EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT


                  EMPLOYMENT  AGREEMENT,  dated as of  January  19,  2006 by and
between Phase III Medical, Inc. (the "Company") and Larry May (the "Executive").

                              W I T N E S S E T H:


                  WHEREAS,  simultaneously with execution of this Agreement, the
Company is acquiring,  through its  wholly-owned  subsidiary,  Phase III Medical
Holding  Company  ("Holding"),  substantially  all of  the  business  assets  of
NeoStem, Inc. (the "Former Employer") pursuant to the terms of an Asset Purchase
Agreement  dated as of  December 6, 2005 (the "Asset  Purchase  Agreement")  and
entered into by and among the Company, Holding and the Former Employer;

                  WHEREAS, the Executive has performed valuable services for the
Former Employer; and

                  WHEREAS,   the   Executive  is  willing  to  serve  after  the
acquisition as an employee of the Company and the Company  desires to retain the
Executive  effective  upon  consummation  of the  acquisition  on the  terms and
conditions herein set forth;

                  NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto hereby agree as follows:

                  SECTION  1.  EMPLOYMENT.  The  Company  agrees to  employ  the
Executive,  and the  Executive  agrees to be employed by the  Company,  upon the
terms and conditions  hereinafter provided,  for a period commencing on the date
first  above  written  (the   "Commencement   Date")  and,  subject  to  earlier
termination  pursuant  to  Section 5 hereof,  continuing  until the third  (3rd)
anniversary  of  the  Commencement  Date  (the  "Term").  The  Executive  hereby
represents  and warrants  that he has the legal  capacity to execute and perform
this  Agreement,  and that its execution and performance by him will not violate
the terms of any existing agreement or understanding to which the Executive is a
party. The Executive also represents that he understands that the Company has no
obligations to the Executive  with respect to any agreements  which exist or may
have existed between the Executive and the Former Employer.

                  SECTION 2. POSITION AND DUTIES. During the Term, the Executive
agrees  to  serve  as an  officer  of  the  Company,  and as an  officer  of any
subsidiary  or  division  of the Company and will have such powers and duties as
may be  reasonably  conferred  upon him by the Board of Directors of the Company
(the "Board").  During the Term, and except for reasonable vacation periods, the
Executive shall devote substantially all of his business time, attention,  skill
and  efforts  exclusively  to the  business  and  affairs of the Company and its
subsidiaries and affiliates.  Executive shall be based in or around Los Angeles,
California;  however, it is understood that reasonable travel,  estimated at two
times monthly shall be required to the Company's headquarters in New York.


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                  SECTION 3.  COMPENSATION.  For all  services  rendered  by the
Executive in any capacity required hereunder during the Term, including, without
limitation,  services as an officer, director, or member of any committee of the
Company or any subsidiary, affiliate or division thereof, the Executive shall be
compensated as follows:

                  (a) The Company  shall pay the Executive a fixed annual salary
equal to $165,000 (the "Base Salary") in bi-weekly  installments or otherwise in
accordance with the Company's  payroll  practices,  including the withholding of
appropriate payroll taxes.

                  (b) The  Executive  shall be  entitled to  participate  in all
compensation and employee benefit plans or programs, and to receive all benefits
and perquisites, which are approved by the Board of Directors of the Company and
are  generally  made  available by the Company to all salaried  employees of the
Company and to the extent  permissible under the general terms and provisions of
such  plans  or  programs  and  in  accordance  with  the  provisions   thereof.
Notwithstanding  any of the foregoing,  nothing in this Agreement  shall require
the Company to establish,  maintain or continue any  particular  plan or program
nor  preclude  the  amendment,  rescission  or  termination  of any such plan or
program  that  may  be  established  from  time  to  time.  Notwithstanding  the
foregoing, you will not participate in any medial, health and insurance plans of
the Company;  however,  the Company shall reimburse you for reasonable  costs of
health  insurance for you which you obtain upon receipt of  appropriate  monthly
medical insurance invoices.

