EMPLOYMENT AGREEMENT

          For purposes of this Agreement, “Cause” means: (a) Employee’s continued refusal or failure to perform the duties assigned to him ten (10) days after receiving notice from the Employer of such refusal or failure to perform; (b) chemical or alcohol dependency which interferes with Executive’s performance of his employment duties; (c) any act of disloyalty or breach of responsibilities to the Employer by the Executive, such as theft, breach of the Confidentiality Agreement or any Employee Invention and Disclosure Agreement , or other unauthorized disclosure or use of confidential information for other than the Employer’s interest, or competing with the Employer while employed by the Employer; (d) conduct which causes harm or may reasonably be expected to cause harm to the Employer’s reputation, such as arrest or indictment for, conviction of or a plea of guilty or nolo contendre to a felony or a conviction of a misdemeanor involving theft or resulting in incarceration for more than one week; (e) sexual harassment or discrimination by Employee; and (f) violation of state or federal securities laws, rules or regulations relating to the Employer’s stock.

          For purposes of this Agreement, “Good Reason” means: (a) relocation of Employee’s place of work to more than fifty (50) miles from Tigard, Oregon, if Employee does not consent to relocating; (b) a material reduction in Employee’s duties, responsibilities or authority or (c) the Employer breaches any material provision of the Agreement, and such breach is not remedied within 30 days after the receipt of notice from the Employee. If Employee intends to resign for Good Reason, he must notify the Employer in writing of his intention to resign and the specific circumstances he believes constitutes Good Reason at least thirty (30) days before the effective date of his resignation. If the Employer cures the circumstances giving rise to Good Reason before the end of the ninety (30) days, Employee may not resign with Good Reason. The Employer may terminate the employee at any time following the Employee’s notice of resignation for Good Reason, provided, however, that the Employer will be obligated to pay the employee for the remainder of the 30 day notification period in addition to the benefits described in Section 4 and Sections 5(a) and 5(b).

          For purposes of this Agreement, “Disability” means a termination of employment due to Employee’s inability to perform one or more of the essential functions of his position, with or without reasonable accommodation, for a period of more than ninety (90) consecutive days, as a result of a physical or mental condition as determined in good faith by the Employer and consistent with the Employer’s rights and obligations under applicable law.

     6. Noncompetition, Nonsolicitation and Nondisparagement. Employee agrees that during the period he is receiving the severance benefits described in Paragraph 5 (a) he will not compete with the Employer for himself or on behalf of another as an employee, owner, consultant or in any other capacity, in any geographic area in which the Employer conducts business, and (b) he will not solicit any customer, supplier, contractor, vendor or employee of Employer to change its relationship with Employer. Employee further agrees that he will not disparage Employer or its related entities, or any of their officers, directors, shareholders, members or employees at any time during or after his employment with Employer. The Employer’s obligation to pay severance benefits to Employee terminates on the first day Employee violates any of his obligations under this paragraph and Employee must return to Employer any severance benefits paid to him by the Employer on or after the first day Employee violates any of his obligations under this paragraph.

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