EMPLOYMENT
      AGREEMENT

    


    THIS
      EMPLOYMENT AGREEMENT (this "Agreement") is entered into this 31st
      day of
      December, 2007, by and between MedaSorb Technologies Corporation, (the
      "Company"), and Al Kraus ("Employee").

    


    The
      Company wishes to employ Employee as Chief Executive Officer upon the terms
      and
      conditions set forth in this Agreement and Employee is willing to accept
      employment subject to the terms and conditions set forth below.

    


    Accordingly,
      the parties, intending to be legally bound, agree as follows:

    


    1.
      Employment and Term

    


    1.1
      Employment. Subject to the terms and conditions hereof, the Company hereby
      employs Employee during the term of employment set forth in Section 1.2 to
      serve
      as President and Chief Executive Officer of the Company and perform such
      services and duties as are normally and customarily associated with such
      position as well as such other associated duties as the Board of Directors
      shall
      determine. Employee hereby accepts such employment and agrees to devote
      sufficient time, attention and energies during regular business hours to
      effectively perform his duties and obligations hereunder, devoting three full
      business days each week to the Company's business either at the Company's
      offices or traveling on Company business and being available by telephone,
      e-mail or other communication for the remainder of the normal work week, until
      the BetaSorb device, or other significant product shall achieve FDA market
      approval, at which time Employee shall devote his full business time solely
      to
      the business of the Company; provided that the Company and Employee mutually
      agree upon an increase in compensation and associated benefits. In the event
      the
      Company and Employee do not agree on an increase in compensation and benefits,
      the terms of this Agreement shall remain in effect including employee's
      obligation to devote no more than three full business days each
      week.

    


    1.2
      Term.
      The term of employment of Employee under this Agreement shall begin on the
      date
      hereof and end on the first anniversary of such date, subject to the provisions
      for early termination set forth herein.

    


    2.
      Compensation. In consideration of the services to be rendered hereunder,(a)
      the
      Company hereby agrees to pay Employee an annual base compensation of $216,351
      payable in equal semimonthly installments in accordance with the usual practice
      of the Company which base compensation shall be subject to annual review (but
      his compensation may not be reduced from then current level) by the Compensation
      Committee, and (b) until such time as the Company obtains additional equity
      (
      including any form of financing or investment that can convert to equity)
      capital of $4 million, the Company agrees to grant Employee options for that
      number of shares of common stock that will enable him to continue holding 5%
      of
      the outstanding shares of common stock of the Company determined and granted
      on
      the date hereof at the market price per share (the "Options") on the date the
      options are granted. Notwithstanding anything set forth herein to the contrary,
      in the event of the issuance of additional shares of common stock, granting
      of
      options to third parties or the issuance of securities convertible or
      exercisable into shares of common stock of the Company, then the Company agrees
      to immediately adjust in favor of the Employee the number of Options granted
      hereunder to assure that Employee at all times retains a 5% equity interest
      in
      the Company on a fully diluted basis. Options issued to employee per this
      section shall be deemed fully vested on issuance and shall be granted on a
      quarterly basis as needed to maintain his interest. It is also understood that
      the Employee's Options will be adjusted on the same basis as all other stock
      holders to account for any stock split, stock dividend, combination or
      recapitalization.

    


    3.
      Benefits.

    


    3.1
      Participation in Plans. During the term hereof, Employee shall be entitled
      to
      participate on the same terms as afforded other executive officers in any group
      insurance, hospitalization, medical, dental, health and accident, disability
      or
      similar plan or program of the Company now existing or established hereafter
      to
      the extent that he is eligible under the general provisions thereof; provided
      that in no case shall the benefits be reduced or less than that granted, awarded
      or provided to Employee on the date hereof.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.2
      Reasonable Business Expenses. Employee shall be allowed reimbursement for
      reasonable business expenses in connection with the performance of his duties
      hereunder upon presentation by Employee of the details of, vouchers for, such
      expenses, including tourist class commercial air travel, and Employee shall
      be
      furnished reasonable office space, assistance and facilities.

