EXHIBIT 10.2




EMPLOYMENT
AGREEMENT






THIS
EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of the ___
day of November 2007 (the "Effective Date"), between Z Trim Holdings, Inc., an
Illinois corporation, whose principal place of business is 1011 Campus Drive,
Mundelein, Illinois 60060 and any of its successors or affiliated companies
(collectively, the "Company") and Brian Chaiken, an individual residing at 2020
Isabella St., Evanston, Illinois 60201 (hereinafter referred to as the
"Employee").






RECITALS




WHEREAS,
the Company is principally engaged in the business of development and marketing
of a functional food ingredient (the "Business");




WHEREAS,
the Company desires to employ the Employee and the Employee desires to enter
into the employ of the Company;




WHEREAS,
the Company has established a valuable reputation and goodwill in its business,
with expertise in all aspects of the Business.




WHEREAS,
the Employee has established a valuable reputation and goodwill in his business,
with expertise in certain, but not all, aspects of the Company's business by
virtue of the Employee's employment with the Company, and is or will become
familiar with and possessed with the manner, methods, trade secrets and other
confidential information pertaining to the Company's Business, including the
Company's client base;




NOW,
THEREFORE, in consideration of the mutual agreements herein made, the Company
and the Employee do hereby agree as follows:




1.
Recitals. The above recitals are true, correct, and are herein incorporated by
reference.




2.
Employment. The Company hereby employs the Employee, and the Employee hereby
accepts employment, upon the terms and conditions hereinafter set
forth.




3.
Authority and Power during Employment Period.




a. Duties
and Responsibilities. During the Term of this Agreement, the Employee shall
serve as "General Counsel and Vice President of Business Development” of the
Company and shall have such responsibilities and duties as customarily
undertaken by individuals in similar positions.




b. Time
Devoted. Throughout the Term of this Agreement, the Employee shall devote
substantially all of the Employee's business time and attention to the business
and affairs of the Company consistent with the Employee's position with the
Company, except for reasonable vacations, illness or incapacity.




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c. Best
Efforts. Throughout the Term of this Agreement, the Employee agrees to use his
best efforts to promote the Company's Business. For purposes of this Agreement,
"best efforts" shall be defined as the Employee carrying out
his assigned duties and responsibilities, adhering to the covenants contained in
paragraphs 8 of this Agreement, and complying with the policies and procedures
related to the Company's operation of its Business.




4. At
will. Employee’s employment under this Agreement shall be at will.




5.
Compensation.




a.
Salary. The Employee shall be paid a base salary, payable in accordance with the
Company's policies from time to time for salaried employees, at the rate of nine
thousand dollars ($9,000) per month.




b. Stock
& Options. The Employee shall receive options under the Company's 2004 Stock
Equity Plan. The options shall be exercisable for a (3) year period of time from
the date of vesting.  The amount of options received shall be approved
by the Compensation Committee of the Board of Directors, and the Board of
Directors itself.




c.  The
Employee shall be entitled to participate in any benefit plans the Employer
maintains for officers of the company.




d.  The
Employee shall be entitled to 23 days of paid personal days off per year,
inclusive of vacation and personal days.  The Employee shall be
entitled to 10 days of paid sick days per year.




6.
Consequences of Termination of Employment.




a.
Disability. In the event of the Employee's disability, the Employee shall be
entitled to compensation in accordance with the Company's disability
compensation practice for its salaried employees. "Disability," for the purposes
of this Agreement, shall be deemed to have occurred in the event (A) the
Employee is unable by reason of sickness or accident, to perform his duties
under this Agreement for an aggregate of 90 days in any 12-month period or 45
consecutive days, or (B) the Employee has a guardian of his person or estate
appointed by a court of competent jurisdiction. Termination due to disability
shall be deemed to have occurred upon the first day following the determination
of disability as defined in the preceding sentence.




b.
Termination by the Company for Cause.




i.
Nothing herein shall prevent the Company from terminating the Employee for
"Cause," as hereinafter defined. The Employee shall continue to receive salary
only for the period ending with the date of such termination as provided in this
Section 6(b). If the Employee is terminated for cause, any other benefits shall
be immediately revoked, including any outstanding unexercised
options.




