Document:

AMENDMENT
      TO DEBT REDUCTION AGREEMENT

    

    This
      Amendment (this “Amendment”)
      is
      made and entered into as of February 20, 2007 by and among China Precision
      Steel, Inc., a Colorado corporation (the “Company”), Partner Success Holdings
      Limited, a British Virgin Islands Business Company (“PSHL”), and Mr. Wo Hing Li,
      a Hong Kong national (“Li”), on the basis of the terms and conditions set forth
      herein. Capitalized terms not otherwise defined herein have the meaning set
      forth in the Debt Reduction Agreement, dated as of February 13, 2007 (the
“Agreement”), among the Company, PSHL and Li.

     

    WHEREAS,
      the
      parties entered into that certain Debt Reduction Agreement on February 13,
      2007
      (the “Agreement”); and

     

    WHEREAS,
      the
      parties consider it appropriate to make certain amendments to the Agreement
      as
      set forth below; 

     

    NOW,
      THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION,
      the
      receipt of which is hereby acknowledged, the parties agree as
      follows:

     

    
      	
              1.

            	
              Amendment.
                

            

    

     

    
      	 	
              1.1

            	
              Effective
                as of the date hereof, section 2 of the Agreement is amended in its
                entirety to read as follows:

            

    

     

    The
      Conversion Amount shall be converted (the “Conversion”) by the Company into such
      number of shares (the “Shares”) of Common Stock, to be issued to Li or his
      designees, as shall be determined pursuant to a price per share equal to that
      of
      the Common Stock sold in a Placement (the “Purchase Price”), such Conversion to
      be effected upon Company shareholder approval (the “Closing”); provided,
      however, that no Conversion shall be required to be effected hereunder if the
      aggregate amount of gross proceeds payable at Closing to the Company is less
      than $19,000,000; provided further that no such shareholder approval shall
      be
      required if Mr. Li, in his sole discretion, effects such Conversion at the
      closing bid price of the Common Stock on The NASDAQ Capital Market as determined
      on the business day prior to such Conversion.

     

    
      	 	
              1.2

            	
              Effective
                as of the date hereof, section 5 (iii) of the Agreement is amended
                in its
                entirety to read as follows:

            

    

     

    The
      Tuorong Consideration, after deduction therefrom for the amount of the Dividend
      Rescission, shall be converted (the “Second Conversion”) into such number of
      shares of Common Stock, to be issued to Li or his designees, at a price per
      share that is the greater of (i) the Purchase Price, as defined in paragraph
      2
      above, and (ii) the closing bid price of the Common Stock as reported on The
      NASDAQ Capital Market as determined on the business day prior to such Second
      Conversion.

     

    
      	 	
              1.3

            	
              In
                all other respects, the Agreement is hereby confirmed in its
                entirety.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              2.

            	
              Representations
                and Warranties.
                Each of Company, PSHL, and LI represents and warrants to each other
                as
                follows:

            

    

     

    
      	 	
              2.1

            	
              Corporate
                Authority and Power.
                It has all requisite power and authority to enter into this
                Amendment.

            

    

     

    
      	 	
              2.2

            	
              Authorization
                of Agreements.
                The execution and delivery of this Amendment and the performance
                of the
                Agreement have been duly authorized by all necessary
                action.

            

    

     

    
      	
              3.

            	
              Governing
                Law.
                This Amendment shall be governed by and construed in accordance with
                the
                laws of the State of New York, without regard to conflict of laws
                principles.

            

    

     

    
      	
              4.

            	
              General.
                Except as expressly set forth herein, the Agreement remains unmodified.
                The Agreement (as amended from time to time) is confirmed as being
                in full
                force and effect. This Amendment and the Agreement referred to herein
                or
                therein constitute and supersede all prior and current understanding
                and
                agreements, whether written or oral, with respect to such subject
                matter.
                This Amendment may be executed in any number of counterparts, which
                together shall constitute one instrument, and shall bind and inure
                to the
                benefit of the parties and their respective successor and
                assigns.

            

    

     

    [The
      rest
      of this page is intentionally left blank.]

     

    
      
        
        

      

      
        2

        
          

        

      

       

    

     

    CONFORMED
      COPY

    IN
      WITNESS THEREOF, THIS AGREEMENT is
      duly
      executed as of the date set forth above.

