EMPLOYMENT AGREEMENT

          This Employment Agreement (hereinafter this “Agreement”) dated as of
April 1, 2003 (the “Effective Date”) by and between i-STAT CORPORATION, a
Delaware corporation having a place of business at 104 Windsor Center Drive,
East Windsor, New Jersey 08520 (the “Company”), and Michael Zelin, an individual
residing at 9104 Tamarron Drive, Plainsboro, NJ 08536 (“Employee”).

WITNESSETH:

          WHEREAS, Employee has been employed by the Company since February 26,
1986, and

          WHEREAS, the Company desires to continue to employ Employee and
Employee desires to continue to be employed by the Company, all pursuant to the
terms and conditions hereinafter set forth.

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, it is agreed as follows:

               Section 1.     Definitions. Unless otherwise defined herein, the
following terms shall
        have the following respective meanings:

          “Benefit”means those benefits set forth in Section 3.3 hereof.

          “Cause”means (i) any felony conviction or admission of guilt, (ii) any
breach or nonobservance by Employee of any material covenant set forth herein,
(iii) any willful, intentional or deliberate disobedience or neglect by Employee
of the lawful and reasonable orders or directions of the Chief Executive Officer
of the Company; provided, that the Chief Executive Officer of the Company has
given Employee written notice of such disobedience or neglect and Employee has
failed to cure such disobedience or neglect within a period reasonable under the
circumstances, or (iv) any willful or deliberate misconduct by employee that is
materially injurious to the Company.

          “Change of Control” shall mean any of the following:

          A.     An acquisition (other than directly from the Company) of any
voting securities of the Company (the “Voting Securities”) by any “Person” (as
the term “person” is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”) immediately after
which such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of thirty percent (30%) or more of the combined
voting power of the Company’s then outstanding Voting Securities; provided,
however, that in determining whether a Change of Control has occurred, Voting
Securities which are acquired in a “Non-Control Acquisition” (as defined below)
shall not constitute an acquisition which would cause a Change of Control. A
“Non-Control Acquisition” shall mean an acquisition by (i) an employee benefit
plan (or trust forming a part thereof) maintained by (x) the Company or (y) any
corporation or other Person of which a majority of its voting power or its
equity securities or equity interest is owned directly or indirectly by the
Company (a “Subsidiary”), (ii) the Company or any Subsidiary, or (iii) any
Person in connection with a Non-Control Transaction (as defined below).

          B.     The individuals who, as of the date immediately before any
“Change of Control” set forth in clauses A or C hereof, are members of the Board
(the “Incumbent Board”), cease for any reason to constitute at least a majority
of the Board; provided, further, that no individual shall be considered a member
of the Incumbent Board if such individual initially assumed office as a result
of either an actual or threatened “Election Contest” (as described in Rule
14a-11 promulgated under the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board (a “Proxy Contest”) including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest.

          C.     Approval by the stockholders of the Company of:

      (i)        A merger, consolidation, or reorganization involving the
Company, unless:

        (1) The stockholders of the Company, immediately before such merger,
consolidation or reorganization, own, directly or indirectly, immediately
following such merger, consolidation or reorganization, at least a majority of
the combined voting power of the outstanding voting securities of the
corporation resulting from such merger or consolidation or reorganization (the
“Surviving Corporation”) in substantially the same proportion as their ownership
of the Voting Securities immediately before such merger, consolidation, or
reorganization; and  

        (2) The individuals who were members of the Incumbent Board immediately
prior to the execution of the agreement providing for such merger,
consolidation, or reorganization constitute at least a majority of the members
of the board of directors of the Surviving Corporation or corporation
Beneficially Owning, directly or indirectly, a majority of the voting securities
of the Surviving Corporation; and  

        (3) No Person (other than the Company, any Subsidiary, any employee
benefit plan (or any trust forming a part thereof) maintained by the Company,
the Surviving Corporation, any Subsidiary, or any Person who, immediately prior
to such merger, consolidation or reorganization had Beneficial Ownership of
fifteen percent (15%) or more of the then outstanding Voting Securities) owns,
directly or indirectly, thirty percent (30%) or more of the combined voting
power of the Surviving Corporation’s then outstanding voting securities.  

