Document:

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                  DAWSON WALDRON

              
	 	
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                  A
                  W Y E R S

              
	 

Contractor
        Agreement

    

     

     

    pSivida
      Limited

     

    ACN
      009
      232 026

     

    Viaticus
      Capital Pty Ltd

     

    ACN
      094
      512 973

    
      	
              Level
                32, Exchange Plaza

              2
                The Esplanade

              Perth
                WA 6000

              Telephone:
                (08) 9366 8000

              Fax:
                (08) 9366 8111

            	
               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

            	 
	
              17
                August 2006

              Ref:
                DFP STJL 09 1395 3581

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    CONTENTS

     

    
      	
               

              1.

            	
               

              INTERPRETATION

            	
               

              1

            
	
               

              2.

            	
               

              TERM
                OF AGREEMENT

            	
               

              4

            
	
               

              3.

            	
               

              PROVISION
                OF SERVICES

            	
               

              4

            
	
               

              4.

            	
               

              CONTRACT
                FEE

            	
               

              5

            
	
               

              5.

            	
               

              INVOICES

            	
               

              5

            
	
               

              6.

            	
               

              CONFIDENTIAL
                INFORMATION

            	
               

              6

            
	
               

              7.

            	
               

              PRIVACY

            	
               

              6

            
	
               

              8.

            	
               

              INTELLECTUAL
                PROPERTY

            	
               

              6

            
	
               

              9.

            	
               

              OCCUPATIONAL
                HEALTH AND SAFETY

            	
               

              7

            
	
               

              10.

            	
               

              TAXATION

            	
               

              7

            
	
               

              11.

            	
               

              TERMINATION

            	
               

              8

            
	
               

              12.

            	
               

              AMENDMENT

            	
               

              8

            
	
               

              13.

            	
               

              GENERAL

            	
               

              9

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    CONTRACTOR
      AGREEMENT

     

    DATE
      August
      2006

     

    PARTIES

     

    pSivida
      Limited ACN
      009 232
      026 of Level 12, BGC Centre, 28 The Esplanade, Perth WA, 6000
      (Principal)

     

    Viaticus
      Capital Pty Ltd ACN
      065
      198 316 of Level
      12,
      BGC Centre, 28 The Esplanade
      Perth WA, 6000 (Contractor)

     

    RECITALS

     

    
      	A.  	
              Mr
                Gavin Rezos (Rezos)
                provided Services to the Principal on behalf of the Contractor as
                managing
                director of the Principal and a director of the Principal in accordance
                with a consultancy agreement between the Principal, the Contractor
                and
                Aymon Pacific Pty Ltd (ACN 065 198 316) (Aymon
                Pacific),
                a related body corporate of the Contractor (the Arrangement).

            

    

     

    
      	B.  	
              The
                Arrangement terminated on 31 July 2006 (the Termination).

            

    

     

    
      	C.  	
              Rezos,
                the Principal, Aymon Pacific and the Contractor executed a Deed of
                Release
                with respect to the Arrangement and the Termination (the Deed).

            

    

     

    
      	D.  	
              Rezos
                has intimate knowledge of the business, trade secrets, functions
                and work
                performed by employees of the Principal, customers and clients and
                processes and operations (among other things) of the Principal. As
                a
                condition precedent to completion of the Deed, the Principal and
                the
                Contractor agreed that the Principal will engage the Contractor as
                a
                Contractor to provide Rezos' personal Services to the Principal in
                accordance with this Agreement.

            

    

     

    
      	E.  	
              The
                Contractor has agreed to accept the appointment as a Contractor to
                the
                Principal and to provide Rezos to provide Services to the Principal
                as and
                when required by the Principal in accordance with this
                Agreement.

            

    

     

    OPERATIVE
      PROVISIONS

     

    
      	1.  	
              INTERPRETATION

            

    

     

    
      	1.1  	
              Definitions

            

    

     

    The
      following definitions apply in this Agreement.

     

    Agreement
      means
      this agreement as amended from time to time in writing and signed by the
      Parties.

     

    Commencement
      Date
      means 1
      August 2006.

     

    Confidential
      Information
      means
      (a) during the term, all information marked as confidential or advised in
      writing as being confidential in any form or medium concerning any past, present
      or future business, operations or affairs of
      the Principal,
      or of
      any

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    customer
      of the Principal
      and (b) after the term, for so long as the Principal provides the Contractor
      with the use of the Principals Perth office as described in Section 3.3, all
      information described in (a) above whether or not so marked. Confidential
      Information includes but is
      not
      limited to:

     

    
      	(a)  	
              all
                technical or non-technical data, formulae, patterns, programs, devices,
                methods, techniques, plans, drawings, models and processes, source
                and
                object code, software and computer
                records;

            

    

     

    
      	(b)  	
              all
                business and marketing plans and projections, details of agreements
                and
                arrangements with third parties, and customer and supplier information
                and
                lists;

            

    

     

    
      	(c)  	
              all
                financial information, pricing schedules and structures, product
                margins,
                remuneration details and investment
                outlays;

            

    

     

    
      	(d)  	
              all
                information concerning any employee, customer, Contractor or agent
                of the
                Principal;

            

    

     

    
      	(e)  	
              the
                Principal's policies and procedures;
                and

            

    

     

    
      	(f)  	
              all
                information contained in this Agreement,

            

    

     

    but
      Confidential Information excludes information that has come into the public
      domain other than by a breach of this Agreement.

     

    Contract
      Fee
      is
      defined in clause 4.

     

    Contractor
      means
      Viaticus Capital Pty Ltd ACN 094 512 973.

     

    Execution
      Date
      means
      the date that this agreement is properly executed by both parties.

     

    GST
      means
      the same as in the GST Law.

     

    GST
      Law
      means
      the same as "GST law" means in A
      New
      Tax System (Goods and Services Tax) Act 1999
      (Cth).

     

    Intellectual
      Property Rights
      means
      all present and future rights conferred by statute, common law or equity in
      or
      in relation to copyright, trade marks, designs, patents, circuit layouts, plant
      varieties, business and domain names, inventions and confidential information,
      and other results of intellectual activity in the industrial, commercial,
      scientific, literary or artistic fields whether
      or not registrable, registered or patentable.

     

    These
      rights include:

     

    
      	a)  	
              all
                rights in all applications to register these
                rights;

            

    

     

    
      	b)  	
              all
                renewals and extensions of these rights;
                and

            

    

     

    
      	c)  	
              all
                rights in the nature of these rights, such as Moral
                Rights.

            

    

     

    Materials
      means
      works, ideas, concepts, designs, inventions, developments, improvements, systems
      or other material or information, created, made or discovered by the Contractor
      (either alone or with others and whether before or after the Commencement Date)
      in the course of the Contractor's engagement or as a result of using the
      resources of the Principal,
      or in
      any way relating to any business of the Principal.

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    Moral
      Rights
      means
      rights of integrity of authorship, rights of attribution of authorship, rights
      not to have authorship falsely attributed and rights of a similar nature, that
      exist, or may come to exist, anywhere in the world in all Materials made or
      to
      be made by the Contractor in the course of the Contractor's engagement.

     

    Party
      means a
      party to this Agreement.

     

    Principal
      means
      pSivida Limited ACN 009 232 026.

     

    Rezos
      means
      Gavin Rezos.

     

    Services
      means
      the services the Principal and the Contractor agree from time to time as
      relevant to the Principal's operations and that are within the scope of the
      Contractor's competence.

