Exhibit 10.40**Employment Agreement**     This employment agreement (“Agreement”), made and entered into this 20st day ofNovember 2006, by and between CytoCore, Inc., with its principal place of business at 414 NorthOrleans Court, Suite 502 in Chicago, Illinois 60610 (the “Company”) and Robert McCullough Jr., 227South Ridgewood, Kentfield, CA 94904 ( “McCullough”).**Background**     McCullough provides a variety of financial and business services as part of his duties asChief Financial Officer for CytoCore, and is ready, willing, and able to provide such assistanceto the Company on the terms and conditions set forth herein.     The Company is in the process of developing a series of medical devices, drug deliverySystems, and other cervical and uterine cancer related medical Systems. In pursuit of its businessstrategy the Company desires to retain the services of McCullough under the terms and conditionsset forth herein.     **NOW THEREFORE,**for good and valuable consideration, the receipt and sufficiency of which ishereby acknowledged, the Company and McCullough agree as follows: 1. Engagement and Scope of Services.  1.1 Company hereby retains McCullough and McCullough agrees to provide to theCompany the employment services which are more fully described below:    Employment duties will involve but are not limited to interaction with the Company’sChief Executive Officer, Medical Advisory Board, other Officers, or consultantsrelated to or regarding the Company’s business plans, operations, commercializationof medical devices, and other business matters that fall within McCullough’s area ofexpertise. McCullough will report directly to the Board of Directors and the AuditCommittee comprised of members of the Board of Directors    McCullough will be responsible for the financial accounting and reporting of thestate of the Company’s financial operations and condition in accordance with rulesand regulations promulgated by regulatory authorities. McCullough has the authorityto hire necessary personnel and consultants to achieve this objective. and dischargesame. McCullough will be responsible for generating financial projections and willhave direct access to all personnel and consultants employed by the Company in orderto obtain necessary information for such projections. Company will provide directaccess to all computers and computer generated information required for financialstatement preparation. Company will reimburse McCullough. for attending seminars thatMcCullough feels are essential to perform the duties listed abovel of 6
 

 
   McCullough shall perform such assignments made by the Board of Directors C  1.2 This Agreement is a non-exclusive agreement. McCullough is free to provide similar ordifferent services to any other company or organization desiring his services, provided,however, such services will not interfere with the performance of his duties hereunder andhis services are not provided to any competitors of CytoCore.  1.3 McCullough shall perform such services from whatever location he elects, but will be inChicago at such times as are necessary for the performance of his duties.     Term of Agreement. 2.1 This Agreement shall supersede the Agreement that is in place between CytoCore andMcCullough dated as of April 1, 2006 that has a twelve (12) month term. This Agreement shallbe for a period of twenty four (24) months from December 1, 2006, and shall terminate twentyfour (24) months from December 1, 2006 following written notice by either party to the otherat least thirty (30) days prior to the expiration date.2.2 This Agreement is subject to termination in the event of a material breach of any term hereofand the breaching party’s failure to cure such material breach to the on- breaching party’sreasonable satisfaction within ten (10) business days of written notice. 1.3 Within ten (10) business days of termination of this Agreement, McCullough shall submit tothe Company an itemized invoice for any remaining unpaid fees or reimbursable expenses thendue and owing under this Agreement. Company, upon receipt and payment of such final invoiceshall thereafter have no further obligation for payment under this Agreement. Upon thetermination of this Agreement and payment in full of all monies due and owed from Company toMcCullough pursuant to this Agreement, McCullough shall promptly return to Company all copiesof any Company data, information, documents, or other materials of any sort stored in anyform whatsoever, including all materials incorporating any of the Company’s ConfidentialInformation.  2. Compensation, Expenses, and Payments.  3.1 The Company shall pay McCullough-Ten Thousand Dollars ($10,000.00) for each month he providesservices to the Company. At such time as the Company has raised additional funding equal toFive Million Dollars ($5,000,000), the Company’s payment to McCullough will increase toFifteen Thousand Dollars ($15,000) per month for the balance of the term of this Agreement.2 of 6
 

 
 3.2 McCullough will also receive various grants of warrants to purchase CytoCore stock. Thewarrant grants and their associated performance triggers are listed in Addendum A.  3.3 The Company shall reimburse McCullough for his out-of-pocket expenses related to theperformance of his duties hereunder pursuant to the Company’s usnal expense reimbursementprocedures. McCullough acknowledges that he will comply with said procedures. Further,McCullough agrees to comply with the Company’s Code of Ethics and Business Conduct forOfficers, Directors and Employees of CytoCore, Inc.  3.4 Company agrees to provide health insurance for McCullough and his children during the termof this Agreement.  3. Proprietary Information.  3.1 McCullough acknowledges that in order to perform his services hereunder, it may be necessaryfor the Company to disclose certain confidential technical, medical, or commercialinformation (“Confidential Information”) to him. McCullough agrees that he shall notdisclose, transfer use, copy. or allow access to any such Confidential Information to anythird parties without the Company’s express written approval except those who have a need toknow such Information and are obligated to maintain the confidentiality of such Information.The foregoing shall not apply to that information which was already known to McCullough as ofApril 1, 2006 before disclosure, is publicly disseminated through no fault of McCullough orthe Company, is rightfully received from a third party, or is required to be disclosedpursuant to court order. This provision shall survive the termination or expiration of thisAgreement and continue in effect for a period of three (3) years.  4. Warranty and Exclusion of Warranty.  4.1 McCullough warrants that his services will be of professional quality and performed inaccordance with the terms hereof.  4.2 The foregoing warranty is in lieu of all other warranties, conditions, or representations,express or otherwise, including without limitation any implied warranties of merchantabilityor fitness of use for a particular purpose.  5. Termination.  5.1 This Agreement may be terminated by either party to this Agreement upon thirty (30) daysprior written notice to the other party. This termination may be without cause. If thisAgreement is terminated by the Company without cause, the Company shall pay McCullough on amonthly basis the balance of what he is entitled to in Section 3.1 above. for the duration ofthe 24 month employment3 of 6
 