        (4) A transaction described in the foregoing clauses (1) through (3)
shall herein be referred to as a “Non-Control Transaction”.  

      (ii)        A complete liquidation or dissolution of the Company; or

      (iii)        A sale or other disposition of all or substantially all of
the assets of the
      Company to any Person (other than a transfer to a Subsidiary).

          D.        Notwithstanding the foregoing, a Change of Control shall not
be deemed to occur solely because (i) any Person (the “Subject Person”) acquired
Beneficial Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by the Company
which by reducing the number of Voting Securities outstanding, increases the
proportional number of shares beneficially owned by the Subject Person;
provided, that if a Change of Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by the Company,
and after such acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities beneficially owned by the
Subject Person to a percentage sufficient to constitute a Change of Control,
then a Change of Control shall be deemed to have occurred; or (ii) the
acquisition of Voting Securities by holders of the Company’s Series D
Convertible Preferred Stock, par value $.10 per share.

          “Common Stock” means the common stock of the Company, par value $.15
per share.

          “Diminution in Responsibility” means a material diminution in
Employee’s duties or responsibilities or the assignment to Employee of duties
which are materially inconsistent with his duties as Executive Vice President
and Chief Technology Officer of the Company or which materially impair
Employee’s ability to function in his position; provided, however, that no
Diminution in Responsibility shall be deemed to have occurred solely as a result
of the consummation by the Company of a strategic corporate alliance,
partnership or joint venture (in whatever form) pursuant to which any
substantial portion of the Company’s marketing and sales activities, or research
and development activities, or manufacturing activities come under the control
of any entity unaffiliated with the Company on the Effective Date.

          “Permanent Disability” means Employee’s inability to substantially
perform his duties and responsibilities hereunder by reason of any physical or
mental incapacity for a period of 180 consecutive days, or two or more periods
of 90 consecutive days each in any 360-day period.

               Section 2.     Employment; Duties.

          2.1     During the Term of Employment (as hereinafter defined), the
Company shall employ Employee, and Employee shall serve, as Executive Vice
President and Chief Technology Officer of the Company. Employee’s
responsibilities shall include such functions and duties with respect to the
Company and its subsidiaries as the Chief Executive Officer or the Board of
Directors of the Company (the “Board”) shall determine and that are consistent
with the functions and duties of a senior technology officer of a corporation of
similar size and nature.

          2.2     During the Term of Employment and excluding any periods of
vacation and sick leave to which Employee is entitled, (a) Employee shall devote
all of his business time to the business and affairs of the Company (except as
provided below) and shall use his best efforts to perform faithfully and
efficiently the responsibilities assigned to Employee, (b) Employee shall apply
his skill and experience to the performance of his duties in such employment,
and (c) Employee shall have no other employment. During the Term of Employment,
it shall not be a violation of this Agreement for Employee to devote up to two
business days per calendar quarter to: (i) serve as a director, officer or
trustee of any trade association or of any civic, educational or charitable
organization, (ii) with the prior consent of the Board, which shall not be
unreasonably withheld, serve as director of any corporation that does not
compete, directly or indirectly, with the Company, and (iii) manage his personal
investments (provided, that no such investment may exceed five percent (5%) of
the equity securities of any entity without the prior written approval of the
Board and further provided, that nothing herein shall limit any investment in an
entity whose primary purpose is not the day-to-day operation of a particular
business) and affairs.

               Section 3.     Compensation And Benefits.

          3.1     Base Salary. During the Term of Employment, the Company shall
pay Employee a salary at the annual rate of Two Hundred Eighty-five Thousand
dollars ($285,000) or such greater amount as the Company’s Board of Directors
may from time to time establish pursuant to the terms hereof (the “Base
Salary”). The Base Salary shall be payable in accordance with the Company’s
customary payroll practices for its senior management personnel.

          3.2     Performance Bonus. During the Term of Employment, Employee
shall be eligible to participate in the Company’s Annual Incentive Program (the
“AIP”). Employee recognizes that the Board of Directors of the Company reserves
the right to amend or terminate the AIP at any time.

          3.3     Benefits.

      (a)   Benefit Plans. During the Term of Employment, Employee may
participate, on the same basis and subject to the same qualifications as other
senior management personnel of the Company, in any benefit plans and policies in
effect with respect to senior management personnel of the Company.

