Document:

EXHIBIT
      10.1

    

    SEPARATION
      AGREEMENT AND RELEASE 

    

    This
      Separation Agreement and Release (the “Agreement”), dated as of May 21, 2008
      (“Effective Date”), is entered into by and between Asian Financial, Inc.
      (“Company”) and William Edward Milewski (“Executive”). 

    

    RECITALS

    

    WHEREAS,
      Company
      and Executive entered into an employment agreement, entitled Chief Financial
      Officer Employment Agreement, dated as of March 1, 2008 under which Executive
      served as Chief Financial Officer of Company (the “Employment
      Agreement”);

    

    WHEREAS,
      Company
      and Executive entered into a Confidentiality and Invention Assignment Agreement
      dated as of March 1, 2008 for the protection of Company confidential information
      as defined therein (the “Confidentiality Agreement”); 

    

    WHEREAS,
      Company
      and Executive mutually desire to enter into an agreement to (a) acknowledge
      Executive’s resignation from his position with Company and (b) evidence certain
      understandings and covenants to be undertaken by each party in connection with
      Executive’s resignation; and

     

    WHEREAS,
      the
      parties have agreed to set forth in writing their mutual decision to enter
      into
      this Agreement.

    

    AGREEMENT

    

    NOW,
      THEREFORE,
      in
      consideration for the promises, compensation, waiver and release, and agreements
      hereinafter set forth, Company and Executive agree as follows:

    

    1. Resignation:
      Executive hereby acknowledges and confirms that Executive has tendered his
      resignation as an officer and employee of Company, effective as of the Effective
      Date, and subject to the terms and conditions of this Agreement, Company hereby
      acknowledges and accepts such resignation, it being understood that following
      the Effective Date, subject to Section 2 hereof, Executive shall no longer
      hold
      any office or position with Company. 

    

    (a) Payment
      of Final Wages:
      Company
      shall pay Executive an amount equal to all unpaid base salary to which Executive
      is entitled pursuant to Section 2.1 of the Employment Agreement, together with
      any accrued but unused vacation days (the “Final Wage Payment”). 

    

    (b) SEC
      Form 8-K: Executive
      acknowledges and agrees that Company may issue a Form 8-K announcing Executive’s
      resignation substantially in the form delivered to the Executive on the
      Effective Date.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c) Bonus:
      Company
      shall pay Executive a bonus equal to one month base salary of $14,000 (after
      taxes, deductions or other charges required to be withheld by law which shall
      be
      paid by Company on Executive’s behalf) on the Effective Date in recognition of
      the contributions made by Executive to Company during his term of employment
      with Company.

    

    2. Consulting
      Services:
      Company
      hereby engages Executive as an external consultant for the eight-month period
      commencing on the Effective Date and ending on January 21,
      2009
      (the “Term”). During the Term, Executive shall provide certain advisory services
      to Company as and when requested by Company (the “Services”).

    

    (a) Compensation:
      In
      consideration for the Services, Company
      shall pay Executive $3,500 (after taxes, deductions or other charges required
      to
      be withheld by law which shall be paid by Company on Executive’s behalf) on each
      monthly anniversary of the Effective Date, beginning in June 2008 until January
      2009 (the “Consulting Fees”). Payment of the Consulting Fees shall be effected
      by wire transfer to an account designated in writing by Executive or, if no
      such
      designation is provided, to the same account designated by Executive in respect
      of the Final Wage Payment. Executive acknowledges and agrees that the payments
      and rights referred to in this Section 2 do not constitute compensation for
      Executive’s time worked and services rendered prior to the Effective Date, but
      rather constitute consideration for the promises contained in this Agreement,
      and that such consideration is above and beyond any wages or salary or other
      sums to which Executive is entitled from Company under the terms of his
      employment with Company or under any other contract or law. 

    

    (b) Independent
      contractor status: Executive
      shall be an independent contractor within the meaning and requirement of
      applicable laws or customs during the Term. Under no circumstances shall
      Executive look to Company as his or her employer, or as a partner, agent or
      principal. Executive shall not be entitled to any benefits accorded to Company’s
      employees, including but not limited to worker’s compensation, disability
      insurance, vacation or paid time off. Executive shall be responsible for
      providing, at Executive’s sole expense, and in Executive’s name, all insurance
      required by law, including but not limited to disability, worker’s compensation
      or general liability insurance, as well as all licenses or permits usual or
      necessary for the performance of Executive’s services under this Agreement.

    

    Nothing
      in this Agreement shall authorize Executive to bind or contract on behalf of
      Company, to act as a person or agent upon which service of process may be made
      on behalf of Company, to accept service of process on behalf of Company, to
      create or establish a partnership, joint venture, or any agency relationship
      between Company and Executive, or to act as an employee or servant of Company.
      Company shall not be responsible in any way for any obligation or liability
      incurred or assumed by Executive. Executive shall at no time represent himself
      as an employee, partner or agent of Company.