     

    
      	CHINA PRECISION STEEL,
              INC.	 	 	WO HING
              LI 
	 	 	 	 
	 	 	 	 
	By
              : 
              /s/ Leada Tak Tai Li	 	 	/s/ Wo
              Hing
              Li
	
              
                

              
Name:
              Leada Tak Tai Li	 	 	
              
Wo
              Hing Li
	Title:
              Chief Financial Officer	 	 	 

    

     

    
      	PARTNER SUCCESS HOLDINGS
              LIMITED	 	 	 
	 	 	 	 
	 	 	 	 
	By: 
              /s/ Shu Keung Leung	 	 	 
	
              
                

              
Name: Shu Keung Leung	 	 	
            
	Title:
              Director- 1 -
                                                                    EXHIBIT 10.1

                  EMPLOYMENT  AGREEMENT made as of the 1st day of January,  2007
by and  between  ARROW  ELECTRONICS,  INC.,  a New  York  corporation  with  its
principal office at 50 Marcus Drive,  Melville,  New York 11747 (the "Company"),
and M.  CATHERINE  MORRIS,  residing at 9502 East Maplewood  Circle,  Englewood,
Colorado 80111 (the "Executive").

                  WHEREAS, the Company desires to employ the Executive,  and the
Executive  desires to be employed by the Company,  as a Senior Vice President of
the Company and Co-President,  Arrow Enterprise  Computing Solutions ("ECS") and
member of the ECS Office of the President,  with the responsibilities and duties
of an executive officer of the Company; and

                  WHEREAS, the Company and the Executive wish to provide for the
employment  of the Executive as an employee of the Company and for her to render
services  to the Company on the terms set forth in, and in  accordance  with the
provisions of, this Employment  Agreement (the  "Agreement"),  which  Employment
Agreement  shall   supersede  and  replace  any  agreement   pertaining  to  the
Executive's  employment by the Company,  written or oral,  entered into prior to
the date hereof;

                  NOW,  THEREFORE, in consideration  of the mutual covenants and
agreements  herein  contained,  the parties agree as follows:

1.       EMPLOYMENT AND DUTIES.

                  (a)  EMPLOYMENT.  The Company hereby employs the Executive for
the  Employment  Period  defined in  Paragraph 3, to perform such duties for the
Company and its  subsidiaries  and affiliates and to hold such offices as may be
specified from time to time by the Company's Board of Directors,  subject to the
following  provisions  of this  Agreement.  The  Executive  hereby  accepts such
employment.

                  (b) DUTIES AND  RESPONSIBILITIES.  It is contemplated that the
Executive will be a Senior Vice President of the Company and Co-President, Arrow
Enterprise Computing Solutions,  but the Board of Directors shall have the right
to adjust the duties, responsibilities,  and title of the Executive as the Board
of  Directors  may from time to time deem to be in the  interests of the Company
(provided,  however,  that during the Employment Period,  without the consent of
the Executive,  she shall not be assigned any titles, duties or responsibilities
which, in the aggregate,  represent a material  diminution in, or are materially
inconsistent  with, her prior title,  duties, and  responsibilities  as a Senior
Vice  President  of the Company and  Co-President,  Arrow  Enterprise  Computing
Solutions).

                  If the  Board  of  Directors  does  not  either  continue  the
Executive  in  the  office  of a  Senior  Vice  President  of  the  Company  and
Co-President,  Arrow Enterprise  Computing  Solutions or elect her to some other
executive  office  satisfactory  to the Executive,  the Executive shall have the
right to  decline to give  further  service  to the  Company  and shall have the
rights and  obligations  which would accrue to her under Paragraph 6 if she were
discharged  without  cause.  If the Executive  decides to exercise such right to
decline to give further  service,  she shall within  forty-five  days after such
action or omission by the Board of Directors  give written notice to the Company
stating her objection and the action he thinks  necessary to correct it, and she
shall permit the Company to have a forty-five day period in which to correct its
action or  omission.  If the  Company  makes a  correction  satisfactory  to the
Executive, the Executive shall be obligated to continue to serve the Company. If
the  Company  does  not make  such a  correction,  the  Executive's  rights  and
obligations  under Paragraph 6 shall accrue at the expiration of such forty-five
day period.

                                      -1-
<PAGE>

                  (c) TIME DEVOTED TO DUTIES.  The Executive shall devote all of
her  normal  business  time and  efforts to the  business  of the  Company,  its
subsidiaries  and its affiliates,  the amount of such time to be sufficient,  in
the reasonable judgment of the Board of Directors,  to permit her diligently and
faithfully to serve and endeavor to further  their  interests to the best of her
ability.

