EMPLOYMENT
AGREEMENT

    


    


    THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is entered into on April 9, 2010, by and
between MedaSorb Technologies Corporation and its wholly-owned subsidiary
CytoSorbents Inc., (collectively, the “Company”), and Phillip P. Chan
(“Employee”).

    


    The
Company wishes to employ Employee as Chief Executive Officer and President 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 Chief Executive
Officer and President 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 reasonably
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.

    


    1.2           Term. The term
of employment of Employee under this Agreement shall commence January 1, 2010
and expiring on December 31, 2010 (the “Term”) subject to the provisions for
early termination set forth herein and subject to renewal based on approval by
the Board of Directors.

    


    2.           Compensation.  In
consideration of the services to be rendered hereunder, the

    Company
hereby agrees to pay Employee an initial 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 semi-annual review
(but his compensation may not be reduced from his then current compensation) by
the Compensation Committee.

    


    


    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, computing resources, 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 three
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.

    


    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 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. In the event of 4.1 (c) and 4.1
(d), Employee will be receive 15 calendar days of notice, after which his
employment will be terminated.

    


    4.2           In
the event that the Board of Directors reasonably determines that the 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.

    


    
      
        
        

      

      
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    4.3 Permanent Disability of
Employee.  The Company shall have the right to terminate
Employee’s employment hereunder if the Board of 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.

    


    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
Employee dies prior to the expiration of the term of this Agreement, 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, however, that no
such benefits shall 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 six (6) weeks of his
then-current base salary, payable in equal semi-monthly payments in arrears
without interest for a period of 1  month.

     (ii)
continued coverage under all plans or programs of the types listed in Section
3.1 until the sooner of 6 months 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 the Company and Employee.

    


    
      
        
        

      

      
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    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 that 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 Managers is comprised of a
majority of Managers 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.

    


    (d)           For
purposes of this Agreement, the term “Good Reason”  shall mean the
assignment of an 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 without the Employee’s written
consent.

    


    
      
        
        

      

      
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    4.6           In
the event that Employee is terminated prior to the end of this Agreement, and
such early termination is not due to Section 4.1a or 4.1b above, then Employee
shall be entitled to six (6) weeks  paid salary and all other
compensation due him during those fsix (6) weeks following notification of early
termination as severance.

    


    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 are regularly traded, if such purchases shall not
result in his owning, at any time, beneficially more than 3% of equity
securities such 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
Managers.  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 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.

    


    
      
        
        

      

      
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    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 the Board 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.

    


    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 supercedes 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 January 1,
2010.

    


    


    
      
        
        

      

      
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    IN WITNESS WHEREOF, the parties have
executed this Agreement.

    
       

      
        
          	 	

                  

                    MedaSorb
      Technologies Corporations

                    And
      Cytosorbents, Inc.

                  

                	 	 	EMPLOYEE	 
	 	 	 	 	 	 
	By:	
                   

                	 	 	
                   

                	 
	 	
                  

                    Al
      Kraus – Chairman of the Board  

                  

                	 	 	
                  Phillip
      P. Chan

                	 


        




    

     

    
      
        
        

      

      
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