    


    3.3
      Vacation. Employee shall be entitled to a vacation (without deduction of salary
      or other compensation) for the period as is in conformity with the Company's
      policy regarding vacations for management employees (but in no event less than
      four weeks per year).

    


    3.4
      Bonuses. Employee may receive such discretionary bonuses as the Board of
      Directors, in its sole discretion and from time to time, deem appropriate.
      Previously issued and any future option grants that the Board may grant as
      a
      bonus, will not count toward the 5% described in Section 2 above.

    


    3.5
      Automobile Allowance. The Company agrees to pay Employee each month an
      automobile allowance of $500.00 per month throughout the term of this
      Agreement.

    


    4.
      Early
      Termination of Employment

    


    4.1
      Termination for Justifiable Cause. In addition to termination pursuant to
      Section 1.2, the Company, by written notice to Employee authorized by a majority
      of the Directors other than Employee, may terminate Employee's employment for
      "justifiable cause", which shall mean any of the following events: (a)
      adjudication by a court of competent jurisdiction that Employee has committed
      an
      act of fraud or dishonesty resulting or intended to result, directly or
      indirectly, in personal enrichment at the expense of the Company; (b) an
      indictment of a felony (other than a motor vehicle related matter) involving
      moral turpitude; (c) repeated failure or refusal by

    Employee
      to follow written policies and directions reasonably established by the Board
      of
      Directors that go uncorrected for a period of thirty (30) consecutive days
      after
      written notice has been provided to Employee; or (d)persistent willful failure
      by Employee to fulfill his duties hereunder that goes uncorrected for a period
      of thirty (30) consecutive days after written notice has been provided
      Employee.

    


    4.2
      In
      the event that the Board of Directors reasonably determines that Employee has
      committed a felony (other than a motor vehicle related matter), a material
      act
      of fraud or other willful tort against the Company, it shall have the right
      to
      suspend Employee from his position and duties hereunder without compensation
      until such time as either the action is dropped or no longer pursued or a final
      adjudication of Employee's actions is made by a court (whether civil or criminal
      as appropriate) of competent jurisdiction. Should said adjudication find
      Employee innocent (or not at fault) or the action is dropped or no longer
      pursued, the Company shall promptly pay him all unpaid back salary together
      with
      interest on said amount (at the average consumer loan rate published by
      Citibank, N.A., during the suspension period) and, if said final adjudication
      is
      rendered or action dropped or no longer pursued within 12 months of Employee's
      suspension, he may, at his option, be reinstated to his position and this
      Agreement continued as if never interrupted.

    


    4.3
      Permanent Disability of Employee. The Company shall have the right to terminate
      Employee's employment hereunder if the Directors shall in good faith and on
      the
      basis of reasonable medical evidence determine that Employee, by reason of
      physical or mental disability, has been unable to perform the services required
      of him hereunder for more than 120 consecutive days or an aggregate of 180
      calendar days, during any 12-month period. Such termination shall be effective
      as of the last day of the month following the month in which the Company shall
      have given notice to Employee of its intention to terminate pursuant to this
      paragraph. Company paid Disability Benefits will be activated 90 days after
      termination.

    


    
      
         

      

      
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    4.4
      Compensation Upon Early Termination.

    


    (a)
      In
      the event of termination of this Agreement for "justifiable cause" as described
      in Section 4.1, or pursuant to Section 1.2 hereof, Employee shall be entitled
      to
      the compensation earned by him before the effective date of termination, as
      provided for in this Agreement, computed pro rata up to and including that
      date,
      in lieu of salary and other benefits under this Agreement.

    


    (b)
      If
      prior to the expiration of the term of this Agreement Employee dies, the Company
      shall continue Employee's compensation and coverage of Employee's direct
      dependents (if any and if they are eligible) under all plans or programs of
      the
      types listed in Section 3.1 for a period of 120 days, provided that no benefits
      will continue past the end of the term of this Agreement.

    


    (c)
      Upon
      a Change of Control or upon Employee's termination for "Good Reason" as defined
      below, Employee shall then be entitled to receive, in lieu of salary and other
      benefits under this Agreement, (i) an amount equal to his then-current base
      salary, payable monthly in arrears without interest for a period of one year,
      (ii) continued coverage under all plans or programs of the types listed in
      Section 3.1 until the sooner of 1.5 years or one (1) month after Employee
      becomes otherwise employed and eligible for other comparable coverage, and
      (iii)
      all other benefits provided to Employee under this Agreement for a period of
      thirty (30) days.