2.       COMPENSATION.

                  (a) MONETARY REMUNERATION AND BENEFITS.  During the Employment
Period,  the Company shall pay to the Executive for all services rendered by her
in any capacity:

                           (i) a  minimum  base  salary  of  $400,000  per  year
(payable in accordance with the Company's then prevailing
practices,  but in no event less frequently than in equal monthly installments),
subject  to  increase  if the  Board of  Directors  of the  Company  in its sole
discretion  so  determines;  provided  that,  should  the  Company  institute  a
Company-wide  pay  cut/furlough  program,  such salary may be decreased by up to
15%, but only for as long as said Company-wide program is in effect;

                           (ii) such additional compensation by way of salary or
bonus or fringe benefits as  the Board of  Directors of the  Company in its sole
discretion shall authorize or agree to pay, payable on such terms and conditions
as it shall determine; and

                           (iii)such  employee  benefits that are made available
by the Company to its other executives generally.

                  (b) ANNUAL INCENTIVE PAYMENT.  The Executive shall participate
in the Company's Management Incentive Plan (or such alternative,  successor,  or
replacement  plan  or  program  in  which  the  Company's   principal  operating
executives,  other than the Chief Executive Officer,  generally participate) and
shall have a targeted  incentive  thereunder of not less than $240,000 per year;
provided,  however,  that the Executive's  actual incentive payment for any year
shall be measured by the Company's  performance  against goals  established  for
that year and that such  performance  may produce an incentive  payment  ranging
from none to 200% of the targeted amount. The Executive's  incentive payment for
any  year  will  be  appropriately  pro-rated  to  reflect  a  partial  year  of
employment.

                  (c)  SUPPLEMENTAL  EXECUTIVE  RETIREMENT  PLAN.  The Executive
shall participate in the Company's Unfunded Pension Plan for Selected Executives
(the "SERP").

                                      -2-
<PAGE>

                  (d)  AUTOMOBILE.  While the Executive is actively  working for
the Company,  the Company will pay the Executive a monthly automobile  allowance
of $850.

                  (e) EXPENSES. During the Employment Period, the Company agrees
to reimburse the Executive,  upon the submission of  appropriate  vouchers,  for
out-of-pocket  expenses  (including,  without  limitation,  expenses for travel,
lodging and entertainment) incurred by the Executive in the course of her duties
hereunder.

                  (f) OFFICE AND STAFF.  The Company will provide the  Executive
with an  office,  secretary  and  such  other  facilities  as may be  reasonably
required for the proper discharge of her duties hereunder.

                  (g) INDEMNIFICATION.  The Company agrees to indemnify,  defend
and hold harmless the Executive for any and all  liabilities to which she may be
subject as a result of her employment  hereunder (and as a result of her service
as an officer or director of the Company, or as an officer or director of any of
its  subsidiaries  or  affiliates),  as well as the  costs of any  legal  action
brought or threatened against her as a result of such employment, to the fullest
extent  permitted by law. The foregoing  indemnity shall survive the termination
of this Agreement.

                  (h)   PARTICIPATION  IN  PLANS.   Notwithstanding   any  other
provision of this  Agreement,  the Executive shall have the right to participate
in any and all of the plans or  programs  made  available  by the Company (or it
subsidiaries,  divisions or  affiliates)  to, or for the benefit of,  executives
(including  the annual  stock  option and  restricted  stock grant  programs) or
employees in general, on a basis consistent with other senior executives.

3.       THE EMPLOYMENT PERIOD.

                  The "Employment Period," as used in the Agreement,  shall mean
the period  beginning as of the date hereof and  terminating  on the last day of
the calendar month in which the first of the following occurs:

                       (a) the death of the Executive;

                       (b) the  disability  of the  Executive as  determined  in
accordance with Paragraph 4 hereof and subject to the provisions thereof;

                       (c) the termination of the Executive's  employment by the
Company for cause in accordance with Paragraph 5
hereof; or

                       (d) December 31, 2008;  provided,  however,  that, unless
sooner  terminated  as  otherwise  provided herein, the Employment  Period shall
automatically  be extended for one or more twelve (12) month periods  beyond the
then  scheduled  expiration  date thereof unless between the 18th and 12th month
preceding  such  scheduled  expiration  date either the Company or the Executive
gives the other written notice of its or her election not to have the Employment
Period so extended.

