Document:

Exhibit 10.1

        Exhibit
      10.1

    
 

    EMPLOYMENT
      AGREEMENT

     

        THIS
      EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of the 22nd
      day of March, 2007 by and between CHROMCRAFT REVINGTON, INC. (the “Company”), a
      Delaware corporation, and RICHARD J. GARRITY (the “Executive”), currently a
      resident of the State of North Carolina,

    

    W
      I T N
      E S S E T H:

     

        WHEREAS, the
      Company desires to employ the Executive as a Senior Vice President, and the
      Executive desires to be employed by the Company as such, in accordance with
      the
      provisions of this Agreement; and

     

        WHEREAS, in
      addition to the employment provisions contained herein, the Company and the
      Executive have agreed to certain restrictions, covenants, agreements and
      severance payments, as set forth in this Agreement;

     

        NOW,
      THEREFORE, in consideration of the foregoing premises, the respective covenants,
      agreements and obligations contained herein, the employment of the Executive
      by
      the Company pursuant to this Agreement and for other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      Company and the Executive hereby agree as follows:

     

        Section
      1. Employment; Term.

     

        (a) Employment.
      Unless the Executive’s employment with the Company is terminated earlier as
      provided in this Agreement, the Company hereby agrees to employ the Executive,
      and the Executive hereby agrees to be employed by the Company, during the Term
      (as hereinafter defined), on a full-time basis in accordance with the provisions
      of this Agreement.

     

        (b) Term.
      (i) Unless the Executive’s employment with the Company is terminated earlier in
      accordance with Section 4 hereof, the initial term of the Executive’s employment
      with the Company under this Agreement shall begin on April 1, 2007 and shall
      end
      on the one-year anniversary of such date (the “Initial Term”); provided,
      however, that upon the expiration of the Initial Term, the Executive’s
      employment under this Agreement shall thereafter be automatically extended
      upon
      the same terms and conditions as set forth herein for successive one year terms
      (each, a “Renewal Term”), unless the Company or the Executive shall have
      delivered to the other a written notice not less than ninety (90) days prior
      to
      the expiration of the Initial Term or any Renewal Term stating that the term
      of
      this Agreement shall not be so extended, in which case the Executive’s
      employment hereunder shall terminate at the end of the Initial Term or a Renewal
      Term, as the case may be. During any Renewal Term, the Executive’s employment
      hereunder is subject to early termination in accordance with Section 4 hereof.
      The Initial Term and a Renewal Term may be referred to in this Agreement
      individually or collectively as the “Term.”

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
           

           

        

      

    

     

                  
      (ii) Notwithstanding anything in this Agreement to the contrary, in the event
      that the Executive does not commence his employment with the Company by April
      15, 2007, then either the Company or the Executive may terminate this Agreement
      without any obligation to the other under this Agreement or otherwise. Without
      limiting the foregoing in any manner, in the event of any such termination,
      (A)
      the Company shall not be obligated to pay or provide to the Executive any
      salary, incentive compensation, employee benefits, hiring bonus, housing or
      automobile allowances, severance payments or any other amounts or benefits
      (or
      to issue any shares of restricted common stock to the Executive) under this
      Agreement or otherwise, and (B) the Executive shall not be bound by the
      covenants and agreements set forth in Section 6, Section 7 or Section 8 of
      this
      Agreement.

     

        Section
      2. Position; Duties; Responsibilities. During the Term, the
      Executive:

     

        (a) shall
      serve
      as a Senior Vice President of the Company;

     

        (b) shall
      have
      general responsibility over the supply chain and operations function of the
      Company and its subsidiaries and affiliates, subject to the direction and
      oversight of the Board of Directors and the Chairman of the
      Company;

     

        (c) shall
      have
      such other executive level authority, duties and responsibilities at the Company
      as may from time to time be reasonably prescribed by the Board of Directors
      or
      the Chairman of the Company or by the By-Laws of the Company;

     

        (d) shall
      perform diligently and faithfully, and use his reasonable best efforts in the
      performance of, his duties and responsibilities under this
      Agreement;

     

        (e) shall
      devote
      all of his working time, attention, energies and skills to his duties and
      responsibilities under this Agreement and to the furtherance of the business
      and
      interests of the Company; and

     

        (f) shall
      maintain his office at which he performs his duties and responsibilities under
      this Agreement at the Company’s facilities located in Lincolnton, North Carolina
      and shall maintain his presence during normal business hours at such office,
      other than for travel on Company business; provided, however, that the Company
      shall have the right to transfer the Executive to and require him to work at
      one
      of the Company’s subsidiaries or affiliates or another location where the
      Company maintains an office, warehouse or distribution or other
      facility.

     

        Section
      3. Compensation and Employee Benefits.

     

        (a) Base
      Salary. During the Term, for all services rendered in all capacities by the
      Executive to or on behalf of the Company or any of the Company’s subsidiaries or
      affiliates, the Company shall pay to the Executive an annual base salary equal
      to $225,000 per calendar year, as may be increased from time to time by the
      Board of Directors (or a committee thereof) or the Chairman of the Company
      (the
“Base Salary”).
      If an increase in the Executive’s Base Salary is approved by the Board of
      Directors (or a committee thereof) or the Chairman of the Company, the new
      salary shall become the applicable Base Salary under this Agreement. The Base
      Salary shall be paid to the Executive in accordance with the Company’s usual and
      customary payroll practices applicable to its employees generally (including,
      but not limited to, withholdings for taxes and other amounts) and shall be
      pro-rated for any partial year of employment.

     

    
      
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        (b) Incentive
      Compensation. During the Term, the Executive shall be entitled to
      participate in all incentive compensation plans and programs generally available
      to executive officers of the Company other than its Chief Executive Officer
      (as
      currently are in effect or as may hereafter be established, amended or in
      effect), subject to the terms and conditions of such plans and programs. The
      performance factors, measures, goals or targets, the award levels and the other
      terms and conditions of any award shall be determined in the discretion of
      the
      Board of Directors (or a committee thereof) or the Chairman of the Company;
      provided, however, that during the Term, the “target” award level of any short
      term incentive compensation award granted to the Executive shall not be less
      than 40% of his Base Salary.

    

        In
      addition,
      the Company shall, within sixty (60) days following the commencement of the
      Initial Term, grant to the Executive an award of Seven Thousand Five Hundred
      (7,500) shares of restricted common stock of the Company. Such shares shall
      vest
      and be payable incrementally to the Executive, with 2,500 shares to become
      vested on December 31, 2007, 2008 and 2009, respectively, on the condition
      that the Executive is employed by the Company on each respective vesting date.
      As a condition to the issuance of any shares of restricted common stock, the
      Executive shall execute a restricted stock award agreement relating to such
      shares.

     

        (c) Employee
      Benefits. During the Term, the Executive shall be entitled to participate in
      all employee benefit plans and programs generally available to executive
      officers of the Company other than its Chief Executive Officer (as currently
      in
      effect or as may hereafter be established, amended or in effect), subject to
      the
      terms, conditions and eligibility requirements of such plans and programs.
      The
      employee’s cost of participation in such plans and programs shall be as
      determined by the Chairman of the Company or the Board of Directors (or a
      committee thereof) of the Company, if not set forth in the plans and programs.
      In addition, the Executive shall be eligible to participate in the Company’s
      executive health insurance program (currently provided through the ExecuCare
      program), and the Company shall pay $5,000 per calendar year (pro-rated for
      any
      partial years) towards the cost of the benefit for the Executive under such
      program.

     

        (d) Other
      Policies. All other matters relating to the employment of the Executive by
      the Company not specifically addressed in this Agreement or in the plans and
      programs referenced in this Section (including, but not limited to, vacation,
      sick and other paid time off) shall be subject to the employee handbooks, rules,
      policies, procedures, corporate governance guidelines and codes of conduct
      and
      ethics of the Company, as are currently in effect or as
      may hereafter be in effect from time to time and as may be applicable to
      executive officers of the Company other than its Chief Executive Officer. The
      Executive shall be entitled to paid vacation in accordance with Company policy,
      but in no event shall he be entitled to fewer than twenty (20) days of paid
      vacation per calendar year (pro-rated for any partial years).

     

    
      
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        (e) Acknowledgment
      by the Executive. Notwithstanding anything in this Agreement to the
      contrary, the Executive understands, acknowledges and agrees that the Company
      may, in its sole discretion, amend, modify, replace, freeze, suspend or
      terminate any or all of the incentive compensation, employee benefit, retirement
      and other plans and programs available, as well as any other rules, policies
      or
      procedures applicable, to the Executive from time to time, but only so long
      as
      any such actions are not designed to affect solely the Executive.

     

        (f) Automobile
      Allowance. During the Term, the Company shall provide to the Executive an
      automobile allowance of One Thousand Dollars ($1,000) per month. The insurance,
      maintenance, fuel, license plates and other costs relating to this automobile
      shall be the responsibility of and paid by the Executive. The Executive shall
      not be entitled to any reimbursement for mileage relating to the use of such
      automobile, other than as set forth in Section 3(g) and other than for Company
      business trips that are within 200 miles of the Executive’s principal office
      location. The Executive shall not be reimbursed for mileage between any of
      the
      Company’s offices or facilities and the Executive’s residence.