      (b)   Reimbursement of Expenses. During the Term of Employment, Company
shall pay or promptly reimburse Employee, upon submission of proper invoices in
accordance with the Company’s normal procedures, for all reasonable
out-of-pocket business, entertainment and travel expenses incurred by Employee
in the performance of his duties hereunder.

      (c)   Vacation. During the Term of Employment, Employee shall be entitled
to vacations in accordance with the policies of the Company applicable to senior
management personnel from time to time.

      (d)   Post-Retirement Benefits. Employee shall be entitled to any
post-retirement benefits generally made available to the Company’s senior
management personnel.

(e)   Withholding. The Company shall be entitled to withhold from amounts
payable or benefits accorded to Employee under this Agreement all federal, state
and local income, employment and other taxes, as and in such amounts as may be
required by applicable law.

          3.4     Term. This Agreement shall remain in full force and effect for
an initial period of four (4) years from the Effective Date (the “Term of
Employment”) shall be automatically extended for additional one-year periods
thereafter (each a “Renewal Period”) unless Employee notifies the Board of
Directors or the Board of Directors notifies Employee that the notifying party
does not desire to extend such Term of Employment at least ninety (90) days
prior to the end of the expiration of the Term of Employment. Employee’s
employment hereunder shall be coterminous with the Term of Employment, unless
sooner terminated as provided in Section 5 hereof.

               Section 4.    Representations And Warranties By Employee And The
Company.

          4.1     Employee hereby represents and warrants to the Company as
follows:

      (a)   The performance by Employee of his duties and other obligations
hereunder will not conflict with or constitute a default under (whether
immediately, upon the giving of notice or lapse of time or both) any prior
employment agreement, contract, or other instrument to which is a party or by
which he is bound.

      (b)   Employee has the right, power and legal capacity to enter and
deliver this Agreement and to perform his duties and other obligations
hereunder. This Agreement constitutes the legal, valid and binding obligation of
Employee enforceable against him in accordance with its terms.

          4.2      The Company hereby represents and warrants to Employee as
follows:

      (a)   The Company is duly organized, validly existing and in good standing
under the laws of the State of Delaware, with all requisite corporate power and
authority to own its properties and conduct its business in the manner presently
contemplated.

      (b)   The Company has full power and authority to enter into this
Agreement and to incur and perform its obligations hereunder.

      (c)   The execution, delivery and performance by the Company of this
Agreement does not and will not conflict with or result in a breach or violation
of or constitute a default under (whether immediately, upon the giving of notice
or lapse of time or both) the certificate of incorporation or by-laws of the
Company, or any agreement or instrument to which the Company is a party or by
which the Company or any of its properties may be bound or affected.

               Section 5.    Termination. Employee’s employment hereunder will
begin on the Effective Date                                     and shall
continue until terminated upon the first to occur of the following events:

      (a)   Death or Permanent Disability of Employee. The Company may, at its
option, terminate Employee’s employment for Permanent Disability (as herein
defined). In the event of termination for death or disability, Employee or his
designated beneficiary shall be entitled to termination benefits pursuant to
Section 5(d) hereof.

      (b)   Termination by the Company for Cause. In the event of termination by
the Company pursuant to this Section 5(b), the Company shall have no further
obligations to Employee under this Agreement other than to (i) pay Employee’s
then current Base Salary through the effective date of termination, and (ii)
subject to the terms hereof, pay or provide any benefits which may be due to
Employee.

      (c)   Termination by Employee for Good Reason. In the event of termination
by Employee for Good Reason (as defined below) pursuant to this Section 5(c),
(i) all unvested options granted to Employee shall vest immediately as of the
date of such termination, (ii) within five (5) days following the date of such
termination, the Company shall pay Employee his target annual bonus for the
current fiscal year on a pro rata basis corresponding to the date of
termination, and (iii) continue to pay Employee monthly compensation equal to
one-twelfth of Employee’s then current Base Salary plus annual target bonus for
a period of twenty-four (24) months following the date of termination.
Employee’s right to terminate his employment pursuant to this Section 5(c) shall
not be affected by his incapacity due to Permanent Disability. The following
actions or omissions by the Company shall constitute “Good Reason”:

        (A) If, in Employee’s sole determination, a Diminution of Responsibility
occurs, Employee may, by providing written notice to the Company within sixty
(60) days following such Diminution of Responsibility, deem such Diminution of
Responsibility to be “Good Reason” under this Section 5(c); or  

        (B) The failure of the Company to obtain an agreement, satisfactory to
Employee, from any successor or assignee of all or substantially all of the
Company’s business, to assume the Company’s obligations to Employee under this
Agreement.  