                                      -3-
<PAGE>

4.       DISABILITY.

                  For purposes of this  Agreement,  the Executive will be deemed
"disabled"  upon the  earlier to occur of (i) her  becoming  disabled as defined
under the terms of the disability  benefit program  applicable to the Executive,
if any, and (ii) her absence from her duties  hereunder on a full-time basis for
one hundred eighty (180)  consecutive  days as a result of her incapacity due to
accident or physical or mental illness.  If the Executive  becomes  disabled (as
defined in the preceding sentence), the Employment Period shall terminate on the
last  day of the  month in which  such  disability  is  determined.  Until  such
termination of the Employment  Period,  the Company shall continue to pay to the
Executive  her  base  salary,  any  additional  compensation  authorized  by the
Company's Board of Directors,  and other  remuneration and benefits  provided in
accordance with Paragraph 2 hereof,  all without delay,  diminution or proration
of any kind whatsoever (except that her remuneration  hereunder shall be reduced
by the  amount of any  payments  she may  otherwise  receive  as a result of her
disability pursuant to a disability program provided by or through the Company),
and her medical  benefits and life insurance  shall remain in full force.  After
termination  of the  Employment  Period  as a result  of the  disability  of the
Executive,  the medical  benefits  covering the  Executive  and her family shall
remain in place (subject to the eligibility  requirements  and other  conditions
continued  in the  underlying  plan,  as  described  in the  Company's  employee
benefits manual,  and subject to the requirement that the Executive  continue to
pay the  "employee  portion"  of the cost  thereof),  and the  Executive's  life
insurance policy under the Management  Insurance Program shall be transferred to
her,  as provided in the related  agreement,  subject to the  obligation  of the
Executive to pay the premiums therefor.

                  In the event that,  notwithstanding  such a  determination  of
disability,  the  Executive  is  determined  not to be totally  and  permanently
disabled prior to the then scheduled  expiration of the Employment  Period,  the
Executive  shall be entitled  to resume  employment  with the Company  under the
terms of this Agreement for the then remaining balance of the Employment Period.

5.       TERMINATION FOR CAUSE.

                  In the event of any malfeasance,  willful  misconduct,  active
fraud or gross  negligence by the Executive in  connection  with her  employment
hereunder,  the Company shall have the right to terminate the Employment  Period
by giving the  Executive  notice in  writing  of the  reason  for such  proposed
termination.  If the  Executive  shall not have  corrected  such  conduct to the
satisfaction of the Company within thirty days after such notice, the Employment
Period shall  terminate and the Company shall have no further  obligation to the
Executive hereunder but the restriction on the Executive's  activities contained
in Paragraph 8 and the obligations of the Executive contained in Paragraphs 9(b)
and 9(c) shall continue in effect as provided therein.

6.       TERMINATION WITHOUT CAUSE.

                  In the event that the Company discharges the Executive without
cause  prior  to  the  expiration  of the  Employment  Period,  the  Executive's
post-discharge  compensation  and  benefits  will be as follows,  subject to the
Executive's execution of a release as set forth in Paragraph 7 below:

                                      -4-
<PAGE>

                       (a) The  Executive  will be  placed on  inactive  or "RA"
status beginning on the day following her last day of
active work and ending on the earliest of (i) the date the Employment Period was
scheduled to expire,  (ii) the day the Executive begins  employment for a person
or  entity  other  than the  Company,  or (iii) the day the  Executive  fails to
observe  any  provision  of this  Agreement,  including  her  obligations  under
Paragraphs  8 and 9 (the "RA  Period),  during  which  time she will be paid the
salary provided in  subparagraph  2(a) on the same schedule as if she still were
an active  employee  (less the  customary  deductions),  subject to any required
delay described in subparagraph (c) below;

                       (b)  The  Executive  will  be paid  an  amount  equal  to
two-thirds of the targeted incentive provided in Paragraph
2(b) for the year in which she ceases active  employment and for each succeeding
year (or, on a pro rata basis, portion of a year) during the RA Period,  payable
on March 31  following  the end of the year to  which  such  targeted  incentive
relates if the Executive is still on RA status on the scheduled payment date or,
in the case of the year during which RA status  terminates,  if the Executive is
still on RA status on the last day of the RA  Period,  subject  to any  required
delay described in subparagraph (c) below;