     

    Term
      means
      6
      months from the Commencement Date or such other period as the Principal and
      the
      Contractor may agree in writing.

     

    
      	1.2  	
              Rules
                for interpreting this Agreement

            

    

     

    Headings
      are for convenience only, and do not affect interpretation. The following rules
      apply in interpreting this Agreement, except where the context makes it clear
      that a rule is not intended to apply.

     

    
      	(a)  	
              A
                reference to:

            

    

     

    
      	(i)  	
              any
                legislation (including subordinate legislation) is to that legislation
                as
                amended, re-enacted or replaced, and includes any subordinate legislation
                issued under it;

            

    

     

    
      	(ii)  	
              a
                policy, document or agreement, or a provision of a policy, document
                or
                agreement, is to that policy, document, agreement or provision as
                amended,
                supplemented, replaced or novated;

            

    

     

    
      	(iii)  	
              a
                Party to this Agreement or to any other document or agreement includes
                a
                permitted substitute or a permitted assign of that Party;
                

            

    

     

    
      	(iv)  	
              a
                person includes any type of entity or body of persons, whether or
                not it
                is incorporated or has a separate legal identity, and any executor,
                administrator or successor in law of the person;
                and

            

    

     

    
      	(v)  	
              anything
                (including a right, obligation, or concept) includes each part of
                it.

            

    

     

    
      	(b)  	
              A
                singular word includes the plural, and vice
                versa.

            

    

     

    
      	(c)  	
              A
                word which suggests one gender includes the other
                gender.

            

    

     

    
      	(d)  	
              If
                a word is defined, another part of speech has a corresponding
                meaning.

            

    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    
      	(e)  	
              If
                an example is given of anything (including a right, obligation or
                concept), such as by saying it includes something else, the example
                does
                not limit the scope of that thing. 

            

    

     

    
      	(f)  	
              A
                reference to dollars
                or
                $
                is
                to an amount in Australian
                currency.

            

    

     

    
      	2.  	
              TERM
                OF AGREEMENT

            

    

     

    This
      Agreement commences on the Commencement Date and will continue for the Term
      unless terminated earlier in accordance with this Agreement.

     

    
      	3.  	
              PROVISION
                OF SERVICES

            

    

     

    
      	3.1  	
              Services

            

    

     

    
      	(a)  	
              The
                Contractor will ensure the Services are provided in a proper and
                efficient
                manner in accordance with the terms of this
                Agreement.

            

    

     

    
      	(b)  	
              The
                Contractor will ensure that the Services are performed diligently,
                competently, with care and skill in a proper and professional
                manner.

            

    

     

    
      	3.2  	
              Provision
                of the Services

            

    

     

    The
      Contractor will provide the Services at such reasonable times as the Principal
      and Contractor agree.

     

    
      	3.3  	
              Location
                and facilities

            

    

     

    
      	(a)  	
              For
                so long as the Principal maintains a Perth office, whether during
                the Term
                or after the Term:

            

    

     

    
      	(i)  	
              The
                Contractor will provide the Services from the Principal's Perth
                office;

            

    

     

    
      	(ii)  	
              The
                Principal will provide the Contractor use of a laptop computer, desktop
                computer, office, car space and secretarial services at the Principal's
                Perth office, subject to the Principal's executives being given preference
                over the Contractor in relation to the provision of secretarial
                services.

            

    

     

    
      	(b)  	
              If
                at any time the Principal ceases to maintain a Perth office, the
                Contractor will be entitled to retain the laptop computer and the
                desktop
                computer provided by the Principal for the Contractor's use under
                clause
                3.3(a), subject to the return of all Confidential Information to
                the
                Principal.

            

    

     

    
      	3.4  	
              Warranty

            

    

     

    The
      Principal does not warrant that the Contractor has preference or priority in
      providing any service to the Principal.

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    3.5 
      Services to be provided by Rezos on behalf of the
      Contractor

     

    
      	(a)  	
              Rezos
                is required to provide the Services to the Principal on behalf of
                the
                Contractor. The Services are not to (and cannot) be provided through
                any
                other person (e.g. an employee, contractor or agent of the
                Contractor).

            

    

     

    
      	(b)  	
              Rezos
                is made available by the Contractor to provide Services to the Principal
                pursuant to this Agreement. Rezos is solely the employee or sub-contractor
                of the Contractor and will not be construed to be the employee or
                sub-contractor of the Principal. Nor will the relationship between
                the
                Principal and Rezos be construed as one of employer and
                employee.

            

    

     

    
      	4.  	
              CONTRACT
                FEE

            

    

     

    
      	4.1  	
              Contract
                Fee

            

    

     

    As
      full
      consideration for the provision of the Services for the Term, the Principal
      will
      pay the Contractor a total fee of $329,000 gross (the
      Contract
      Fee)
      due on
      the Execution Date. Subject to clause 11, the Contractor agrees that the
      Contract Fee may be paid in instalments of $54,833 with the first instalment
      being paid on the Execution Date and thereafter 5 monthly instalments commencing
      on the monthly anniversary of the Commencement Date. The Contract Fee is
      exclusive of GST.

     

    
      	4.2  	
              Reimbursement
                of expenses

            

    

     

    The
      Contractor is not entitled to reimbursement by the Principal for any expenses
      incurred in providing the Services
      except
      with the Principal's prior written approval, save for expenses related to home
      broadband services and home phone and fax during the Term.

     

    
      	4.3  	
              Full
                payment for the Services

            

    

     

    The
      Contractor agrees that payment of the amounts provided for in this clause
      constitute full payment for the provision of the Services, and the Principal
      is
      not liable to pay any other amount to the Contractor. 

     

    
      	5.  	
              INVOICES

            

    

     

    
      	5.1  	
              Invoice
                Period

            

    

     

    The
      Contractor will issue an initial Invoice for the Contract Fee on the Execution
      Date and a monthly additional invoices detailing any pre-approved amounts
      claimed for reimbursement from the Execution Date (“Additional
      Invoice”).

     

    
      	5.2  	
              Payment
                of invoice

            

    

     

    The
      Principal will pay each Additional Invoice within 7 days of receipt by the
      Principal of the Additional Invoice and any supporting documentation reasonably
      required by the Principal. 

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    5.3 
      Withholding of Contract Fee

     

    The
      Principal may withhold any payment (or part of any payment) due to the
      Contractor under any Additional Invoice until the Contractor provides any
      supporting documentation reasonably required by the Principal (e.g.
      documentation supporting the reimbursement for expenses incurred).

     

    
      	6.  	
              CONFIDENTIAL
                INFORMATION

            

    

     

    
      	6.1  	
              Confidential
                Information

            

    

     

    The
      Contractor acknowledges that all Confidential Information of the Principal
      which
      has or may come into the possession of the Contractor remains the property
      of
      the Principal. 

     

    
      	6.2  	
              Non-disclosure

            

    

     

    The
      Contractor must not,
      unless
      the Principal has first agreed in writing:

     

    
      	(a)  	
              disclose
                to anyone else, or

            

    

     

    
      	(b)  	
              use
                for a purpose other than the provision of the
                Services,

            

    

     

    any
      of
      the Confidential Information either before or after the expiration or
      termination of the Term and/or this Agreement.

