Electronic Sensor Technology, Inc
EXHIBIT 10.1
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<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>exhibit10_1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
                     SEVERANCE AGREEMENT AND MUTUAL RELEASE

          This Severance Agreement and Mutual Release ("Agreement") is made and
entered into by and between Barry S. Howe ("Howe") and Electronic Sensor
Technology, Inc., a Nevada corporation (together with its subsidiaries,
collectively, "EST").

                                    RECITALS

          A.   Howe is an employee of EST, the President and Chief Executive
Officer of EST (the "Offices"), and a director of EST ("Director").

          B.   Concurrent with the execution and delivery of this agreement,
Howe will voluntarily resign (i) his employment with EST, (ii) from the Offices
and (iii) as a Director (collectively, the "Resignations").

          C.   Howe and EST desire to settle fully and finally any and all
issues, claims, causes of action, concerns, and differences between them.

                                      TERMS

          NOW, THEREFORE, IN CONSIDERATION of the covenants and promises herein
contained and other good and valuable consideration, and to avoid unnecessary
litigation, it is agreed by and between the parties as follows:

          1.   EST and Howe agree that the Resignations shall become effective
as of July 25, 2008 (the "Effective Date").

          2.   On the Effective Date, EST will pay Howe (i) all accrued salary
and accrued and unused vacation time, in each case through the Effective Date,
totaling Three Thousand Five Hundred Fifty-Seven and 69/00 Dollars ($3,557.69)
of accrued salary, and Twelve Thousand Three Hundred Fifty-Eight and 53/00
Dollars ($12,358.53) for accrued and unused vacation time
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and (ii) a total of Eighty-Two Thousand One Hundred Seventy and 83/00 Dollars
($82,170.83), which is the equivalent of 5.33 months of Howe's salary, as
severance.

          3.   Howe agrees not to file any claim or seek to pursue any claims
which Howe has or claims to have against EST, its officers, its directors or its
shareholders (the "EST Parties") regarding events that have occurred as of or
prior to the date of this Agreement, including, but not limited to, any and all
claims against the EST Parties related or in any manner incidental to Howe's
employment with EST, or the cessation of his employment therefrom, or any
discrimination or harassment he may claim to have encountered in connection
therewith.

          4.   Howe represents that he has not filed any complaints, claims, or
actions against the EST Parties with any state, federal, or local agency or
court, and that, unless EST fails to perform its obligations under this
Agreement, he will not do so at any time hereafter and that if any agency or
court assumes jurisdiction of any complaint, claim, or action against any EST
Party on behalf of Howe, he will direct that agency or court to withdraw from or
dismiss with prejudice the matter.

          5.   Concurrent with the execution of this Agreement, Howe agrees to
return to EST, at EST's offices, all property and information, if any, held by
Howe as a result of his employment with EST.

          6.   Except for the failure of a party to perform his or its
obligations under this Agreement, each of Howe and EST waives all rights he or
it may have under California Civil Code section 1542. Section 1542 provides as
follows:

          "A general release does not extend to claims which
          the creditor does not know or suspect to exist in
          his favor at the time of executing the release,
          which if known by him must have materially
          affected his settlement with the debtor."