                       (c)  Notwithstanding  the provisions of subparagraphs (a)
and (b) above, if the Executive is a "specified
employee"  under  section 409A of the Internal  Revenue Code of 1986, as amended
("Code"), no payment of deferred compensation within the meaning of Code section
409A will be paid to the Executive on account of her  termination  of employment
for 6 months following the day she ceases active work, and any such payments due
during  such  6-month  period  will be held and paid on the first  business  day
following  completion of such 6-month period,  along with interest calculated at
the 6-month Treasury rate in effect at the beginning of the RA Period;

                       (d) Any  unvested  stock  options,  restricted  stock  or
performance shares held by the Executive on her last day
of active  work  that  would  have  vested by the  scheduled  expiration  of the
Employment  Period had the Executive not been  discharged  will vest on her last
day of active work  subject to the payment by the  Executive  of all  applicable
taxes.  Any vested  stock  option will remain  exercisable  after the  Executive
ceases active work in accordance with the terms of the applicable award relating
to  post-termination   exercise.  Any  stock  options,   performance  shares  or
restricted  stock not already vested on the Executive's  last day of active work
or vested  on such last day in  accordance  with this  subparagraph  (d) will be
forfeited on the Executive's last day of active work.

                       (e) The Executive's active participation in the Company's
401(k) Plan, ESOP and SERP will end on her last day of active work, and she will
earn no vesting service and no additional  benefits under those plans after that
date.  For purposes of receiving a distribution  of her vested  account  balance
under the 401(k) plan or ESOP,  the Executive will be considered to have severed
from service with the Company on her last day of active work.

                       (f) The  Executive  will  remain  covered by the  Company
medical  plan  during  the  RA Period  under  the  same terms  and conditions as
an active  employee.  At the end of the RA Period the Executive will be entitled
to  continuation  coverage  for herself and her  eligible  dependents  under the
plan's COBRA provisions at her own expense. The Executive's participation in all
other  welfare  benefit and fringe  benefit plans of the Company will end on the
day she ceases active work, subject to any conversion rights generally available
to former employees under the terms of such plans.

                                      -5-
<PAGE>

                  Any amounts  payable to the Executive  under this  Paragraph 6
shall be reduced by the amount of the Executive's earnings from other employment
(which the Executive shall have an affirmative duty to seek; provided,  however,
that the Executive  shall not be obligated to accept a new position which is not
reasonable comparable to her employment with the Company).

7.       RELEASE.

                  In  consideration  for the  payments and benefits set forth in
Paragraph 6, Executive  agrees to execute and return to the Company a release in
the following form:

                  "M. Cathy Morris (the "Executive") and Arrow Electronics, Inc.
and its  affiliates  ("Arrow")  each hereby  releases  the other and its agents,
directors  and  employees  from  and  against  any  and all  claims  (statutory,
contractual  or  otherwise)  arising out of the  Executive's  employment  or the
termination  thereof or any  discrimination in connection  therewith and for any
further additional payments of any kind or nature whatsoever except as expressly
set forth in the  employment  agreement  between the  Executive  and Arrow dated
January 1, 2007.  Without limiting the foregoing,  the Executive hereby releases
Arrow from any claim  under the Age  Discrimination  in  Employment  Act and any
other similar law.  Nothing  contained herein will be construed as impacting the
Executive's right to claim  unemployment  benefits on account of her termination
of  employment  with Arrow,  if any, or  preventing  the Executive or Arrow from
providing  information to or making a claim with any governmental  agency to the
extent permitted or required by law. This release will,  however,  constitute an
absolute  bar to  the  recovery  of  any  damages  or  additional  compensation,
consideration  or relief of any kind or nature  whatsoever  arising out of or in
connection with such claim."

                  The  executed  release  required  by  this  Paragraph  7  as a
condition for payment  under  Paragraph 6 shall be given to the Company no later
than 35 days following the Executive's last day of active work. The Company will
provide to the  Executive  an executed  release in the same form  promptly  upon
receipt  of the  release  signed by the  Executive.  If the  Executive  fails to
provide  the  executed  release by the  expiration  of such 35-day  period,  the
Executive  will  forfeit any payments or benefits  still due under  Paragraph 6,
including but not limited to any unexercised  stock options the vesting of which
was accelerated pursuant to the terms of Paragraph 6.