     

    
      	6.3  	
              Return
                of Confidential
                Information

            

    

     

    On
      termination or expiry of this Agreement, the Contractor must immediately return
      or cause to be returned, all originals and copies of any Confidential
      Information in its possession.

     

    
      	7.  	
              PRIVACY

            

    

     

    
      	7.1  	
              The
                Contractor must comply with his obligations under the Privacy
                Act 1988 (Cth).
                

            

    

     

    
      	7.2  	
              The
                Contractor consents to the Principal (and its Officers Etc) and the
                Company (and its Officers Etc), collecting, using and disclosing
                information about the Contractor and the Services provided by the
                Contractor to the extent the Principal, its Officers Etc, the Company
                or
                its Officers Etc are carrying out its or their legitimate business.
                For
                example, that collection, use or disclosure may involve the Principal,
                its
                Officers Etc, the Company or its Officers Etc, collecting information
                from
                or disclosing information to its or their accountants, lawyers, staff,
                customers or suppliers, insurers and other third parties for business
                reasons. 

            

    

     

    
      	8.  	
              INTELLECTUAL
                PROPERTY

            

    

     

    
      	8.1  	
              In
                this clause Intellectual
                Property
                means all present and future rights whether or not conferred by statute,
                common law or equity in or in relation to any copyright, trade marks
                (including service marks), designs, business and domain names, circuit
                layouts, trade secrets, inventions (including patents), Confidential
                Information and know how and other

            

    

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    
      	8.2  	
              results
                in the industrial, commercial, scientific, literary or artistic fields
                (whether registered or not and whether protected by statute or
                not).

            

    

     

    
      	8.3  	
              The
                Contractor as beneficial owner assigns to the Principal absolutely
                all
                Intellectual Property in any material, work, ideas, concepts, designs,
                developments, improvements, systems, software, agreements or other
                materials prepared or created by the Contractor in connection with
                this
                Agreement or the provision of the Services (the Materials).

            

    

     

    
      	8.4  	
              The
                Contractor must do all things necessary or desirable to give full
                effect
                to the assignment under this clause to the
                Principal.

            

    

     

    
      	8.5  	
              The
                Contractor warrants that:

            

    

     

    
      	(a)  	
              the
                Materials, or the use or reproduction of the Materials, will not
                infringe
                the Intellectual Property Rights of any person;
                and

            

    

     

    
      	(b)  	
              except
                as required by this clause, the Contractor will not assign, license
                or
                otherwise deal with the Materials.

            

    

     

    
      	8.6  	
              On
                termination or expiry of this Agreement the Contractor must immediately
                deliver to the Principal all originals and copies of Materials in
                its
                possession or
                Materials that it can otherwise reasonably
                obtain.

            

    

     

    
      	8.7  	
              Nothing
                in this Agreement prevents the Contractor from using any materials,
                software, formats and precedents that the Contractor owned or was
                licensed
                to use at the Commencement Date, whether or not the Principal has
                acquired
                rights under this Agreement (or otherwise) to any adaptation or
                reproduction of them through the Contractor's provision of the
                Services.

            

    

     

    
      	9.  	
              OCCUPATIONAL
                HEALTH AND SAFETY

            

    

     

    The
      Contractor must comply with
      occupational health and safety legislation and all occupational health and
      safety policies and procedures issued by the Principal from time to
      time.

     

    
      	10.  	
              TAXATION

            

    

     

    
      	10.1  	
              Definitions
                in this clause

            

    

     

    Words
      defined in the GST Law have the same meaning in this clause, unless it is clear
      that a different meaning is intended.

     

    
      	10.2  	
              Payment
                of GST

            

    

     

    In
      addition to paying the Contract Fee under clause 4 or other consideration (which
      is exclusive of GST) the Principal must:

     

    
      	(a)  	
              pay
                to the Contractor an amount equal to any GST payable for anything
                provided
                or supplied by the Contractor in connection with this Agreement;
                and

            

    

     

    
      	(b)  	
              make
                that payment as and when the Principal must pay or provide the Contract
                Fee or other consideration.

            

    

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    
      	10.3  	
              Tax
                invoice

            

    

     

    The
      Contractor must issue a tax invoice (or an adjustment note) to the Principal
      for
      any supply for which the Contractor may recover GST from the Principal under
      this Agreement. 

     

    
      	10.4  	
              Overpayment

            

    

     

    The
      Contractor must refund to the Principal any overpayment by the Principal for
      GST
      within 14 days of the Contractor becoming aware of the overpayment.

     

    
      	10.5  	
              Claim
                for a cost

            

    

     

    If
      a
      Party has a claim for a cost on which the Party must pay GST, the claim is
      for
      the cost plus all GST (except any GST for which that Party is entitled to an
      input tax credit).

     

    
      	10.6  	
              Contractor
                must be registered for GST

            

    

     

    The
      Contractor must be registered for GST purposes. If the Contractor is not
      registered for GST the Principal will have no obligation under this clause
      to
      pay GST to the Contractor. 

     

    
      	11.  	
              TERMINATION

            

    

     

    
      	11.1  	
              Expiry
                of Term

            

    

     

    Save
      for
      the provisions of this Agreement which specify that they survive the termination
      of this Agreement, including clause 3.3 of this Agreement subject to its terms,
      this Agreement automatically ends on expiry of the Term.

     

    
      	11.2  	
              Early
                termination

            

    

     

    At
      any
      time prior to the expiry of the Term:

     

    
      	(a)  	
              the
                Principal may terminate this Agreement on payment to the Contractor
                of the
                outstanding balance, if any, of the Contract Fee;

            

    

     

    
      	(b)  	
              the
                Contractor may terminate this Agreement by giving the Principal two
                month's written notice. If the Contractor terminates this Agreement
                in
                accordance with this paragraph (b), the Principal will pay to the
                Contractor the outstanding balance, if any, of the Contract
                Fee.

            

    

     

    
      	11.3  	
              No
                additional payment

            

    

     

    The
      Contractor acknowledges that termination of this Agreement does not entitle
      it
      to any form of payment or compensation by the Principal, except for payment
      of
      any outstanding balance of the Contract Fee.

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    12. 
      AMENDMENT 

     

    This
      document can only be amended, supplemented or replaced by another document
      signed by the parties.

     

    
      	13.  	
              GENERAL

            

    

     

    
      	13.1  	
              Governing
                law

            

    

     

    This
      document is governed by the law in force in Western Australia.

     

    
      	13.2  	
              Operation
                of this document

            

    

     

    
      	(a)  	
              This
                Agreement contains the entire agreement between the parties about
                its
                subject matter. Any previous understanding, agreement, representation
                or
                warranty relating to that subject matter is replaced by this document
                and
                has no further effect.

            

    

     

    
      	(b)  	
              Any
                provision of this Agreement which is unenforceable or partly unenforceable
                is, where possible, to be severed to the extent necessary to make
                this
                Agreement enforceable, unless this would materially change the intended
                effect of this Agreement.

            

    

     

    
      	13.3  	
              Inconsistency
                with other documents

            

    

     

    If
      this
      Agreement is inconsistent with any other document or agreement between the
      parties, to the fullest extent permitted by law this Agreement prevails to
      the
      extent of the inconsistency.

     

    
      	13.4  	
              Counterparts

            

    

     

    This
      document may be executed in counterparts.