    


    4.5
      In
      the event Employee is terminated for any reason other than for "justifiable
      cause" as defined in Section 4.1 hereof, death, disability or voluntary
      termination (unless the Company and Employee mutually agree to such voluntary
      termination), then all unexercised options granted to Employee under the
      Company's option plan (including without limitation the Options granted pursuant
      to Section 2(b) hereof) shall be deemed fully vested and exercisable immediately
      upon Employee's termination. The foregoing benefit shall be in addition to,
      and
      not in lieu of, any similar benefit that may be contained in any other agreement
      between Company and Employee.

    


    4.6
      (a)
      Upon the occurrence of a Change of Control of the Company
      or Employee terminates for Good Reason pursuant to Section 4.6(d)(i), all
      options granted to Employee under the Company option plan and the Options
      granted to Employee pursuant to Section 2(b) hereof shall be automatically
      fully
      vested and exercisable immediately upon a Change of Control.

    


    (b)
      For
      purposes of this Agreement, "Change of Control" shall be deemed to have occurred
      if, during the term of this agreement:

    


    (i)
      the
      beneficial ownership of at least 50% of the Company's
      voting securities or all or substantially all of the assets of the Company
      shall
      have been acquired, directly or indirectly by a single person or a group of
      affiliated persons, other than the Employee or a group in which the Employee
      is
      a member, in any transaction or series of transactions; or

    


    (ii)
      as
      the result of or in connection with any cash tender
      offer, exchange offer, sale of assets, merger, consolidation or other business
      combination of the Company with another corporation or entity the new Board
      of
      Directors is comprised of a majority of Directors chosen or elected by the
      members of the new/combined entity who were not members of the Company before
      such cash tender offer, exchange offer, sale of assets, merger, consolidation
      or
      other business combination of the Company with another corporation or
      entity.

    


    (c)
      For
      purposes of this Agreement, the date of Change of Control shall mean the earlier
      to occur of:

    


    (i)
      the
      first date on which a single person or group of affiliated persons acquires
      the
      beneficial ownership of 50% or more of the Company's voting securities or all
      or
      substantially all of the Company's assets in any transaction or series of
      transactions; or

    


    (ii)
      the
      date on which a cash tender offer, exchange offer,
      sale of assets, merger, consolidation other business combination resulting
      in
      the change in the Board of Directors contemplated by Section 4.5 hereof is
      consummated.

    


    
      
         

      

      
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    (d)
      For
      purposes of this Agreement, the term "Good Reason" shall mean the occurrence
      of
      any of the following events without the Employee's express written
      consent.

    


    (i)
      the
      assignment to Employee of any duties that are not in the same corporate capacity
      or area of operations or are not of the same general nature as Employee's duties
      with Company; or

    


    (ii)
      the
      Company's assigning Employee to an office other than the principal office of
      the
      Company. The current principal office is located in Monmouth Junction, New
      Jersey and the Company represents to Employee that there is at this time no
      intention on the part of the Company to move said principal office beyond a
      radius of 50 miles from Monmouth Junction, New Jersey.

    


    This
      clause (ii), however, shall in no way limit the complete discretion of the
      Board
      of Directors to relocate the principal office of the Company at any time in
      the
      future. In the event, however, that the Company does move its principal office
      beyond a 50 mile radius of Monmouth Junction, N.J., Employee shall have the
      right, for 120 days after the decision of the Board of Directors to relocate,
      to
      elect (by written notice to the Board of Directors) to terminate this Agreement
      and receive upon the date of termination, in lieu of all compensation and
      privileges provided for herein (except as set forth in the subsequent sentence),
      that number of options equal to one additional year's vesting hereunder,
      provided Employee remains with the Company for a period (up to 12 months) (the
      "Transition Period") sufficient to assist the Company to make an expeditious
      and
      effective transition to the new location. The end of such Transition Period
      shall be deemed the date o termination for the purposes of this Section.
      Notwithstanding anything set forth herein to the contrary, in the event the
      Company moves its principal office beyond a 50 mile radius from Princeton,
      New
      Jersey, the Company shall be obligated to pay to Employee the amount of
      compensation and benefits set forth in Section 4.4(c) hereof commencing after
      the Transition Period set forth above.

