Document:

EMPLOYMENT
      AGREEMENT

    

         THIS
      EMPLOYMENT AGREEMENT (this “Agreement”)
      is
      made as of December 11, 2006, by and between NexCen Brands, Inc., a Delaware
      corporation (the “Company”),
      and
      Charles A. Zona (the “Executive”),
      each
      a “Party”
and
      collectively the “Parties.”
Unless
      otherwise indicated, capitalized terms used herein are defined in Section 2.1.
      

    

         WHEREAS,
      the Company has determined that it is in the best interests of the Company
      and
      its shareholders to enter into an employment agreement with the Executive and
      the Executive is willing to serve as an employee of the Company. 

    

         NOW,
      THEREFORE, in consideration of the mutual covenants and agreements set forth
      herein, including the Option Grant, as defined below, it is agreed by and
      between the Executive and the Company as follows: 

    

    ARTICLE
      I

    EMPLOYMENT
      TERMS

    

         1.1
      Employment.
      The
      Company will employ the Executive, and the Executive accepts employment with
      the
      Company, upon the terms and conditions set forth in this Agreement for the
      period beginning on the date hereof (the “Effective Date”) and ending as
      provided in Section
      1.4(a)
      hereof
      (the “Employment
      Period”).
      

    

         1.2
      Position
      and Duties.
      

    

         (a) Generally.
      The
      Executive shall serve as the Executive Vice President, Brand Management and
      Licensing, of the Company and, in such capacity shall perform such duties as
      are
      set forth in the By-Laws of the Company and as are customarily performed by
      an
      officer with similar title and responsibilities of a public company of a similar
      size and shall have such power and authority as shall reasonably be required
      to
      enable him to perform his duties hereunder; provided, however, that in
      exercising such power and authority and performing such duties, he shall at
      all
      times be subject to the authority, control and direction of the President and
      Chief Executive Officer of the Company. 

    

         (b) Duties
      and Responsibilities.
      The
      Executive shall report to the President and Chief Executive Officer of the
      Company and shall devote his full business time and attention to the business
      and affairs of the Company and its Subsidiaries. The Executive shall perform
      his
      duties and responsibilities in a diligent, trustworthy, businesslike and
      efficient manner. The Executive shall not engage in any other business
      activities that could reasonably be expected to conflict with the Executive’s
      duties, responsibilities and obligations hereunder. During the Employment
      Period, the Executive shall promptly bring to the Company or its Subsidiaries,
      as applicable, all investment or business opportunities relating to the Business
      of which the Executive becomes aware. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

         (c)  Principal
      Office.
      The
      principal place of performance by the Executive of his duties hereunder shall
      be
      the Company’s principal executive offices in New York, New York, although the
      Executive may be required to travel outside of the area where the Company’s
      principal executive offices are located in connection with the business of
      the
      Company.

     

         1.3
      Compensation.
      

    

         (a) Base
      Salary.
      The
      Executive’s base salary shall be $300,000.00 per annum (the “Base
      Salary”).
      The
      Base Salary payable for Fiscal Year 2006 shall be pro rated based on the number
      of days from and including the Effective Date through and including
      December 31, 2006. The Base Salary will be payable to the Executive by the
      Company in regular installments in accordance with the Company’s general payroll
      practices. The Executive shall receive such increases (but not decreases) in
      his
      Base Salary as the President and Chief Executive Officer, or the compensation
      committee of the Board, may approve in his or its sole discretion from time
      to
      time, provided that the Executive’s Base Salary will be reviewed for potential
      upward adjustment not less often than annually.

    

         (b) Annual
      Bonus.
      Executive will be eligible to receive a performance-based bonus calculated
      as a
      percentage of the Bonus Pool, as determined by the President and Chief Executive
      Officer, based on achieving annual performance goals that may be recommended
      by
      the President and Chief Executive Officer, all of which shall be subject to
      review and confirmation by the Company’s compensation committee or Board of
      Directors to the extent required under applicable securities laws and the Nasdaq
      listed company requirements.

     

         (c) Withholding.
      All
      payments made under this Agreement (including Base Salary, bonus payments,
      and
      other amounts) shall be subject to withholding for income taxes, payroll taxes
      and other legally required deductions. 

    

         (d) Expenses.
      The
      Company will reimburse the Executive for all reasonable expenses incurred by
      him
      in the course of performing his duties under this Agreement that are consistent
      with the Company’s policies in effect at that time with respect to travel,
      entertainment and other business expenses, subject to the Company’s requirements
      with respect to reporting and documentation of such expenses. 

    

         (e) Vacation;
      Holiday Pay and Sick Leave.
      The
      Executive shall be entitled to four (4) weeks’ paid vacation in each calendar
      year, which if not taken during any year may be carried forward to any
      subsequent year. Executive shall receive holiday pay and paid sick leave as
      provided to other executive employees of the Company. 

    

         (f) Additional
      Benefits.
      During
      the Employment Period, the Executive shall be entitled to participate (for
      himself and, as applicable, his dependents) in the group medical, life, 401(k)
      and other insurance programs, employee benefit plans and perquisites which
      may
      be adopted by the Board, or the compensation committee of the Board, from time
      to time, for participation by the Company’s senior management or executives, as
      well as dental, life and disability insurance coverage, with payment of, or
      reimbursement for, such insurance premiums by the Company, subject to, in all
      cases, the terms and conditions established by the Board with respect to such
      plans (collectively, the “Benefits”);
      provided, however, that the Board, in its reasonable discretion, may revise
      the
      terms of any Benefits so long as such revision does not have a
      disproportionately negative impact on the Executive vis-à-vis other Company
      employees, to the extent applicable. 

     

    
      
         

      

      
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         (g) Indemnification.
      The
      Executive shall be entitled to indemnification by the Company in the same
      circumstances and to the same extent as the other executive officers and
      directors of the Company, which indemnification shall in no event be less
      favorable to the Executive than the fullest scope of indemnification permitted
      by applicable Delaware law (or any such greater scope of indemnification
      provided by agreement or by the terms of the Company’s Certificate of
      Incorporation or By-Laws to any executive officer or director of the Company).
      