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    EXECUTED
      as an
      agreement

     

    
      	
               

              EXECUTED
                by
                pSivida Limited

              ACN
                009 232 026:

            	 	 
	 	 	 
	      
	 	/s/
              Aaron Finlay
	
              Signature
                of director

            	 	
              Signature
                of director/secretary

            
	 	 	 
	    
	 	Aaron
              Finlay  
	
              Name

            	 	
              Name

            
	
              EXECUTED
                by
                Viaticus
                Capital Pty Ltd, by
                its sole director and sole company secretary:

            	 	
              /s/
                Gavin Rezos

            
	 	 	
              Signature
                of sole director and sole company secretary

            
	 	 	 
	 	 	 
	 	 	
              Mr.
                Gavin Rezos

            
	 	 	
              Name

            

    

     

    
      
        
        

      

      -10-Service
      Agreement - Mark Parry-Billings - pSiMedica 

    

     

    DATED
      January 6, 2005

    

     

    (1)  PSIMEDICA
      LIMITED

     

     

    
      
        (2) 
          MARK
          PARRY-BILLINGS

      

    

    

    
 

    ___________________________

    

    SERVICE
      AGREEMENT

    ___________________________

    

    

    
 

    STEPHENSON
      HARWOOD

    One,
      St. Paul's Churchyard

    London
      EC4M 8SH

    Tel:
      020 7329 4422

    Fax:
      020 7606 0822

    Ref:
      1040

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    CONTENTS

    Page

    
      	
              1

            	
              DEFINITIONS
                AND INTERPRETATION

            	
              1

            
	
              2

            	
              APPOINTMENT

            	
              2

            
	
              3

            	
              DURATION
                OF THE EMPLOYMENT

            	
              2

            
	
              4

            	
              SCOPE
                OF THE EMPLOYMENT

            	
              3

            
	
              5

            	
              PLACE
                OF WORK

            	
              4

            
	
              6

            	
              REMUNERATION

            	
              5

            
	
              7

            	
              EXPENSES

            	
              6

            
	
              8

            	
              HOLIDAYS

            	
              6

            
	
              9

            	
              SICKNESS
                BENEFITS

            	
              7

            
	
              10

            	
              PENSION
                AND BENEFITS

            	
              8

            
	
              11

            	
              RESTRICTIONS
                DURING THE EMPLOYMENT 

            	
              9

            
	
              12

            	
              CONFIDENTIAL
                INFORMATION AND COMPANY DOCUMENTS

            	
              10

            
	
              13

            	
              INVENTIONS
                AND OTHER INTELLECTUAL PROPERTY

            	
              11

            
	
              14

            	
              TERMINATION

            	
              13

            
	
              15

            	
              RESTRICTIVE
                COVENANTS

            	
              15

            
	
              16

            	
              DISCIPLINARY
                AND GRIEVANCE PROCEDURES

            	
              17

            
	
              17

            	
              NOTICES

            	
              18

            
	
              18

            	
              FORMER
                CONTRACTS OF EMPLOYMENT

            	
              18

            
	
              19

            	
              CHOICE
                OF LAW AND SUBMISSION TO JURISDICTION

            	
              18

            
	
              20

            	
              GENERAL

            	
              19

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    AGREEMENT

    

    Dated:   
      2005

    

    BETWEEN:

    

    
      	
              (1)

            	
              PSIMEDICA
                LIMITED (registered
                in England and Wales under number 4027099) whose registered office
                is at
                One, St Paul’s Churchyard, London EC4M 8SH ("the
                Company");
                and

            

    

    

    
      	
              (2)

            	
              DR
                MARK PARRY-BILLINGS
                of
                3 Cheslyn Grange, 50 Nascot Wood Road, Watford, Herts., WD17 4WF
                ("the
                Executive").

            

    

    

    IT
      IS AGREED as
      follows:

    

    1 DEFINITIONS
      AND INTERPRETATION

     

    
      	 	
              1.1

            	
              In
                this Agreement unless the context otherwise requires the following
                expressions have the following
                meanings:

            

    

    

    "the
      Board"
      means
      the board of directors for the time being of the Company or any committee of
      directors for the time being;

    

    "Confidential
      Information"
      means
      information relating to the business, Intellectual Property Rights (as defined
      in clause 13.2), products, affairs and finances of the Company or of any Group
      Company for the time being confidential to it or to them or treated by it or
      them as such and trade secrets (including, without limitation, technical data
      and know-how) relating to the business of the Company or of any Group Company
      or
      of any of its or their suppliers, clients or customers, including in particular
      (by way of example only and without limitation) the use of silicon technology
      in
      medical therapy; 

    

    "the
      Employment"
      means
      the Executive's employment under this Agreement; 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    "the
      ERA"
      means
      the Employment Rights Act 1996 as amended;

    

    "the
      Group"
      means
      the Company and the Group Companies;

    

    "Group
      Company"
      means
      any company which is for the time being a subsidiary or holding company of
      the
      Company and any subsidiary of any such holding company and for the purposes
      of
      this Agreement the terms "subsidiary"
      and
      "holding
      Company"
      shall
      have the meanings ascribed to them by sections 736 and 736A Companies Act 1985
      (and "Group
      Companies"
      shall
      be interpreted accordingly);

     

    “the
      Salary”
      means
      the salary referred to in clause 6.1.

     

    
      	 	
              1.2

            	
              References
                to clauses and schedules are unless otherwise stated to clauses of
                and
                schedules to this Agreement.

            

    

    

    
      	 	
              1.3

            	
              The
                headings to the clauses are for convenience only and shall not affect
                the
                construction or interpretation of this
                Agreement.

            

    

    

    2 APPOINTMENT

     

    
      	 	
              2.1

            	
              The
                Company appoints the Executive and the Executive agrees to act as
                Research
                & Development Director of the Company on the terms of this Agreement.
                On appointment you will become a director of the Company and initially
                report to Roger Brimblecombe as Executive
                Chairman.

            

    

    

    
      	 	
              2.2

            	
              With
                the prior consent of the Executive but not otherwise the Company
                may
                appoint any other person or persons to act jointly with the Executive
                in
                any position to which he may be assigned from time to time without
                loss of
                status by the Executive. 

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3 DURATION
      OF THE EMPLOYMENT

     

    
      	 	
              3.1

            	
              The
                Employment shall commence on the date of this Agreement and, subject
                to
                the provisions of this Agreement, shall continue until terminated
                by
                either party giving to the other not less than 6 months' notice in
                writing
                to expire on or at any time after the commencement
                date.

            

    

    

    
      	 	
              3.2

            	
              Notwithstanding
                clause 3.1, the Employment shall automatically terminate when the
                Executive reaches the normal retiring age from time to time applicable
                to
                directors of the Company, currently being the age of 60.
                

            

    

    

    
      	 	
              3.3

            	
              The
                Company reserves the right to terminate the Employment without any
                notice
                or on notice less than that required by clause 3.1 provided that
                if it
                does so it will pay to the Executive a sum equal to, but no more
                than, the
                Salary in respect of that part of the period of notice in clause
                3.1 which
                the Company has not given to the Executive less any appropriate tax
                and
                other statutory deductions.

            

    

    

    
      	 	
              3.4

            	
              At
                any time or times during any period of notice of termination served
                in
                accordance with this clause 3 (whether given by the Company or the
                Executive), the Company shall be under no obligation to assign any
                duties
                to the Executive and shall be entitled to exclude him from its premises
                and any other premises to which during the currency of this Agreement
                the
                Executive has had access for the purposes of fulfilling his duties
                under
                this Agreement, provided that this shall not affect the Executive's
                entitlement to receive the Salary and other contractual benefits
                during
                such period.

