              (e)

            	
              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 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 securities law, rule or regulation (other than minor
                traffic violations or similar
                offenses);

            


    

    


    
      	 	
              (v)

            	
              personal
                dishonesty, or breach of fiduciary duty which involves personal
                profit;

            


    

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (vi)

            	
              gross
                incompetence in the performance of the Executive’s duties under this
                Agreement;

            


    

    


    
      	 	
              (vii)

            	
              willful
                misconduct in connection with the Executive’s
                duties;

            


    

    


    
      	 	
              (viii)

            	
              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)

            	
              willful
                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(g) 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 the 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 not 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.

    


    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    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.

    


    
      	
              (f)

            	
              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(f) in its sole discretion. If the Executive's
                employment is terminated by the Company without cause pursuant to
                this
                paragraph 5(f), 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 eligible 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 by continuing 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
                and eighty (180) days from the earlier to occur of the date: (i)
                notice of
                termination is given pursuant to this paragraph 5(f); or (ii) the
                date on
                which employment actually terminates pursuant to this paragraph 5(f).
                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.

            


    

    


    The
      salary, bonus (if any) and health insurance benefits to be provided under this
      paragraph 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 general 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 including those under this
      Agreement, except for the Company's obligations with respect to the Termination
      Compensation, which general 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(f) is to be provided in
      consideration for the general 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.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    
      	
              (g)

            	
              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 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(g), 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
                conclusive.

            


    

    


    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 eligible
      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 by continuing 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
      ninety (90) days from the date on which employment actually terminates pursuant
      to this paragraph 5(g). 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(g) 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.

    


    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    The
      salary, bonus (if any) and health insurance benefits to be provided under this
      Section 5(g) 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 general 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 including those under this
      Agreement, except for the Company's obligations with respect to the Termination
      Compensation, which general 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(g) is to be provided in
      consideration for the general 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.

    


    
      	
              (h)

            	
              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(h).

            


    

    


    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 eligible 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 by continuing 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 ninety (90) days from the date on which employment actually
      terminates pursuant to this paragraph 5(h). 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 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.

    


    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    The
      salary, bonus (if any) and health insurance benefits to be provided under this
      paragraph 5(h) 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 general 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 including those under this Agreement, except for the
      Company's obligations with respect to the Termination Compensation, which
      general 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(h) is to be provided in
      consideration for the general 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.

    
      


      
        	
                (i)

              	
                Termination
                  of Employment; Expiration of the Agreement. 

              


      

       

    

    
      	 	
              (i)

            	
              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:

            


    

    


    
      	 	
              (1)

            	
              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

            


    

    


    
      	 	
              (2)

            	
              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.

            


    

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    
    

     

    
      	 	
              (ii)

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

            


    

    


    
      	 	
              (1)

            	
              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;

            


    

    


    
      	 	
              (2)

            	
              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. Should the Executive fail to resign 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

            


    

    


    
      	 	
              (3)

            	
              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 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.

            


    

    


    
      	 	
              (iii)

            	
              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.

            


    

     

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    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.

    


    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 or 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:

            


    

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (i)

            	
              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%) 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.

            


    

    


    
      	 	
              (ii)

            	
              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


            


    

    


    
      	 	
              (iii)

            	
              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.

            


    

    
 

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    
    

     

    
      	
              (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.

            


    

     

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    8. Protection
      of Confidential Information.

    


    
      	
              (a)

            	
              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.

    


    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    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.

            


    

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    
      	
              (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.

            


    

    


    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’s property discussed in this paragraph shall survive
                the termination or expiration of this
                Agreement.

            


    

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    
      	
              (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.

            


    

    


    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.

    


    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    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
      Executive 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.

    


    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.

    


    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    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).

            


    

    


    
      	
              (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.

            


    

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    
      	
              (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 Executive 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.

    


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      REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

     

     

    
 

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    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:  	 
	 	
              

              MAGNUS
                GITTINS

              Duly
                Authorized

              


              EXECUTIVE

               

               

            
	 	
              
ANTONIO
              GONCALVES, JR.




     

     

    
      
        
        

      

      
        -24-