    

         (h) Stock
      Options.
      The
      Executive shall be granted options to purchase a total of 250,000 shares of
      the
      Company’s common stock (the “Stock
      Options”)
      on the
      Effective Date (such grant of Stock Options being referred to herein as the
      “Option
      Grant”).
      These
      Stock Options shall have an exercise price equal to the fair market value of
      the
      Company’s common stock on the date of grant, and a 10-year term. The Stock
      Options shall be granted pursuant to and be subject to the terms of the
      Company’s 2006 Equity Incentive Plan (the “Plan”)
      and
      customary grant agreements. The Stock Options shall vest and become exercisable
      in equal tranches on the first, second and third anniversaries of the Effective
      Date, subject to the Executive’s continued employment with the Company on each
      vesting date, and further subject to accelerated vesting under the Plan, the
      grant agreement and the terms of this Agreement; provided that in the event
      of
      the Executive’s termination by the Company without Cause, the Executive’s
      resignation with Good Reason or upon a Change of Control (as defined below),
      the
      Executive shall immediately be fully vested in all of the Stock Options. Except
      as provided in the preceding sentence, any unvested options shall be forfeited
      upon termination of Executive’s employment, and any options that are vested but
      unexercised upon termination shall be subject to the terms and conditions of
      the
      Plan or, if applicable, the last sentence of Section 1.4(c) hereof. In the
      event that the Company elects from time to time during the Employment Period
      to
      award to its senior management or executives, generally, options to purchase
      shares of the Company’s stock pursuant to any stock option plan or similar
      program, the Executive shall be entitled to participate in any such stock option
      plan or similar program on a basis consistent with the participation of other
      senior management or executives of the Company. 

     

     

    
      
         

      

      
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         1.4
      Term
      and Termination.
      

    

         (a) Duration.
      The
      Employment Period shall commence on the Effective Date and the initial term
      shall terminate three (3) years from the Effective Date (the “Term”),
      unless earlier terminated by the Company or the Executive as set forth in this
      Section 1.4.
      The
      Term shall renew automatically for one-year periods, unless either party gives
      the other party written notice of its intention not to renew the Agreement
      no
      later than 90 days prior to the expiration of the then current Term. The
      Employment Period shall be terminated prior to the then-applicable expiration
      of
      the Term upon the first to occur of (i) termination of the Executive’s
      employment by the Company for Cause, (ii) termination of the Executive’s
      employment by the Company without Cause, (iii) the Executive’s resignation
      with Good Reason, (iv) the Executive’s resignation other than for Good
      Reason, or (v) the Executive’s death or Disability. The Executive shall not
      terminate the Employment Period unless he gives the Company written notice
      that
      he intends to terminate the Employment Period at least (i) 90 days prior to
      the Executive’s proposed Termination Date in the case of termination without
      Good Reason or (ii) 30 days prior to the Executive’s proposed Termination
      Date in the case of termination with Good Reason. As a condition to Executive
      receiving any payments or benefits under Section 1.4(b) or
      Section 1.4(c), the Executive shall execute and deliver to the Company the
      General Release in the form attached hereto as Exhibit
      A.
      

    

         (b) Severance
      Upon Termination Without Cause, Upon Resignation by the Executive For Good
      Reason or Failure to Renew Term.
      If the
      Employment Period is terminated by the Company without Cause or if the Executive
      resigns for Good Reason, or if the Company fails to renew the Term (in which
      case termination of the Executive’s employment shall be effective at the
      expiration of the then-current Term), then the Executive will be entitled to
      receive (1) any unpaid Base Salary through and including the date of
      termination or resignation and any other amounts, including any declared but
      unpaid Annual Bonus, or other entitlements then due and owing to the Executive
      as of the Termination Date; (2) an amount equal to the Executive’s Base
      Salary (at the rate in effect on the date the Executive’s employment is
      terminated) for a 6-month period following the Executive’s termination of
      employment as described in this Section 1.4(b),
      payable
      in (A) substantially equal installments over the lesser of (i) a
      six-month period immediately following such termination, or (ii) such
      shorter period that is the longest period permissible in order for the payments
      not to be considered “nonqualified deferred compensation” under
      Section 409A of the Code or any regulations, rulings or other regulatory
      guidance issued thereunder, or, (B)  if such payment terms would not
      satisfy the requirements of Section 409A of the Code and the regulations,
      rulings and other regulatory guidance issued thereunder, a lump sum on the
      date
      that is six months following the Executive’s “separation from service” (within
      the meaning of Section 409A of the Code) occurring in connection with such
      termination and (3) continue to participate in the Company’s group medical
      plan on the same basis as he previously participated or
      receive
      payment of, or reimbursement for, COBRA premiums (or, if COBRA coverage is
      not
      available, reimbursement of premiums paid for other medical insurance in an
      amount not to exceed the COBRA premium) for a one-year period following the
      Executive’s termination of employment; provided
      that
      if
      the Executive is provided with health insurance coverage by a successor
      employer, any such coverage by the Company shall cease (each of (2) and
      (3) referred to as the “Severance
      Payment”).
      The
      Executive also shall be entitled to receive payment for all reimbursable
      expenses or other entitlements then due and owing to the Executive as of the
      Termination Date. If the Executive breaches his obligations under Section 1.6,
      1.7, 1.8 or 1.9
      of this
      Agreement, the Company’s obligation to make any Severance Payments and provide
      any Benefits shall cease as of the date of such breach; provided, that if the
      Executive cures such breach within 10 days of receiving written notice from
      the Company of such breach (which notice the Company shall provide promptly
      to
      the Executive after learning of such breach), the Company shall promptly pay
      all
      Severance Payments not made during such period of dispute and resume making
      Severance Payments and providing Benefits promptly following such cure.

    

    
      
         

      

      
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         (c) Severance
      upon a Change of Control.
      Anything contained herein to the contrary notwithstanding, in the event the
      Executive’s employment hereunder is terminated within twelve (12) months
      following a Change of Control (as defined in the Plan) by the Company without
      Cause or by the Executive with Good Reason, the Executive shall be entitled
      to
      receive the Severance Payment as described in sub-section (b) above;
      provided, however, that in lieu of the calculation contained in Section 1.4(b)(2),
      Executive shall be entitled to receive an amount equal to $100 less than two
      times the sum of (i) the Executive’s Base Salary (at the rate in effect on
      the date of termination) and (ii) the annual bonus paid to Executive
      pursuant to Section
      1.3(b)
      in the
      year prior to such Change of Control, if any; provided, however, that if such
      lump sum severance payment, either alone or together with other payments or
      benefits, either cash or non-cash, that the Executive has the right to receive
      from the Company, including, but not limited to, accelerated vesting or payment
      of any deferred compensation, options, stock appreciation rights or any benefits
      payable to the Executive under any plan for the benefit of employees, would
      constitute an “excess parachute payment” (as defined in Section 280G of the
      Internal Revenue Code of 1986), then such lump sum severance payment or other
      benefit shall be reduced to the largest amount that will not result in receipt
      by the Executive of an “excess parachute payment.” The determination of the
      amount of the payment described in this subsection shall be made by the
      Company’s independent auditors at the sole expense of the Company. For purposes
      of clarification the value of any options described above will be determined
      by
      the Company’s independent auditors using a Black-Scholes valuation methodology.
      If within twelve (12) months after the occurrence of a Change of Control,
      the Company shall terminate the Executive’s employment without Cause or the
      Executive terminates his employment with Good Reason, then notwithstanding
      the
      vesting and exercisability schedule in any stock option or other grant agreement
      between the Company and the Executive, all unvested stock options, shares of
      restricted stock and other equity awards granted by the Company to the Executive
      pursuant to any such agreement shall immediately vest, and all such stock
      options shall become exercisable and shall remain exercisable for the lesser
      of
      180 days after the effective date of termination of the Executive’s
      employment or the remaining term of the applicable option.