            

    

    

    
      	 	
              3.5

            	
              For
                the purposes of the ERA the Executive's period of continuous employment
                began on the date of this Agreement. The Employment is not continuous
                with
                any previous employment. 

            

    

    

    
      	 	
              3.6

            	
              The
                Executive represents and warrants that he is not bound by or subject
                to
                any court order, agreement, arrangement or undertaking which in any
                way
                restricts or prohibits him from entering into this Agreement or from
                performing his duties under it.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4 SCOPE
      OF
      THE EMPLOYMENT

     

    
      	 	
              4.1

            	
              During
                the Employment the Executive shall:

            

    

    

    
      	 	
              4.1.1

            	
              save
                as provided for in accordance with clause 11.2.2, devote the whole
                of his
                time, attention and skill to the business and affairs of the Company
                both
                during normal business hours and during such additional hours as
                are
                necessary for the proper performance of his duties or as the Board
                may
                reasonably require from time to time;

            

    

    

    
      	 	
              4.1.2

            	
              faithfully
                and diligently perform such duties and exercise such powers consistent
                with his position as may from time to time be assigned to or vested
                in him
                by the Board;

            

    

    

    
      	 	
              4.1.3

            	
              obey
                the reasonable and lawful directions of the
                Board;

            

    

    

    
      	 	
              4.1.4

            	
              comply
                with all the Company's rules, regulations, policies and procedures
                from
                time to time in force; and

            

    

    

    
      	 	
              4.1.5

            	
              keep
                the Board at all times promptly and fully informed (in writing if
                so
                requested) of his conduct of the business of the Company and any
                Group
                Company and provide such explanations in connection with it as the
                Board
                may require.

            

    

    

    
      	 	
              4.2

            	
              The
                Executive shall if and so long as the Company requires and without
                any
                further remuneration carry out his duties on behalf of any Group
                Company
                and act as a director or officer of any Group
                Company.

            

    

    

    
      	 	
              4.3

            	
              The
                Company may at its sole discretion transfer this Agreement to any
                Group
                Company at any time. 

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5 PLACE
      OF
      WORK

     

    
      	 	
              5.1

            	
              The
                Executive's place of work will initially be the Company's offices
                at
                Malvern
                Hills Science Park, Geraldine Road, Malvern, Worcestershire, WR14
                3SZ
                but the Company may require the Executive to work at any place (whether
                inside or outside the United Kingdom) for such periods as the Company
                may
                from time to time require but not outside the United Kingdom for
                periods
                exceeding 2 months in any 12 months.

            

    

    

    
      	 	
              5.2

            	
              If
                the Executive's principal place of work is changed from the location
                set
                out in Clause 5.1 to a location which is outside reasonable commuting
                distance from his home, the Company may entirely at its discretion
                reimburse to him reasonable relocation expenses, including removal
                costs
                and estate agents' fee and solicitors' fees in accordance with its
                relocation policy from time to time in force.

            

    

    

    
      	 	
              5.3

            	
              The
                Company will consult with the Executive on the effects on him of
                any such
                requirement to change his place of work on a permanent basis or to
                move
                house and will endeavour to take into account any concerns or difficulties
                raised by the Executive in relation to such requirements.
                

            

    

     

    
      	 	
              5.4

            	
              Should
                the Executive choose to retain his permanent place of residence in
                Watford
                and not move within reasonable commuting distance from Malvern, the
                Company will at its discretion reimburse the Executive for the cost
                of him
                renting accommodation in the Malvern area for the first 6 months
                of his
                Employment up to a maximum of £5,000 in total during that 6 month period,
                subject to him providing such receipts or other appropriate evidence
                as
                the Company may require.

            

    

    

    6 REMUNERATION

     

    
      	 	
              6.1

            	
              The
                Company shall pay to the Executive the Salary at the rate of £125,000 per
                annum, on the last day of each calendar month by credit transfer
                to his
                bank account payable by equal monthly instalments in arrears. The
                rate of
                Salary will be reviewed annually in December, the first such review
                to
                take place on 1 December 2005.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
            	6.2	
              The
                Salary shall be inclusive of any fees to which the Executive may
                be
                entitled if he is appointed as a director of the Company or any Group
                Company.

            

    

    

    
      	 	
              6.3

            	
              The
                Executive shall be eligible to participate in such bonus scheme as
                the
                Company, at its sole discretion, shall from time to time operate,
                subject
                to the rules of such scheme from time to time in
                force.

            

    

    

    
      	 	
              6.4

            	
              Payment
                of the Salary and any bonus to the Executive shall be made either
                by the
                Company or by a Group Company and, if by more than one company, in
                such
                proportions as the Board may from time to time think
                fit.

            

    

    

    7 EXPENSES

     

    
      	 	
              7.1

            	
              The
                Company shall reimburse the Executive in respect of all expenses
                reasonably incurred by him in the proper performance of his duties,
                subject to him providing such receipts or other appropriate evidence
                as
                the Company may require.

            

    

    

    
      	 	
              7.2

            	
              If
                the Company issues to the Executive a company credit card then such
                a
                credit card is issued on condition that
                he:

            

    

    

    
      	 	
              7.2.1

            	
              takes
                good care of such card and immediately reports any loss of it to
                the
                Company;

            

    

    

    
      	 	
              7.2.2

            	
              uses
                the card only for the purposes of the Company's business in accordance
                with any applicable Company policy;
                and

            

    

    

    
      	
            	7.2.3	
              returns
                the card immediately to the Company on
                request.

            

    

    

    8 HOLIDAYS

     

    
      	 	
              8.1

            	
              The
                Executive shall be entitled, in addition to all Bank and Public holidays
                normally observed in England, to 25 working days’ paid holiday in each
                holiday year (being the

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    period
      from 1st January to 31st December). The Executive may take his holiday only
      at
      such times as are agreed with the Board.

    

    
      	 	
              8.2

            	
              In
                the respective holiday years in which the Employment commences or
                terminates, the Executive's entitlement to holiday shall accrue on
                a pro
                rata basis for each completed calendar month of service during the
                relevant year.

            

    

    

    
      	 	
              8.3

            	
              If,
                on the termination of the Employment, the Executive has exceeded
                his
                accrued holiday entitlement, the value of such excess, calculated
                by
                reference to clause 8.2 and the Salary, may be deducted by the Company
                from any sums due to him. If the Executive has any unused holiday
                entitlement, the Company may either require the Executive to take
                such
                unused holiday during any notice period or make a payment to him
                in lieu
                of it, calculated in accordance with this clause
                8.3.

            

    

    

    
      	 	
              8.4

            	
              Holiday
                entitlement for one holiday year cannot be taken in subsequent holiday
                years unless otherwise agreed by the Board. Failure to take holiday
                entitlement in the appropriate holiday year will lead to forfeiture
                of any
                accrued holiday not taken without any right to payment in lieu of
                it.

            

    

    

    9 SICKNESS
      BENEFITS

     

    
      	 	
              9.1

            	
              Subject
                to clause 14, the Company shall continue to pay the Executive's salary
                for
                up to a maximum of 20 working days’ absence on medical grounds in any
                period of 12 calendar months provided
                that the Executive shall from time to time if
                required:

            

    

    

    
      	 	
              9.1.1

            	
              supply
                the Company with medical certificates covering any period of sickness
                or
                incapacity exceeding seven days (including weekends);
                and

            

    

    

    
      	 	
              9.1.2

            	
              undergo
                at the Company's expense, by a doctor appointed by the Company, any
                medical examination.