    

    3. Fringe
      Benefits; Paid Leave:
      Executive’s participation in Company’s benefits plans shall cease as of the
      Effective Date, and Executive thereafter shall not be eligible to participate
      in
      any of Company’s benefit plans, including, but not limited to, any dental or
      medical insurance, long term care plans, retirement or 401(k) plans, vacation
      leave, sick leave, long term disability insurance, life insurance, or personal
      accident insurance. Nothing in this Section shall prevent Executive from
      participating in a COBRA continuation coverage program or any similar state
      medical and dental insurance continuation coverage program.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4. Return
      of Company Property: Executive
      agrees that, on or before the Effective Date, Executive shall return all
      property of Company, its direct and indirect parents, their respective
      subsidiaries, affiliates and any divisions thereof which is in his possession,
      including, but not limited to, documents, contracts, agreements, plans,
      photographs, books, notes, electronically stored data, and all copies of the
      foregoing as well as any automobile or other materials or equipment supplied
      by
      Company or its affiliates to Executive.

    

    5. Waiver
      and Release

    

    (a) Except
      for any rights granted under this Agreement, Executive, for himself and for
      his
      heirs, assigns, executors and administrators, hereby releases, remises and
      forever discharges Company, its parents, subsidiaries, affiliates, divisions,
      predecessors, successors, assigns, directors, officers, partners, attorneys,
      shareholders, administrators, employees, agents, representatives, employment
      benefit plans, plan administrators, fiduciaries, trustees, insurers and
      re-insurers, and all of their predecessors, successors and assigns,
      (collectively, the “Releasees”), of and from all claims, causes of action,
      covenants,
      contracts, agreements, promises, damages, disputes, demands, and all other
      manner
      of
      actions
      whatsoever, in law or in equity, that Executive ever had, may have had, now
      has
      or that his heirs, assigns, executors or administrators hereinafter can, shall
      or may have, whether known or unknown, asserted or unasserted, suspected or
      unsuspected, as a result of Executive’s employment, the termination of that
      employment, or any act or
      omission which
      has
      occurred at any time up to and including the date of the execution of this
      Agreement
      (the
“Released Claims”).

    

    The
      Released Claims include,
      without
being
      limited to,
      any and
      all claims, demands and causes of action under
      the
      following laws, all as amended—the
      Civil Rights Acts of 1866 and 1964,
      42
      U.S.C. Sections 1981 and 2000(e) et
      seq.;
      the
      Civil Rights Act of 1991; the Americans with Disabilities Act of 1990,
42
      U.S.C.
      Sections 12,101 et
      seq.;
      the
      Rehabilitation Act of 1973, 29
      U.S.C.
      Section 701 et
      seq.;
      the
      Employee Retirement Income Security Act, 29 U.S.C. Section 1001 et
      seq.;
      the Age
      Discrimination in Employment Act, 29 U.S.C. Section 621 et
      seq.;
      and
      any
      other
      federal, state or local
      statute,
      regulation,
      common
      law
      or
      decision
      concerning discrimination, pay, benefits, or any other aspect of employment
      or
      any other matter.
      The
      Released Claims do not include any rights that cannot by law be released by
      private agreement.

    

    Executive
      acknowledges that different or additional facts may be discovered in addition
      to
      what he now knows or believes to be true with respect to the matters herein
      released, and Executive agrees that this Agreement shall be and remain in effect
      in all respects as a complete and final release of the matters released,
      notwithstanding any such different or additional facts. Executive represents
      and
      warrants that he has not previously filed or joined in any claims
      that are released herein
      and that
      he has not given or sold any portion of any claims released herein to anyone
      else.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) Executive
      agrees that from and after the date of the receipt of this Agreement, he will
      not, directly or indirectly, provide to any person or entity any information
      that concerns or relates to the negotiation of or circumstances leading to
      the
      execution of this Agreement or to the terms and conditions hereof, except:
      (i)
      to the extent that such disclosure is specifically required by law or legal
      process or as authorized in writing by Company; (ii) to his tax advisors as
      may
      be necessary for the preparation of tax returns or other reports required by
      law; (iii) to his attorneys as may be necessary to secure advice concerning
      this
      Agreement; or (iv) to members of his immediate family. Executive agrees that
      prior to disclosing such information under parts (ii), (iii) or (iv) of this
      Section 5(b), he will inform the recipients that they are bound by the
      limitations of this Section. Executive further agrees that subsequent disclosure
      of such information by any such recipients shall be deemed to be a disclosure
      by
      Executive in breach of this Agreement.

    

    6. Release
      of ADEA Claims

    

    Executive
      agrees and understands that he is specifically releasing all claims under the
      Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. Sections
      621
et
      seq. Executive
      affirms that he has read the Agreement in its entirety and has had a full and
      fair opportunity to consider and understand its terms and to be advised by
      his
      counsel. Executive further acknowledges that he understands the Agreement and
      has, of his own free will, without coercion, agreed to the terms of the
      Agreement. Executive further understands that he has been advised herein in
      writing that: (i) he should consult with an attorney before signing the
      Agreement; (ii) that he has at least twenty-one (21) days to consider the
      Agreement; (iii) that if he signs this Agreement, he may revoke it within
      seven (7) days after he signs it; and (iv) that this Agreement shall not be
      enforceable until the seven (7) day revocation period has expired without the
      Agreement having been revoked as provided herein. Revocation shall be made
      by
      delivering a written notice of revocation to: 

    

    Fiona
      Feng

    Asian
      Financial, Inc.