     

    
      
         

      

      
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         (d) Death
      and Disability.
      In the
      event of the Company terminates this Agreement due to the death or Disability
      of
      the Executive, the Company shall pay the Executive or his estate his Base Salary
      through the date of termination, at the rate then in effect, any declared but
      unpaid Annual bonus, and all expenses or accrued Benefits, including any arising
      prior to such termination which are payable to the Executive pursuant to this
      Agreement through the date of termination. Any other rights and benefits the
      Executive may have under employee benefit plans and programs of the Company
      generally in the event of the Executive’s Disability shall be determined in
      accordance with the terms of such plans and programs. In the event of
      Executive’s death, any rights and benefits that the Executive’s estate or any
      other person may have under employee benefit plans and programs of the Company
      generally in the event of the Executive’s death shall be determined in
      accordance with the terms of such plans and programs. 

    

         (e) Salary
      and Other Payments Through Termination.
      If the
      Executive’s employment with the Company is terminated during the Term
      (i) by the Company for Cause or (ii) by the Executive other than for
      Good Reason, the Executive will be entitled to receive his Base Salary through
      the Termination Date, as well as any declared but unpaid Annual Bonus, but
      will
      not be entitled to receive any Severance Payments or Benefits after the
      Termination Date. The Executive shall be entitled to receive payment for all
      reimbursable expenses or other entitlements then due and owing to the Executive
      as of the Termination Date.

     

         (f) Other
      Rights.
      Except
      as set forth in this Section 1.4,
      all of
      the Executive’s rights to receive Base Salary, Benefits and annual bonuses
      hereunder (if any) which accrue or become payable after the termination of
      the
      Employment Period shall cease upon such termination. 

    

         (g) Continuing
      Benefits.
      Notwithstanding Section 1.4(f),
      termination pursuant to this Section 1.4
      shall
      not modify or affect in any way whatsoever any vested right of the Executive
      to
      benefits payable under any retirement or pension plan or under any other
      employee benefit plan of the Company, and all such benefits shall continue,
      in
      accordance with, and subject to, the terms and conditions of such plans, to
      be
      payable in full to, or on account of, the Executive after such termination.
      

    

         (h) No
      Duty of Mitigation.
      The
      Executive shall not be required to mitigate the amount of any payment provided
      for in this Article I by seeking other employment or
      otherwise.

    

         1.5
      Confidential
      Information.
      

    

         (a) The
      Executive shall not disclose or, directly or indirectly, use at any time, during
      the Employment Period or thereafter, any Confidential Information (as defined
      below) of which the Executive is or becomes aware, whether or not such
      information is developed by him, alone or with others, except to the extent
      that
      (i) such disclosure or use is required by the Executive’s performance of
      the duties assigned to the Executive by the President and Chief Executive
      Officer, (ii) the Executive is required by subpoena or similar process to
      disclose or discuss any Confidential Information, provided, that in such case,
      the Executive shall promptly inform the Company in writing of such event, shall
      cooperate with the Company in attempting to obtain a protective order or to
      otherwise limit or restrict such disclosure to the greatest extent possible,
      except if the Executive’s reasonable interests are adverse to the Company with
      respect to such disclosure or discussion, and shall disclose only that portion
      of the Confidential Information as is strictly required, or (iii) such
      Confidential Information is or becomes generally known to and available for
      use
      by the public, other than as a result of any action or inaction directly or
      indirectly by the Executive in breach of this Agreement. At the Company’s
      expense, the Executive shall take all appropriate steps to safeguard
      Confidential Information and to protect it against disclosure, misuse,
      espionage, loss and theft. The Executive acknowledges that the Confidential
      Information obtained by him during the course of his employment with the Company
      is the sole and exclusive property of the Company and its Subsidiaries, as
      applicable.

     

    
      
         

      

      
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         (b) The
      Executive understands that the Company and its Subsidiaries will receive from
      third parties confidential or proprietary information (“Third
      Party Information”)
      subject to a duty on the part of the Company and its Subsidiaries to maintain
      the confidentiality of such information and to use it only for certain limited
      purposes. During the Employment Period and in the period specified in such
      confidentiality agreements, and without in any way limiting the provisions
      of
Section 1.5(a)
      above,
      the Executive will hold Third Party Information in confidence, consistent with
      the obligations applicable to Confidential Information of the Company generally,
      and will not disclose to anyone (other than personnel and agents of the Company
      or its Subsidiaries who need to know such information in connection with their
      work for the Company or its Subsidiaries) or use, except in connection with
      his
      work for the Company or its Subsidiaries, Third Party Information unless
      expressly authorized by the President and Chief Executive Officer in writing.
      

    

         (c) As
      used in this Agreement, the term “Confidential
      Information”
means
      information that is not generally known to the public and that is related in
      any
      way to the actual or anticipated business of the Company, its Subsidiaries,
      its
      Affiliates or any of their respective predecessors in interest, including but
      not limited to (i) business development, growth and other strategic
      business plans, (ii) properties available for acquisition, financing
      development or sale, (iii) accounting and business methods,
      (iv) services or products and the marketing of such services and products,
      (v) fees, costs and pricing structures, (vi) designs,
      (vii) analysis, (viii) drawings, photographs and reports,
      (ix) computer software, including operating systems, applications and
      program listings, (x) flow charts, manuals and documentation,
      (xi) data bases, (xii) inventions, devices, new developments, methods
      and processes, whether patentable or unpatentable and whether or not reduced
      to
      practice, (xiii) copyrightable works, (xiv) all technology and trade
      secrets, (xv) confidential terms of material agreements and customer
      relationships, and (xvi) all similar and related information in whatever
      form or medium. Confidential Information shall not include any information
      that
      has become generally available to the public (other than through a breach by
      Executive of this Agreement) prior to the date the Executive proposes to
      disclose or use such information or general know-how of the
      Executive.