            

    

    

    
      	 	
              9.2

            	
              Payment
                in respect of any other or further period of absence shall be at
                the
                Company's discretion.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              9.3

            	
              Any
                payment to the Executive pursuant to clause 9.1 shall be subject
                to set
                off by the Company in respect of any Statutory Sick Pay and any Social
                Security Sickness Benefit or other benefits to which the Executive
                may be
                entitled.

            

    

    

    
      	 	
              9.4

            	
              Subject
                to clause 9.3, when all sick pay entitlement in any period of 12
                calendar
                months has been exhausted, no further salary will be payable by the
                Company to the Executive until the Executive has returned to active
                service of the Company.

            

    

    

    
      	 	
              9.5

            	
              If
                the Executive's absence shall be occasioned by the actionable negligence
                of a third party in respect of which damages are recoverable, then
                the
                Executive shall:

            

    

    

    
      	 	
              9.5.1

            	
              notify
                the Company immediately of all the relevant circumstances and of
                any
                claim, compromise, settlement or judgment made or awarded in connection
                with it;

            

    

    

    
      	 	
              9.5.2

            	
              give
                to the Company such information concerning the above matters as the
                Company may reasonably require; and

            

    

    

    
      	 	
              9.5.3

            	
              if
                the Company so requires, refund to the Company any amount received
                by him
                from any such third party provided that the refund shall be no more
                than
                the amount which he has recovered from the Company under clauses
                9.1 and
                9.2. in respect of sick pay for the period he is absent from work
                due to
                such actionable negligence of a third party in respect of which damages
                are recoverable.

            

    

     

    10 PENSION
      AND BENEFITS

     

    
      	 	
              10.1

            	
              The
                Company shall at each monthly payment to the Executive of the Salary
                herein also pay to an Inland Revenue approved personal pension scheme
                (that satisfies Stakeholder Pension Requirements) ("the Scheme")
                an amount
                equal to 12 per cent of the Salary due to the Executive in that
                month, such amount to be in addition to the Salary, provided that
                contributions by the Company shall not extend beyond the
                maximum

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    contributions
      that can be made in any particular year of assessment to income tax without
      prejudicing the approval of the Scheme under Chapter IV of Part XIV of ICTA.
      

     

    
      	
            	10.2	
              There
                is no contracting-out certificate in force under the Pension Schemes
                Act
                1993 in respect of the Employment.

            

    

     

    
      	 	
              10.3

            	
              During
                the employment the Executive shall be eligible to participate in
                such
                death in service, group income protection and medical expenses insurance
                schemes as the Company shall from time to time maintain for the benefit
                of
                the Executive, subject to their terms and conditions from time to
                time in
                force and the insurers accepting the Executive for cover under the
                relevant policy at normal rates. In the event that the insurer of
                any such
                policy refuses any claim under it the Company shall not be liable
                to meet
                that claim.

            

    

    

    
      	 	
              10.4

            	
              On
                appointment the Executive shall be awarded 1.2million options in
                pSivida
                Limited (presently the Group’s holding company), with one third vesting at
                the end of years one, two and three respectively. The options will
                all be
                granted at the market value on the day of the
                grant.

            

    

    

    11 RESTRICTIONS
      DURING THE EMPLOYMENT 

     

    
      	 	
              11.1

            	
              Save
                as provided for in clause 11.2, during the Employment the Executive
                shall
                not directly or indirectly:

            

    

     

    

    
      	 	
              11.1.1

            	
              be
                employed, engaged, concerned or interested in any other business
                or
                undertaking save for those in which he is involved pursuant to clause
                4.3;
                or

            

    

    

    
      	 	
              11.1.2

            	
              in
                any activity which the Board reasonably considers may be, or become,
                harmful to the interests of the Company or of any Group Company or
                which
                might reasonably be considered to interfere with the performance
                of the
                Executive's duties under this
                Agreement.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
            	11.2	
              Clause
                11.1 shall not apply:

            

    

    

    
      	 	
              11.2.1

            	
              to
                the Executive holding (directly or through nominees) investments
                publicly
                listed on any publicly traded stock exchange as long as he does not
                hold
                more than 10 per cent of the issued shares or other securities of
                any
                class of any one company unless otherwise approved by the Board;
                or

            

    

    

    
      	 	
              11.2.2

            	
              to
                any act undertaken by the Executive with the prior written consent
                of the
                Board; or

            

    

    

    
      	
            	11.2.3	
              to
                any interest permitted by clause
                4.3.

            

    

    

    
      	 	
              11.3

            	
              The
                Executive shall comply with every rule of law and every regulation
                of the
                Company and any competent authority for the time being in force in
                relation to dealings in shares or other securities of the Company
                or any
                Group Company. 

            

    

    

    
      	 	
              11.4

            	
              The
                Executive shall acknowledge his position within the Company in any
                business or scientific papers presented or published by him during
                the
                course of the Employment. 

            

    

    

    12 CONFIDENTIAL
      INFORMATION AND COMPANY DOCUMENTS

     

    
      	 	
              12.1

            	
              The
                Executive shall neither during the Employment (except in the proper
                performance of his duties or with the express written consent of
                the
                Board) nor at any time (without limit) after the termination of the
                Employment except in compliance with an order of a competent court
                or as
                required by law:

            

    

    

    
      	 	
              12.1.1

            	
              divulge
                or communicate to any person, company, business entity or other
                organisation;

            

    

    

    
      	 	
              12.1.2

            	
              use
                for his own purposes or for any purposes other than those of the
                Company
                or any Group Company; or

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
            	12.1.3	
              through
                any failure to exercise due care and diligence, permit or cause any
                unauthorised disclosure of any Confidential Information. These
                restrictions shall cease to apply to any information which shall
                become
                available to the public generally otherwise than through any breach
                by the
                Executive of the provisions of this Agreement or other default of
                the
                Executive.

            

    

    

    
      	 	
              12.2

            	
              The
                Executive acknowledges that all books, notes, memoranda, records,
                lists of
                customers and suppliers and employees, correspondence, documents,
                computer
                and other discs and tapes, data listings, codes, designs and drawings
                and
                other documents and material whatsoever (whether made or created
                by the
                Executive or otherwise) relating to the business of the Company or
                any
                Group Company (and any copies of the
                same):

            

    

    

    
      	 	
              12.2.1

            	
              shall
                be and remain the property of the Company or the relevant Group Company;
                and

            

    

    

    
      	 	
              12.2.2

            	
              shall
                be handed over by the Executive to the Company or to the relevant
                Group
                Company on demand and in any event on the termination of the Employment
                and the Executive shall certify that all such property has been handed
                over on request by the Board.

            

    

    

    13 INVENTIONS
      AND OTHER INTELLECTUAL PROPERTY

     

    
      	 	
              13.1

            	
              The
                parties foresee that the Executive may make inventions, create ideas,
                or
                create other intellectual property in the course of his duties and
                agree
                that in this respect the Executive has a special responsibility to
                further
                the interests of the Company. 