    4/F,
      No.
      3 Jinyuan Road

    Daxing
      District Industrial Development Zone

    Beijing,
      People’s Republic of China

    Post
      Code: 102600

    

    For
      such
      revocation to be effective, notice must be received by the Company
      representative designated above no later than 8:00 a.m. on the eighth
      (8th)
      calendar day after the day on which Executive signs this Agreement. The parties
      expressly agree that, in the event that Executive revokes this Agreement, the
      Agreement shall be null and void and have no legal or binding effect whatsoever.
      The parties to this Agreement recognize that Executive may elect to sign this
      Agreement before the expiration of the twenty-one (21) day consideration period
      specified herein, and Executive agrees that if he elects to do so, he shall
      manifest such election by signing Attachment A to this Agreement.

     

    If
      Executive does not execute this Agreement within the twenty-one (21) day
      consideration period, the Agreement shall be deemed revoked and shall have
      no
      legal or binding force or effect.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    7. Legal
      Expenses: Company
      agrees to pay for all reasonable legal fees actually and directly incurred
      by
      Executive on behalf of Executive if, by reason of Executive’s Corporate Status,
      Executive is made a party to or participant in any legal proceeding against
      Company, provided that (a) Executive consents to the appointment and direction
      of legal counsel by Company for and on behalf of Executive in any such legal
      proceeding and (b) Executive shall reimburse Company for any such fees paid
      by
      Company on his behalf in any such legal proceedings resulting in liability
      to
      Executive as a direct result of Executive’s negligence or active or passive
      wrongdoing. For purposes hereof, the term “Corporate Status” means the status of
      Executive as Chief Financial Officer of Company.

    

    8. Entire
      Agreement, Amendment:
      Each of
      Company and Executive acknowledges that no promise, inducement or other
      agreement not expressly contained in this Agreement has been made conferring
      any
      benefit upon the other; that this Agreement contains the entire agreement
      between Executive and Company with respect to Executive’s employment and ending
      of employment with Company; and that, with the exception of the Confidentiality
      Agreement, all prior agreements, understandings, oral agreements and writings
      between Executive and Company are expressly superseded by this Agreement and
      are
      of no further force and effect. The Confidentiality Agreement, and Executives
      duties and obligations under that agreement, shall remain in full force and
      effect. This Agreement may not be altered, modified or amended except by written
      agreement signed by both parties hereto. 

    

    9. Non-disparagement: Executive
      agrees that he will not make to any person or entity any false, disparaging,
      or
      derogatory comments about Company, its business affairs, its employees, clients,
      contractors, affiliates, agents, or any of the other Releasees
      as defined in Section 5.
      If
      Executive is asked about Executive’s termination and/or resignation, Executive
      may only state that Executive voluntarily resigned from Company due to health
      reasons.

    

    10. Requests
      for References
      and Year-end Tax Information

     

    (a) References: Executive
      agrees that he shall direct all requests for references or other inquiries
      concerning Executive’s employment with Company to the attention of Fiona
      Feng, Assistant to the Chairman of Company, who
      shall
      respond to the request by providing only the starting and ending dates of
      Executive’s employment with Company, and the last position held by Executive.
      This Section 10(a) shall not apply to Company’s response to agency
      inquiries,
      governmental investigations,
      or
      court processes. 

    

    (b) Year-end
      Tax Information: For
      the
      sole purpose of Executive’s preparation of his 2008 and 2009 income tax returns
      to be filed with the United States Internal Revenue Service, at the reasonably
      request of Executive, Company shall, promptly after the 2008 and 2009 calendar
      year-ends, provide Executive with a wage and tax statement setting forth the
      aggregate income received by Executive from Company, including any taxes,
      deductions or other charges paid by Company on Executive’s behalf, pursuant to
      the Employment Agreement and this Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    11. Remedies:
      Executive
      acknowledges and agrees that if Executive breaches any obligation under this
      Agreement, Company will suffer immediate and irreparable harm and damage for
      which money alone cannot fully compensate Company. Executive therefore agrees
      that upon such breach or threatened breach of any obligation under this
      Agreement, Company shall be entitled to a temporary restraining order,
      preliminary injunction, permanent injunction or other injunctive relief
      compelling Executive to comply with any or all such provisions. This Section
      shall not be construed as an election of any remedy, or as a waiver of any
      right
      available to Company under this Agreement or the law, including the right to
      seek damages from Executive for a breach of any provision of this Agreement,
      nor
      shall this Section be construed to limit the rights or remedies available under
      applicable law for any violation of any provision of this
      Agreement.

     

    12. General:
      This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of Wyoming. The language of all parts of this Agreement shall in
      all
      cases be construed as a whole, according to the language’s fair meaning, and not
      strictly for or against any of the parties. This Agreement shall be binding
      upon
      and inure to the benefit of the parties and their respective representatives,
      successors and permitted assigns.
      Neither
      the waiver by either party of a breach of or default under any of the provisions
      of the Agreement, nor the failure of such party, on one or more occasions,
      to
      enforce any of the provisions of the Agreement or to exercise any right or
      privilege hereunder shall thereafter be construed as a waiver of any subsequent
      breach or default of a similar nature, or as a waiver of any provisions, rights
      or privileges hereunder.
      The
      parties agree to take or cause to be taken such further actions as may be
      necessary or as may be reasonably requested in order to fully effectuate the
      purposes, terms, and conditions of this Agreement. This Agreement and the rights
      and obligations of the parties hereunder may not be assigned by either party
      without the prior written consent of the other party. 
      In the
      event that any one or more of the provisions of this Agreement, or any part
      thereof, shall be held to be invalid, illegal or unenforceable, the validity,
      legality and enforceability of the remainder of this Agreement shall not in
      any
      way be affected or impaired thereby. This Agreement may be signed in one or
      more
      counterparts, each of which shall be deemed an original, and all of which
      together shall constitute one instrument.

