NONSOLICITATION AND NONCOMPETITION AGREEMENT

NONSOLICITATION AND NONCOMPETITION AGREEMENT

THIS NONSOLICITATION AND NONCOMPETITION AGREEMENT (this "Agreement") is entered into as of July 31, 2008 by and between Harris & Harris Group, Inc. (the "Company") and Charles E. Harris (the "Employee").

WHEREAS, the Company and the Employee acknowledge that the Employee is currently party to the (i) Non-Qualified Stock Option Agreement dated as of June 26, 2006; (ii) Incentive Stock Option Agreement dated as of June 26, 2006; and (iii) Non-Qualified Stock Option Agreement dated as of June 27, 2007 (collectively, the "Existing Stock Option Agreements"), in each case, entered into pursuant to the Harris & Harris Group, Inc. 2006 Equity Incentive Plan;

WHEREAS, the Company and the Employee acknowledge that until the Employee terminates his employment with the Company the Employee may become party to one or more additional non-qualified stock option agreements entered into pursuant to the Harris & Harris Group, Inc. 2006 Equity Incentive Plan (the "Future Stock Option Agreement(s)"; and, in the event such Future Stock Option Agreement(s) are implemented, together with the Existing Stock Option Agreements, the "Stock Option Agreements");

WHEREAS, pursuant to Section 2(e)(iv) of each of the Stock Option Agreements the Employee's ability to exercise certain options following termination of employment may be extended upon the occurrence of certain conditions therein, including, but not limited to, the Employee executing and abiding by a post-termination nonsolicitation and/or noncompetition agreement;

WHEREAS, the Company and the Employee acknowledge that the Employee's execution and abiding by the terms of this Agreement, including, but not limited to, its nonsolicitation and noncompetition provisions will satisfy the Stock Option Agreements' requirement for the Employee to execute and abide by a nonsolicitation and/or noncompetition agreement for the purpose of extending the Employee's ability to exercise certain stock options granted thereby; and

NOW THEREFORE, in consideration of the recitals above and the mutual promises and obligations contained in this Agreement and in the Stock Option Agreements, and for other good and valuable consideration, the receipt and sufficiency of which are mutually hereby acknowledged, the Company and the Employee agree as follows:

1. Noncompetition. At all times commencing on the date first written above and extending for a period which equals the longer of (a) three (3) years from the date first written above, or (b) the entire duration for which Employee may exercise any option under the Stock Option Agreements, including any applicable time extensions, the Employee will not engage in "Competition" (as defined below) with the Company anywhere in the world. For purposes of clarification only, the "entire duration for which Employee may exercise any option under the Stock Option Agreements, including any applicable time extensions," shall be deemed expired if Employee exercises every option Employee is granted under the Stock Option Agreements, in accordance with the terms of such agreements. For purposes of this Agreement, "Competition" shall mean engaging in, or otherwise directly or indirectly being employed by, or acting as an advisor, manager, consultant or lender to, or being a director, officer, employee, contractor, principal, agent, stockholder, member, owner or partner of, or permitting the Employee's name to be used in connection with the activities of any other business or organization engaged other than incidentally in making investments in privately-held companies in the areas of nanotechnology, microsystems and/or microelectromechanical systems; provided, however, that it shall not be a violation of this Section 1 for the Employee to become the registered or beneficial owner of up to five percent (5.0%) of any class of the capital stock of an entity in Competition with the Company that is registered under the Securities Exchange Act of 1934, as amend