    


    5.
      Confidentiality and Non-Competition.

    


    5.1
      (i)
      Confidentiality. During the term of employment under this Agreement, Employee
      will have access to and become acquainted with various confidential information
      including without limitation, trade secrets, customer relationships, formulas,
      devices, inventions, processes, know-how, financial information and other
      compilations of information, records, and specifications, which are owned by
      the
      Company. Employee shall not disclose any of the Company's confidential
      information, directly or indirectly, or use them in any way, either during
      the
      term of this Agreement or at any time thereafter, except as required in the
      course of his employment for the Company. All files, records, documents,
      drawings, specifications, equipment and similar items relating to the business
      of the Company, whether prepared by Employee or otherwise coming into his
      possession, shall remain the exclusive property of the Company and shall not
      be
      removed from the premises of the Company under any circumstances whatsoever
      without the prior written consent of the Company, and if removed shall be
      immediately returned to the Company upon any termination of his employment
      and
      no copies thereof shall be kept by Employee, provided, however, that Employee
      shall be entitled to retain documents reasonably related to his interest as
      a
      shareholder.

    


    (ii)
      Inventions and Shop Right. Every invention, discovery or improvement made or
      conceived by Employee related to the business of the Company during his
      employment by the Company whenever and wherever made or conceived, and whether
      or not during business hours, of any product, article, appliance, tool, device,
      formula, process, machinery or pattern similar to, or which constitutes an
      improvement, on those heretofore, now or at any time during this employment,
      manufactured or used by the Company in connection with the manufacture or
      process of any product heretofore or now or hereafter manufactured by the
      Company, or of any product which shall or could reasonably be manufactured
      in
      the reasonable expansion of the Company's business, shall be and continue remain
      the Company's exclusive property, without any added compensation or any
      reimbursement for expenses to Employee, and upon the conception of any and
      every
      such invention, discovery or improvement and without waiting to perfect or
      complete it, Employee promises and agrees that he will immediately disclose
      it
      to the Company and to no one else and thenceforth will treat it as the property
      and secret of the Company. Employee will also execute any instruments requested
      from time to time by the Company to vest in it complete title and ownership
      to
      such invention, discovery or improvement and will, at the request of the
      Company, do such acts and execute such instruments as the Company may require
      but at the Company's expense to obtain Letters Patent in the United States
      and
      foreign countries, for such invention, discovery or improvement and for the
      purpose of vesting title thereto in the Company, all without any reimbursement
      for expenses or otherwise and without any additional compensation of any kind
      to
      Employee.

    


    
      
         

      

      
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    5.2
      Non-Competition. In the event of a termination of this Agreement for any reason,
      Employee shall be prohibited for a period of one (1) year from the effective
      date of this separation from engaging in any business in competition with that
      of the Company in those states within the United States and those countries
      outside the United States in which the Company at the time of Employee's
      separation has conducted business or where Company has written a reasonable
      plan
      to conduct business in the next 12 months or directly or indirectly advising
      or
      consulting to or otherwise performing services for or providing assistance
      to
      any person, firm, corporation, or other entity engaged in such competitive
      business, provided, however, nothing herein contained shall be construed as
      (a)
      preventing Employee from investing his personal assets in any businesses which
      do not compete directly or indirectly with the Company, provided such investment
      or investments do not require any services on his part in the operation of
      the
      affairs of the entity in which such investment is made and in which his
      participation is solely that of an investor, (b) preventing Employee from
      purchasing securities in any corporation whose securities in any corporation
      whose securities are regularly traded, if such purchases shall not result in
      his
      owning beneficially at any time 3% or more of equity securities of any
      corporation engaged in a business which is competitive, directly or indirectly,
      to that of the Company, (c) preventing Employee from engaging in any activities,
      if he receives the prior authorization of the Directors. Notwithstanding
      anything herein to the contrary this Section 5.2 shall not be effective in
      the
      event Employee has been discharged for any reason other than "justifiable cause"
      or voluntarily leaves the employment of the Company with the mutual agreement
      of
      the Company.