     

        (g) Relocation.
      The Executive currently maintains his principal residence in Winston-Salem,
      North Carolina. In the event that the Executive relocates his principal
      residence from Winston-Salem, North Carolina to a location in or within 50
      miles
      of Lincolnton, North Carolina by December 31, 2007, the Company shall pay the
      following expenses of the Executive:

     

            (i) Reasonable
      temporary housing expenses of the Executive for a temporary residence in or
      within 50 miles of Lincolnton, North Carolina until the earlier of the
      Executive’s purchase of a permanent residence in such location or
      December 31, 2007;

     

            (ii) Mileage
      expenses (at the then applicable IRS rate) of the Executive for up to two (2)
      roundtrips per month between his current home in Winston-Salem, North Carolina
      and Lincolnton, North Carolina until the earlier of the Executive’s purchase of
      a permanent residence in or within 50 miles of Lincolnton, North Carolina or
      December 31, 2007;

     

            (iii) Reasonable
      moving expenses of the Executive in connection with the relocation of the
      Executive and his spouse from Winston-Salem, North Carolina to or within 50
      miles of Lincolnton, North Carolina;

     

            (iv) Reasonable
      real estate brokerage commission and reasonable attorneys’ fees incurred by the
      Executive relating to the sale of his existing home in Winston-Salem, North
      Carolina; and

     

    
      
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              (v) Reasonable
        closing costs (but not any points) and reasonable attorneys’ fees incurred by
        the Executive relating to the purchase of his permanent residence in or within
        50 miles of Lincolnton, North Carolina.

    

     

        In
      the event
      that the Executive does not relocate his principal residence from Winston-Salem,
      North Carolina to a location in or within 50 miles of Lincolnton, North Carolina
      by December 31, 2007, the Company shall pay the Executive a one-time hiring
      bonus of $20,000 (but the Company shall not pay for any commuting, housing
      or
      other related expenses of the Executive). Such hiring bonus shall be paid on
      December 31, 2007.

     

        The
      Executive
      shall not be entitled to receive both the payment of the expenses and the hiring
      bonus referenced above. In addition, as a condition to receiving any amounts
      referenced above, the Executive must be employed by the Company at the time
      of
      payment.

     

        (h) Taxes.
      All taxes (other than the Company’s portion of any employment taxes) on the Base
      Salary and other amounts payable to the Executive under this Agreement or any
      plan or program shall be the responsibility of and paid by the Executive. The
      Company shall be entitled to withhold from the Executive’s Base Salary and all
      other amounts payable to him under this Agreement or any plan or program (i)
      applicable income, employment and other taxes, (ii) such amounts authorized
      by
      the Executive, and (iii) other appropriate and customary amounts.

     

        (i) Expense
      Reimbursements. The Company shall reimburse the Executive for all reasonable
      and customary out-of-pocket expenses incurred by the Executive related to the
      performance of his duties and responsibilities for the Company. The Executive
      shall comply with the Company’s standard expense reimbursement policies and
      procedures in effect from time to time.

     

    
      
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          Section
        4. Termination of Employment.

    

     

        In
      addition
      to a termination of the Executive’s employment upon a determination by the
      Company or the Executive not to extend the Term (as provided in Section 1(b)
      hereof), the Executive’s employment with the Company may be terminated during
      the Term in any of the following ways:

     

        (a) Termination
      by the Company for Cause. The Company, upon written notice to the Executive,
      may terminate the Executive’s employment with the Company immediately for Cause.
      For purposes of this Agreement, “Cause” is defined as any of the following:

     

            (i) any
      refusal
      by the Executive to follow the lawful directions of the Board of Directors
      or
      the Chairman of the Company that are consistent with the Executive’s duties and
      responsibilities under this Agreement; or

     

            (ii) any
      gross
      negligence by the Executive in managing the business or affairs of the Company
      or in carrying out his duties and responsibilities under this Agreement (or
      any
      negligence by any employee of the Company who reports to the Executive in
      managing the business or affairs of the Company or in performing such employee’s
      duties at the Company with the knowledge of the Executive and where the
      Executive allows or fails to prevent such negligent acts or omissions);
      or

     

            (iii) any
      dishonesty, fraud, theft or embezzlement by the Executive (or by any employee
      of
      the Company who reports to the Executive with the knowledge of the Executive
      and
      where the Executive allows or fails to prevent such dishonesty, fraud, theft
      or
      embezzlement by such employee) upon or against the Company or any of the
      Company’s subsidiaries or affiliates or any customer of the Company or any of
      the Company’s subsidiaries or affiliates; or

     

            (iv) any
      conviction of, or the entering of any plea of guilty or
nolo contendere by, the Executive for any felony;
      or

     

            (v) any
      intentional or negligent violation by the Executive (or by any employee of
      the
      Company who reports to the Executive with the knowledge of the Executive and
      where the Executive allows or fails to prevent such violation by such employee)
      of any law, statute, rule, regulation or governmental requirement that has
      or
      may have a material adverse effect on the Company or any of the Company’s
      subsidiaries or affiliates; or

     

            (vi) any
      material noncompliance by the Executive (or by any employee of the Company
      who
      reports to the Executive with the knowledge of the Executive and where the
      Executive allows or fails to prevent such noncompliance by such employee) with
      any provision of any employee handbook, code of business conduct and ethics
      or
      corporate governance guidelines, or any rule, policy or procedure, of the
      Company or any of the Company’s subsidiaries or affiliates as are applicable to
      the Executive and currently in effect or as may hereafter be in effect from
      time
      to time; or

     

    
      
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            (vii) any
      breach
      by the Executive of any provision of this Agreement; or

     

            (viii) any
      inaccuracy in or breach of the Executive’s representation and warranty contained
      in Section 13(r) hereof; or

     

            (ix) any
      refusal
      by the Executive to transfer his employment to a subsidiary or affiliate of
      the
      Company, or any refusal by the Executive to relocate his principal place of
      employment from the office or facility to which he may then be assigned to
      a
      different office or facility of the Company or any subsidiary or affiliate
      of
      the Company, following a request for such a transfer or relocation by the
      Company.

     

        (b) Termination
      by the Company without Cause. The Company, upon not less than ninety (90)
      days’ prior written notice to the Executive, may terminate the Executive’s
      employment with the Company without Cause.

     

        (c) Termination
      by the Executive for Good Reason. The Executive, upon not less than ninety
      (90) days’ prior written notice to the Company, may terminate his employment
      with the Company for Good Reason. For purposes of this Agreement, “Good Reason”
is defined as any material breach by the Company of any provision of this
      Agreement.

     

        (d) Termination
      by the Executive without Good Reason. The Executive, upon not less than
      ninety (90) days’ prior written notice to the Company, may
      terminate his employment with the Company without Good Reason.

     

        (e) Termination
      in the Event of Death or Disability. The Executive’s employment with the
      Company shall terminate immediately upon the death of the Executive. The
      Executive’s employment with the Company may be terminated immediately by the
      Company in the event of the occurrence of a Disability of the Executive. For
      purposes of this Agreement, a “Disability” shall be defined as an illness or a
      physical or mental disability or incapacity of the Executive such that the
      Executive has not been able to perform the essential functions of his duties
      and
      responsibilities under this Agreement (as reasonably determined by the Company),
      with or without reasonable accommodation, for at least sixty (60) days (whether
      consecutive or non-consecutive days) during any one (1) year period, including,
      but not limited to, any reasonable determination by the Company of alcoholism
      or
      drug, chemical or substance abuse or addiction by the Executive. A Disability
      may, but is not required to, be evidenced by a signed, written opinion of an
      independent, qualified medical doctor selected by the Board of Directors or
      the
      Chairman of the Company and paid for by the Company. The Executive hereby agrees
      to make himself promptly available for examination by such medical doctor upon
      reasonable request by the Board of Directors or the Chairman and consents to
      provide promptly the results of such examination and any diagnosis to the
      Company. Nothing in this Section is intended to be in violation of the Americans
      with Disabilities Act.

     

    
      
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        (f) Termination
      by the Executive in the Event of a Change in Control. Following a Change in
      Control (as hereinafter defined), the Executive, upon not less than thirty
      (30)
      days’ prior written notice to the Company, may terminate his employment with the
      Company upon the occurrence of any of the following events during the six (6)
      month period immediately following a Change in Control:

     

            (i) a
      material
      reduction in the Executive’s duties or responsibilities from those in effect on
      the day before the Change in Control, or

     

            (ii) a
      material
      breach of any provision of this Agreement by the Company.

        

        For
      purposes
      of this Agreement, a “Change in Control” shall mean a transaction or series of
      related transactions pursuant to which (i) at least fifty-one percent (51%)
      of
      the outstanding shares of common stock of the Company, on a fully diluted basis,
      shall subsequent to the date of this Agreement be acquired by any Person (as
      hereinafter defined) unrelated to or unaffiliated with the Company, (ii) the
      Company merges into, consolidates with or effects any plan of share exchange
      or
      other combination with any Person unrelated to or unaffiliated with the Company
      in a transaction where the holders of voting shares of the Company immediately
      prior to the transaction do not hold a majority of the voting shares of the
      surviving entity immediately following such transaction, or (iii) the Company
      disposes of all or substantially all of its assets other than in the ordinary
      course of business, to any Person unrelated to or unaffiliated with the
      Company.

     

        Notwithstanding
      the
      foregoing, for purposes of the definition of “Change in Control,” (x) a Person
      shall not include any subsidiary or affiliate of the Company or the Chromcraft
      Revington, Inc. Employee Stock Ownership Plan Trust which forms a part of the
      Chromcraft Revington, Inc. Employee Stock Ownership Plan (collectively, the
      “ESOP”), or any other employee benefit plan currently or hereafter sponsored by
      the Company or any subsidiary or affiliate of the Company, (y) the outstanding
      shares of common stock of the Company, on a fully diluted basis, shall include
      all shares owned by the ESOP, whether allocated or unallocated to the accounts
      of participants, and (z) a transaction or a series of transactions pursuant
      to
      which the Company is taken private or no longer has shares of stock that are
      listed for trading on any securities exchange or market shall not constitute
      a
      Change in Control.