                  (c) On the  Commencement  Date,  Executive shall be granted an
option under and subject to the Company's 2003 Equity Participation Plan ("EPP")
to  purchase  150,000  shares of the  Company's  common  stock,  $.001 par value
("Common  Stock") at an exercise  price equal to the closing price of the Common
Stock on the Commencement  Date,  which shall vest and become  exercisable as to
50,000  shares  of  Common  Stock  on  each  of  the  first,  second  and  third
anniversaries of the Commencement Date.

                  SECTION  4.  BUSINESS  EXPENSES.  The  Company  shall  pay  or
reimburse the Executive for all reasonable  travel or other reasonable  expenses
incurred by the Executive in connection  with the  performance of his duties and
obligations  under this  Agreement,  including a monthly car  allowance  of $750
(paid through the Company's payroll), subject to the Executive's presentation of
appropriate  vouchers in  accordance  with such  expense  account  policies  and
approval  procedures as the Company may from time to time establish for officers
(including but not limited to prior approval of  extraordinary  expenses) and to
preserve  any  deductions  for  Federal  income  taxation  purposes to which the
Company may be entitled.

                  SECTION 5. TERMINATION OF EMPLOYMENT.

                  (a) The Company may terminate Executive's  employment prior to
the end of the Term immediately upon written notice to Executive.  Executive may
terminate  Executive's  employment upon thirty days' prior written notice to the
Company.  In the  event  that the  Executive's  employment  terminates  prior to
expiration  of the Term due to any  reason,  earned but unpaid Base Salary as of
the date of termination of employment shall be payable in full. In the event the
Company  terminates  Executive's  employment prior to the expiration of the Term
based on any reason except a Termination  for Cause,  Executive will be entitled
to receive severance payments equal to one year's salary, paid at the same level
and timing of salary as Executive is then receiving;  provided, however, that no
severance  payments shall be made hereunder unless and until Executive  executes
and  delivers  to the  Company a release  of all  claims  against  the  Company.
However,  no other payments shall be made, or benefits provided,  by the Company
under this Agreement except as otherwise required by law.


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                  (b) For purposes of this Agreement,  the term "Termination for
Cause" means,  to the maximum extent  permitted by applicable law, a termination
of the  Executive's  employment  by the  Company  for any event or  circumstance
which,  pursuant to applicable law,  constitutes cause for dismissal,  including
termination  because  the  Executive  has (a)  materially  breached or failed to
perform  his duties  under  applicable  law  (including  but not limited to laws
governing  employment  practices and  securities  laws),  this  Agreement or any
employment  policies or  practices  of the Company and such breach or failure to
perform  constitutes  self-dealing,  willful  misconduct  or  recklessness,  (b)
committed an act of dishonesty in the performance of his duties  hereunder,  (c)
intentionally engaged in conduct detrimental to the business of the Company, (d)
been  convicted of a felony or a  misdemeanor  involving  moral  turpitude,  (e)
materially breached or failed to perform his obligations and duties hereunder or
under any policies or procedures of the Company,  and, if such breach or failure
is curable, which breach or failure the Executive shall fail to remedy within 15
days after  written  demand from the Company  (which  demand  shall  specify the
breach or  failure  and any  necessary  or  desired  corrective  action)  or (f)
violated in any material respect the representations  made in Section 1 above or
the provisions of Section 6 below.

                  (c) The Company  shall have the right to suspend the Executive
with pay during any period in which it is  investigating  a possible basis for a
Termination for Cause. Upon suspension,  the Company shall provide the Executive
with reasonable notice of the basis for suspension to the extent practical.