      (d)   Termination by the Company without Cause.

        (i) The Company shall give Employee not less than thirty (30) days prior
written notice of the termination of his employment without Cause and the
Company shall have the option of amending, suspending or terminating Employee’s
duties and responsibilities prior to the expiration of the thirty-day notice
period (for which purposes no Diminution of Responsibility shall be deemed to
have occurred).  

        (ii)      If such termination shall occur, the Company shall (A)
continue to pay Employee monthly compensation equal to one-twelfth of Employee’s
then current Base Salary for a period of fifteen (15) months following the date
of such termination, and (B) on the date on which performance bonuses are paid
to all Company employees, pay Employee a lump sum equal to the cash portion of
the Performance bonus at the Target Level applicable to the year in which such
termination occurs, pro rated to reflect the date of Employee’s termination (the
“Pro-Rated Performance Bonus”).  

        (iii)      If such termination shall occur within eighteen (18) months
immediately following a Change of Control, then in lieu of amounts due under
paragraph (ii) above, the Company shall (A) within five (5) days following the
date of such termination, pay Employee his target annual bonus for the current
fiscal year on a pro rata basis corresponding to the date of termination, and
(B) continue to pay Employee monthly compensation equal to one-twelfth of
Employee’s then current Base Salary plus annual target bonus for a period of
twenty-four (24) months following the date of termination, and (C) immediately
accelerate the exercisability of all unvested stock options granted to Employee
to purchase Common Stock as of the date of such termination.  

      (e)   Termination by Employee without Good Reason. In the event Employee
wishes to resign without Good Reason, he shall give not less than thirty (30)
days prior written notice of such resignation and the Company shall have the
option of terminating Employee’s duties and responsibilities at any time prior
to Employee’s proposed termination date, subject to payment by the Company to
Employee of the lesser of (i) Employee’s then current Base Salary for a thirty
(30) day period, or (ii) such portion of the period remaining under the notice
given by Employee.

      (f)   Termination Due to Non-Renewal of Agreement by the Company. In the
event the Company notifies Employee under Section 3.6 that it shall not renew
this Agreement for any Renewal Period, Employee shall be entitled to monthly
compensation equal to one-twelfth of Employee’s then current Base Salary
self-executing for a period of fifteen (15) months following the end of the Term
of Employment.

  Section 6.    Change Of Control. Notwithstanding anything contained in this
Agreement to the contrary, if Employee’s employment is terminated by the
Company, other than for Cause, prior to a Change of Control and such termination
(i) was at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change of Control and who effectuates a
Change of Control (a “Third Party”), or (ii) otherwise occurred as a condition
to, or in connection with or anticipation of, a Change of Control which actually
occurs, then for all purposes of this Agreement, the date of the Change of
Control with respect to Employee shall mean the date immediately prior to the
date of such termination of Employee’s employment and shall entitle Employee to
the benefits provided under Section 5(c) of this Agreement as though the
termination of Employee’s employment was for Good Reason.

  Section 7.    Federal Excise Tax.

          7.1     General Rule. Employee’s payments and benefits under this
Agreement and all other arrangements or programs related thereto shall not, in
the aggregate, exceed the maximum amount that may be paid to Employee without
triggering golden parachute penalties under Section 280G of the Internal Revenue
Code of 1986, as amended (the “Code”), and the provisions related thereto with
respect to such payments. If Employee’s benefits must be cut back to avoid
triggering such penalties, Employee’s benefits will be cut back in the priority
order Employee designates or, if Employee fails to promptly designate an order,
in the priority order designated by the Company. If an amount in excess of the
limit set forth in this Section is paid to Employee, Employee must repay the
excess amount to the Company upon demand, with interest at the rate provided in
Code Section 1274(b)(2)(B). Employee and the Company agree to cooperate with
each other reasonably in connection with any administrative or judicial
proceedings concerning the existence or amount of golden parachute penalties on
payments or benefits Employee receives.