     

        (g) Limited
      Right to Cure. In the event that the Company desires to terminate the
      Executive’s employment for Cause pursuant to Sections 4(a)(i), 4(a)(vi) or
      4(a)(vii) hereof, the Company shall first deliver to the Executive a written
      notice which shall (i) indicate the specific provisions of this Agreement relied
      upon for such termination, (ii) set forth in reasonable detail the facts and
      circumstances claimed to provide the grounds for such termination, and (iii)
      describe the steps, actions, events or other items that must be taken, completed
      or followed by the Executive to correct or cure the grounds for such
      termination. The Executive shall then have thirty (30) days following the
      effective date of such notice to fully correct and cure the grounds for the
      termination of his employment to the reasonable satisfaction of the Board of
      Directors of the Company. If the Executive does not fully correct and cure
      such
      grounds within such thirty (30) day period, then the Company shall have the
      right to terminate the Executive’s employment with the Company immediately for
      Cause upon delivering to the Executive written notice of such fact, and the
      Executive shall have no further cure period with respect thereto.
      Notwithstanding the foregoing and regardless of the grounds for the termination,
      the Executive shall be entitled to so correct and cure only one (1) time during
      the Term, unless the Board of Directors of the Company has reasonably determined
      that the grounds for termination were incorrect or inapplicable, in which case
      the Executive shall still have the ability to correct and cure one (1) time
      during the Term.

    

    
      
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          In
        the event
        that the Executive desires to terminate his employment with the Company for
        Good
        Reason pursuant to Section 4(c) hereof, the Executive shall first deliver
        to the
        Company a written notice which shall (A) indicate the specific provisions
        of
        this Agreement relied upon for such termination, (B) set forth in reasonable
        detail the facts and circumstances claimed to provide the grounds for such
        termination, and (C) describe the steps, actions, events or other items that
        must be taken, completed or followed by the Company to correct or cure the
        grounds for such termination. The Company shall then have thirty (30) days
        following the effective date of such notice to fully correct and cure the
        grounds for the Executive’s termination of his employment to the reasonable
        satisfaction of the Executive. If the Company does not fully correct and
        cure
        such grounds within such thirty (30) day period, then the Executive shall
        have
        the right to terminate his employment with the Company immediately for Good
        Reason upon delivering to the Company written notice of such fact, and the
        Company shall have no further cure period with respect thereto. Notwithstanding
        the foregoing and regardless of the grounds for the termination, the Company
        shall be entitled to so correct and cure only one (1) time during the Term,
        unless the Board of Directors of the Company has reasonably determined that
        the
        grounds for termination were incorrect or inapplicable, in which case the
        Company shall still have the ability to correct and cure one (1) time during
        the
        Term.

    

     

        Section
      5. Payment Upon Termination of Employment. Upon the termination
      of the Executive’s employment with the Company pursuant to Section 1(b) or
      Section 4 hereof, the Executive shall receive, subject to Sections 5(g) and
      5(h), the following in accordance with the appropriate subsection
      below:

     

        (a) Termination
      by the Company for Cause or by the Executive without Good Reason. Upon the
      termination of the Executive’s employment by the Company for Cause pursuant to
      Section 4(a) hereof or by the Executive without Good Reason pursuant to Section
      4(d) hereof, the Company shall pay to the Executive (i) that portion of his
      Base
      Salary earned through his last day of employment with the Company on its next
      regularly scheduled payroll date, (ii) a severance payment in a single lump
      sum
      equal to the Executive’s Base Salary (calculated as a monthly amount) for three
      (3) months (provided, however, that if the Company terminates the Executive’s
      employment for Cause pursuant to Section 4(a)(viii), then the Company shall
      not
      be required to make any severance payment to the Executive), (iii) all amounts
      that are fully vested and properly payable on or before his last day of
      employment with the Company under all retirement plans sponsored by the Company
      in accordance with the provisions of such plans, and (iv) all other amounts
      that
      are properly payable to the Executive by the Company that have not been paid
      to
      him on or before his last day of employment. The foregoing amounts shall be
      paid
      to the Executive within sixty (60) days following his last day of employment
      with the Company, unless provided otherwise by the ESOP or by a retirement,
      incentive compensation or other plan of the Company.

    

    
      
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          In
        addition,
        all outstanding awards of cash bonuses, stock options, restricted stock and
        other incentive compensation (whether cash or equity based) shall vest and
        be
        paid or distributed to, or be exercisable by, as the case may be, the Executive
        in accordance with (I) the incentive compensation plan applicable to such
        award
        (an “Incentive Plan”), (II) the applicable written agreement between the Company
        and the Executive relating to an incentive compensation award (an “Award
        Agreement”), or (III) in the absence of an Incentive Plan or an Award Agreement
        relating to a particular award, as determined by the Board of Directors (or
        a
        committee thereof) or the Chairman of the Company.

    

     

        (b) Termination
      by the Company Without Cause or by the Executive for Good Reason. Upon the
      termination of the Executive’s employment by the Company without Cause pursuant
      to Section 4(b) hereof or by the Executive for Good Reason pursuant to Section
      4(c) hereof, the Company shall pay to the Executive (i) that portion of his
      Base
      Salary earned through his last day of employment with the Company on its next
      regularly scheduled payroll date, (ii) a severance payment equal to the
      Executive’s Base Salary (calculated as a monthly amount) for a period of the
      earlier of twelve (12) months following the Executive’s last day of employment
      with the Company or the Executive’s first day of a new position with another
      Person, (iii) all amounts that are fully vested and properly payable on or
      before his last day of employment under all retirement plans sponsored by the
      Company in accordance with the provisions of such plans, and (iv) all other
      amounts that are properly payable to the Executive by the Company that have
      not
      been paid to him on or before his last day of employment. The foregoing monthly
      severance payment shall begin within thirty (30) days following the Executive’s
      last day of employment with the Company and all other amounts shall be paid
      to
      the Executive within sixty (60) days of his last day of employment with the
      Company, unless provided otherwise by the ESOP or by a retirement, incentive
      compensation or other plan of the Company.

     

        In
      addition,
      all outstanding awards of cash bonuses, stock options, restricted stock and
      other incentive compensation (whether cash or equity based) shall vest and
      be
      paid or distributed to, or be exercisable by, as the case may be, the Executive
      in accordance with (I) the applicable Incentive Plan, (II) the applicable Award
      Agreement, or (III) in the absence of an Incentive Plan or an Award Agreement
      relating to a particular award, as determined by the Board of Directors (or
      a
      committee thereof) or the Chairman of the Company.

     

        (c) Termination
      Upon Death of the Executive. Upon the death of the Executive, the Company
      shall pay to the Executive’s estate (i) that portion of the Executive’s Base
      Salary earned through the date of his death on its next regularly scheduled
      payroll date, (ii) all amounts that are fully vested and properly payable on
      or
      before his date of death under all retirement plans of the Company in accordance
      with the provisions of such plans, and (iii) all other amounts that are properly
      payable to the Executive by the Company that have not been paid to him on or
      before his date of death. The foregoing amounts shall be paid to the Executive’s
      estate or authorized representative within sixty (60) days following his death,
      unless provided otherwise by the ESOP or by a retirement, incentive compensation
      or other plan of the Company.

    

    
      
        10

      

      
        
        

        
          

        

      

      
        
        

      

       

          In
        addition,
        all outstanding awards of cash bonuses, stock options, restricted stock and
        other incentive compensation (whether cash or equity based) shall vest and
        be
        paid or distributed to, or be exercisable by, as the case may be, the
        Executive’s estate or authorized representative in accordance with (I) the
        applicable Incentive Plan, (II) the applicable Award Agreement, or (III)
        in the
        absence of an Incentive Plan or an Award Agreement relating to a particular
        award, as determined by the Board of Directors (or a committee thereof) or
        the
        Chairman of the Company.

    

     

        (d) Termination
      Upon a Disability. Upon the termination of the Executive’s employment by the
      Company upon the occurrence of a Disability pursuant to Section 4(e) hereof,
      the
      Company shall pay to the Executive (i) that portion of the Executive’s Base
      Salary earned through the date of his last day of employment with the Company
      on
      its next regularly scheduled payroll date, (ii) a severance payment, payable
      in
      a lump sum, equal to the Executive’s Base Salary (calculated as a monthly
      amount) for three (3) months, (iii) all amounts that are fully vested and
      properly payable on or before his last day of employment under all retirement
      plans of the Company in accordance with the provisions of such plans, and (iv)
      all other amounts that are properly payable to the Executive by the Company
      that
      have not been paid to him on or before his last day of employment. The foregoing
      amounts shall be paid to the Executive within sixty (60) days following his
      last
      day of employment with the Company, unless provided otherwise by the ESOP or
      by
      a retirement, incentive compensation or other plan of the Company.

     

        In
      addition,
      all outstanding awards of cash bonuses, stock options, restricted stock and
      other incentive compensation (whether cash or equity based) shall vest and
      be
      paid or distributed to, or be exercisable by, as the case may be, the Executive
      in accordance with (I) the applicable Incentive Plan, (II) the applicable Award
      Agreement, or (III) in the absence of an Incentive Plan or an Award Agreement
      relating to a particular award, as determined by the Board of Directors (or
      a
      committee thereof) or the Chairman of the Company.