8.       NON-DISCLOSURE; NON-COMPETITION; TRADE SECRETS.

                  During  the  Employment  Period  and for a period of two years
after the termination of the Employment Period, the Executive will not, directly
or indirectly:

                       (a)  DISCLOSURE  OF  INFORMATION.  Use,  attempt  to use,
disclose or otherwise make known to any person or entity
(other than to the Board of  Directors of the Company or otherwise in the course
of the business of the Company, its subsidiaries or affiliates and except as may
be required by applicable law):

                                      -6-
<PAGE>

                           (i) any knowledge or information,  including, without
limitation, lists of customers or suppliers, trade
secrets, know-how, inventions,  discoveries,  processes and formulae, as well as
all data and records pertaining thereto,  which she may acquire in the course of
her  employment,  in any manner which may be  detrimental  to or cause injury or
loss to the Company, its subsidiaries or affiliates; or

                           (ii) any knowledge or  information  of a confidential
nature (including all unpublished matters) relating
to, without limitation, the business, properties, accounting, books and records,
trade secrets or memoranda of the Company, its subsidiaries or affiliates, which
she now knows or may come to know in any manner which may be  detrimental  to or
cause injury or loss to the Company, its subsidiaries or affiliates.

                       (b)  NON-COMPETITION.  Engage or become interested in the
United States, Canada or Mexico (whether as an
owner,  shareholder,  partner,  lender  or other  investor,  director,  officer,
employee,  consultant or otherwise) in the business of  distributing  electronic
parts,  components,   supplies  or  systems,  or  any  other  business  that  is
competitive  with the principal  business or businesses then (or, in the case of
the post-termination  covenant, as of the date of termination)  conducted by the
Company,  its  subsidiaries  or  affiliates  (provided,  however,  that  nothing
contained  herein shall prevent the Executive from acquiring or owning less than
1% of the issued and  outstanding  capital  stock or debentures of a corporation
whose  securities  are listed on the New York  Stock  Exchange,  American  Stock
Exchange,  or the National Association of Securities Dealers Automated Quotation
System,  if such  investment  is  otherwise  permitted  by the  Company's  Human
Resource and Conflict of Interest policies).

                       (c)   SOLICITATION.   Solicit  or   participate   in  the
solicitation of any business of any type conducted by the
Company,  its subsidiaries or affiliates,  during said term or thereafter,  from
any person,  firm or other entity which is or was at any during the preceding 12
months (or, in the case of the post-termination  covenant,  during the 12 months
preceding  the date of  termination)  a supplier  or  customer,  or  prospective
supplier or customer, of the Company, its subsidiaries or affiliates; or

                       (d) EMPLOYMENT.  Employ or retain, or arrange to have any
other person, firm or other entity employ or
retain,  or otherwise  participate in the employment or retention of, any person
who  was  an  employee  or  consultant  of  the  Company,  its  subsidiaries  or
affiliates,  at  any  time  during  the  period  of  twelve  consecutive  months
immediately preceding such employment or retention.

                  The Executive will promptly furnish in writing to the Company,
its  subsidiaries  or affiliates,  any information  reasonably  requested by the
Company (including any third party  confirmations)  with respect to any activity
or interest the Executive may have in any business.

                  Except as expressly herein provided,  nothing contained herein
is intended to prevent the Executive,  at any time after the  termination of the
Employment  Period,  from either (i) being gainfully employed or (ii) exercising
her skills and abilities  outside of such geographic  areas,  provided in either
case the provisions of this Agreement are complied with.

                                      -7-
<PAGE>

9.       PRESERVATION OF BUSINESS.

                  (a) GENERAL.  During the Employment Period, the Executive will
use her best efforts to advance the business  and  organization  of the Company,
its  subsidiaries  and  affiliates,  to  keep  available  to  the  Company,  its
subsidiaries and affiliates, the services of present and future employees and to
advance the business relations with its suppliers,  distributors,  customers and
others.

                  (b) PATENTS AND COPYRIGHTS, ETC. The Executive agrees, without
additional  compensation,  to  make  available  to  the  Company  all  knowledge
possessed by her relating to any methods, developments,  inventions,  processes,
discoveries and/or improvements  (whether patented,  patentable or unpatentable)
which  concern in any way the  business  of the  Company,  its  subsidiaries  or
affiliates,  whether  acquired by the Executive  before or during her employment
hereunder,  provided  that the  Executive  shall not disclose to the Company any
such knowledge  acquired by the Executive prior to her employment by the Company
and which is owned by a third party.