     

    
      
         

      

      
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         1.6
      Inventions
      and Patents.
      Executive acknowledges that all discoveries, concepts, ideas, inventions,
      innovations, improvements, developments, products, methods, processes,
      techniques, programs, designs, analyses, drawings, reports, patents,
      copyrightable works and mask works (whether or not including any Confidential
      Information) and all issuances, registrations or applications related thereto,
      all other proprietary information or intellectual property and all similar
      or
      related information (whether or not patentable) conceived, developed,
      contributed to, made, or reduced to practice by Executive (either alone or
      with
      others) while employed by Company or any of its Subsidiaries or Affiliates
      or
      any of their respective predecessors in interest (including prior to the date
      of
      this Agreement) or using the materials, facilities or resources of the Company
      or any of its Subsidiaries or Affiliates or any of their respective predecessors
      in interest (collectively, “Company
      Works”)
      is the
      sole and exclusive property of the Company and its Subsidiaries. Executive
      hereby assigns all right, title and interest in and to all Company Works to
      the
      Company and its Subsidiaries and waives any moral rights he may have therein,
      without further obligation or consideration. Any copyrightable work prepared
      in
      whole or in part by the Executive will be deemed “a work made for hire” under
      Section 201(b) of the 1976 Copyright Act, and the Company and its Subsidiaries
      shall own all of the rights comprised in the copyright therein. The Executive
      shall promptly and fully disclose in writing all Company Works to the Company
      and shall cooperate with the Company and its Subsidiaries to protect, maintain
      and enforce the Company’s and its Subsidiaries’ interests in and rights to such
      Company Works (including, without limitation, providing reasonable assistance
      in
      securing patent protection and copyright registrations and executing all
      affidavits, assignments, powers-of-attorney and other documents as reasonably
      requested by the Company, whether such requests occur prior to or after
      termination of the Executive’s employment with the Company). 

    

         1.7
      Delivery
      of Materials Upon Termination of Employment.
      As
      requested by the Company from time to time and in any event upon the termination
      of the Executive’s employment with the Company, the Executive shall promptly
      deliver to the Company, or at the Company’s election destroy, all copies and
      embodiments, in whatever form or medium, of all Confidential Information,
      Company Works and other property and assets of the Company and its Subsidiaries
      in the Executive’s possession or within his control (including, but not limited
      to, office keys, access cards, written records, notes, photographs, manuals,
      notebooks, documentation, program listings, flow charts, magnetic media, disks,
      diskettes, tapes computers and handheld devices (including all software, files
      and documents thereon) and any other materials containing any Confidential
      Information or Company Works) irrespective of the location or form of such
      material and, if requested by the Company, shall provide the Company with
      written confirmation that all such materials have been delivered to the Company
      or destroyed, as applicable. 

    

         1.8
      Non-Compete
      and Non-Solicitation Covenants.
      

    

    
      
         

      

      
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         (a) The
      Executive acknowledges and agrees that the Executive’s services to the Company
      and its Subsidiaries are unique in nature and that the Company and its
      Subsidiaries would be irreparably damaged if the Executive were to provide
      similar services to any Person competing with the Company and its Subsidiaries
      or engaged in the Business. The Executive further acknowledges that, in the
      course of his employment with the Company, he will become familiar with the
      Company’s and its Subsidiaries’ trade secrets and with other Confidential
      Information. During the Noncompete Period, he shall not, directly or indirectly,
      whether for himself or for any other Person, permit his name to be used by
      or
      participate in any business or enterprise (including, without limitation, any
      division, group or franchise of a larger organization) that engages or proposes
      to engage in the Business in the Restricted Territories, other than the Company
      and its Subsidiaries or except as otherwise directed or authorized by the
      President and Chief Executive Officer. For purposes of this Agreement, the
      term
“participate in” shall include, without limitation, having any direct or
      indirect interest in any Person, whether as a sole proprietor, owner,
      stockholder, partner, member, joint venturer, creditor or otherwise, or
      rendering any direct or indirect service or assistance to any Person (whether
      as
      a director, officer, supervisor, employee, agent, consultant or otherwise).
      Nothing herein will prohibit the Executive from mere passive ownership of not
      more than five percent (5%) of the outstanding stock of any class of a publicly
      held corporation whose stock is traded on a national securities exchange or
      in
      the over-the-counter market. As used herein, the phrase “mere passive ownership”
shall include voting or otherwise granting any consents or approvals required
      to
      be obtained from such Person as an owner of stock or other ownership interests
      in any entity pursuant to the charter or other organizational documents of
      such
      entity, but shall not include, without limitation, any involvement in the
      day-to-day operations of such entity. 

    

         (b) During
      the Nonsolicitation Period, the Executive will not directly, or indirectly
      through another Person, solicit, induce or attempt to induce any customer,
      supplier, licensee, or other business relation of the Company or any of its
      Subsidiaries to cease doing business with the Company or any of its
      Subsidiaries, or solicit, induce or attempt to induce any person who is, or
      was
      during the then-most recent 12-month period, a corporate officer, general
      manager or other employee of the Company or any of its Subsidiaries to terminate
      such employee’s employment with the Company or any of its Subsidiaries, or hire
      any such person unless such person’s employment was terminated by the Company or
      any of its Subsidiaries, or in any way interfere with the relationship between
      any such customer, supplier, licensee, employee or business relation and the
      Company or any of its Subsidiaries. The Executive acknowledges and agrees that
      the Company and its Subsidiaries would be irreparably damaged if the Executive
      were to breach any of the provisions contained in this Section 1.8(b).

     

         (c) Executive
      acknowledges that this Agreement, and specifically, this Section 1.8,
      does
      not preclude Executive from earning a livelihood, nor does it unreasonably
      impose limitations on Executive’s ability to earn a living. In addition,
      Executive agrees and acknowledges that the potential harm to the Company of
      its
      non-enforcement outweighs any harm to Executive of its enforcement by injunction
      or otherwise. 