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          7.   By waiving the provisions of California Civil Code section 1542,
each of Howe and EST hereby irrevocably and unconditionally releases and forever
discharges the other, and each of its shareholders, directors, officers,
employees (individually or in their representative capacities), representatives,
heirs, and their successors and assigns, and all persons acting by, through,
under, or in concert with any of them from any and all charges, complaints,
claims, and liabilities of any kind or nature whatsoever, whether in tort,
contract, or otherwise, known or unknown, suspected or unsuspected (hereinafter
referred to as "claim" or "claims") which Howe or EST, as the case may be, at
any time heretofore has or claims to have against EST or Howe, respectively,
regarding events that have occurred on or prior to the date of this Agreement,
including, but not limited to any and all claims related to or in any manner
incidental to Howe's employment with EST, the cessation of Howe's employment
with EST, and any discrimination or harassment he may claim to have encountered
in connection therewith, including, but not limited to, that under the Age
Discrimination in Employment Act of 1967 (29 U.S.C. Sections 621, et seq.),
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Civil Rights Act of 1866, the Equal Pay Act of 1963, the Americans with
Disabilities Act of 1990, the Family and Medical Leave Act of 1993, the Worker
Adjustment and Retraining Notification Act, the Employee Retirement Income
Security Act of 1974 (except any valid claim to recover vested benefits, if
applicable), any applicable Executive Order program, and their state and local
counterparts, including, without limitation, the California Fair Employment and
Housing Act or any other federal, state or local law, rule, regulation,
constitution or ordinance, or under any public policy or common law or arising
under any practices or procedure of EST. For the avoidance of doubt, neither
party is waiving any rights or claims he or it may have against the other party
for breach of his or its, as the case may be, obligations under this Agreement.

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          8.   The parties understand the word "claims" to include all actions,
claims, and grievances, whether actual or potential, known or unknown, and
specifically, but not exclusively, all claims against the other party and
against any of the other party's shareholders, directors, officers, employees
(individually or in their representative capacities), representatives, heirs,
and their successors and assigns, arising out of Howe's employment with EST, the
cessation of his employment with EST, and any discrimination or harassment he
may claim to have encountered in connection with his employment with EST. All
such claims (including related attorneys' fees and costs), other than those
arising as a result of a breach (or alleged breach) of a party's obligations
under this Agreement, are forever barred by this Agreement without regard to
whether those claims are based on any alleged breach of a duty arising in
contract or tort; any alleged unlawful act, including, without limitation,
employment discrimination; any other claim or cause of action; and regardless of
the forum in which it might be brought.

          9.   Howe understands and agrees that he has twenty-one (21) days
within which to consider this Agreement before executing it, whether or not he
has taken that time.

          10.  Each of Howe and EST understands and agrees that he or it has
been advised to consult with an attorney concerning the terms of this Agreement
and that he or it, as the case may be, has done so to the extent that he or it,
as the case may be, deems necessary.

          11.  Each of Howe and EST understands and agrees that he or it, as the
case may be, has carefully read and fully understands all of the provisions of
this Agreement.

          12.  Each of Howe and EST understands and agrees that he or it, as the
case may be, is, through this Agreement, releasing the other party from any and
all claims he or it, as the case may be, may have against the other party (other
than claims arising as a result of the breach (or alleged breach) of this
Agreement by the other party), that he or it, as the case may be,

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knowingly and voluntarily agrees to all of the terms set forth in this
Agreement, and that he or it, as the case may be, knowingly and voluntarily
intends to be legally bound by this Agreement.

          13.  The parties have conducted such investigation of the facts
underlying this Agreement and the terms of this Agreement as they see fit.

          14.  Howe understands and agrees that he has a full seven (7) days
following the execution of this Agreement to revoke this Agreement and has been
and hereby is advised in writing that this Agreement shall not become effective
or enforceable until the revocation period has expired. Howe's revocation shall
be made by notifying the EST in writing of his decision to revoke. The
revocation, along with all amounts paid to Howe on the Effective Date as
severance, must be personally delivered to Teong Lim at EST's offices located at
1077 Business Center Circle, Newbury Park, California 91320. Howe understands
that rights or claims under the Age Discrimination in Employment Act of 1967 (29
U.S.C. Sections 621 et seq.) that may arise after the date of this Agreement is
executed are not waived.

          15.  This Agreement and compliance with this Agreement shall not be
construed as an admission by either party of any liability whatsoever, or as an
admission by either party that it violated the rights of the other, or any
person, or violation of any order, law, statute, duty, or contract whatsoever
against either party or any other person. EST specifically disclaims any
liability to Howe or any other person for any alleged violation of the rights of
Howe or any person, or for any alleged violation of any order, law statute,
duty, or contract on the part of EST, its employees or agents or related
companies or their employees or agents.