          7.2     Exception. Section 7.1 shall apply only if it increases the
net amount Employee would realize from payments and benefits subject to Section
7.1, after payment of income and excise taxes by Employee on such payments and
benefits.

          7.3     Determinations. The determination of whether the golden
parachute penalties under Code Section 280G and the provisions related thereto
shall apply, shall be made by counsel chosen by Employee. All other
determinations needed to apply this Section 7 shall be made in good faith by the
Company’s independent auditors.

          Section 8.     Extended Medical And Dental Benefits. In the event of
the termination of Employee’s employment under Sections 5(a), 5(c) or 5(d) of
this Agreement, and at Employee’s election, Employee and Employee’s dependents
shall continue to receive the Company’s standard employee medical and dental
benefits at the Company’s expense under such plans for (i) twelve (12) months
for termination under Sections 5(a), or 5(d)(i) or 5(d)(ii) hereof, or (ii)
eighteen (18) months for termination under Section 5(c) or Section 5(d)(iii)
hereof. Notwithstanding the foregoing, in the event Employee becomes covered or
eligible to be covered as a primary insured (that is, not as a beneficiary under
a spouse’s plan) under another employer’s group health plan during the extended
benefit periods provided for herein, Employee shall promptly notify the Company
and the Company shall have no further obligation to provide group health
benefits for Employee and any dependents.

          Section 9.     Confidentiality Agreement. Employee agrees to execute
an Employee Confidentiality and Invention Agreement with the Company, in a form
customarily employed by the Company, which provides for standard
non-solicitation and non-competition covenants covering a period of twelve (12)
months after Employee ceases to be employed by the Company for any reason or no
reason.

          Section 10.     Release Of Claims. The Company may condition payment
of the cash termination benefits described in Sections 5(a), 5(c) or 5(d) of
this Agreement upon the delivery by Employee of a signed release of claims in a
form customarily employed by the Company; provided, however, that Employee shall
not be required to release any rights Employee may have to be indemnified by the
Company under Section 11.5 of this Agreement or the certificate of incorporation
or by-laws of the Company.

          Section 11.     General.

          11.1     Notices. Any notice or other communication under this
Agreement shall be in writing and shall be deemed to have been given: (i) upon
delivery when delivered personally; (ii) the next business day after being sent
by Federal Express or similar overnight delivery prepaid; or (iii) three (3)
days after being mailed via registered or certified mail, postage prepaid,
return receipt requested, to either party at the address set forth in the
preamble of this Agreement, or to such other address as such party shall give by
notice hereunder to the other party.

          11.2     Severability of Provisions. If any provision of this
Agreement shall be declared by a court of competent jurisdiction to be invalid,
illegal or incapable of being enforced in whole or in part, such provision shall
be interpreted so as to remain enforceable to the maximum extent permissible
consistent with applicable law and the remaining conditions and provisions or
portions thereof shall nevertheless remain in full force and effect and
enforceable to the extent they are valid, legal and enforceable, and no
provision shall be deemed dependent upon any other covenant or provision unless
so expressed herein.

          11.3     Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the Company, its successors and assigns and the
Company shall require any successors and assigns to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment had
taken place.

          11.4     Entire Agreement Modification. This Agreement and the
exhibits attached hereto contains the entire agreement of the parties relating
to the subject matter hereof, and any prior agreements or understandings between
the parties hereto which are not set forth herein are hereby superceded. No
modification of this Agreement shall be valid unless made in writing and signed
by the parties hereto.

          11.5     Indemnification. The Company and Employee shall execute an
indemnification agreement in the form attached hereto as Exhibit A.

          11.6     Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New Jersey
without regard to principles of conflict of laws.

          

          11.7      Headings. The headings of paragraphs are inserted for
convenience and shall not affect any interpretation of this Agreement.

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

        IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have executed this Agreement as of the day and year first above written.

MICHAEL ZELIN
/s/ MICHAEL ZELIN

Michael Zelin

i-STAT CORPORATION
/s/ WILLIAM P. MOFFITT

William P. Moffitt
President and
Chief Executive Officer