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ii.
Either party may terminate without cause on 30 days written notice. In this
eventuality, all vested options will be fully owned by the
Employee.  To the extent the terms of such other compensation
arrangements or plans or programs differ from the terms of this Agreement, the
terms of this Agreement shall control.




iii.
"Cause" shall mean (A) committing or participating in an act of fraud, gross
neglect, misrepresentation, embezzlement or dishonesty against the Company; (B)
committing or participating in any other injurious act or omission wantonly,
willfully, recklessly or in a manner which was grossly negligent against the Company, monetarily or otherwise; (C) engaging in a
criminal enterprise involving moral turpitude; (D) an act or acts (1)
constituting a felony under the laws of the United States or any state thereof;
or (2) if applicable, loss of any state or federal license required for the
Employee to perform the Employee's material duties or responsibilities for the
Company; (E) the Employee's breach of any provision of this Agreement; or (F)
any assignment of this Agreement by the Employee in violation of Section 13 of
this Agreement.




iv.
Notwithstanding anything else contained in this Agreement, this Agreement will
not be deemed to have been terminated for Cause unless and until there shall
have been delivered to the Employee a notice of termination stating that the
Employee committed one of the types of conduct delineated in paragraph 6(b)(iii)
supra, notwithstanding
anything contained herein to the contrary, this Agreement may be terminated (i)
at any time upon the mutual written consent of the Company and the Employee; or
(ii) by either party giving 30 days prior written notice to the other. During
such 30 day period, the Employee shall continue to perform the Employee's duties
pursuant to this Agreement, and the Company shall continue to compensate the
Employee in accordance with this Agreement.




c. Death.
In the event of the death of the Employee during the Term of the Agreement,
compensation shall be paid to the Employee's designated beneficiary, or, in the
absence of such designation, to the estate or other legal representative of the
Employee for a period of one hundred eighty (180) days from and after the date
of death. Other death benefits will be determined in accordance with the terms
of the Company's benefit programs and plans.




7.  Severance




If the
employee is terminated without cause, not initiated by the employee, the company
will provide a monthly severance payment equal to employee’s monthly wages at
the time he/she is terminated.  The severance period will be for a
minimum of six months, with an additional two months for each year of completed
service on a pro-rated basis, not to exceed a total severance period of two
years.




Additionally,
Employer will provide reimbursement for COBRA expenses for family health
insurance for 9 months.




8.
Covenant Not to Compete and Non-Disclosure of Information




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a.
Covenant Not to Compete. The Employee acknowledges and recognizes the highly
competitive nature of the Company's Business and the goodwill, continued
patronage, and specifically the names and addresses of the Company's Clients (as
hereinafter defined) constitute a substantial asset of the Company having been
acquired through considerable time, money and effort. Accordingly, in
consideration of the execution of this Agreement, the Employee agrees to the
following:




i. That
during the Restricted Period (as hereinafter defined) and within the Restricted
Area (as hereinafter defined), the Employee will not, individually or in
conjunction with others, directly or indirectly, engage in any Business
Activities (as hereinafter defined), whether as an officer, director,
proprietor, employer, partner, independent contractor, investor (other than as a
holder solely as an investment of less than one percent (1%) of the outstanding
capital stock of a publicly traded corporation), consultant, advisor, agent or
otherwise.




ii. That
during the Restricted Period and within the Restricted Area, the Employee will
not, directly or indirectly, compete with the Company by soliciting, inducing or
influencing any of the Company's Clients or potential Clients which have or may
in the future have a business relationship with the Company at the time during
the Restricted Period to discontinue or reduce the extent of such relationship
or potential relationship with the Company.




iii. That
during the Restricted Period and within the Restricted Area, the Employee will
not (A) directly or indirectly recruit, solicit or otherwise influence any
employee or agent of the Company to discontinue such employment or agency
relationship with the Company, or (B) employ or seek to employ, or cause or
permit any business which competes directly or indirectly with the Business
Activities of the Company (the "Competitive Business") to employ or seek to
employ for any Competitive Business employs or seeks to employ such person
employed by the Company.




iv. That
during the Restricted Period the Employee will not interfere with, or disrupt or
attempt to disrupt any past, present or prospective relationship, contractual or
otherwise, between the Company and any supplier, customer or agent of the
Company.




b.
Non-Disclosure of Information.