            

    

    

    
      	 	
              13.2

            	
              Any
                invention, improvement, idea, design, process, information, know
                how,
                copyright work, trade mark or trade name or get-up made, created
                or
                discovered by the Executive in the course of the Employment (whether
                capable of being patented or registered or not and whether or not
                made or
                discovered in the course of the Employment) in conjunction with or
                in any
                way affecting or relating to the business of the Company or of any
                Group
                Company or capable of being used or adapted for use in or in connection
                with such business ("Intellectual Property Rights") shall be disclosed
                immediately to

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    the
      Company and shall (subject to sections 39 to 43 Patents Act 1977) belong to,
      be
      assigned to (where applicable) and be the absolute property of the Company
      or
      such Group Company as the Company may direct.

    

    
      	 	
              13.3

            	
              If
                and whenever required so to do by the Company the Executive shall
                at the
                expense of the Company or such Group Company as the Company may
                direct:

            

    

    

    
      	 	
              13.3.1

            	
              apply
                or join with the Company or such Group Company in applying for letters
                patent or other protection or registration in the United Kingdom
                and in
                any other part of the world for any Intellectual Property Rights;
                and

            

    

    

    
      	 	
              13.3.2

            	
              execute
                all instruments and do all things necessary for vesting such letters
                patent or other protection or registration when obtained and all
                right,
                title and interest to and in them absolutely and as sole beneficial
                owner
                in the Company or such Group Company or in such other person as the
                Company may specify.

            

    

    

    
      	 	
              13.4

            	
              The
                Executive irrevocably and unconditionally waives all rights under
                Chapter
                IV of Part I of the Copyright Designs and Patents Act 1988 in connection
                with his authorship of any existing or future copyright work in the
                course
                of the Employment, in whatever part of the world such rights may
                be
                enforceable including, without
                limitation:

            

    

    

    
      	 	
              13.4.1

            	
              the
                right conferred by section 77 of that Act to be identified as the
                author
                of any such work; and

            

    

    

    
      	 	
              13.4.2

            	
              the
                right conferred by section 80 of that Act not to have any such work
                subjected to derogatory treatment.

            

    

    

    
      	 	
              13.5

            	
              The
                Executive irrevocably appoints the Company to be his Attorney in
                his name
                and on his behalf to execute any such instrument or do any such thing
                and
                generally to use his name for the purpose of giving to the Company
                the
                full benefits of this clause 13. A certificate in writing in favour
                of any
                third party signed by any director or by the Secretary of the Company
                that
                any instrument or act falls within the authority conferred by this
                Agreement shall be conclusive evidence that such is the
                case.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              13.6

            	
              Nothing
                in this clause 13 shall be construed as restricting the rights of
                the
                Executive or the Company under sections 39 to 43 of the Patents Act
                1977.
                

            

    

    

    14 TERMINATION

     

    
      	 	
              14.1

            	
              Notwithstanding
                any other provisions of this Agreement, in any of the following
                circumstances the Company may terminate the Employment immediately
                by
                serving written notice on the Executive to that effect. In such event
                the
                Executive shall not be entitled to any further payment from the Company
                except such sums as shall have accrued due at that time. The circumstances
                are if the Executive:

            

    

    

    
      	 	
              14.1.1

            	
              commits
                any serious breach of this Agreement or is guilty of any gross misconduct
                or any wilful neglect in the discharge of his duties
                ;

            

    

    

    
      	 	
              14.1.2

            	
              repeats
                or continues (after warning) any breach of this Agreement;
                

            

    

    

    
      	 	
              14.1.3

            	
              is
                guilty of any fraud, dishonesty or conduct tending to bring himself
                the
                Company or any Group Company into
                disrepute;

            

    

    

    
      	
            	14.1.4	
              is
                convicted of any criminal offence (other than minor offences under
                the
                Road Traffic Acts or the Road Safety Acts for which a fine or
                non-custodial penalty is imposed) which might reasonably be thought
                to
                affect adversely the performance of his duties;  

            

    

     

    
      	 	
              14.1.5

            	
              refuses
                (without reasonable cause) to accept the novation by the Company
                of this
                Agreement, or an offer of employment on terms no less favourable
                to him
                than the terms of this Agreement, by any company which, as a result
                of a
                reorganisation, amalgamation or reconstruction of the Company, acquires
                or
                agrees to acquire not less than 90 per cent of the issued equity
                share
                capital of the Company (as defined by section 744 of the Companies
                Act
                1985); 

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              14.1.6

            	
              is
                disqualified from holding any office to which he may be appointed
                in the
                Company or in any other company by reason of any order made under
                the
                Company Directors Disqualification Act 1986 or any other
                enactment;

            

    

    

    
      	 	
              14.1.7

            	
              is
                appointed at any time as a director of the Company and subsequently
                resigns as or otherwise ceases to be or becomes prohibited by law
                from
                being a director of the Company, otherwise than at the Company’s
                request.

            

    

     

    Any
      delay
      by the Company in exercising such right of termination shall not constitute
      a
      waiver of it.

    

    
      	 	
              14.2

            	
              If
                the Company believes that it may be entitled to terminate the Employment
                pursuant to clause 14 it shall be entitled (but without prejudice
                to its
                right subsequently to terminate the Employment on the same or any
                other
                ground) to suspend the Executive either on full pay or without payment
                of
                the Salary or other benefits for so long as it may think
                fit.

            

    

    

    
      	 	
              14.3

            	
              On
                the termination of the Employment or upon either the Company or the
                Executive having served notice of such termination, the Executive
                shall:

            

    

    

    
      	 	
              14.3.1

            	
              at
                the request of the Company resign from any office he may hold as
                a
                director of the Company and all offices held by him in any Group
                Company
                and shall transfer without payment to the Company or as the Company
                may
                direct any qualifying shares, held by him directly or as nominee,
                provided
                by it, provided however that such resignation shall be without prejudice
                to any claims which the Executive may have against the Company or
                any
                Group Company arising out of the termination of the Employment;
                and

            

    

    

    
      	 	
              14.3.2

            	
              immediately
                deliver to the Company all materials within the scope of clause 12.2
                and
                all keys credit cards motor-cars and other property of or relating
                to the
                business of the Company or of any Group Company which may be in his
                possession or under his power or control, and the Executive
                irrevocably

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    authorises
      the Company to appoint any person in his name and on his behalf to sign any
      documents and do any things necessary or requisite to give effect to his
      obligations under this clause 14.3.

    

    15 RESTRICTIVE
      COVENANTS

     

    
      	
            	
              15.1

            	
              The
                Executive will not for the period of 6 months immediately
                after the termination of the Employment whether as principal or agent,
                and
                whether alone or jointly with, or as a director, manager, partner,
                shareholder, employee or consultant of any other person, directly
                or
                indirectly:

            

    

    

    
      	 	
              (a)

            	
              carry
                on, or be engaged, concerned or interested in any business within
                the
                field of biomedical application of porous or polycrystalline silicon
                technology at the termination of the Employment and with which the
                Executive was involved in a senior capacity at any time during the
                period
                of 12 months immediately
                preceding the termination of the Employment;

            

    

    

    
      	 	
              (b)

            	
              interfere
                with, tender for, canvass, solicit or endeavour to entice away from
                the
                Company, the business of any person, within the field of biomedical
                application of porous or polycrystalline silicon technology, who
                at the
                date of termination of the Employment or during the period of 12
                months immediately
                preceding that date (or if earlier, prior to the date on which the
                Executive last carried out duties assigned to him by the Company)
                was, to
                his knowledge, a customer, client or agent of or supplier to or who
                had
                dealings with the Company or with any Group Company and with whom
                he had
                personal dealings in the normal course of his employment at that
                date or
                during that period;