     

        (e) Termination
      Upon No Extension of Term. Upon the termination of the Executive’s
      employment upon either the Company or the Executive providing the notice
      contemplated by Section 1(b) hereof that the Term of the Executive’s employment
      shall not be extended, the Company shall pay to the Executive (i) that portion
      of his Base Salary earned through his last day of employment with the Company
      on
      its next regularly scheduled payroll date, (ii) in the event the Company elects
      not to extend the Term of the Executive’s employment, a severance payment equal
      to the Executive’s Base Salary (calculated as a monthly amount) for a period of
      the earlier of twelve (12) months following the Executive’s last day of
      employment with the Company or the Executive’s first day of a new position with
      another Person, or in the event the Executive elects not to extend the Term
      of
      the Executive’s employment, a severance payment in a single lump sum equal to
      the Executive’s Base Salary (calculated as a monthly amount) for three (3)
      months, (iii) all amounts that are fully vested and properly payable on or
      before his last day of employment under all retirement plans sponsored by the
      Company in accordance with the provisions of such plans, and (iv) all other
      amounts that are properly payable to the Executive by the Company that have
      not
      been paid to him on or before his last day of employment. The foregoing monthly
      severance payment shall begin within thirty (30) days following the Executive’s
      last day of employment with the Company and other amounts shall be paid to
      the
      Executive within sixty (60) days of his last day of employment, unless provided
      otherwise by the ESOP or by a retirement, incentive compensation or other plan
      of the Company.

    

    
      
        11

      

      
        
        

        
          

        

      

      
        
        

      

       

          In
        addition,
        all outstanding awards of cash bonuses, stock options, restricted stock and
        other incentive compensation (whether cash or equity based) shall vest and
        be
        paid or distributed to, or be exercisable by, as the case may be, the Executive
        in accordance with (I) the applicable Incentive Plan, (II) the applicable
        Award
        Agreement, or (III) in the absence of an Incentive Plan or an Award Agreement
        relating to a particular award, as determined by the Board of Directors (or
        a
        committee thereof) or the Chairman of the Company.

    

     

        (f) Termination
      by the Executive following a Change in Control. Upon the termination of the
      Executive’s employment by the Executive following a Change in Control pursuant
      to Section 4(f) hereof, the Company shall pay to the Executive (i) that portion
      of his Base Salary earned through his last day of employment with the Company,
      (ii) a severance payment equal to the Executive’s Base Salary (calculated as a
      monthly amount) for a period of the earlier of twelve (12) months following
      the
      Executive’s last day of employment with the Company or the Executive’s first day
      of a new position with another Person, (iii) all amounts that are fully vested
      and properly payable on or before his last day of employment under all
      retirement plans sponsored by the Company in accordance with the provisions
      of
      such plans, and (iv) all other amounts that are properly payable to the
      Executive by the Company that have not been paid to him on or before his last
      day of employment. The foregoing monthly severance payment shall begin within
      thirty (30) days following the Executive’s last day of employment with the
      Company and other amounts shall be paid to the Executive within sixty (60)
      days
      of his last day of employment with the Company, unless provided otherwise by
      the
      ESOP or by a retirement, incentive compensation or other plan of the
      Company.

     

        In
      addition,
      all outstanding awards of cash bonuses, stock options, restricted stock and
      other incentive compensation (whether cash or equity based) shall vest and
      be
      paid or distributed to, or be exercisable by, as the case may be, the Executive
      simultaneously with a Change in Control unless expressly provided otherwise
      in
      (I) the applicable Incentive Plan, or (II) the applicable Award
      Agreement.

    

    
      
        12

      

      
        
        

        
          

        

      

      
        
        

      

    

     

        (g) COBRA
      Coverage. If the Executive is participating in the Company’s group health
      plan at the time of his termination of employment and he elects to continue
      such
      coverage for himself and/or his spouse and legal dependents under the
      Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”),
      the Executive shall pay the premiums associated with such continued coverage
      and
      the Company shall reimburse the Executive only for the premiums actually paid
      by
      him associated with such continued coverage until the earlier of (i) the
      expiration of the period of time that the Executive has elected to receive
      continued coverage under the Company’s group health plan pursuant to COBRA (but,
      in any event, not to exceed twelve (12) months following his last day of
      employment with the Company), or (ii) the date on which the Executive becomes
      eligible to receive health insurance benefits from a new employer or another
      Person. The foregoing reimbursement of premiums shall be paid to the Executive
      only if his employment with the Company is terminated by the Company without
      Cause, by the Executive for Good Reason, by the Company in the event of a
      Disability of the Executive, by the Company in the event the Company elects
      not
      to extend the Term of the Executive’s employment or by the Executive following a
      Change in Control, and upon the condition that the Executive makes an
      appropriate election under COBRA.

     

        (h) Certain
      Other Matters. Notwithstanding the foregoing provisions of this Section 5,
      the following shall apply:

     

            (i) The
      Executive understands and agrees that the severance payments and the
      reimbursement for the premiums associated with the COBRA continuation coverage
      under this Section 5 shall constitute adequate consideration for his
      covenants and agreements set forth in Section 6 (Non-Disclosure, etc.), Section
      7 (Non-Competition), Section 8 (Non-Solicitation) and Section 9 (Intellectual
      Property) of this Agreement.

     

            (ii) Upon
      any
      termination of the Executive’s employment, the Executive shall execute (and not
      subsequently rescind or revoke) a release substantially similar to the release
      attached to this Agreement as Exhibit A.

     

            (iii) Any
      termination of the Executive’s employment with the Company in accordance with
      Section 1(b) or Section 4 hereof shall not affect either the Company’s
      obligation to make the payments and reimbursements required under this Section
      5
      (except as expressly provided in this Agreement) or the Executive’s covenants
      and agreements under Sections 6, 7, 8 or 9 of this Agreement. The Company’s
      obligation to make any severance payment or to make any reimbursement for the
      premiums associated with the COBRA continuation coverage to the Executive under
      this Section 5 shall terminate immediately without reinstatement of any
      obligation of the Company to resume paying or reimbursing the Executive
      hereunder if the Executive breaches any of the provisions of this Agreement
      (including, but not limited to, any of the provisions of Sections 6, 7, 8 or
      9)
      or refuses to execute (or rescinds or revokes) the release attached to this
      Agreement as Exhibit A. Notwithstanding any such termination of the
      Company’s obligation to pay or reimburse, (a) the covenants of the Executive set
      forth in Sections 6, 7, 8 and 9 hereof shall continue in full force and effect
      and be binding upon the Executive, and (b) the Company shall be entitled to
      the
      remedies specified in Section 12 hereof, among others.

    

    
      
        13

      

      
        
        

        
          

        

      

      
        
        

      

       

              (iv) In
        the
        event of any termination of the Executive’s employment that requires prior
        written notice from either party, the Company shall during such thirty (30)
        or
        ninety (90) day notice period, as applicable, continue to pay the Executive
        his
        Base Salary but may, in its discretion, elect to direct the Executive not
        to
        report to work.

    

     

            (v) In
      the event
      the Company gives notice to the Executive of its intent to terminate the
      Executive’s employment because the Company (or the division to which he has been
      assigned) will cease operations, then the Executive shall be entitled to receive
      the severance payments provided by this Section 5 only if the Executive remains
      as an employee of the Company (or the division to which he has been assigned)
      until such time as the Company (or the division) has actually ceased
      operations.

     

            (vi) If
      the
      Company becomes obligated to make monthly severance payments to the Executive
      pursuant to this Section 5 (the “Monthly Severance Payments”) and the Executive
      obtains an employee, consulting or other position with another Person without
      breaching any of his covenants set forth in this Agreement (including, but
      not
      limited to, his covenants set forth in Sections 6, 7, 8 or 9 hereof), then
      the
      Monthly Severance Payments shall terminate or be reduced as set forth in this
      paragraph. For purposes of this paragraph, the “New Monthly Compensation” shall
      mean the monthly base salary, consulting fee or other compensation associated
      with the Executive’s new position with another Person. In the event that the
      Executive’s New Monthly Compensation is equal to or greater than the Executive’s
      monthly Base Salary on his last day of employment with the Company, then the
      Company’s obligation to pay additional Monthly Severance Payments shall
      immediately terminate. In the event that the Executive’s New Monthly
      Compensation is less than the Executive’s monthly Base Salary on his last day of
      employment, then the Monthly Severance Payments shall be reduced for the period
      that the Company is obligated to make any severance payments such that the
      Monthly Severance Payments shall equal solely the amount by which the
      Executive’s monthly Base Salary on his last day of employment exceeds the New
      Monthly Compensation.

     

        If
      the
      Company’s obligation to pay Monthly Severance Payments has been terminated or
      reduced as provided in the foregoing paragraph, such obligation shall not
      thereafter be reinstated or increased, in whole or in part, and shall not affect
      the Executive’s covenants under Sections 6, 7, 8 or 9 of this Agreement. The
      Executive shall promptly provide written notice to the Company of his new
      position with another Person, which shall include an adequate confirmation
      of
      his New Monthly Compensation. If the Executive’s employment with the Company is
      terminated for any reason (whether by the Company or the Executive), he shall
      use his best efforts to obtain a new position (but without breaching his
      non-competition covenants set forth in Section 7 hereof) with another Person.
      In
      addition, the Executive shall not do any act or thing relating to any new
      position or his New Monthly Compensation to circumvent the operation of the
      foregoing paragraph.

    

    
      
        14

      

      
        
        

        
          

        

      

      
        
        

      

       

          Section
        6. Non-Disclosure; Return of Confidential Information and Other
        Property; Compliance with Laws.