                  SECTION 6. CONFIDENTIALITY;  COVENANT AGAINST COMPETITION. (a)
The Executive recognizes and acknowledges that all information pertaining to the
affairs,  business,  clients, customers or acquisition targets of the Company or
any of its  subsidiaries  or  affiliates  or  predecessors  (any  or all of such
entities being hereinafter  referred to as the "Business"),  as such information
may  exist  from time to time,  other  than  information  that the  Company  has
previously  made publicly  available or which has  otherwise  entered the public
domain through no fault of the Executive,  is confidential  information and is a
unique and valuable asset of the Business, access to and knowledge of which will
be essential to the performance of the Executive's  duties under this Agreement.
In consideration of the payments made to him hereunder, the Executive shall not,
except to the extent reasonably necessary in the performance of his duties under
this  Agreement,  or as  required  by law,  during  the  term of his  employment
hereunder and thereafter, divulge to any person, firm, association, corporation,
or  governmental  agency,  any information  concerning the affairs,  businesses,
clients, customers or acquisition targets of the Company or the Business (except
such information as is required by law to be divulged to a government  agency or
pursuant  to  subpoena  or  similar  lawful  process),  or make  use of any such
information  for his  own  purposes  or for the  benefit  of any  person,  firm,
association  or  corporation  (except the Business) and shall use his reasonable
best efforts to prevent the disclosure of any such  information  by others.  All
records, memoranda, letters, books, papers, reports, customer lists, accountings
or other data, and other records and documents relating to the Business, whether
made by the Executive or otherwise coming into his possession,  are confidential
information and are, shall be, and shall remain the property of the Business. No
copies  thereof  shall be made which are not retained by the  Business,  and the
Executive  agrees,  on termination of his employment  that he will not retain or
make copies of any such documents relating to the Business and, on demand of the
Company, to deliver the same to the Company.


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                  (b) All  proprietary  information  and all of the  Executive's
interest in trade secrets, trademarks,  computer programs, customer information,
customer lists, employee lists, products,  procedures,  copyrights,  patents and
developments  developed by the Executive as a result of, or in connection  with,
his  employment  hereunder,  shall  belong to the Company;  and without  further
compensation, but at the Company's expense, upon the request of the Company, the
Executive  shall execute any and all assignments or other documents and take any
and all such other action as the Company may reasonably request in order to vest
in the Company all of the Executive's right, title and interest in and to all of
the foregoing  items,  free and clear of all liens,  charges and encumbrances of
the Executive of any kind.

                  (c) In  consideration  of the payments made to him  hereunder,
during the period  commencing on the effective  date of the  termination  of his
employment  (whether pursuant to this Agreement or under any extension  hereof),
and ending on the second (2nd) anniversary of such effective date of termination
of his employment (the "Restrictive  Period"),  the Executive shall not, without
express  prior  written  approval of the Board of Directors  of the Company,  as
evidenced by a resolution of the Company's  Board,  directly or indirectly,  for
himself  or on behalf of or in  conjunction  with,  any other  person,  persons,
company,  partnership,  corporation or business of whatever nature,  own or hold
any proprietary  interest in, or be employed by or receive remuneration from, or
engage as an  officer,  director  or in a  managerial  capacity,  whether  as an
employee,  independent  contractor,   consultant  or  advisor,  or  as  a  sales
representative of, any corporation,  partnership,  sole  proprietorship or other
entity (a "Competitor") engaged in competition with the "Business Activities" of
the  Company  or any of its  subsidiaries  or  affiliates  at the  time  of such
termination of employment,  in the  "Territory",  other than  severance-type  or
retirement-type  benefits  from  entities  constituting  prior  employers of the
Executive.  The Executive agrees that during such Restrictive Period he will not
solicit for himself or for the account of any Competitor, any customer or client
of the  Company  or its  subsidiaries  or  affiliates,  or,  in the event of the
Executive's  termination of his  employment,  any entity or individual  that was
such a customer or client  during the  eighteen  (18)-month  period  immediately
preceding the Executive's termination of employment. "Business Activities" shall
mean the collection and storage of adult stem cells and any ancillary or related
services engaged in by the Company or its subsidiaries during the Term.

                  The Executive agrees that the restrictive  covenants contained
herein are in addition and not in lieu of any similar covenants contained in the
Asset Purchase Agreement.