            

    

    

    
      	 	
              (c)

            	
              manufacture,
                supply, carry out or undertake any product or provide any service
                within
                the field of biomedical application of porous or polycrystalline
                silicon
                technology to which he was concerned to a material extent during
                the
                period of 12 months immediately
                preceding the termination of the Employment to or for any person
                who, at
                the date of termination of the Employment or during the period of
                12
                months immediately
                preceding that date (or, if earlier, prior to the date on which the
                Executive

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    last
      carried out duties assigned to him by the Company) was a customer, client or
      agent of or supplier to or was in the habit of dealing with the Company or
      any
      other Group Company and with whom he had personal dealings in the normal course
      of his employment during that period of 12 months;

    

    
      	 	
              (d)

            	
              be
                employed by, or enter into partnership with, interfere with, solicit
                or
                endeavour to entice away the employment of, employ or attempt to
                employ or
                negotiate or arrange the employment or engagement by any other person,
                of
                any person who to his knowledge was, at the date of the termination
                of the
                Employment, or within a period of 12 months immediately
                preceding that date had been, part of the senior management or a
                senior
                scientific officer of the Company or of any Group Company and with
                whom he
                had personal dealings during that
                period;

            

    

    

    
      	 	
              (e)

            	
              solicit,
                interfere with, tender for or endeavour to entice away from the Company
                or
                from any Group Company any contract, project or business, or the
                renewal
                of any of them, carried on by the Company which is currently in progress
                at the date of the termination of the Employment or which was in
                the
                process of negotiation at that date and in respect of which the Executive
                had contact with any customer, client or agent of or supplier to
                the
                Company or any Group Company at any time during the period of 12
                months
                immediately preceding the date of termination of the
                Employment.

            

    

     

    
      	
            	
              15.2

            	
              Nothing
                in clause 15.1 shall preclude the Executive from holding such investments
                as set out in clause 11.2.1 or continuing to undertake acts in respect
                of
                which he received prior written consent of the Board during the Employment
                in accordance with clause 11.2.2

            

    

    

    
      	
            	
              15.3

            	
              At
                no time after the termination of the Employment shall the Executive
                directly or indirectly represent himself as being interested in or
                employed by or in any way connected with the Company or any Group
                Company,
                other than as a former employee of the Company. The Executive also
                undertakes not to make any disparaging comments about the Company
                and the
                Company likewise undertakes not to make any disparaging comments
                about the
                Executive.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
            	15.4	
              The
                Executive agrees that, having regard to all the circumstances, the
                restrictions contained in this clause are reasonable and necessary
                for the
                protection of the Company or of any Group Company and that they do
                not
                bear harshly upon him and the parties agree
                that:

            

    

    

    
      	 	
              (a)

            	
              each
                restriction shall be read and construed independently of the other
                restrictions so that if one or more are found to be void or unenforceable
                as an unreasonable restraint of trade or for any other reason the
                remaining restrictions shall not be affected;
                and

            

    

    

    
      	 	
              (b)

            	
              if
                any restriction is found to be void but would be valid and enforceable
                if
                some part of it were deleted, that restriction shall apply with such
                deletion as may be necessary to make it valid and
                enforceable.

            

    

    

    16 DISCIPLINARY
      AND GRIEVANCE PROCEDURES

     

    
      	 	
              16.1

            	
              If
                the Executive wishes to obtain redress of any grievance relating
                to the
                Employment, he shall apply in writing to the Chairman of the Board,
                setting out the nature and details of any such grievance or
                dissatisfaction. The decision of the Chairman of the Board shall
                be
                final.

            

    

    

    
      	 	
              16.2

            	
              The
                provisions of clause 16.1 shall not apply to any action taken by
                the
                Company under clause 14 or clause
                3.4.

            

    

    

    
      	 	
              16.3

            	
              The
                Executive shall be subject to the Company’s Disciplinary Procedure from
                time to time in force. A copy of the current procedure is available
                from
                the Company.

            

    

     

    17 NOTICES

     

    
      	 	
              17.1

            	
              Any
                notice or other document to be given under this Agreement shall be
                in
                writing and may be given personally to the Executive or to the Secretary
                of the Company (as the case may be) or may be sent by first class
                post or
                other fast postal service or by facsimile transmission to, in the
                case of
                the Company, its registered office for the time being and in the
                case of
                the Executive either to his address shown on the face of this Agreement
                or
                to his last known place of
                residence.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              17.2

            	
              Any
                such notice shall (unless the contrary is proved) be deemed served
                when in
                the ordinary course of the means of transmission it would first be
                received by the addressee in normal business hours. In proving such
                service it shall be sufficient to prove, where appropriate, that
                the
                notice was addressed properly and posted, or that the facsimile
                transmission was despatched.

            

    

    

    18 FORMER
      CONTRACTS OF EMPLOYMENT

     

    
      	 	
              18.1

            	
              This
                Agreement shall be in substitution for any previous contracts, whether
                by
                way of letters of appointment, agreements or arrangements, whether
                written, oral or implied, relating to the employment of the Executive,
                which shall be deemed to have been terminated by mutual consent as
                from
                the date of this Agreement and the Executive acknowledges that he
                has no
                outstanding claims of any kind against the Company or any Group Company
                in
                respect of any such contract. 

            

    

    

    19 CHOICE
      OF LAW AND SUBMISSION TO JURISDICTION

     

    
      	 	
              19.1

            	
              This
                Agreement shall be governed by and interpreted in accordance with
                English
                law.

            

    

    

    
      	 	
              19.2

            	
              The
                parties submit to the exclusive jurisdiction of the English courts
                but
                this Agreement may be enforced by the Company in any court of competent
                jurisdiction.

            

    

    

    20 GENERAL

     

    
      	 	
              20.1

            	
              The
                Executive acknowledges that the provisions of clauses 11, 12, 13
                and 15
                constitute separate undertakings given for the benefit of each Group
                Company and may be enforced by any of them.

            

    

    

    
      	 	
              20.2

            	
              The
                expiration or termination of this Agreement shall not prejudice any
                claim
                which either party may have against the other in respect of any
                pre-existing breach of or contravention of or non-compliance with
                any
                provision of this Agreement nor shall it prejudice the coming into
                force
                or the continuance in force of any provision of this Agreement which
                is
                expressly or by implication intended to or has the effect of coming
                into
                or continuing in force on or after such expiration or
                termination.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              20.3

            	
              This
                Agreement incorporates the written statement of the terms of employment
                of
                the Executive provided in compliance with Part I of the
                ERA.

            

    

    

    

    

    Signed
      as
      a deed and delivered by the      )

    Company
      acting [by a director and its      
)

    Secretary]
      [by two directors]             
       )

    

    

    Director.../s/
      Roger Brimblecombe.........

    

    Secretary
      or Director........................

    

    /s/
      Mark
      Parry-Billings

    October
      26, 2004

    

    Signed
      as
      a deed and delivered by the      )

    Executive
      in the presence of:-                     )

    

    Witness
      N.C. Bassett

    

    Signature....../s/
      N.C. Bassett..................

    

    Name......Nigel
      Cameron Bassett...............

    

    Address...56
      Tunnel Wood Road...............

    

    ...Watford,
      Herts, WO17 4GE..................

    

    ...............................................................

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