    

    13. Voluntarily
      Entering Agreement: Executive
      acknowledges that Executive (a) have had a sufficient period to consider and
      review this Agreement before signing it; (b) have carefully read this Agreement;
      and (c) fully understand this Agreement and are entering into them
      voluntarily.

    

    14. Non-Admission
      of Liability: Company
      has entered into this Agreement and this General Release with Executive to
      effect a mutually acceptable resolution of each claim that is released in
      Section 5. Company does not believe or admit that it or any other Releasee
      has
      done anything wrong. Executive agrees that this Agreement is not admissible
      in
      any court or other forum for any purpose other than the enforcement of its
      terms.

    

    15. Advice
      of Counsel:
      Executive acknowledges that, in executing this Agreement, Executive has had
      the
      opportunity to seek the advice of independent legal counsel, and Executive
      has
      read and understands all of the terms and provisions of this Agreement. This
      Agreement shall not be construed against any party by reason of the drafting
      or
      preparation thereof.

    

    [Signature
      page follows]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    The
      parties have executive this Agreement on the respective dates set forth
      below:

    

    
      	
              May
                21, 2008

            	 	
                
                /s/ William Edward Milewski

            
	 	 	
              William
                Edward Milewski

            
	 	 	 
	
              May
                21, 2008

            	 	
              Asian
                Financial, Inc.

            
	 	 	 	 
	 	 	
                
                /s/ Wenhua Guo

            
	 	 	
              By:
                

            	
              Wenhua
                Guo

            
	 	 	
              Title:
                

            	
              Chief
                Executive Officer

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ATTACHMENT
      A

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ELECTION
      TO EXECUTE SEPARATION AGREEMENT AND RELEASE OF ALL

     

    CLAIMS
      PRIOR TO EXPIRATION OF 21-DAY CONSIDERATION PERIOD

    

    I,
      William Edward Milewski, understand that I have twenty-one (21) days within
      which to consider and execute the attached Separation Agreement and Release
      of
      All Claims. However, after having an opportunity to consult counsel, I have
      freely and voluntarily elected to execute the Separation Agreement and Release
      of All Claims before such twenty-one (21) day period has expired.

    

    
      	
              May
                21, 2008 

            	 	
              /s/
                William Edward Milewski

            
	
              Date

            	 	
              William
                Edward MilewskiUnassociated Document

    EXECUTIVE
      EMPLOYMENT AGREEMENT

    

    

    This
      EMPLOYMENT AGREEMENT (this “Agreement”)
      is
      made as of May
      ___, 2008
      (“Effective
      Date”)
      by and
      between INNOVATIVE CARD TECHNOLOGIES, INC., a Delaware corporation (the
“Company”),
      and
      Vincent M. Schiavo (“Executive”),
      with
      reference to the following facts:

    

    A.   Innovative
      Card Technologies, Inc., a Delaware corporation (the “Company”),
      is a
      public company that develops and markets secure powered cards for payment,
      identification, physical and logical access applications. 

    

    B.   The
      Company desires to employ the Executive, and the Executive desires to be
      employed by the Company. 

    

    NOW,
      THEREFORE, in consideration of the mutual covenants and promises contained
      herein, and other good and valuable consideration, the receipt and sufficiency
      of which are hereby acknowledged by the parties hereto, the parties agree as
      follows:

     

    1.   Employment.
      The
      Company hereby employs Executive and Executive hereby accepts such employment
      upon the terms and conditions hereinafter set forth. Irrespective of the date
      on
      which this Agreement is executed, Executive’s date of employment with the
      Company is May ____, 2008.

     

    2.   Duties.
      Subject
      to the terms and provisions of this Agreement, Executive is hereby employed
      by
      the Company as Senior Vice President Global Sales of the Company. Executive
      shall have full responsibility and authority for such duties as customarily
      are
      associated with service as Senior Vice President Global Sales of the Company
      at
      the direction of the Chief Executive Officer of the Company (the “CEO”).
      Executive shall faithfully and diligently perform such duties assigned to
      Executive and shall report directly to the CEO. 

     

    3.   Scope
      of Services.
      Executive shall devote substantially all of his business time, attention,
      energies, skills, learning and efforts to the Company’s business.

     

    4.   At
      Will Employment.
      Executive
      understands and acknowledges that his employment with Company is "AT WILL",
      meaning that either Executive or Company may terminate the employment
      relationship at
      any
      time with or without cause.
      Upon
      termination of the employment relationship by either Executive or Company,
      Company shall have no obligations to Executive other than those expressed in
      this Agreement or provided by law. Notwithstanding that certain time periods
      are
      expressed herein, such time periods are contingent upon Executive remaining
      employed by Company and are not intended by either party to create any express
      or implied term of employment, as Executive shall at all times be employed
      on an
“AT WILL” basis with no term of employment.