 
   term and health insurance for him and his children during the duration of thisagreement.  6. No Interference.  6.1 For the period commencing on the date hereof and ending on the date twentyfour (24) months after the date this Agreement is terminated, the Contractor agrees heshall not: (a) Take any action which would: (i) Interfere with the contractual relationships ofthe Company or any affiliate of the Company, customers, suppliers, otherconsultants, employees, or others which relate to the business of theCompany or any affiliate of the Company; or  (ii) Induce any employee, consultant, or representativeof the Company or any affiliate of the Company not to become or not tocontinue as an employee, McCullough, or representative of the Company oraffiliate of the Company.  (iii) Disparage, orally or in writing, or diminish thereputation of the Company or any entity affiliated with the Company.     7.2 McCullough recognizes that irreparable damage will result to the Company and its businessif McCullough fails to or refuses to perform his obligations referred to in Sections 4 and 7 ofthis Agreement. Accordingly, in addition to any remedies and damages available, the Company shallbe entitled to request injunc5tive relief and McCullough may be specifically compelled to performhis obligations hereunder. 7. General.  7.1 This Agreement is made and entered into, and is to be at least partiallyperformed, in Cook County, Illinois. It shall be interpreted, construed and enforcedby, and its construction and performance shall be governed by, the laws of the Stateof Illinois applicable to written agreements made and to be performed entirely withinIllinois without regard to principles of conflicts of laws, except to the extent thatFederal law may apply.  7.2 All notices required to be given hereunder shall be in writing and addressed tothe respective parties set forth herein, unless another address shall have beenpreviously designated in writing to the other party. Notice shall be deemed sent4 of 6
 

 
   and effective when delivered by hand delivery, via U.S. Mail,Certified, with return receipt requested, or via regular U.S. Mailand confirmed facsimile delivery.  7.3 This Employment Agreement constitutes the complete and entireAgreement . between McCullough and the Company with respect to the subjectmatter hereof. This Agreement supersedes all prior agreements, contracts,representations, proposals, discussions, and communications, whether oral orin writing, relating hereto. This Agreement may be modified only in writingsigned by both McCullough and a duly authorized representative of theCompany.  7.4 This Agreement may be executed in counterparts or withfacsimile signatures, all of which shall constitute an original.  7.5 In the event any portion of this Agreement is deemed to beinvalid or unenforceable, that portion will be deemed to be omitted and theremainder of this Release will remain in full force and effect.Signatures   The Company  **Cytocore, Inc.** Robert McCullough, Jr.   /s/ David Weissberg /s/ Robert McCullough, Jr.   By: David Weissberg By: Robert McCullough, Jr.Title: CEO Title:Date: November 20, 2006 Date:5 of 6
 

 
**Addendum A.****1. Performance Milestones:**McCullough will be granted warrants based on the following performance milestones.     A.) 150,000 warrants upon product completion of FDA product trials and receipt of allnecessary FDA approvals.     B.) 250,000 warrants when the Company raises 5 million in equity at a price above $.22/Share     C.) 100,000 warrants when the Company signs a distribution agreement for the E2collecter.     D.) 250,000 warrants when the Company’s stock price trades above $.30 for 45 out of 60 tradingdays.     E.) 250,000 warrants when the Company’s stock price trades above $.50 for 45 out of 60 tradingdays     F.) 500,000 warrants when the Company’s stock price trades above $1.00 for 45 out of 60trading days.All the warrants listed in categories 1. (A) through (F) will have an exercise price at a 33%discount to the average closing price of the Company’s stock price during the prior forty five daysbefore the target as described above is reached.**2. Revenue Milestones:**     McCullough will be granted 500,000 warrants when the company’s revenue reaches $20million and 500,000 warrants when the Company’s revenue reaches $50 million. Exercise price will beat a 33% discount to the average trading price of the Company’s stock for a period of 45 days priorto the attainment of the revenue milestones.3. **Acquisition of Company:**     A.) McCullough will receive 1.25 million warrants to purchase the Company’s stock at $.25 ifthe company is acquired for more than $1.00.     B.) McCullough will receive 1.75 million warrants to purchase the Company’s stock at $.50 ifthe company is acquired for more than $2.00     C.) McCullough will receive 2.5 million warrants each to purchase the Company’s stock at $.75if the company is acquired for more than $3.00.The Company agrees to facilitate a cash less exercise of the warrants.6 of 6