    


    5.3
      Subsequent to the termination of this Agreement, Employee will not for a period
      of one (1) year materially interfere with or disrupt the Company's business
      relationship with its customers or suppliers or employ any person who was
      employed with the Company at any time during the 6 months prior to Employee's
      termination, or for a period of three (3) years, directly or indirectly solicit
      any of the employees to leave the employ of the Company.

    


    6.
      Notices. All notices under this Agreement shall be in writing and shall be
      deemed effective when delivered in person (in the Company's case, to its
      President or Secretary) or forty eight (48) hours after deposit thereof in
      the
      U.S. mail, postage prepaid, addressed to Employee, at last known address as
      carried in the records of the Company, or to the Company, at the corporate
      headquarters, to the attention of the Secretary, or to such other address as
      the
      party to be notified may specify by notice to the other party.

    


    7.
      Assigns and Successors. The rights and obligations of the Company under this
      Agreement shall inure to the benefit of and shall be binding upon the successors
      and assigns of the Company and the rights and obligations of Employee shall
      move
      to the benefit of and shall be binding on Employee and his legal representatives
      or heirs. This agreement constitutes a personal service agreement and Employee's
      obligations hereunder may not be transferred or assigned by
      Employee.

     

    8.
      Amendment Waiver. This Agreement may be amended, and any right or claim
      hereunder waived, only by a written instrument signed by both Employee and
      the
      Company, following authorization by a majority of Directors. Nothing in this
      Agreement, express or implied, is intended to confer upon any third person
      any
      rights or remedies under or by reason of this Agreement. No amendment or waiver
      of this Agreement requires the consent of any individual, partnership,
      corporation or other entity not a party of this Agreement.

    


    
      
         

      

      
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    9.
      Injunction.

    


    (a)
      Should Employee at any time violate or threaten to violate any of the provisions
      of this Agreement, the Company shall be entitled to an injunction restraining
      Employee from doing or continuing to do or performing any such acts, and
      Employee hereby consents to the issuance of such an injunction.

    


    (b)
      In
      the event that a proceeding is bought in equity to enforce the provisions of
      this paragraph, Employee shall not urge as a defense that there is an adequate
      remedy at law, nor shall the Company be prevented from seeking any other
      remedies which may be available.

    


    (c)
      The
      existence of a claim or cause of action by the Company against Employee, or
      by
      Employee against the Company, whether predicated upon this Agreement or
      otherwise, shall not constitute a defense to the endorsement by the Company
      of
      the foregoing restrictive covenants but shall be litigated
      separately.

    


    (d)
      The
      provisions of this Section 9 shall survive termination of this
      Agreement.

    


    10.
      Governing Law and Jurisdiction. This Agreement in its interpretation and
      application and enforcement shall be governed by the law of the State of New
      Jersey without application of its conflict of laws provisions, and any legal
      action commenced by either party seeking interpretation, application and/or
      enforcement of this Agreement shall be brought only in the State of New Jersey
      of federal court sitting in Princeton, NJ.

    


    11.
      Prior
      Agreements. This Agreement supersedes and replaces any and all prior agreements
      between the parties as to its subject matter.

    


    12.
      Construction. Paragraph headings are for convenience only and shall not be
      considered a part of the terms and provisions of this Agreement.

    


    13.
      Effective Date. The effective date of this Agreement shall be December 31,
      2007.

    


    


    IN
      WITNESS WHEREOF, the parties have executed this Agreement.

    
 

    
      	
              MEDASORB
                TECHNOLOGIES CORPORATION

            	 	
              EMPLOYEE

            
	 	 	 	 
	 	 	 	 
	
              By:

            	
              /s/
                William Miller

            	 	
              /s/
                Al Kraus

            
	 	
              William
                Miller

            	 	
              Al
                Kraus

            
	 	
              Chairman

            	 	 


    

    


    


    
      
         

      

      
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