     

    
      
         

      

      
        
          1

          
            Employment
              Agreement - Vincent M. Schiavo

          

        

        
          

        

      

      
         

      

    

     

    5.   Compensation.

     

    5.1  Salary.
      Executive's annual compensation ("Base
      Compensation")
      under
      this Agreement shall be Two Hundred Fifty Thousand Dollars ($250,000) per year,
      prorated for any partial year, commencing upon the Effective Date.  The
      Base Compensation shall be payable in equal bi-monthly installments on the
      fifteenth and end of each month.  

     

    5.2  Bonus.
      Executive shall be eligible for a bonus targeted at one hundred percent (100%)
      of Executive’s Base Compensation. The CEO, in his sole discretion, shall create
      a performance plan that will permit Executive’s performance to be measured and
      his bonus, if any, calculated pursuant to the numerical performance of the
      Company. The performance plan shall include criteria based on sales of
      DisplayCards and Clamshells; revenue; and gross profit margin performance
      targets. Any bonus due to Executive shall be paid quarterly within forty five
      (45) days after the end of each calendar quarter and seventy five days (75)
      after the calendar year end, provided Employee is employed at the time of the
      bonus payment. Executive shall be given the opportunity to meet with the Board
      and Chief Executive Officer to discuss the evaluation and provide input. Payment
      of the bonus, if any, shall be subject to all appropriate federal and state
      income and employment taxes. 

     

    5.3  Expenses.
      The
      Company shall reimburse Executive for all reasonable business, entertainment
      and
      travel expenses actually incurred or paid by Executive in the performance of
      his
      services on behalf of the Company, in accordance with the Company’s expense
      reimbursement policy in effect from time to time 

     

    5.4  Options.
      The
      Executive shall be eligible to participate in the Company’s Stock Incentive
      Plan, and receive option grant(s) thereunder for the purchase of common stock
      of
      the Company (“Options”
or
      “Option”)
      at the
      discretion of the Board of Directors. The Executive shall receive an initial
      issuance of three hundred fifty thousand (350,000) Options to be issued and
      priced at the closing price of the effective date subject to formal approval
      of
      the option grants by the Company’s Board of Directors. Vesting of the Options
      granted to the Executive shall vest as follows: a) no options shall vest if
      Executive’s employment with Company terminates prior to one year after the
      Effective Date (the “Anniversary Date”); b) Eighty Seven Thousand Five Hundred
      (87,500) shares on the Anniversary Date; c) Fourteen Thousand Five Hundred
      Eighty Four (14,584) shares every sixty (60) days thereafter, with the exception
      of the last vesting period being Fourteen Thousand Five Hundred Seventy Two
      (14,572) shares, provided Executive is employed by Company on each said sixtieth
      (60th)
      day for
      the next eighteen periods. 

     

    5.5  Vacation.
      Executive shall be entitled to four (4) weeks paid vacation per year, to be
      taken at such times as may be approved by the Company’s CEO or its designee. The
      Executive shall be entitled to carry forward from year to year not more than
      one
      (1) week of unused vacation days (such limitation shall preclude Executive
      from
      having more than five (5) available weeks of vacation in any one year). All
      unused vacation days shall be determined annually and provided such days exceed
      one (1) week, Executive shall be paid for such excess unused days and may only
      carry forward one (1) week per year.

     

    
      
         

      

      
        2

          Employment
            Agreement - Vincent M. Schiavo

        

        
          

        

      

      
         

      

       

    

    5.6  Other
      Rights and Benefits.
      Executive and his dependents (identified as ________________) shall receive
      all
      medical, dental, vision, short/long term disability and drug prescription
      insurance through the Company’s group plan of insurance or reimbursement for
      private insurance, including any COBRA coverage available to Executive, or
      private insurance if such COBRA coverage ceases to be available, at Executive’s
      option. However,
      notwithstanding the foregoing, Company’s maximum reimbursement obligation to
      Executive shall be limited to One Thousand Five Hundred Dollars ($1,500) per
      month.

     

    6.   Taxation
      of Payments and Benefits.
      The
      Company shall undertake to make deductions, withholdings and tax reports with
      respect to payments and benefits under this Agreement to the extent that it
      reasonably and in good faith believes that it is required to make such
      deductions, withholdings and tax reports. Payments under this Agreement shall
      be
      in amounts net of any such deductions or withholdings. Nothing in this Agreement
      shall be construed to require the Company to make any payments to compensate
      the
      Executive for any adverse tax effect associated with any payments or benefits
      or
      for any deduction or withholding from any payment or benefit. 

     

    7.   Termination.
      Executive’s employment may be terminated as follows:

     

    7.1  Termination
      for Death.
      Executive’s employment shall terminate immediately upon Executive’s
      death.

     

    7.2  Termination
      Upon Disability.
      Executive’s employment shall terminate if Executive should become totally and
      permanently disabled. For purposes of this Agreement, Executive shall be
      considered “totally and permanently disabled” if Executive is treated as
      permanently “disabled” under any permanent disability insurance policy
      maintained by the Company and is entitled to full benefits payable under such
      policy upon a total and permanent disability. In the event any such policy
      is
      either not in force or the benefits are not available under such policy, then
      “total and permanent disability” shall mean the inability of Executive, as a
      result of substance abuse, any mental, nervous or psychiatric disorder, or
      physical condition, injury or illness to perform substantially all of his
      current duties on a full-time basis for a period of six (6) consecutive months,
      as determined by a licensed physician selected by the Board.