1. In
connection with employment between Z Trim as employer and 1st party as employee
(the “Employment”), each party to this Agreement may wish to disclose certain
proprietary and confidential information to the other party on a confidential
basis.  Such proprietary or confidential information (“Information”)
includes any and all technical and non-technical information, including without
limitation, information concerning financial, accounting and marketing reports,
business plans, analyses, forecasts, predictions, projections, intellectual
property, formulas, formulations, drawings, methods, procedures, processes,
trade secrets and know-how disclosed in connection with the
Employment.  “Information” may take the form of documentation,
drawings, specifications, software, technical and engineering data, and other
forms, and may be communicated orally, in writing, by electronic and magnetic
media, by visual observation and other means.  “Information”
otherwise, that contain or are based upon proprietary or confidential
Information is covered by this Agreement.




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2. “Representatives”
means the controlled affiliates of either party, and the respective directors,
officers, employees, attorneys, consultants and other agents and advisors of
either party or of the controlled affiliates of either party.  Each
party shall be responsible for any breach of this Agreement by its respective
Representatives and shall take all reasonably necessary measures to restrain its
Representatives from unauthorized disclosure or use of information.




3. All
Information that is disclosed by one party to the other in connection with
discussions relating to the Employment, whether before or after the date of
execution of this Agreement, shall automatically be deemed proprietary and
confidential and subject to this Agreement unless otherwise confirmed in writing
by the disclosing party.  In addition, the existence and terms of this
Agreement, and the fact and substance of Z Trim’s discussions and correspondence
with 1st party
relating to the Employment, including the identification of either party by name
or identifiable description in connection with the parties’ participation in
such process, shall be deemed Information of both parties and shall not be
disclosed by either party without the consent of the other party.




4. With
respect to Information disclosed under this Agreement, the party to whom the
Information is disclosed and its Representatives shall:





a. hold
the Information in confidence, exercising a degree of care not less than the
care used by such party to protect its own proprietary and confidential
information that it does not wish to disclose, and in no event less than a
reasonable degree of care;





b.restrict
disclosure of the Information solely to those Representatives with a need to
know and not disclose it to any other person;


c. advise
those representatives of their obligations with respect to the Information;
and





d. use
the Information only in connection with continuing discussions by the parties
concerning the Employment, except as may otherwise be mutually agreed upon in
writing, and shall reproduce such Information only to the extent necessary for
such purpose.





5. Information
shall be deemed the property of the disclosing party and, within ten (10)
business days upon written request from the disclosing party, the other party
will return all such Information received in tangible form to the disclosing
party or will destroy all such Information.




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6. The
party to whom Information is disclosed shall have no obligation to preserve the
proprietary or confidential nature of any Information that:





a. was
previously known to such party free of any obligation to keep it confidential;
or





b. is
or becomes publicly available by means other than unauthorized disclosure;
or





c. is
developed by or on behalf of such party independent of any Information furnished
under this Agreement as evidenced by contemporaneous written records;
or





d. is
received from a third party whose disclosure does not violate any
confidentiality obligation.





Proprietary Information shall not be
deemed to be within any of the above exceptions if it is merely embraced by more
general information available on a non-confidential basis or in the recipient’s
possession.  In addition, any combination of features shall not be
deemed within any of the foregoing exceptions unless the combination itself and
its principles of operation are embraced by the corresponding information that
is within one of the foregoing exceptions.





The party to whom Information is
disclosed shall have the burden of establishing the applicability of any
exception or exceptions to the duty of confidentiality and non-disclosure
provided in this section, and as to the exceptions provided in sections 6(a) and
6(c), shall waive the exception(s) if not asserted in writing within 30 days
from receipt of the portion of Information as to which the party to whom
Information is disclosed claims it to be applicable.





7. Neither
this Agreement, nor the disclosure of Information under this Agreement, nor the
ongoing discussions and correspondence by the parties concerning the Employment
or any other matter, shall constitute or imply any promise or intention to make
any purchase or use of products, facilities or services by either party or its
affiliated companies or any commitment by either party or its affiliated
companies with respect to any other present or future
transaction.  If, in the future, the parties elect to enter into
binding commitments relating to the Employment or any other transaction, such
commitments will be explicitly stated in a separate written agreement executed
by both parties, and the parties hereby affirm that they do not intend their
discussions, correspondence, and other activities to be construed as forming a
contract relating to the Employment or any other transaction without execution
of such separate written agreement.