                  Any methods, developments,  inventions, processes, discoveries
and/or  improvements  (whether patented,  patentable or unpatentable)  which the
Executive  may  conceive  of or make,  related  directly  or  indirectly  to the
business or affairs of the Company, its subsidiaries or affiliates,  or any part
thereof,  during the Employment Period,  shall be and remain the property of the
Company.  The Executive  agrees  promptly to  communicate  and disclose all such
methods, developments, inventions, processes, discoveries and/or improvements to
the Company and to execute and deliver to it any instruments deemed necessary by
the Company to effect the disclosure and assignment thereof to it. The Executive
also  agrees,  on request and at the expense of the Company,  to execute  patent
applications and any other  instruments  deemed necessary by the Company for the
prosecution of such patent  applications or the acquisition of Letters Patent in
the United States or any other country and for the  assignment to the Company of
any  patents  which may be issued.  The  Company  shall  indemnify  and hold the
Executive  harmless  from any and all costs,  expenses,  liabilities  or damages
sustained by the Executive by reason of having made such patent  applications or
being granted such patents.

                  Any  writings  or other  materials  written or produced by the
Executive or under her supervision  (whether alone or with others and whether or
not during  regular  business  hours),  during the  Employment  Period which are
related,  directly or indirectly, to the business or affairs of the Company, its
subsidiaries  or  affiliates,  or are  capable  of being used  therein,  and the
copyright  thereof,  common  law  or  statutory,   including  all  renewals  and
extensions,  shall be and remain the  property  of the  Company.  The  Executive
agrees  promptly to  communicate  and disclose all such writings or materials to
the Company and to execute and deliver to it any instruments deemed necessary by
the Company to effect the disclosure and assignment thereof to it. The Executive
further  agrees,  on request and at the expense of the Company,  to take any and
all  action  deemed  necessary  by the  Company  to obtain  copyrights  or other
protections  for such  writings or other  materials or to protect the  Company's
right, title and interest therein. The Company shall indemnify,  defend and hold
the Executive harmless from any and all costs, expenses,  liabilities or damages
sustained by the  Executive  by reason of the  Executive's  compliance  with the
Company's request.

                  (c)  RETURN  OF  DOCUMENTS.   Upon  the   termination  of  the
Employment  Period,   including  any  termination  of  employment  described  in
Paragraph 6, the  Executive  will  promptly  return to the Company all copies of
information  protected by Paragraph 9(a) hereof or pertaining to matters covered
by subparagraph (b) of this Paragraph 9 which are in her possession,  custody or
control, whether prepared by her or others.

                                      -8-
<PAGE>

10.      SEPARABILITY.

                  The Executive agrees that the provisions of Paragraphs 8 and 9
hereof  constitute  independent and separable  covenants which shall survive the
termination  of the  Employment  Period and which  shall be  enforceable  by the
Company  notwithstanding any rights or remedies the Executive may have under any
other provisions  hereof.  The Company agrees that the provisions of Paragraph 6
hereof  constitute  independent and separable  covenants which shall survive the
termination  of the  Employment  Period and which  shall be  enforceable  by the
Executive  notwithstanding any rights or remedies the Company may have under any
other provisions hereof.

11.      SPECIFIC PERFORMANCE.

                  The  Executive  acknowledges  that  (i)  the  services  to  be
rendered  under the  provisions  of this  Agreement and the  obligations  of the
Executive assumed herein are of a special,  unique and extraordinary  character;
(ii)  it  would  be  difficult  or  impossible  to  replace  such  services  and
obligations;  (iii)  the  Company,  its  subsidiaries  and  affiliates  will  be
irreparably damaged if the provisions hereof are not specifically  enforced; and
(iv) the award of monetary damages will not adequately protect the Company,  its
subsidiaries  and  affiliates in the event of a breach hereof by the  Executive.
The Company  acknowledges that (i) the Executive will be irreparably  damaged if
the provisions of Paragraphs 6 hereof are not specifically enforced and (ii) the
award of monetary damages will not adequately protect the Executive in the event
of a breach thereof by the Company. By virtue thereof,  the Executive agrees and
consents that if she violates any of the provisions of this  Agreement,  and the
Company  agrees  and  consents  that if it  violates  any of the  provisions  of
Paragraphs  6 hereof,  the other  party,  in  addition  to any other  rights and
remedies available under this Agreement or otherwise, shall (without any bond or
other  security  being  required and without the  necessity of proving  monetary
damages) be entitled to a temporary and/or permanent  injunction to be issued by
a  court  of  competent  jurisdiction   restraining  the  breaching  party  from
committing  or  continuing  any  violation  of  this  Agreement,  or  any  other
appropriate decree of specific performance. Such remedies shall not be exclusive
and shall be in addition to any other remedy which any of them may have.