     

    7.3  Termination
      by Company for “Cause”.
      The
      Company may terminate this Agreement for “Cause” upon three (3) days written
      notice so long as the Company has given Executive written notice describing
      the
      Cause and Executive has not cured such Cause within a reasonable time, but
      not
      less than twenty (20) days nor more than forty (40) days, as determined in
      Company’s reasonable subjective discretion. However, if such “Cause” is not
      reasonably capable of cure, Company shall not be obligated to provide a cure
      period. For purposes of this Agreement, “Cause” shall mean the existence or
      occurrence of any of the following:

     

    (a)  Executive’s
      conviction for or pleading of nolo contendre to any felony involving the Company
      or moral turpitude.

     

    (b)  Executive’s
      misappropriation of Company assets.

     

    (c)  Executive’s
      willful violation of a Company policy or a directive of the Board previously
      delivered to him in writing.

     

    
      
         

      

      
        3

          Employment
            Agreement - Vincent M. Schiavo

        

        
          

        

      

      
         

      

       

    

    (d)  Executive’s
      material breach of his obligations, warranties or representations set forth
      in
      this Agreement.

     

    (e)  Any
      willful neglect or material breach of duty by Executive under this Agreement,
      or
      any material failure by Executive to perform under this Agreement. 

     

    The
      “Cause” provisions for termination are solely for purposes of determining
      Executive’s severance pursuant to paragraph 9 herein, and shall not create any
      implied right to termination solely for “Cause” as Executive’s employment at all
      times shall be on an “AT WILL” basis not requiring cause or notice prior to
      termination. 

     

    8.   Change
      in Control.
      For
      purposes of this Agreement, a “Change
      in Control” means
      a
      change in ownership or control of the Company after the Effective Date effected
      through any of the following: 

     

    (a)  the
      acquisition, directly or indirectly, by any person or related group of persons
      (other than the Company or a person that directly or indirectly controls, is
      controlled by, or is under common control with, the Company) of beneficial
      ownership of securities possessing more than fifty percent (50%) of the total
      combined voting power of the Company's outstanding securities pursuant to a
      tender or exchange offer made directly to the Company's stockholders;

     

    (b)   a
      change
      in the composition of the Board over a period of thirty-six 

    (36)
      consecutive months or less such that a majority of the Board members ceases
      by
      reason of one or more contested elections for Board membership, to be comprised
      of individuals who either (A) have been Board members continuously since the
      beginning of such period, or (B) have been elected or nominated for election
      as
      Board members during such period by at least a majority of the Board members
      described in clause (A) who were still in office at the time such election
      or
      nomination was approved by the Board, or

    

    (c)   a
      merger
      or consolidation in which securities possessing at least fifty percent (50%)
      of
      the total combined voting power of the Company's outstanding securities are
      transferred to a person or persons different from the persons holding those
      securities immediately prior to such transaction, or the sale, transfer or
      other
      disposition of all or substantially all of the Corporation's assets or a
      complete liquidation or dissolution of the Corporation.

     

    If
      Executive’s employment is terminated without Cause prior to the Anniversary
      Date, and after a Change in Control, Executive shall be deemed to have been
      employed for one year for purposes of calculating his severance pursuant to
      paragraph 9 herein.

     

    9.   Effect
      of Termination.
      If the
      Executive’s employment is terminated by Executive without Cause or terminated by
      the Company for Cause, death or a disability of Executive, Executive shall
      not
      be entitled to any severance pay or other benefits, except as mandated by law.
      In the event the Company terminates Executive’s employment without “Cause,”
Executive shall be entitled to receive a lump sum payment equal to Twenty
      Thousand Eight Hundred Thirty Three Dollars and Thirty Four Cents ($20,833.34)
      for every one month Executive has been employed by Company, with such severance
      payment not to exceed One Hundred Twenty Five Thousand Dollars ($125,000)
      regardless of how long Executive has been employed by Company. Such payment
      shall be made within five (5) business days following written notification
      of
      such termination, less all appropriate federal and state income and employment
      taxes. In addition, if Executive is terminated by the Company without “Cause,”
(i) all Options issued to Executive prior to the termination without “Cause”
shall vest immediately and become exercisable; and (ii) Executive shall be
      paid
      any bonus the CEO deems appropriate within forty five (45) days after
      termination.

     

    
      
         

      

      
        4

          Employment
            Agreement - Vincent M. Schiavo

        

        
          

        

      

      
         

      

       

    

    10.   Representations
      and Warranties.
      Executive hereby represents and warrants to Company that as of the date of
      execution of this Agreement: (i) this Agreement will not cause or require
      Executive to breach any obligation to, or agreement or confidence with, any
      other person; (ii) Executive is not representing, or otherwise affiliated in
      any
      capacity with, any other lines of products, manufacturers, vendors or customers
      of the Company; and (iii) Executive has not been induced to enter into this
      Agreement by any promise or representation other than as expressly set forth
      in
      this Agreement.

     

    11.   Non-Solicitation
      and Non-Competition.

     

    11.1  Non-Solicitation
      of Employees.
      Executive agrees that he will not, while employed by the Company and for a
      period of two (2) years following termination of such employment:

     

    (a)  directly
      solicit, encourage, or take any other action which is intended to induce any
      other employee of the Company to terminate his or her employment with the
      Company; or 

     

    (b)  directly
      interfere in any manner with the contractual or employment relationship between
      the Company and any such employee of the Company.