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8. Each
party retains the right, in its sole discretion, to determine whether to
disclose its Information to the other party, and disclosure of Information of
any nature shall not obligate the disclosing party to disclose any further
Information.




9. Each
party (a) acknowledges that neither makes any representation or warranty
(express or implied) as to the accuracy or completeness of any Information, (b)
explicitly acknowledges that all Information under this Agreement constitutes
trade secrets, and (c) agrees to assume full responsibility for all conclusions
it may derive from the Information.  Each Party specifically disclaims
all warranties, guarantees, and representations of any kind, and related damages
of whatever kind, including without limitation incidental, collateral and
consequential damages with respect to any exchanged proprietary information,
express and implied, including, but not limited to, its adequacy, sufficiency,
freedom of defect of any kind, and from patent infringement.




10. In
the event that the receiving party or its employees or Representatives (a) need
(for securities law purposes) to make disclosures of Information or (b) are
required by law, regulation, or government investigative demands to disclose any
Information, in the case of (a) the receiving party shall provide the disclosing
party with prompt written notice so that the disclosing party can work with the
receiving party to limit the disclosure to the greatest extent possible
consistent with legal obligations (it being understood that disclosure of the
name of the other party will never be made without that party’s prior written
consent); or in the case of (b) the receiving party shall use its reasonable
efforts to minimize such disclosure and obtain an assurance that the recipient
shall accord confidential treatment to the Information, and shall notify the
disclosing party contemporaneously of such disclosure.




11.
Nothing contained in this Agreement shall be construed as granting or conferring
any rights by license or otherwise in any Information disclosed, or under any
trademark, patent, copyright, mask work or any other intellectual property right
of either party.  None of the information which may be disclosed or
exchanged by the parties shall constitute any representation, warranty,
assurance, guarantee or inducement by either party to the other of any kind,
and, in particular, with respect to the non-infringement of trademarks, patents,
copyrights, mask works or any other intellectual property right.




12. Each
party agrees that it will not, without the prior written consent of the other,
transmit, directly or indirectly, the information received from the other
hereunder or any portion thereof to any country outside of the United States
except such information which is directly related to ongoing Employment between
the two parties, and which is beneficial to both parties, and which will not
injure either party, and which is necessary for the Employment’
success.




c. Restricted Period. The "Restricted Period" shall be deemed as
the term of this Agreement and twelve (12) months following termination of this
Agreement.




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d.
Restricted Area. The Restricted Area shall be deemed to mean within any target
market in which the Company engages in or may in the future engage in the
Business, namely the global functional food market..




e.
Business Activities. "Business Activities" shall be deemed to include the
Business and any additional activities that the Company or any of its affiliates
may engage in during the term of this Agreement or may foreseeably engage in
after the term of this Agreement.




f.
Covenants as Essential Elements of this Agreement. It is understood by and
between the parties hereto that the foregoing covenants contained in Sections
7(a) and 7(b) are essential elements of this Agreement, and that but for the
agreement by the Employee to comply with such covenants, the Company would not
have agreed to enter into this Agreement. Such covenants by the Employee shall
be construed to be agreements independent of any other provisions of this
Agreement. The existence of any other claim or cause of action, whether
predicated on any other provision in this Agreement, or otherwise, as a result
of the relationship between the parties shall not constitute a defense to the
enforcement of such covenants against the Employee.




g.
Survival After Termination of Agreement. Notwithstanding anything to the
contrary contained in this Agreement, the covenants in Sections 7(a) and 7(b)
shall survive the termination of this Agreement and the Employee's employment
with the Company




9.
Withholding. Anything to the contrary notwithstanding, all payments required to
be made by the Company hereunder to the Employee or the Employee's estate or
beneficiaries shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions, the Company may accept other
arrangements pursuant to which it is satisfied that such tax and other payroll
obligations will be satisfied in a manner complying with applicable law and
regulation.