    

     

        (a) Confidential
      Information; Non-Disclosure. At all times while the Executive is employed by
      the Company or any of the Company’s subsidiaries or affiliates and at all times
      thereafter, the Executive shall not (i) directly or indirectly disclose, provide
      or discuss any Confidential Information with or to any Person other than those
      directors, officers, employees, representatives and agents of the Company or
      any
      of the Company’s subsidiaries or affiliates who need to know such Confidential
      Information for a proper corporate purpose, and/or (ii) directly or indirectly
      use any Confidential Information (A) to compete against the Company or any
      of
      the Company’s subsidiaries or affiliates, (B) to the detriment of the Company or
      any of the Company’s subsidiaries or affiliates, or (C) for the Executive’s own
      benefit or for the benefit of any Person other than the Company or any of the
      Company’s subsidiaries or affiliates. The Executive agrees that all Confidential
      Information is and at all times shall remain the property of the Company or
      any
      of the Company’s subsidiaries or affiliates, as applicable.

     

        For
      purposes
      of this Agreement, the term “Confidential Information” means any and all of the
      following, whether provided or disclosed to the Executive, prepared by the
      Executive or to which the Executive has been provided access by the Company
      or
      any of its representatives or agents, regardless of whether on, before or after
      the date of this Agreement:

     

            (i) any
      and all
      materials, records, data, documents, lists and information (whether in writing,
      printed, verbal, electronic, computerized, on disk, CD, DVD or otherwise) (A)
      relating or referring in any manner to the business, operations, affairs,
      financial condition, results of operation, assets, liabilities, sales, revenues,
      income, estimates, projections, budgets, policies, strategies, techniques,
      methods, products, developments, suppliers, vendors, relationships and/or
      customers of the Company or any of the Company’s subsidiaries or affiliates that
      are confidential, proprietary or not otherwise publicly available (other than
      through a breach of this Agreement by the Employee or any other impermissible
      disclosure), or (B) that the Company or any of the Company’s subsidiaries or
      affiliates has deemed confidential, proprietary or nonpublic; and

     

            (ii) without
      limiting the foregoing, any and all material nonpublic information of the
      Company within the meaning and intent of the federal securities laws;
      and

     

            (iii) without
      limiting the foregoing, any and all trade secrets of the Company or any of
      the
      Company’s subsidiaries or affiliates; and

     

            (iv) any
      and all
      copies, summaries, analyses, extracts, documents or information (whether
      prepared by the Company, the Employee or otherwise) which relate or refer to
      or
      reflect any of the items set forth in (i), (ii) or (iii) above.

    

    
      
        15

      

      
        
        

        
          

        

      

      
        
        

      

       

          (b) Return
        of
        Confidential Information and Other Property. The Executive covenants and
        agrees (i) to return promptly to the Company, at the Company’s headquarters, all
        Confidential Information that is still in the Executive’s possession or control
        on his last day of employment with the Company or the location of which the
        Employee knows (including, but not limited to, any Confidential Information
        contained on the Executive’s personal or home computer), and (ii) to return
        promptly to the Company, at the Company’s headquarters, all vehicles, equipment,
        computers, credit cards, keys, access cards, passwords and other property
        of the
        Company that are still in the Executive’s possession or control on his last day
        of employment or the location of which the Employee knows, and to cease using
        any of the foregoing on and after his last day of employment.

    

     

        (c) Compliance
      with Laws. The Executive agrees, and shall ensure, that his performance of
      his duties and responsibilities under this Agreement shall be in compliance
      with
      all laws, rules, regulations and other legal requirements. The Executive also
      agrees to comply with the Company’s code of business conduct and ethics as
      currently in effect or as may hereafter be in effect from time to time. In
      addition, the Executive acknowledges and understands that, in the course of
      his
      performance of duties and responsibilities under this Agreement, he may be
      provided or have access to Confidential Information. Accordingly, the Executive
      shall not use such information as a basis to purchase, sell, hold or otherwise
      deal in any securities of the Company or to otherwise violate any federal or
      state securities laws.

     

        Section
      7. Non-Competition.

     

        (a) The
      Executive hereby understands, acknowledges and agrees that, by virtue of his
      position at the Company, he has or will have advantageous familiarity and
      personal contacts with the suppliers, vendors, employees and customers (wherever
      located) of the Company and its subsidiaries or affiliates and has and will
      have
      advantageous familiarity with the Confidential Information and the business,
      operations, affairs and strategies of the Company and its subsidiaries or
      affiliates.

     

        (b) For
      a period of one (1) year following his last day of employment with the Company,
      the Executive shall not, in any location within the United States of America,
      directly or indirectly, or individually or together with any other Person,
      as
      owner, shareholder, investor, member, partner, proprietor, principal, director,
      officer, employee, manager, agent, representative, independent contractor,
      consultant or otherwise:

     

            (i) engage
      in,
      or assist another Person in engaging in, any business, operation or activity
      which competes with any business, operation or activity that is conducted or
      actively being developed or pursued by the Company or any of its subsidiaries
      or
      affiliates (or which is in the same or a similar line of business as the Company
      or any of its subsidiaries or affiliates) on his last day of employment with
      the
      Company or during such one year non-competition period or that was conducted
      or
      actively being developed or pursued by the Company or any of its subsidiaries
      or
      affiliates at any time during the one (1) year period preceding his last day
      of
      employment with the Company; or

    

    
      
        16

      

      
        
        

        
          

        

      

      
        
        

      

       

              (ii) finance,
        operate or control any business, operation or activity which competes with
        any
        business, operation or activity that is conducted or actively being developed
        or
        pursued by the Company or any of its subsidiaries or affiliates (or which
        is in
        the same or a similar line of business as the Company or any of its subsidiaries
        or affiliates) on his last day of employment with the Company or during such
        one
        year non-competition period or that was conducted or actively being developed
        or
        pursued by the Company or any of its subsidiaries or affiliates at any time
        during the one (1) year period preceding his last day of employment with
        the
        Company; or

    

     

            (iii) offer
      or
      provide employment, hire or engage (whether on a full-time, part-time or
      consulting basis or otherwise) any individual who is an employee of the Company
      or any of its subsidiaries or affiliates on the last day of the Executive’s
      employment with the Company or who was such an employee at any time during
      the
      one (1) year period preceding the Executive’s last day of employment with the
      Company.

     

        (c) The
      Executive acknowledges the nationwide scope of the business of the Company
      and
      its subsidiaries or affiliates. Nevertheless, in the event that any provision
      of
      Section 7(b) is found by a court of competent jurisdiction to exceed the
      geographic or other restrictions permitted by applicable law, then the court
      shall have the power to reduce, limit or reform (but not to increase or make
      greater) such provision to make it enforceable to the maximum extent permitted
      by law, and such provision shall then be enforceable against the Executive
      in
      its reduced, limited or reformed manner.

     

        In
      addition,
      the Company and the Executive agree that the provisions of this Section 7 shall
      be severable in accordance with Section 13(e) hereof.

     

        (d) At
      all times while the Executive is employed by the Company, he shall not engage
      in, or assist another Person in engaging in (or finance, operate or control)
      any
      business, operation or activity which is conducted or proposed to be conducted
      by the Company or any of its subsidiaries or affiliates (or which is in the
      same
      or a similar line of business as or competes with the Company or any of its
      subsidiaries or affiliates).

     

        Section
      8. Non-Solicitation.

     

        (a) The
      Executive hereby understands, acknowledges and agrees that, by virtue of his
      position at the Company, he has and will have advantageous familiarity and
      personal contacts with the suppliers, vendors, employees and customers (wherever
      located) of the Company and its subsidiaries or affiliates and has and will
      have
      advantageous familiarity with the Confidential Information and the business,
      operations, affairs and strategies of the Company and its subsidiaries or
      affiliates.

    

    
      
        17

      

      
        
        

        
          

        

      

      
        
        

      

       

          (b) For
        a period of one (1) year following his last day of employment with the Company,
        the Executive shall not, directly or indirectly, or individually or together
        with any other Person, as owner, shareholder, investor, member, partner,
        proprietor, principal, director, officer, employee, manager, agent,
        representative, independent contractor, consultant or
        otherwise:

    

     

            (i) solicit
      in
      any manner, seek to obtain, service or accept any business of any Person who
      is
      a customer of the Company or any of its subsidiaries or affiliates on the
      Executive’s last day of employment with the Company or during such one year
      non-solicitation period or who was an existing or prospective customer of the
      Company or any of its subsidiaries or affiliates at any time during the one
      (1)
      year period preceding the Executive’s last day of employment; or

     

            (ii) request,
      encourage or advise any Person who is a customer, supplier, vendor or otherwise
      doing business with the Company or any of its subsidiaries or affiliates on
      the
      Executive’s last day of employment with the Company or during such one year
      non-solicitation period, or who was an existing or prospective customer of
      the
      Company or any of its subsidiaries or affiliates at any time during the one
      (1)
      year period preceding the Executive’s last day of employment, to terminate,
      reduce, limit or change their business or relationship with the Company or
      any
      of its subsidiaries or affiliates; or

     

            (iii) induce,
      request or attempt to influence any Person who is employed by the Company or
      any
      of its subsidiaries or affiliates on the Executive’s last day of employment with
      the Company to terminate the employee’s employment with the Company or any of
      its subsidiaries or affiliates.

     

        (c) The
      Executive acknowledges the nationwide scope of the business of the Company
      and
      its subsidiaries or affiliates. Nevertheless, in the event that any provision
      of
      Section 8(b) is found by a court of competent jurisdiction to exceed the time,
      geographic or other restrictions permitted by applicable law, then the court
      shall have the power to reduce, limit or reform (but not to increase or make
      greater) such provision to make it enforceable to the maximum extent permitted
      by law, and such provision shall then be enforceable against the Executive
      in
      its reduced, limited or reformed manner.