     

    The
      foregoing shall not prohibit Executive or any entity with which Executive may
      later be affiliated from hiring a former or existing employee of the Company
      or
      any of its subsidiaries, provided that such hiring does not result from the
      direct actions of Executive. For purposes of this Section, any reference to
      the
      Company shall include all of the Company’s Affiliates. As used herein,
“Affiliate” means any person or entity controlling, controlled by or under
      common control with another person or entity. 

     

    11.2  Non-Solicitation
      of Customers with respect to Competitive Business Activity.
      Executive agrees that he will not, while employed by the Company, directly
      or
      indirectly, whether for his own account or for the account of any other
      individual or entity, solicit the business or patronage of any customers of
      the
      Company with respect to products and/or services directly related to a
      Competitive Business Activity. “Competitive
      Business Activity”
shall
      mean engaging in, whether independently or as an employee, agent, consultant,
      advisor, independent contractor, partner, stockholder, officer, director or
      otherwise, any business which is materially competitive with the business of
      the
      Company as conducted or actively planned to be conducted by the Company during
      his employment by it, provided that Executive shall not be deemed to engage
      in a
      Competitive Business Activity solely by reason of (i) owning 5% or less of
      the
      outstanding common stock of any corporation if such class of common stock is
      registered under Section 12 of the Securities Exchange Act of 1934, or (ii)
      after the termination of his employment by the Company, being employed by or
      otherwise providing services to a corporation having total revenue of at least
      $500 million (or such lower number as may be agreed by the Board) so long as
      such services are provided solely to a division or other business unit of such
      corporation which does not engage in a business which is then competitive with
      the business of the Company. 

     

    
      
         

      

      
        5

          Employment
            Agreement - Vincent M. Schiavo

        

        
          

        

      

      
         

      

       

    

    11.3  Non-Competition.
      Without
      the prior written consent of the CEO, during the period of employment with
      the
      Company, Executive will not, directly or indirectly, engage in any employment,
      occupation, consulting or other business activity in competition with the
      Company. Executive acknowledges and agrees that such conduct would violate
      the
      duty of loyalty owed by Executive to the Company. Employee agrees to promptly
      disclose to the CEO, in writing, any business opportunities that are presented
      to him or her in his or her capacity as an employee of the Company which are
      of
      a similar nature to the Company’s current business or business which, to
      Executive’s knowledge, the Company proposes to engage in. 

    

    Executive
      further acknowledges and agrees that, during the course of performing services
      for the Company, the Company will furnish, disclose or make available to
      Executive confidential and proprietary information related to the Company’s
      business and that such confidential information has been developed and will
      be
      developed by the Company through the expenditure by the Company of substantial
      time, effort and money and that all such confidential information could be
      used
      by Executive to harm the Company or adversely impact its operations. Executive
      agrees to use all reasonable means to keep all such information confidential
      and
      secret and not to divulge any such information to any person or entity not
      having a need to know such information and then to only do so under
      circumstances designed to protect the Company’s information from further
      disclosure. Accordingly, the Executive hereby agrees, in consideration of the
      Company’s agreement to hire Executive and to pay the Employee’s compensation for
      services rendered to the Company and in view of the position of trust to be
      held
      by Executive and the confidential nature and proprietary value of the
      information which the Company may share with Executive, and for other good
      and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, as follows:

    

    For
      a
      period of one (1) year following the expiration or termination of the Agreement
      (the “Restricted Term”), whether such termination is voluntary, involuntary or
      with or without cause, Executive shall not, without the prior written consent
      of
      the Company, for the Executive for his own account or on behalf of any other,
      directly or indirectly, either as principal, agent, stockholder, employee,
      consultant, representative or in any other capacity, solicit, divert or
      appropriate or attempt to solicit, divert or appropriate, for the purpose of
      providing services, any customers or patrons of the Company, or any prospective
      customers or patrons with respect to which the Company has targeted or developed
      during the Term by the use of any of Company’s confidential, proprietary and/or
      trade secret information.

    

    Executive
      further recognizes and acknowledges that the specified restrictions in this
      paragraph are reasonable, legitimate and fair to Executive in light of the
      Company’s need to market its services in a large geographic area in order to
      have a sufficient customer base to make the Company’s business
      profitable.

     

    
      
         

      

      
        6

          Employment
            Agreement - Vincent M. Schiavo

        

        
          

        

      

      
         

      

       

    

    If
      any
      part of this section should be determined by a court of competent jurisdiction
      to be unreasonable in duration or scope, then this section is intended to and
      shall extend only for such period of time, in such area and with respect to
      such
      activity as is determined to be reasonable.

    

    12.   Confidentiality
      and Invention Assignment.
      In
      connection with this Agreement, Executive agrees to execute and acknowledge
      his
      employment shall be bound by the Company’s
      Confidentiality and Invention Assignment Agreement,
      a copy
      of which has been previously provided to and reviewed by Executive and his
      advisor(s). The terms of such Confidentiality and Invention Assignment Agreement
      are incorporated herein by this reference and Executive acknowledges and agrees
      that its terms and conditions constitute materials terms of this Agreement.
      

     

    13.   Miscellaneous.

     

    13.1  Section
      Headings.
      The
      section headings or captions in this Agreement are for convenience of reference
      only and do not form a part hereof, and do not in any way modify, interpret
      or
      construe the intent of the parties or affect any of the provisions of this
      Agreement.