10.
Notices. Any notice required or permitted to be given under the terms of this
Agreement shall be sufficient if in writing and if sent postage prepaid by
registered or certified mail, return receipt requested, by overnight delivery;
by courier; or by confirmed telecopy, in the case of the Employee to the
Employee's last place of business or residence as shown on the records of the
Company, or in the case of the Company to its principal office as set forth in
the first paragraph of this Agreement, or at such other place as it may
designate.




11.
Waiver. Unless agreed in writing, the failure of either party, at any time, to
require performance by the other of any provisions hereunder shall not affect
its right thereafter to enforce the same, nor shall a waiver by either party of
any breach of any provision hereof be taken or held to be a wavier of any other
preceding or succeeding breach of any term or provision of this Agreement. No
extension of time for the performance of any obligation or act shall be deemed
to be an extension of time for the performance of any other obligation or act
hereunder.




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12.
Completeness and Modification. This Agreement constitutes the entire
understanding between the parties hereto superseding all prior and
contemporaneous agreements or understandings among the parties hereto concerning
the Employment Agreement. This Agreement may be amended, modified, superseded or
canceled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
parties or, in the case of a waiver, by the party to be charged.




13.
Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which shall constitute but one
agreement.




14.
Binding Effect/Assignment. This Agreement shall be binding upon the parties
hereto, their heirs, legal representatives, successors and assigns. This
Agreement shall not be assignable by the Employee but shall be assignable by the
Company in connection with the sale, transfer or other disposition of any part
or all of its business or to any of the Company's affiliates controlled by or
under common control with the Company.




15.
Governing Law. This Agreement shall become valid when executed and accepted by
the Company. The parties agree that it shall be deemed made and entered into in
the State of Illinois and shall be exclusively governed in accordance with the
laws of the State of Illinois without regard for conflict of law
principles.




16.
Further Assurances. All parties hereto shall execute and deliver such other
instruments and do such other acts as may be necessary to carry out the intent
and purposes of this Agreement.




17.
Headings. The headings of the sections are for convenience only and shall not
control or affect the meaning or construction or limit the scope or intent of
any of the provisions of this Agreement.




18.
Survival. Any termination of this Agreement shall not, however, affect the
ongoing provisions of this Agreement which shall survive such termination in
accordance with their terms.




19.
Severability. The invalidity or unenforceability, in whole or in part, of any
covenant, promise or undertaking, or any section, subsection, paragraph,
sentence, clause, phrase or word or of any provision of this Agreement shall not
affect the validity or enforceability of the remaining portions
thereof.




20.
Enforcement. Should it become necessary for any party to institute legal action
to enforce the terms and conditions of this Agreement, the ultimately successful
party will be awarded reasonable attorneys' fees at all trial and appellate
levels, expenses and costs.




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21.
Venue. Company and Employee acknowledge and agree that the U.S. District for the
Northern District of Illinois, or if such court lacks jurisdiction, the
Nineteenth Judicial Circuit (or its successor) in and for Lake County, Illinois,
shall be the exclusive venue and exclusive proper forum in which to adjudicate
any case or controversy arising either, directly or indirectly, under or in
connection with this Agreement and the parties further agree that, in the event
of litigation arising out of or in connection with this Agreement in these
courts, they will not contest or challenge the jurisdiction or venue of these
courts.




22.
Construction. This Agreement shall be construed within the fair meaning of each
of its terms and not against the party drafting the document.




23.
Independent Legal Counsel. The parties have either (i) been represented by
independent legal counsel in connection with the negotiation and execution of
this Agreement, or (ii) each has had the opportunity to obtain independent legal
counsel, has been advised that it is in their best interests to do so, and by
execution of this Agreement has waived such right.




24.
Facsimile Copies. All duly executed facsimile copies are fully binding under any
and all applicable laws.


















THE
EMPLOYEE ACKNOWLEDGES THAT HE HAS READ ALL OF THE TERMS OF THIS AGREEMENT,
UNDERSTANDS THE AGREEMENT, AND AGREES TO ABIDE BY ITS TERMS AND
CONDITIONS.




WITNESSED
BY:




Z
TRIM HOLDINGS, INC.














_______________________
              
              
              
              On behalf of Z Trim Holdings,
      Inc.
            ______________________
              
              
              
              Brian Chaiken,
    Individual