          16.  Howe acknowledges that he has acquired knowledge of information
relating to the confidential affairs of EST, including, but not limited to,
technical information, intellectual property, business and marketing plans,
strategies, customer information, supplier information,

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sales representative information, distributor information, process material,
methodologies, technical materials, manuals and strategic options and models
(collectively, "Confidential Information"). Howe agrees that he (i) will hold
inviolate, keep secret and will not divulge, transmit or otherwise disclose the
Confidential Information (except as legally compelled by court order, and then
only to the extent required, after prompt notice to EST of any such order),
directly or indirectly, without the prior written consent of EST, and (ii) will
not use, directly or indirectly, any Confidential Information.

          17.  Howe shall not take any action to disparage or criticize EST, its
products or the employees, officers, directors, shareholders or customers of EST
or to engage, directly or indirectly, in any other action that injures or
hinders the business of EST, including, without limitation, the solicitation of
employees, customers, suppliers, sales representatives or distributors of EST or
its products. EST shall not, and shall not permit any of its officers, directors
or employees to, take any action to disparage or criticize Howe.

          18.  In the event of the breach or threatened breach of paragraph 16
of this Agreement by Howe or paragraph 17 of this Agreement by Howe or EST, Howe
and EST each acknowledges that the other would have no adequate remedy at law
and, in the event of such breach by Howe or EST, the other would be irreparably
harmed and shall, therefore, be entitled to injunctions, both preliminary and
final, enjoining and restraining such breach or threatened breach. Such remedies
shall be in addition to all other remedies available at law or in equity,
including the right of each of Howe and EST to receive from the other any and
all damages that may be sustained as a result of such breach of contract.

          19.  Each of Howe and EST acknowledges that paragraph 6.1 of the
Bylaws of EST states as follows:

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          Indemnification.

          The Corporation shall indemnify its officers and directors
     to the fullest extent permitted by law; provided, however, that
     the Corporation shall only be required to indemnify its officers
     and directors in connection with any action, suit or proceeding
     initiated by such officer(s) or director(s) if such action, suit
     or proceeding was authorized by the Board of Directors. The
     Corporation may, in the discretion of the Board of Directors,
     indemnify its employees, agents and those persons serving in any
     other capacity for or on behalf of the Corporation to the fullest
     extent permitted by law.

          20.  Each of Howe and EST represents and acknowledges that in
executing this Agreement, he or it, as the case may be, does not rely and has
not relied upon any representation or statement made by the other party or by
any of the other party's shareholders, directors, officers, employees or
representatives with regard to the subject matter, basis, or effect of this
Agreement or otherwise, other than those specifically stated in this written
Agreement.

          21.  This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and upon their respective heirs, administrators,
representatives, executors, successors, and assigns. Howe expressly warrants
that he has not and will not transfer to any person or entity any rights, causes
of action, or claims released in this Agreement.

          22.  Should any provision of this Agreement be declared or be
determined by any court of competent jurisdiction to be illegal, invalid, or
unenforceable, the legality, validity, and enforceability of the remaining
parts, terms, or provisions shall not be affected thereby, and said illegal,
unenforceable, or invalid part, term, or provision shall be deemed not to be a
part of this Agreement.

          23.  This Agreement sets forth the entire agreement between the
parties hereto and fully supersedes any and all prior agreements or
understandings, written or oral, between the parties hereto pertaining to the
subject matter hereof.

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          24.  This Agreement shall be governed by and construed in accordance
with the internal laws of the State of California.

          PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.


Dated: July 25, 2008                /s/ Barry S. Howe
                                    --------------------------------------------
                                    Barry S. Howe


Dated: July 25, 2008                ELECTRONIC SENSOR TECHNOLOGY, INC.


                                    By: /s/ Teong C. Lim
                                        ----------------------------------------
                                    Name:  Teong C. Lim
                                    Title: President and Chief Executive Officer

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