    

    
      
         

      

      
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         1.9
      Enforcement.
      If, at
      the time of enforcement of Section 1.5,
      1.6,
      1.7,
      1.8
      or
1.10,
      a court
      holds that the restrictions stated herein are unreasonable under circumstances
      then existing, the Parties agree that, to the extent permitted by applicable
      law, the maximum period, scope or geographical area reasonable under such
      circumstances will be substituted for the Noncompete Period, scope or area.
      Because the Executive’s services are unique and because the Executive has access
      to Confidential Information and Company Works, the Parties agree that money
      damages would be an inadequate remedy for any breach of Section
      1.5,
      1.6,
      1.7,
      1.8
      or
1.10.
      Therefore, in the event of a breach or threatened breach of Section 1.5,
      1.6,
      1.7,
      1.8
      or
1.10,
      the
      Company or any of its Subsidiaries or any of their respective successors or
      assigns may, in addition to other rights and remedies existing in their favor,
      apply to any court of competent jurisdiction for specific performance and/or
      injunctive or other relief in order to enforce, or prevent any violations of,
      the provisions hereof (without posting a bond or other security). The Parties
      hereby acknowledge and agree that (a) performance of the services of the
      Executive hereunder may occur in jurisdictions other than the jurisdiction
      whose
      law the Parties have agreed shall govern the construction, validity and
      interpretation of this Agreement, (b) the law of the State of New York
      shall govern construction, validity and interpretation of this Agreement to
      the
      fullest extent possible, and (c) Section 1.5,
      1.6,
      1.7,
      1.8
      or
1.10
      shall
      restrict the Executive only to the extent permitted by applicable
      law.

     

         1.10
      Survival.
      Sections 1.5,
      1.6,
      1.7
      and
1.8
      and
1.10
      will
      survive and continue in full force in accordance with their terms
      notwithstanding any termination of the Employment Period. 

    

         1.11
      Consideration.
      The
      Executive hereby agrees and acknowledges that the Option Grant constitutes
      good
      and valuable consideration for the covenant and obligations incurred by
      Executive pursuant to Section 1.8.
      

    

    ARTICLE
      III

    DEFINED
      TERMS

    

         2.1
      Definitions.
      For
      purposes of this Agreement, the following terms will have the following
      meanings: 

    

              “Bonus
      Pool”
means,
      with respect to any Fiscal Year, the amount of the annual net income of Company
      for such Fiscal Year, expressed as a percentage, as determined by the
      compensation committee of the Board of Directors.

     

              “Business”
means
      the business of (i) acquiring or licensing, for sale, licensing or
      sublicensing (or other commercial exploitation) intellectual property including
      trademarks and service marks, (ii) providing, structuring or assisting
      others in providing or obtaining whole company or asset-backed securitization
      financings involving intellectual property and (iii) activities related or
      ancillary to, or that support, any of the foregoing.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

              “Cause”
means
      with respect to the Executive, the occurrence of one or more of the following:
      (i) indictment of a felony involving moral turpitude, misappropriation of
      Company property, embezzlement of Company funds, violation of the securities
      laws or dishonesty, (ii) persistent and repeated refusal to comply with the
      material directives of the President and Chief Executive Officer of the Company
      or acting in a manner inconsistent with Executive’s fiduciary obligations;
      (iii) reporting to work under the influence of alcohol or illegal drugs, or
      the use of illegal drugs (whether or not at the workplace), or (iv) any willful
      breach of Section 1.6,
      1.7, 1.8 or 1.9
      of this
      Agreement. Notwithstanding the foregoing, termination by the Company for Cause
      (other than pursuant to clause (i) above) shall not be effective until and
      unless (i) to the extent such alleged act or circumstance is curable,
      Executive fails to cure such alleged act or circumstance within 30 days of
      receipt of written notice thereof, to the satisfaction of the President and
      Chief Executive Officer in the exercise of his reasonable judgment (or, if
      within such 30-day period the Executive commences and proceeds to take all
      reasonable actions to effect such cure, within such reasonable additional time
      period (no longer than 60 days) as may be necessary), and (ii) notice
      of intention to terminate for Cause has been given by the Company within sixty
      (60) days after the President and Chief Executive Officer learns of the
      act, failure or event constituting “Cause,” which notice shall include a
      description of the particular acts or circumstances which are the basis for
      the
      termination for Cause.

     

              “Code”
      means
      the
      Internal Revenue Code of 1986 and the Treasury regulations thereunder, each
      as
      amended from time to time. 

    

              “Disability”
shall
      have the meaning set forth in a policy or policies of long-term disability
      insurance, if any, the Company obtains for the benefit of itself and/or its
      employees. If there is no definition of “disability” applicable under any such
      policy or policies, if any, then the Executive shall be considered disabled
      due
      to mental or physical impairment or disability, despite reasonable
      accommodations by the Company and its Subsidiaries, to perform his customary
      or
      other comparable duties with the Company or its Subsidiaries immediately prior
      to such disability for a period of at least 120 consecutive days or for at
      least
      180 non-consecutive days in any 12-month period.

     

              “Fiscal
      Year”
means
      the fiscal year of the Company and its Subsidiaries. 

    

              “Good
      Reason”
means
      the occurrence, without the Executive’s written consent, of one or more of the
      following events: (i) the Company reduces the amount of Executive’s Base
      Salary, (ii) the Company requires that the Executive relocate his principal
      place of employment to a site that is more than 50 miles from the Company’s
      offices in New York City or if the Company changes the location of its
      headquarters without the consent of Executive to a location that is more than
      50
      miles from such location, (iii) the Company materially reduces the
      Executive’s responsibilities or removes the Executive from the position of
      Executive Vice President, Brand Management and Licensing other than pursuant
      to
      a termination of his employment for Cause, or upon the Executive’s death or
      Disability, (iv) the failure or unreasonable delay of the Company to
      provide to the Executive any of the payments or benefits contemplated hereby
      or
      (v) the Company otherwise materially breaches the terms of this Agreement;
      provided that no such event shall constitute Good Reason hereunder unless
      (a) the Executive shall have given written notice to the Company of the
      Executive’s intent to resign for Good Reason within 30 days after the
      Executive becomes aware of the occurrence of any such event, which notice shall
      describe in reasonable detail the event or events constitution the basis for
      the
      Executive’s intention to resign for Good Reason and (b) such event or
      occurrence, if a breach susceptible to cure, shall not have been cured or
      otherwise shall not have been resolved to the Executive’s reasonable
      satisfaction, in each case within 30 days of the Company’s receipt of such
      notice. In such case the Executive’s resignation shall become effective on the
      31st
      day
      after the Company’s receipt of the aforementioned notice.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

              “Noncompete
      Period”
means
      the Employment Period and 12 months thereafter; provided that, in the
      event, but only in the event, the Executive’s employment hereunder is terminated
      by the Company without Cause or by the Executive with Good Reason, “Noncompete
      Period” shall mean the Employment Period and 6 months
      thereafter.