     

    13.2  Survival.
      The
      obligations and rights imposed upon the parties hereto by the provisions of
      this
      Agreement which relate to acts or events subsequent to the termination of this
      Agreement shall survive the termination of this Agreement and shall remain
      fully
      effective thereafter, including without limitation the obligations of Executive
      with respect to any Confidentiality or Invention Assignment obligations under
      Section 12.

     

    13.3  Severability.
      Should
      any one or more of the provisions of this Agreement be determined to be illegal
      or unenforceable in any relevant jurisdiction, then such illegal or
      unenforceable provision shall be modified by the proper court, if possible,
      but
      only to the extent necessary to make such provision enforceable, and such
      modified provision and all other provisions of this Agreement shall be given
      effect separately from the provision or portion thereof determined to be illegal
      or unenforceable and shall not be affected thereby; provided
      that,
      any such modification shall apply only with respect to the operation of this
      Agreement in the particular jurisdiction in which such determination of
      illegality or unenforceability is made.

     

    13.4  Waiver.
      The
      failure of either party to enforce any provision of this Agreement shall not
      be
      construed as a waiver of any such provision, nor prevent such party thereafter
      from enforcing such provision or any other provision of this Agreement. The
      rights granted both parties herein are cumulative and the election of one shall
      not constitute a waiver of such party’s right to assert all other legal remedies
      available under the circumstances.

     

    13.5  Parties
      in Interest.
      Nothing
      in this Agreement, except as expressly set forth herein, is intended to confer
      any rights or remedies under or by reason of this Agreement on any persons
      other
      than the parties to this Agreement and the successors, assigns and affiliates
      of
      the Company, nor is anything in this Agreement intended to relieve or discharge
      the obligation or liability of any third person to any party to this Agreement,
      nor shall any provision give any third person any right of action over or
      against any party to this Agreement.

     

    
      
         

      

      
        7

          Employment
            Agreement - Vincent M. Schiavo

        

        
          

        

      

      
         

      

       

    

    13.6  Assignment.
      The
      rights and obligations under this Agreement shall be binding upon, and inure
      to
      the benefit of, the heirs, executors, successors and assigns of Executive and
      the Company. Except as specifically provided in this Section 13, neither the
      Company nor Executive may assign this Agreement or delegate their respective
      responsibilities under this Agreement without the consent of the other party
      hereto. Upon the sale, exchange or other transfer of substantially all of the
      assets of the Company, the Company shall assign this Agreement to the transferee
      of such assets. No assignment of this Agreement by the Company shall relieve
      the
      Company of, and the Company shall remain obligated to perform, its duties and
      obligations under this Agreement, including, without limitation, payment of
      the
      Base Compensation set forth in Section 5, above through the date of
      Assignment.

     

    13.7  Modification.
      This
      Agreement may be modified only by a contract in writing executed by the parties
      to this Agreement against whom enforcement of such modification is
      sought.

     

    13.8  Prior
      Understandings.
      This
      Agreement contains the entire agreement between the parties to this Agreement
      with respect to the subject matter of this Agreement, is intended as a final
      expression of such parties’ agreement with respect to such terms as are included
      in this Agreement, is intended as a complete and exclusive statement of the
      terms of such agreement, and supersedes all negotiations, stipulations,
      understandings, agreements, representations and warranties, if any, with respect
      to such subject matter, which precede or accompany the execution of this
      Agreement.

     

    13.9  Interpretation.
      Whenever the context so requires in this Agreement, all words used in the
      singular shall be construed to have been used in the plural (and vice versa),
      each gender shall be construed to include any other genders, and the word
“person” shall be construed to include a natural person, a corporation, a firm,
      a partnership, a joint venture, a trust, an estate or any other
      entity.

     

    13.10  Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

     

    13.11  Applicable
      Law.
      This
      Agreement and the rights and obligations of the parties hereunder shall be
      construed under, and governed by, the laws of the State of California without
      giving effect to conflict of laws provisions.

     

    13.12  Drafting
      Ambiguities.
      Each
      party to this Agreement has reviewed and revised this Agreement. Each party
      to
      this Agreement has had the opportunity to have such party’s legal counsel review
      and revise this Agreement. The rule of construction that any ambiguities are
      to
      be resolved against the drafting party shall not be employed in the interpretation
      of this Agreement or of any amendments or exhibits to this
      Agreement.

     

    
      
         

      

      
        8

          Employment
            Agreement - Vincent M. Schiavo

        

        
          

        

      

      
         

      

       

    

    IN
      WITNESS WHEREOF, the Parties have executed this Agreement as of the dates
      indicated below. 

     

    
      	 	 	 
	 	THE
              COMPANY:
	 	 
	 	
              INNOVATIVE
                CARD TECHNOLOGIES, INC.

              a
                Delaware corporation

            
	 
 	 
 	 
 
	Date: May
              _____, 2008	By:  	 
	 	
              
Steven
              R Delcarson, CEO

    

     

     

    

    
      	 	 	 
	 	EXECUTIVE:
	 
 	 
 	 
 
	Dated:
              May ______, 2008	By:  	/s/ 
	 	
              
Vincent
              M. Schiavo

    

     

    
      
         

      

      
        9

          Employment
            Agreement - Vincent M. Schiavo

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00143-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00143-of-00352.parquet"}]]