     

        In
      addition,
      the Company and the Executive agree that the provisions of this Section 8 shall
      be severable in accordance with Section 13(e) hereof.

     

        (d) At
      all times while the Executive is employed by the Company, he shall not solicit
      in any manner, seek to obtain, service or accept any business for or on behalf
      of a Person other than the Company or any of its subsidiaries or
      affiliates.

    

    
      
        18

      

      
        
        

        
          

        

      

      
        
        

      

       

          Section
        9. Intellectual Property. The Executive understands,
        acknowledges and agrees that each and every invention, idea, concept, discovery,
        improvement, device, design, apparatus, practice, process, method, technique
        or
        product (whether or not patentable or copyrightable) made, created, developed,
        perfected, devised, conceived, worked on or first reduced to practice by
        the
        Executive, either solely or in collaboration with others, during the period of
        the Executive’s employment with the Company (whether or not during regular
        working hours) relating, directly or indirectly, to the business, operations,
        affairs, products, practices, techniques or methods of the Company or any
        of its
        subsidiaries or affiliates (the “Intellectual Property”) is and shall be the
        exclusive property of the Company or its subsidiaries or affiliates, as
        applicable. The Executive hereby forever, unconditionally and irrevocably
        releases and relinquishes any and all right, title and interest that he may
        have
        in and to the Intellectual Property worldwide and hereby forever,
        unconditionally and irrevocably assigns to the Company or any of its
        subsidiaries or affiliates any and all of the Executive’s right, title and
        interest in and to the Intellectual Property worldwide. At the Company’s request
        and expense, the Executive shall (a) execute any and all assignments, documents
        and other writings that the Company determines are necessary to evidence
        ownership of the Intellectual Property in the Company, (b) execute any and
        all
        applications and registrations of the Company for patents, trademarks and/or
        copyrights relating to the Intellectual Property, and (c) assist the Company
        in
        obtaining any and all patents, trademarks and copyrights that it desires
        relating to the Intellectual Property.

    

     

        Section
      10. Periods of Noncompliance and Reasonableness of Periods. The
      restrictions and covenants contained in Sections 7 and 8 of this Agreement
      shall
      be deemed not to run during all periods of noncompliance, the intention of
      the
      parties hereto being to have such restrictions and covenants apply during the
      full periods specified in Sections 7 and 8 of this Agreement. The Company and
      the Executive understand, acknowledge and agree that the restrictions and
      covenants contained in Section 7 and Section 8 of this Agreement are
      reasonable in view of the Executive’s position at the Company, the competitive
      and confidential nature of the information of which the Executive has or will
      have knowledge and the competitive and the nature of the business in which
      the
      Company and its subsidiaries and affiliates are or may be engaged.

     

        Section
      11. Survival of Certain Provisions. Upon any termination of the
      Executive’s employment with the Company, both the Company and the Executive
      hereby agree that Sections 1, 2, 3 and 4 of this Agreement shall terminate
      and
      be of no force or effect (except for the definitions of capitalized terms
      specified in such sections) and that Sections 5, 6, 7, 8, 9, 10, 11, 12 and
      13
      hereof shall continue to be in full force and effect and binding upon the
      Company or the Executive, as the case may be, in accordance with the respective
      provisions of such Sections.

     

        Section
      12. Certain Remedies. The Executive agrees that the Company will
      suffer irreparable damage and injury and will not have an adequate remedy at
      law
      in the event of any actual, threatened or attempted breach by the Executive
      of
      any provision of Sections 6, 7, 8 or 9. Accordingly, in the event of a breach
      or
      a threatened or attempted breach by the Executive of any provision of Sections
      6, 7, 8 or 9, in addition to all other remedies to which the Company is entitled
      at law, in equity or otherwise, the Company shall be entitled to a temporary
      restraining order, a permanent injunction and/or a decree of specific
      performance of any provision of Sections 6, 7, 8 or 9. In addition, in the
      event
      of any breach by the Executive of any provision of Sections 6, 7, 8, or 9,
      the
      Executive shall immediately repay to the Company all severance payments paid
      to
      him under Section 5 hereof, as well as all incentive compensation vested or
      paid
      to him and all profits from his exercise of options to purchase Company
      securities following the Executive’s last day of employment. The parties agree
      that a bond posted by the Company in the amount of One Thousand Dollars ($1,000)
      shall be adequate and appropriate in connection with such restraining order
      or
      injunction and that actual damages need not be proved by the Company prior
      to it
      being entitled to obtain such restraining order, injunction or specific
      performance. The foregoing remedies shall not be deemed to be the exclusive
      rights or remedies of the Company for any breach of or noncompliance with this
      Agreement by the Executive but shall be in addition to all other rights and
      remedies available to the Company at law, in equity or otherwise. 

    

    
      
        19

      

      
        
        

        
          

        

      

      
        
        

      

       

          Section
        13. Miscellaneous.

    

     

        (a) Binding
      Effect; Assignment. This Agreement shall be binding upon and inure to the
      benefit of the Company and the Executive and their respective heirs, executors,
      representatives, successors and assigns; provided, however that neither party
      may assign this Agreement without the prior written consent of the other party
      hereto except that the Company may, without the consent of the Executive, assign
      this Agreement in connection with any transfer of the Executive to a subsidiary
      or affiliate of the Company or in connection with any merger, consolidation,
      share exchange, combination, sale of stock or assets, dissolution or similar
      transaction involving the Company. In the event of any such permitted assignment
      of this Agreement, all references to the “Company” shall thereafter mean and
      refer to the assignee of the Company.

     

        (b) Waiver.
      Either party hereto may, by a writing signed by the waiving party, waive the
      performance by the other party of any of the covenants or agreements to be
      performed by such other party under this Agreement. The waiver by either party
      hereto of a breach of or noncompliance with any provision of this Agreement
      shall not operate or be construed as a continuing waiver or a waiver of any
      other or subsequent breach or noncompliance hereunder. The failure or delay
      of
      either party at any time to insist upon the strict performance of any provision
      of this Agreement or to enforce its rights or remedies under this Agreement
      shall not be construed as a waiver or relinquishment of the right to insist
      upon
      strict performance of such provision, or to pursue any of its rights or remedies
      for any breach hereof, at a future time.

     

        (c) Amendment.
      This Agreement may be amended, modified or supplemented only by a written
      agreement executed by all of the parties hereto.

     

        (d) Headings.
      The headings in this Agreement have been inserted solely for ease of reference
      and shall not be considered in the interpretation or construction of this
      Agreement.

     

        (e) Severability.
      In case any one or more of the provisions (or any portion thereof) contained
      herein shall, for any reason, be held to be invalid, illegal or unenforceable
      in
      any respect, such invalidity, illegality or unenforceability shall not affect
      any other provision of this Agreement, but this Agreement shall be construed
      as
      if such invalid, illegal or unenforceable provision or provisions (or portion
      thereof) had never been contained herein; provided, however, if any provision
      of
      Section 7 or 8 of this Agreement shall be determined by a court of competent
      jurisdiction to be unenforceable because of the provision’s scope, duration,
      geographic restriction or other factor, then such provision shall be considered
      divisible and the court making such determination shall have the power to reduce
      or limit (but not increase or make greater) such scope, duration, geographic
      restriction or other factor or to reform (but not increase or make greater)
      such
      provision to make it enforceable to the maximum extent permitted by law, and
      such provision shall then be enforceable against the appropriate party hereto
      in
      its reformed, reduced or limited form.

    

    
      
        20

      

      
        
        

        
          

        

      

      
        
        

      

       

          (f) Counterparts.
        This Agreement may be executed in any number of counterparts, each of which
        shall be an original, but such counterparts shall together constitute one
        and
        the same agreement.

       

          (g) Construction.
        This Agreement shall be deemed to have been drafted by both parties hereto.
        This
        Agreement shall be construed in accordance with the fair meaning of its
        provisions and its language shall not be strictly construed against, nor
        shall
        ambiguities be resolved against, any party.

    

     

        (h) Voluntary
      Execution. The Executive hereby understands and agrees that he has executed
      this Agreement voluntarily.

     

        (i) Entire
      Agreement. This Agreement, and the plans, programs, policies, procedures,
      rules, agreements and other documents referenced herein, as well as the Release
      attached hereto, constitute the entire understanding and agreement between
      the
      parties hereto relating to the subject matter hereof and thereof and supersede
      all other prior understandings, commitments, representations, negotiations,
      contracts and agreements, whether oral or written, between the parties hereto
      relating to the matters contemplated hereby and thereby.

     

        (j) Certain
      References. Whenever in this Agreement a singular word is used, it also
      shall include the plural wherever required by the context and vice-versa. All
      references to the masculine, feminine or neuter genders herein shall include
      any
      other gender, as the context requires. Unless expressly provided otherwise,
      all
      references in this Agreement to days shall mean calendar, not business,
      days.

     

        (k) Governing
      Law. Because the Company maintains its principal place of business in the
      State of Indiana, this Agreement shall be governed by and construed in
      accordance with the laws of the State of Indiana, without reference to any
      choice of law provisions, principles or rules thereof (whether of the State
      of
      Indiana or any other jurisdiction) that would cause the application of any
      laws
      of any jurisdiction other than the State of Indiana. Any claim, demand or action
      relating to this Agreement shall be brought only in a court of competent
      jurisdiction in the State of Indiana. In connection with the foregoing, the
      parties hereto irrevocably consent to the jurisdiction and venue of such court
      and expressly waive any claims or defenses of lack of jurisdiction of or proper
      venue by such court.