     

              “Nonsolicitation
      Period”
means
      the Employment Period and 12 months thereafter.

    

              “Person”
means
      an individual, a partnership, a corporation, a limited liability company, an
      association, a joint stock company, a trust, a joint venture, an unincorporated
      organization, or the United States of America any other nation, any state or
      other political subdivision thereof, or any entity exercising executive,
      legislative, judicial, regulatory or administrative functions of government.
      

    

              “Restricted
      Territories”
means
      the United States and its territories and possessions in which the Company
      engages in the Business as of the Termination Date. 

    

              “Subsidiary”
means,
      with respect to any Person, any corporation, limited liability company,
      partnership, association, or business entity of which (i) if a corporation,
      a majority of the total voting power of shares of stock entitled (without regard
      to the occurrence of any contingency) to vote in the election of directors,
      managers, or trustees thereof is at the time owned or controlled, directly
      or
      indirectly, by that Person or one or more of the other Subsidiaries of that
      Person or a combination thereof, or (ii) if a limited liability company,
      partnership, association, or other business entity (other than a corporation),
      a
      majority of partnership or other similar ownership interest thereof is at the
      time owned or controlled, directly or indirectly, by that Person or one or
      more
      Subsidiaries of that Person or a combination thereof. For purposes hereof,
      a
      Person or Persons shall be deemed to have a majority ownership interest in
      a
      limited liability company, partnership, association, or other business entity
      (other than a corporation) if such Person or Persons shall be allocated a
      majority of limited liability company, partnership, association, or other
      business entity gains or losses or shall be or control any managing director
      or
      general partner of such limited liability company, partnership, association,
      or
      other business entity. For purposes hereof, references to a “Subsidiary” of any
      Person shall be given effect only at such times that such Person has one or
      more
      Subsidiaries, and, unless otherwise indicated, the term “Subsidiary” refers to a
      Subsidiary of the Company. 

    

              “Termination
      Date”
means
      the effective date of the Executive’s termination of employment with the
      Company. 

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

         2.2
      Other
      Definitional Provisions.
      

     

         (a) Section
      references contained in this Agreement are references to sections in this
      Agreement, unless otherwise specified. Each defined term used in this Agreement
      has a comparable meaning when used in its plural or singular form. Each
      gender-specific term used in this Agreement has a comparable meaning whether
      used in a masculine, feminine or gender-neutral form.  

     

         (b) Whenever
      the term “including” (whether or not that term is followed by the phrase “but
      not limited to” or “without limitation” or words of similar effect) is used in
      this Agreement in connection with a listing of items within a particular
      classification, that listing will be interpreted to be illustrative only and
      will not be interpreted as a limitation on, or an exclusive listing of, the
      items within that classification. 

    

    ARTICLE
      III

    MISCELLANEOUS
      TERMS

    

         3.1
      Defense
      of Claims.
      The
      Executive agrees that, during the Employment Period, and for a period of six
      months after termination of the Executive’s employment, upon request by the
      Company, the Executive shall reasonably cooperate with the Company in connection
      with any matters the Executive worked on during his employment with the Company
      and any related transitional matters. In addition, during the Employment Period
      and thereafter, the Executive agrees to reasonably cooperate with the Company
      in
      the defense of any claims or actions that may be made by or against the Company
      that affect the Executive’s prior areas of responsibility or involve matters
      about which the Executive has knowledge, except if the Executive’s reasonable
      interests are adverse to the Company in such claim or action and provided that
      after the Employment Period such level of cooperation shall be reasonable and
      shall take due account of the Executive’s work and personal commitments. The
      Company agrees to promptly reimburse the Executive for all of the Executive’s
      reasonable travel and other direct expenses incurred, or to be reasonably
      incurred, to comply with the Executive’s obligations under this
      Section 3.1.

     

         3.2
      Nondisparagement.
      The
      Executive agrees to refrain from (i) making, directly or indirectly, any
      derogatory comments concerning the Company or its Subsidiaries or any current
      or
      former officers, directors, employees or shareholders thereof or
      (ii) taking any other action with respect to the Company or its
      Subsidiaries which is reasonably expected to result, or does result in, damage
      to the business or reputation of the Company, its Subsidiaries or any of its
      current or former officers, directors, employees or shareholders. The Company
      agrees to refrain from (i) making, directly or indirectly, any derogatory
      comments concerning the Executive or (ii) taking any other action with
      respect to the Executive which is reasonably expected to result, or does result
      in, damage to the reputation of the Executive. Notwithstanding anything to
      the
      contrary contained herein, nothing in this Agreement shall prohibit or restrict
      either party from, truthfully and in good faith: (i) making any disclosure
      of information required by law; (ii) providing information to, or testifying
      or
      otherwise assisting in any investigation or proceeding brought by, any federal
      regulatory or law enforcement agency or legislative body, any self-regulatory
      organization, or the Company’s or the Executive’s designated legal, compliance
      or human resources officers; (iii) filing, testifying, participating in or
      otherwise assisting in a proceeding relating to an alleged violation of any
      federal, state or municipal law relating to fraud, or any rule or regulation
      of
      the Securities and Exchange Commission or any self-regulatory organization
      or
      (iv) competing with each other after the expiration of any applicable
      non-compete and non-solicitation periods. 

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

         3.3
      Source
      of Payments.
      All
      payments provided under this Agreement, other than payments made pursuant to
      a
      plan which provides otherwise and except as otherwise provided herein, shall
      be
      paid in cash from the general funds of the Company, and no special or separate
      fund shall be established, and no other segregation of assets shall be made,
      to
      assure payment. The Executive shall have no right, title or interest whatsoever
      in or to any investments which the Company or its Subsidiaries may make to
      aid
      the Company in meeting its obligations hereunder. To the extent that any person
      acquires a right to receive payments from the Company hereunder, such right
      shall be no greater than the right of an unsecured creditor of the Company.
      

    

         3.4
      Notices.
      Any
      notice provided for in this Agreement must be in writing and must be either
      personally delivered, mailed by first class mail (postage prepaid and return
      receipt requested), sent by reputable overnight courier service (charges
      prepaid) or sent by facsimile (with receipt confirmed) to the recipient at
      the
      address or facsimile number indicated below: 

    

    To
      the
      Company:

     

    NexCen
      Brands, Inc.