12.      MISCELLANEOUS.

                       (a)   ENTIRE   AGREEMENT;   AMENDMENT.   This   Agreement
constitutes the whole employment agreement between the
parties  and may not be  modified,  amended  or  terminated  except by a written
instrument  executed  by the  parties  hereto.  It is  specifically  agreed  and
understood,  however, that the provisions of that certain letter agreement dated
as of September 1, 2006 granting to the Executive extended  separation  benefits
in the event of a change in control of the Company  shall  survive and shall not
be affected hereby.  All other agreements  between the parties pertaining to the
employment or remuneration of the Executive not specifically contemplated hereby
or incorporated or merged herein are terminated and shall be of no further force
or effect.

                                      -9-
<PAGE>

                       (b) ASSIGNMENT. Except as stated below, this Agreement is
not assignable by the Company without the written consent  of  the Executive, or
by the Executive  without the written consent of the Company,  and any purported
assignment by either party of such party's rights and/or  obligations under this
Agreement shall be null and void; provided,  however, that,  notwithstanding the
foregoing,   the  Company  may  merge  or  consolidate   with  or  into  another
corporation,  or  sell  all  or  substantially  all  of its  assets  to  another
corporation  or business  entity or otherwise  reorganize  itself,  provided the
surviving corporation or entity, if not the Company, shall assume this Agreement
and become obligated to perform all of the terms and conditions hereof, in which
event  the  Executive's  obligations  shall  continue  in  favor  of such  other
corporation or entity.

                       (c)  WAIVERS,  ETC.  No waiver of any  breach or  default
hereunder shall be considered valid unless in writing,
and no such waiver shall be deemed a waiver of any subsequent  breach or default
of the same or similar  nature.  The  failure of any party to insist upon strict
adherence to any term of this  Agreement on any occasion shall not operate or be
construed as a waiver of the right to insist upon strict  adherence to that term
or any other term of this Agreement on that or any other occasion.

                       (d) PROVISIONS  OVERLY BROAD.  In the event that any term
or   provision  of this  Agreement shall be  deemed  by a  court   of  competent
jurisdiction to be overly broad in scope, duration or area of applicability, the
court  considering  the same shall have the power and hereby is  authorized  and
directed to modify such term or provision to limit such scope, duration or area,
or all of them,  so that such term or provision is no longer overly broad and to
enforce the same as so limited.  Subject to the foregoing sentence, in the event
any provision of this Agreement shall be held to be invalid or unenforceable for
any  reason,  such  invalidity  or  unenforceability  shall  attach only to such
provision  and shall not  affect or render  invalid or  unenforceable  any other
provision of this Agreement.

                       (e) NOTICES.  Any notice permitted or required  hereunder
shall  be  in  writing  and  shall  be deemed to have been  given on the date of
delivery or, if mailed by registered or certified mail, postage prepaid,  on the
date of mailing:

                           (i)      if to the Executive to:
                                    M. Catherine  Morris
                                    9502 East Maplewood Circle
                                    Englewood, Colorado 80111

                           (ii)     if to the Company to:
                                    Arrow Electronics, Inc.
                                    50 Marcus Drive
                                    Melville, New York 11747
                                    Attention:    Peter S. Brown
                                                  Senior Vice President and
                                                  General Counsel

Either  party may, by notice to the other,  change her or its address for notice
hereunder.

                                      -10-
<PAGE>

                       (f) NEW YORK LAW. This  Agreement  shall be construed and
governed in all respects by the internal laws of the State of New York,  without
giving effect to principles of conflicts of law.

                  IN WITNESS  WHEREOF,  the parties have executed this Agreement
as of the day and year first above written.

                                      ARROW ELECTRONICS, INC.

                                      By: /S/ PETER S. BROWN
                                      ----------------------
                                      Peter S. Brown
                                      Senior Vice President &
                                      General Counsel

                                      THE EXECUTIVE

                                      /S/ M. CATHERINE MORRIS
                                      -----------------------
                                      M. Catherine Morris

                                      -11-

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