    

    
      
        21

      

      
        
        

        
          

        

      

      
        
        

      

       

          (l) Notices.
        All notices, requests and other communications hereunder shall be in writing
        (which shall include facsimile communication) and shall be deemed to have
        been
        duly given if (i) delivered by hand; (ii) sent by certified United States
        Mail,
        return receipt requested, first class postage pre-paid; (iii) sent by overnight
        delivery service; or (iv) sent by facsimile transmission if such fax is
        confirmed immediately thereafter by also mailing a copy of such notice, request
        or other communication by regular (not certified or registered) United States
        Mail, first class postage pre-paid, as follows:

    

     

        If
      to the
      Company:     Chromcraft
      Revington, Inc.

                    Attention:
      Chairman

                    1330
      Win Hentschel Boulevard, Suite 250

                    West
      Lafayette, Indiana 47906

                    Telephone:
      (765) 807-2640

                    Facsimile:
      (765) 807-2660

     

        If
      to the
      Executive:     Richard J.
      Garrity

                    ____________________________

                    ____________________________

                    Telephone:
      (___) __________

                    Facsimile:
      (___) __________

    

    or
      to such
      other address or facsimile number as either party hereto may have furnished
      to
      the other in writing in accordance herewith. The Executive shall promptly
      provide any changes to his address, telephone number and facsimile number to
      the
      Company.

     

        All
      such
      notices, requests and other communications shall be effective (i) if delivered
      by hand, when delivered; (ii) if sent by mail in the manner provided herein,
      two
      (2) business days after deposit with the United States Postal Service; (iii)
      if
      sent by overnight delivery service, on the next business day after deposit
      with
      such service; or (iv) if sent by facsimile transmission or electronic mail,
      on
      the date indicated on the fax confirmation page or the electronic mail of the
      sender, respectively, if such fax or electronic mail also is confirmed by mail
      in the manner provided herein.

     

        (m) Attorneys’
      Fees. The prevailing party in any claim or action (or any settlement
      thereof) under this Agreement shall, in addition to such other relief that
      a
      court may award, be entitled to recover its or his, as the case may be,
      reasonable attorneys’ fees, costs and expenses from the non-prevailing
      party.

     

        (n) Recitals.
      The recitals, premises and “Whereas” clauses contained on page 1 of this
      Agreement are expressly incorporated into and made a part of this
      Agreement.

    

    
      
        22

      

      
        
        

        
          

        

      

      
        
        

      

       

          (o) Definition
        of Person. For purposes of this Agreement, the term “Person” shall mean any
        natural person, proprietorship, partnership, corporation, limited liability
        company, organization, firm, business, joint venture, association, trust
        or
        other entity, but shall not include the Company or any of its subsidiaries
        or
        affiliates.

    

     

        (p) Non-disparagement.
      Following any termination of the Executive’s employment with the Company, the
      Executive shall not publicly disparage or make or publish any negative
      statements or comments about the Company, any of the Company’s subsidiaries or
      affiliates or any of their respective products, directors or employees.
      Following any termination of the Executive’s employment with the Company, and
      subject to applicable law, no executive officer of the Company or member of
      the
      Company’s Board of Directors shall publicly disparage or make or publish any
      negative statements or comments about the Executive.

     

        (q) Cooperation.
      For a period of five (5) years following any termination of the Executive’s
      employment with the Company and upon the request of the Company or any of its
      subsidiaries or affiliates, the Executive shall reasonably cooperate, assist
      and
      make himself available (for testimony or otherwise) at appropriate times and
      places as reasonably determined by the Company or any of its subsidiaries or
      affiliates in connection with any claim, demand, action, suit, proceeding,
      examination, investigation or litigation by, against or affecting the Company
      or
      any of its subsidiaries or affiliates. In connection with the foregoing, if
      the
      Executive has obtained employment or a position with another Person and has
      to
      take time away from such employment or position, then the Company shall pay
      the
      Executive a fee of $1,000 for each day that the Company or any subsidiary or
      affiliate of the Company requests the Executive to cooperate, assist or make
      himself available, and shall also reimburse the Executive for his reasonable
      out-of-pocket travel expenses that are approved in advance by the Chairman
      of
      the Company; provided, however, that the Company shall not pay such fee or
      reimburse for such expenses in connection with any claim, demand, action, suit
      or proceeding relating to this Agreement.

     

        (r) No
      Other
      Agreements. The Executive hereby represents and warrants to the Company that
      he is not a party to or bound by any other employment agreement, noncompetition
      agreement or covenant, nonsolicitation agreement or covenant or any other
      agreement or covenant that would restrict, limit or prevent him from performing
      his duties and responsibilities for the Company under this Agreement. In the
      event the foregoing representation and warranty is inaccurate or breached in
      any
      respect, the Company may, in its discretion, terminate the Executive’s
      employment with the Company in accordance with Section 4(a)(viii) hereof. In
      addition, the Executive shall indemnify and reimburse the Company for any and
      all claims, demands, damages, liabilities, costs and expenses (including, but
      not limited to, its reasonable attorneys fees) incurred by the Company arising
      out of or relating to such inaccuracy or breach in the event that any liability
      is imposed on the Company by virtue of the Executive being a party to or bound
      by any other employment, noncompetition, nonsolicitation or other agreement
      or
      covenant.

    

    
      
        23

      

      
        
        

        
          

        

      

      
        
        

      

       

          IN
        WITNESS
        WHEREOF, the Company and the Executive have made, entered into, executed
        and
        delivered this Agreement as of the day and year first above
        written.

    

    

     

                                                                    /s/
      Richard J.
      Garrity   

                                                                    Richard J.
      Garrity

                                

                    

                                                                    CHROMCRAFT
      REVINGTON, INC.

                                                                    

                                                                    By: /s/
      Benjamin M. Anderson-Ray  

                                                                    Benjamin
      M.
      Anderson-Ray

                                                                    ChairmanExhibit 10.18 to Scanner Technologies Corporation Form 10-KSB for fiscal year ended December 31, 2006

Exhibit 10.18

THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE DISTRIBUTED FOR VALUE UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND SUCH LAWS COVERING SUCH SECURITIES, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT, OFFER, PLEDGE OR OTHER DISTRIBUTION FOR VALUE IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

COMMON STOCK PURCHASE WARRANT

To Purchase 5,000 Shares of Common Stock

of

SCANNER TECHNOLOGIES CORPORATION

THIS CERTIFIES THAT, for good and valuable consideration, Betsy Brenden Radtke, or her registered successors or assigns, is entitled to subscribe for and purchase from Scanner Technologies Corporation, a New Mexico corporation (the “Company”), at any time up to and including June 8, 2011, five thousand (5,000) fully paid and nonassessable shares of Common Stock of the Company at a price of $0.56 per share (the “Warrant Exercise Price”), subject to the antidilution provisions of this Warrant.  The shares of Common Stock that may be acquired upon exercise of this Warrant are referred to herein as the “Warrant Shares.”  As used herein, the term “Common Stock” means and includes the Company’s presently authorized common stock, no par value, and shall also include any capital stock of any class of the Company hereafter authorized which shall not
be limited to a fixed sum or percentage in respect of the rights of the holders thereof to participate in dividends or in the distribution of assets upon the voluntary or involuntary liquidation, dissolution, or winding up of the Company.

This Warrant is subject to the following provisions, terms and conditions:

	
             
 	
            1.
 	
            Exercise; Transferability.
 

	
             
 	
            (a)
 	
            The rights represented by this Warrant may be exercised by the holder hereof, in whole or in part (but not as to a fractional share of Common Stock), by written notice of exercise (in the form attached hereto) delivered to the Company at the principal office of the Company prior to the expiration of this Warrant and accompanied or preceded by the surrender of this Warrant along with a check in payment of the Warrant Exercise Price for such shares.
 

	
             
 	
            (b)
 	
            This Warrant may not be sold, transferred, assigned, hypothecated or divided into two or more Warrants of smaller denominations, nor may any Warrant Shares issued pursuant to exercise of this Warrant be transferred, except as provided in Section 7 hereof.
 

2.          Exchange and
Replacement.  Subject to Sections l and 7 hereof, this Warrant is exchangeable upon the surrender hereof by the
holder to the Company at its office for new Warrants of like tenor and date representing in the aggregate the right to purchase
the number of Warrant Shares purchasable hereunder, each of such new Warrants to represent the right to purchase such number of
Warrant Shares (not to exceed the aggregate total number purchasable hereunder) as shall be designated by the holder at the time
of such surrender. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction, or
mutilation of this Warrant, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it,
and upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor,
in lieu of this Warrant. This Warrant shall be promptly canceled by the Company upon the surrender hereof in connection with any
exchange or replacement. The Company shall pay all expenses, taxes (other than stock transfer taxes), and other charges payable in
connection with the preparation, execution, and delivery of Warrants pursuant to this Section
2.

	
             
 	
            3.
 	
            Issuance of the Warrant Shares.
 

	
             
 	
            (a)
 	
            The Company agrees that the Warrant Shares shall be and are deemed to be issued to the holder as of the close of business on the date on which this Warrant shall have been surrendered and the payment made for such Warrant Shares as aforesaid.  Subject to the provisions of the next section, certificates for the Warrant Shares so purchased shall be delivered to the holder within a reasonable time, not exceeding fifteen (15) days after the rights represented by this Warrant shall have been so exercised, and, unless this Warrant has expired, a new Warrant representing the right to purchase the number of Warrant Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be delivered to the holder within such time.
 