    1330
      Avenue of the Americas, 40th
      Floor

    New
      York,
      NY 10019

    Telephone:
      (212) 277-1101

    Telecopy:
      (212) 573-1160

    Attention:
      Chief Executive Officer 

    

    With
      copies to: 

    

    Littman
      Krooks LLP

    655
      Third
      Avenue

    20th
      Floor

    New
      York,
      NY 10017

    Telephone:
      (212) 490-2020

    Telecopy:
      (212) 490-2990

    Attention:
      Mitchell C. Littman, Esq.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    To
      the
      Executive: 

    

    Charles
      A. Zona

    c/o
      NexCen Brands, Inc.

    1330
      Avenue of the Americas, 40th
      Floor

    New
      York,
      NY 10019

    Telephone:
      (212) 277-1100

    Telecopy:
      (212) 277-1160 

    

    With
      copies to:

    

    Hughes
      Hubbard & Reed LLP

    One
      Battery Park Plaza

    New
      York,
      N.Y. 10004-1482

    Telephone:
      (212) 837-6854

    Telecopy:
      (212) 422-4726

    Attention:
      Samuel Sultanik, Esq.

     

    or
      such
      other address or to the attention of such other Person as the recipient Party
      will have specified by prior written notice to the sending Party. Any notice
      under this Agreement will be deemed to have been given when so delivered or
      sent
      or, if mailed, five days after deposit in the U.S. mail. 

    

         3.5
      Severability.
      Subject
      to the express provisions of Section 1.10
      relating
      to certain specified changes, whenever possible, each provision of this
      Agreement will be interpreted in such manner as to be effective and valid under
      applicable law, but if any provision of this Agreement is held to be invalid,
      illegal or unenforceable in any respect under any applicable law or rule in
      any
      jurisdiction, such invalidity, illegality or unenforceability will not affect
      any other provision or any other jurisdiction, but this Agreement will be
      reformed, construed and enforced in such jurisdiction as if such invalid,
      illegal or unenforceable provision had never been contained herein.

    

         3.6
      Complete
      Agreement.
      This
      Agreement embodies the complete agreement and understanding among the Parties
      with regard to the subject matter hereof and supersedes and preempts any prior
      understandings, agreements or representations by or among the Parties, written
      or oral, which may have related to the subject matter hereof in any way. To
      the
      extent that this Agreement provides greater benefits to the Executive than
      available under the Company’s employee handbook or other corporate policies,
      then this Agreement shall prevail.

     

         3.7
      Counterparts.
      This
      Agreement may be executed in separate counterparts, each of which is deemed
      to
      be an original and all of which taken together constitute one and the same
      agreement. 

    

         3.8
      Assignment.
      Without
      the Executive’s consent, the Company may not assign its rights and obligations
      under this Agreement except (i) to a “Successor” (as defined below) or (ii)
      to an entity that is formed and controlled by the Company or any of its
      Subsidiaries. This Agreement is personal to the Executive, and the Executive
      shall not have the right to assign the Executive’s interest in this Agreement,
      any rights under this Agreement or any duties imposed under this Agreement,
      nor
      shall the Executive have the right to pledge, hypothecate, transfer, assign
      or
      otherwise encumber the Executive’s right to receive any form of compensation
      hereunder without the prior written consent of the President and Chief Executive
      Officer of the Company. As used in this Section 3.8,
      “Successor”
shall
      include any Person that at any time, whether by purchase, merger or otherwise,
      directly or indirectly acquires all or substantially all of the assets of,
      or
      ownership interests in, the Company and its Subsidiaries.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

         3.9
      Successors
      and Assigns.
      This
      Agreement is intended to bind and inure to the benefit of and be enforceable
      by
      the Company, the Executive, and their respective heirs, successors and permitted
      assigns.

     

         3.10
      Choice
      of Law.
      This
      Agreement and the performance of the parties hereunder shall be governed by
      the
      internal laws (and not the law of conflicts) of the State of New York. Any
      claim
      or controversy arising out of or in connection with this Agreement, or the
      breach thereof, shall be adjudicated exclusively by the Supreme Court, New
      York
      County, State of New York, or by a federal court sitting in Manhattan in New
      York City, State of New York. The parties hereto agree to the personal
      jurisdiction of such courts and agree to accept process by regular mail in
      connection with any such dispute. 

    

         3.11
      Waiver
      of Jury Trial.
      AS A
      SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER
      INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL),
      EACH
      PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR
      PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS
      CONTEMPLATED HEREBY. 

    

         3.12
      Legal
      Fees and Court Costs.
      In the
      event that any action, suit or other proceeding in law or in equity is brought
      to enforce the provisions of this Agreement, and such action results in the
      award of a judgment for money damages or in the granting of any injunction
      in
      favor of the Company, all expenses (including reasonable attorneys’ fees) of the
      Company in such action, suit or other proceeding shall be paid by the Executive.
      In the event that any action, suit or other proceeding in law or in equity
      is
      brought to enforce the provisions of this Agreement, and such action results
      in
      the award of a judgment for money damages or in the granting of any injunction
      in favor of the Executive, all expenses (including reasonable attorneys’ fees
      and travel expenses) of the Executive in such action, suit or other proceeding
      shall be paid by the Company.

     

         3.13
      Remedies.
      Subject
      to the provisions of Section 3.1,
      each
      Party will be entitled to enforce its rights under this Agreement specifically,
      to recover damages and costs caused by any breach of any provision of this
      Agreement and to exercise all other rights existing in its favor. Nothing herein
      shall prohibit any arbitrator or judicial authority from awarding attorneys’
fees or costs to a prevailing Party in any arbitration or other proceeding
      to
      the extent that such arbitrator or authority may lawfully do so. 

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

         3.14
      Amendment
      and Waiver.
      The
      provisions of this Agreement may be amended or waived only with the prior
      written consent of the Company and the Executive, and no course of conduct
      or
      failure or delay in enforcing the provisions of this Agreement will affect
      the
      validity, binding effect or enforceability of this Agreement. 

    

         3.15
      Third
      Party Beneficiaries.
      This
      Agreement will not confer any rights or remedies upon any Person other than
      the
      Parties and their respective successors and permitted assigns and other than,
      in
      the event of the Executive’s death, his estate, to which all of Executive’s
      rights and remedies set forth herein shall accrue.