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                  In  addition,  during such  Restrictive  Period the  Executive
agrees not to act on behalf of himself or any  Competitor to interfere  with the
relationship  between the Company or its  subsidiaries  or affiliates  and their
employees, independent contractors, customers, suppliers or acquisition targets.
The  Executive  also  agrees,  during  such  Restrictive  Period  not to hire an
employee of the Company or its subsidiaries or induce any such employee to leave
the employment of the Company or its  subsidiaries,  provided that the Executive
shall be permitted to call upon and hire any member of his immediate family.

                  For  purposes of this  Agreement,  "Territory"  shall mean the
entire United States.

                  For  purposes  of  the  preceding  paragraphs,  (i)  the  term
"proprietary  interest"  means legal or  equitable  ownership,  whether  through
stockholding or otherwise,  of an equity interest in a business,  firm or entity
other  than  ownership  of less  than two (2%)  percent  of any  class of equity
interest in a publicly held business, firm or entity and (ii) an entity shall be
considered  to be  "engaged in  competition"  if such entity is, or is a holding
company for, a company  engaged in any aspect of the  Business or providing  any
other services competitive with the business then being conducted by the Company
and/or  its  subsidiaries  at the  date of  termination  of  employment,  in the
Territory.

                  (d)  The  Executive  acknowledges  the  reasonableness  of the
restrictions  contained in this Section 6. The Executive  acknowledges  that the
Company  and  its  subsidiaries  and  their  successors  and  assigns  would  be
irreparably injured in a manner not adequately compensated by money damages by a
breach or violation (or  threatened  breach or  violation) of the  provisions of
this Section 6 by the Executive.  Therefore,  in the event of any such breach or
violation (or threatened  breach or violation),  in addition to all other rights
and  remedies  which the  Company  may have,  whether at law or in  equity,  the
Company and its successors and assigns shall be entitled to obtain injunctive or
other  equitable  relief against the Executive  without the need to post bond or
other security in connection  therewith and the Executive hereby consents to the
entry of an order for such injunctive or other equitable relief.

                  (e) The  Executive's  agreement as set forth in this Section 6
shall survive the expiration of the Term and the  termination of the Executive's
employment with the Company.

                  (f) If any  court  determines  that  the  provisions  of  this
Section 6, or any part  hereof,  is  unenforceable  because of the  duration  or
geographic scope of such  provisions,  such court shall have the power to reduce
the  duration or scope of such  provisions,  as the case may be, so that,  as so
reduced, such provisions are then enforceable to the maximum extent permitted by
applicable law.

                  SECTION 7.  WITHHOLDING  TAXES.  The Company  may  directly or
indirectly  withhold  from any payments  made under this  Agreement all Federal,
state,  city or other  taxes  and all  other  deductions  as  shall be  required
pursuant  to any law or  governmental  regulation  or ruling or  pursuant to any
contributory  benefit plan  maintained by the Company in which the Executive may
participate.



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                  SECTION 8. NOTICES. All notices,  requests,  demands and other
communications  required or  permitted  hereunder  shall be given in writing and
shall be deemed to have been duly given if delivered or mailed, postage prepaid,
by  certified  or  registered  mail  or by use  of an  independent  third  party
commercial  delivery  service for same day or next day delivery and  providing a
signed receipt as follows:

                  (a)   To the Company:
                        Phase III Medical, Inc. 330
                        South Service Road
                        Suite 120
                        Melville, New York 11747
                        Attention: General Counsel

                  (b)   To  the   Executive:   Mr.
                        Larry May
                        11038  Hilderth
                        Ct. Camarillo, CA 93012


or to such other  address as either  party shall have  previously  specified  in
writing to the other.  Notice by mail  shall be deemed  effective  on the second
business day after its deposit with the United States Postal Service,  notice by
same day courier  service  shall be deemed  effective on the day of deposit with
the  delivery  service and notice by next day delivery  service  shall be deemed
effective on the day following the deposit with the delivery service.