	
             
 	
            (b)
 	
            Notwithstanding the foregoing, however, the Company shall not be required to deliver any certificate for Warrant Shares upon exercise of this Warrant except in accordance with exemptions from the applicable securities registration requirements or registrations under applicable securities laws.  Nothing herein, however, shall obligate the Company to effect registrations under federal or state securities laws.  If registrations are not in effect and if exemptions are not available when the holder seeks to exercise the Warrant, the Warrant exercise period will be extended, if need be, to prevent the Warrant from expiring, until such time as either registrations become effective or exemptions are available, and the Warrant shall then remain exercisable for a period of at least 30 calendar days from the date the Company delivers to
the holder written notice of the availability of such registrations or exemptions.  The holder agrees to execute such documents and make such representations, warranties, and agreements as may be required solely to comply with the exemptions relied upon by the Company, or the registrations made, for the issuance of the Warrant Shares.
 

4.          Covenants of the
Company. The Company covenants and agrees that all Warrant Shares will, upon issuance, be duly authorized
and issued, fully paid, nonassessable, and free from all taxes, liens, and charges with respect to the issue thereof. The Company
further covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved for the purpose of issue or transfer upon exercise of the subscription
rights evidenced by this Warrant a sufficient number of shares of Common Stock to provide for the exercise of the rights
represented by this Warrant.

 

2

	
             
 	
            5.
 	
            Antidilution
Adjustments. The provisions of this Warrant are subject to adjustment as provided in this Section 5.

	
             
 	
            (a)
 	
            The Warrant Exercise Price shall be adjusted from time to time such that in case the Company shall hereafter:
 

	
             
 	
            (i)
 	
            pay any dividends on any class of stock of the Company payable in  Common Stock or securities convertible into Common Stock;
 

	
             
 	
            (ii)
 	
            subdivide its then outstanding shares of Common Stock into a greater number of shares; or
 

	
             
 	
            (iii)
 	
            combine outstanding shares of Common Stock, by reclassification or otherwise;
 

then, in any such event, the Warrant Exercise Price in effect immediately prior to such event shall (until adjusted again pursuant hereto) be adjusted immediately after such event to a price (calculated to the nearest full cent) determined by dividing (a) the number of shares of Common Stock outstanding immediately prior to such event, multiplied by the then existing Warrant Exercise Price, by (b) the total number of shares of Common Stock outstanding immediately after such event (including the maximum number of shares of Common Stock issuable in respect of any securities convertible into Common Stock), and the resulting quotient shall be the adjusted Warrant Exercise Price per share.  An adjustment made pursuant to this subsection shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective
date in the case of a subdivision, combination or reclassification.  If, as a result of an adjustment made pursuant to this subsection, the holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be conclusive) shall determine the allocation of the adjusted Warrant Exercise Price between or among shares of such classes of capital stock or shares of Common Stock and other capital stock.  All calculations under this subsection shall be made to the nearest cent or to the nearest 1/100 of a share, as the case may be.  In the event that at any time as a result of an adjustment made pursuant to this subsection, the holder of any Warrant thereafter surrendered for exercise shall become entitled to receive any shares of the Company other than shares of Common Stock, thereafter the Warrant Exercise
Price of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to Common Stock contained in this subsection.

	
             
 	
            (b)
 	
            Upon each adjustment of the Warrant Exercise Price pursuant to subsection 5(a) above, the holder of each Warrant shall thereafter (until another such adjustment) be entitled to purchase at the adjusted Warrant Exercise Price the number of shares, calculated to the nearest full share, obtained by multiplying the number of shares specified in such Warrant (as adjusted as a result of all adjustments in the Warrant Exercise Price in effect prior to such adjustment) by the Warrant Exercise Price in effect prior to such adjustment and dividing the product so obtained by the adjusted Warrant Exercise Price.
 

 

3

	
             
 	
            (c)
 	
            In case of any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another corporation of the Company’s property as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), there shall be no adjustment under subsection (a) of this Section but the holder of each Warrant then outstanding shall have the right thereafter to convert such Warrant into the kind and amount of shares of stock and other securities and property which the holder would have owned or have been entitled to receive immediately after such consolidation,
merger, statutory exchange, sale, or conveyance had such Warrant been converted immediately prior to the effective date of such consolidation, merger, statutory exchange, sale, or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this subsection with respect to the rights and interests thereafter of any holders of the Warrant, to the end that the provisions set forth in this Section shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of stock and other securities and property thereafter deliverable on the exercise of the Warrant.  The provisions of this subsection shall similarly apply to successive consolidations, mergers, statutory exchanges, sales or conveyances.
 

	
             
 	
            (d)
 	
            Upon any adjustment of the Warrant Exercise Price, then and in each such case, the Company shall give written notice thereof, by first-class mail, postage prepaid, addressed to the holder as shown on the books of the Company, which notice shall state the Warrant Exercise Price resulting from such adjustment and the increase or decrease, if any, in the number of shares of Common Stock purchasable at such price upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.
 

6.          No Voting Rights.  This Warrant shall not entitle the holder to any voting rights or other rights as a shareholder of the Company.

	
             
 	
            7.
 	
            Notice of Transfer of Warrant or Resale of the Warrant Shares.
 

	
             
 	
            (a)
 	
            Subject to the sale, assignment, hypothecation, or other transfer restrictions set forth in Section 1 hereof, the holder, by acceptance hereof, agrees to give written notice to the Company before transferring this Warrant or transferring any Warrant Shares of such holder’s intention to do so, describing briefly the manner of any proposed transfer.  Promptly upon receiving such written notice, the Company shall present copies thereof to the Company’s counsel and to counsel to the original purchaser of this Warrant.  If in the opinion of each such counsel the proposed transfer may be effected without registration or qualification (under any federal or state securities laws), the Company, as promptly as practicable, shall notify the holder of such opinion, whereupon the holder shall be entitled to transfer this Warrant
or to dispose of Warrant Shares received upon the previous exercise of this Warrant, all in accordance with the terms of the notice delivered by the holder to the Company; provided that an appropriate legend may be endorsed on this Warrant or the certificates for such Warrant Shares respecting restrictions upon transfer thereof necessary or advisable in the opinion of counsel and satisfactory to the Company to prevent further transfers which would be in violation of Section 5 of the Securities 
 

 

4

Act of 1933, as amended (the “Securities Act”) and applicable state securities laws; and provided further that the prospective transferee or purchaser shall execute such documents and make such representations, warranties, and agreements as may be required solely to comply with the exemptions relied upon by the Company for the transfer or disposition of the Warrant or Warrant Shares.

	
             
 	
            (b)
 	
            If in the opinion of either of the counsel referred to in this Section, the proposed transfer or disposition of this Warrant or such Warrant Shares described in the written notice given pursuant to this Section may not be effected without registration or qualification of this Warrant or such Warrant Shares the Company shall promptly give written notice thereof to the holder, and the holder will limit its activities in respect to such as, in the opinion of both such counsel, are permitted by law.
 

8.          Fractional Shares.  Fractional shares shall not be issued upon the exercise of this Warrant, but in any case where the holder would, except for the provisions of this Section, be entitled under the terms hereof to receive a fractional share, the Company shall, upon the exercise of this Warrant for the largest number of whole shares then called for, pay a sum in cash equal to the sum of (a) the excess, if any, of the Market Price of such fractional share over the proportional part of the Warrant Exercise Price represented by such fractional share, plus (b) the proportional part of the Warrant Exercise Price represented by such fractional share.  For purposes of this Section, the term “Market Price” with respect to shares of Common Stock of any class or series
means the last reported sale price or, if none, the average of the last reported closing bid and asked prices on any national securities exchange or quoted on the Nasdaq Stock Market or other over-the-counter market, or, if not listed on a national securities exchange or quoted on the Nasdaq Stock Market or other over-the-counter market, then the price per share established by the Board of Directors of the Company.

IN WITNESS WHEREOF, Scanner Technologies Corporation has caused this Warrant to be signed by its duly authorized officer and this Warrant to be dated June 8, 2006.

 

	
             
 	
            SCANNER TECHNOLOGIES CORPORATION
 
	
             
 	
             
 	
             
 
	
             
 	
            By:
 	
            /s/ Elwin M. Beaty
 
	
             
 	
             
 	
            Elwin M. Beaty, President, Chief Executive 
 Officer and Chief Financial Officer
 

 

 

5

	
            To:
 	
            SCANNER TECHNOLOGIES CORPORATION
 

 

NOTICE OF EXERCISE OF WARRANT — To Be Executed by the Registered Holder in Order to Exercise the Warrant

Subscriber hereby irrevocably elects to exercise the attached Warrant to purchase by surrendering a check, ___________________ of the shares issuable upon the exercise of such Warrant, and requests that certificates for such shares (together with a new Warrant to purchase the number of shares, if any, with respect to which this Warrant is not exercised) shall be issued in the name of

 

	
             
 	
             
 	
             
 
	
             
 	
             
 	
            (Print Name)
 
	
            Please insert social security
 or other identifying number
 of registered holder of
 certificate (_____________________________)
 	
             
 	
            Address:
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	 
	
            Dated:
 	
             
 	
            ,
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
            (Signature)*
 

 

 

*The signature on the Notice of Exercise of Warrant must correspond to the name as written upon the face of the Warrant in every particular without alteration or enlargement or any change whatsoever.  When signing on behalf of a corporation, partnership, trust or other entity, PLEASE indicate your position(s) and title(s) with such entity.

 

 

 

ASSIGNMENT FORM

 

To be signed only upon authorized transfer of Warrants.

FOR VALUE RECEIVED, Subscriber hereby sells, assigns, and transfers unto _____________________________ the right to purchase the securities of Scanner Technologies Corporation, to which the within Warrant relates and appoints _____________, attorney, to transfer said right on the books of Scanner Technologies Corporation, with full power of substitution in the premises.

 

	
            Dated:
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
            (Signature)
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
            Address:

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