                  SECTION 9. NO ATTACHMENT.  Except as required by law, no right
to receive  payments  under  this  Agreement  shall be subject to  anticipation,
commutation,  alienation,  sale,  assignment,  encumbrance,  charge,  pledge, or
hypothecation  or  to  execution,   attachment,  levy,  or  similar  process  or
assignment by operation of law, and any attempt,  voluntary or  involuntary,  to
effect any such action shall be null, void and of no effect; PROVIDED,  HOWEVER,
that nothing in this Section 9 shall  preclude the  assumption of such rights by
executors, administrators or other legal representatives of the Executive or his
estate  and their  conveying  any  rights  hereunder  to the  person or  persons
entitled thereto.

                  SECTION 10. SOURCE OF PAYMENT. All payments provided for under
this Agreement shall be paid in cash from the general funds of the Company.  The
Company  shall not be required to establish a special or separate  fund or other
segregation  of assets to assure such  payments,  and, if the Company shall make
any  investments to aid it in meeting its obligations  hereunder,  the Executive
shall have no right,  title or interest  whatever in or to any such  investments
except as may otherwise be expressly  provided in a separate written  instrument
relating to such investments. Nothing contained in this Agreement, and no action
taken pursuant to its provisions, shall create or be construed to create a trust
of any kind, or a fiduciary relationship,  between the Company and the Executive
or any other person.  To the extent that any person  acquires a right to receive
payments from the Company  hereunder,  such right,  without  prejudice to rights
which  employees  may have,  shall be no greater  than the right of an unsecured
creditor of the Company.

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                  SECTION 11. BINDING AGREEMENT;  NO ASSIGNMENT.  This Agreement
shall be binding upon,  and shall inure to the benefit of, the Executive and the
Company and their respective permitted successors, assigns, heirs, beneficiaries
and representatives.  This Agreement is personal to the Executive and may not be
assigned by him. This Agreement may not be assigned by the Company except (a) in
connection with a sale of all or substantially  all of its assets or a merger or
consolidation  of the  Company,  or (b) to an  entity  that is a  subsidiary  or
affiliate of the Company.  Any attempted assignment in violation of this Section
11 shall be null and void.  SECTION 12.  GOVERNING LAW; CONSENT TO JURISDICTION.
The validity,  interpretation,  performance,  and  enforcement of this Agreement
shall  be  governed  by the laws of the  State of New  York.  In  addition,  the
Executive and the Company  irrevocably  submit to the jurisdiction of the courts
of the State of New York and the United  States  District  Court  sitting in New
York County for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Agreement and the  transactions  contemplated  hereby.
Service of process in connection with any such suit, action or proceeding may be
served on the Executive or the Company anywhere in the world by the same methods
as are specified for the giving of notices under this  Agreement.  The Executive
and the Company irrevocably consent to the jurisdiction of any such court in any
such suit, action or proceeding and to the laying of venue in such court.

                  SECTION 13. ENTIRE AGREEMENT.  This Agreement shall constitute
the entire  agreement  among the parties  with  respect to the  matters  covered
hereby and shall supersede all previous written, oral or implied  understandings
among them with respect to such matters.

                  SECTION 14. AMENDMENTS.  This Agreement may only be amended or
otherwise modified by a writing executed by all of the parties hereto.

                  SECTION 15.  COUNTERPARTS.  This  Agreement may be executed in
any number of counterparts, each of which when executed shall be deemed to be an
original  and all of  which  together  shall  be  deemed  to be one and the same
instrument.

                  IN WITNESS  WHEREOF,  the Company has caused this Agreement to
be executed by its duly  authorized  officer and the  Executive  has signed this
Agreement, all as of the first date above written. PHASE III MEDICAL, INC.


                                     By: /S/ MARK WEINREB
                                     -----------------------------
                                         Name:  Mark Weinreb
                                         Title:  President and CEO

                                        /S/ LARRY MAY
                                        ---------------------------
                                        Larry May, Executive


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