     

         3.16
      The
      Executive’s Representations.
      The
      Executive hereby represents and warrants to the Company that (a) the
      execution, delivery and performance of this Agreement by the Executive do not
      and shall not conflict with, breach, violate or cause a default under any
      contract, agreement, instrument, order, judgment or decree to which the
      Executive is a party or by which he is bound, (b) the Executive is not a
      party to or bound by any employment agreement, noncompete agreement or
      confidentiality agreement with any other Person (or other agreement with any
      other person containing a restriction on the Executive’s right to do business or
      obligating him to do business with any other Person on a priority or
      preferential basis), (c) upon the execution and delivery of this Agreement
      by the Company, this Agreement shall be the valid and binding obligation of
      the
      Executive, enforceable in accordance with its terms and (d) upon the
      execution and delivery of this Agreement by the Company, Executive shall not
      be
      in violation of clause (i) set forth in the definition of Cause and shall
      not be Disabled.

     

         3.17
      Amendment
      to Comply with Section 409A of the Code.
      To the
      extent that this Agreement or any part thereof is deemed to be a nonqualified
      deferred compensation plan subject to Section 409A of the Code and the
      Treasury Regulations (including proposed regulations) and guidance promulgated
      thereunder, (a) the provisions of this Agreement shall be interpreted in a
      manner to the maximum extent possible to comply in good faith with Code
      Section 409A and (b) the parties hereto agree to amend this Agreement
      for purposes of complying with Code Section 409A promptly upon issuance of
      any Treasury regulations or guidance thereunder, provided,
      that
      any such amendment shall not materially change the present value of the benefits
      payable to the Executive hereunder or otherwise materially adversely affect
      the
      Executive, the Company, or any affiliate of the Company, without the consent
      of
      such party. 

     

    [END
      OF PAGE]

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
         

      

      
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         IN
      WITNESS WHEREOF, the Parties have executed this Employment Agreement as of
      the
      date first written above. 

    
      	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
              NexCen
                Brands, Inc.

               

            	
               

            
	
               

            	
              By:  

            	
              /s/
                Robert W. D’Loren

            	
               

            
	
               

            	
               

            	
              Name:  

            	
              Robert
                W. D’Loren 

            	
               

            
	
               

            	
               

            	
              Title:  

            	
              President
                and Chief Executive Officer 

            	
               

            
	
               

            
	
               

            	
              /s/
                Charles A. Zona

            	
               

            
	
               

            	
              CHARLES
                A. ZONA 

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            

    

     

    
 

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

    FORM
      OF RELEASE

    

    I,
      Charles A. Zona, on behalf of myself and my heirs, successors and assigns,
      in
      consideration of the performance by NexCen Brands, Inc., Inc., a Delaware
      corporation (together with its Subsidiaries, the “Company”),
      of
      its material obligations under the Employment Agreement, dated as of November
      __, 2006 (the “Agreement”),
      do
      hereby release and forever discharge as of the date hereof the Company, its
      Affiliates, each such Person’s respective successors and assigns and each of the
      foregoing Persons’ respective present and former directors, officers, partners,
      stockholders, members, managers, agents, representatives, employees (and each
      such Person’s respective successors and assigns) (collectively, the
“Released
      Parties”)
      to the
      extent provided below. 

    

    1.
      I
      understand that any payments or benefits paid or granted to me under
Section 1.4(b)
      of the
      Agreement represent, in part, consideration for signing this General Release
      and
      are not salary, wages or benefits to which I was already entitled. I understand
      and agree that I will not receive the payments and benefits specified in
Section 1.4(b)
      of the
      Agreement unless I execute this General Release and do not revoke this General
      Release within the time period permitted hereafter or breach this General
      Release. 

    

    2.
      I
      knowingly and voluntarily release and forever discharge the Company and the
      other Released Parties from any and all claims, controversies, actions, causes
      of action, cross-claims, counter-claims, demands, debts, compensatory damages,
      liquidated damages, punitive or exemplary damages, other damages, claims for
      costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in
      equity, both past and present (through the date of this General Release),
      whether under the laws of the United States or another jurisdiction and whether
      known or unknown, suspected or claimed against the Company or any of the
      Released Parties which I, my spouse, or any of my heirs, executors,
      administrators or assigns, have or may have, which arise out of or are connected
      with my employment with, or my separation from, the Company (including, but
      not
      limited to, any allegation, claim or violation, arising under: Title VII of
      the
      Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age
      Discrimination in Employment Act of 1967, as amended (including the Older
      Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the
      Americans with Disabilities Act of 1990; the Family and Medical Leave Act of
      1993; the Civil Rights Act of 1866, as amended; the Worker Adjustment Retraining
      and Notification Act; the Employee Retirement Income Security Act of 1974;
      any
      applicable Executive Order Programs; the Fair Labor Standards Act; or their
      state or local counterparts; or under any other federal, state or local civil
      or
      human rights law, or under any other local, state, or federal law, regulation
      or
      ordinance; or under any public policy, contract or tort, or under common law;
      or
      arising under any policies, practices or procedures of the Company; or any
      claim
      for wrongful discharge, breach of contract, infliction of emotional distress,
      or
      defamation; or any claim for costs, fees, or other expenses, including
      attorneys’ fees incurred in these matters) (all of the foregoing collectively
      referred to herein as the “Claims”);
      provided,
      however, that nothing contained in this General Release shall apply to, or
      release the Company from, (i) any obligation of the Company contained in
      the Agreement to be performed after the date hereof or (ii) any vested or
      accrued benefits pursuant to any employee benefit plan, program or policy of
      the
      Company. 

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    3.
      I
      represent that I have made no assignment or transfer of any right, claim,
      demand, cause of action, or other matter covered by paragraph 2
      above.

     

    4.
      I
      agree that this General Release does not waive or release any rights or claims
      that I may have under the Age Discrimination in Employment Act of 1967 which
      arise after the date I execute this General Release. I acknowledge and agree
      that my separation from employment with the Company in compliance with the
      terms
      of the Agreement shall not serve as the basis for any claim or action
      (including, without limitation, any claim under the Age Discrimination in
      Employment Act of 1967).

     

    5.
      In
      signing this General Release, I acknowledge and intend that it shall be
      effective as a bar to each and every one of the Claims hereinabove mentioned
      or
      implied. I expressly consent that this General Release shall be given full
      force
      and effect according to each and all of its express terms and provisions,
      including those relating to unknown and unsuspected Claims (notwithstanding
      any
      state statute that expressly limits the effectiveness of a general release
      of
      unknown, unsuspected and unanticipated Claims), if any, as well as those
      relating to any other Claims hereinabove mentioned or implied. I acknowledge
      and
      agree that this waiver is an essential and material term of this General Release
      and that without such waiver the Company would not have agreed to the terms
      of
      the Agreement. I covenant that I shall not directly or indirectly, commence,
      maintain or prosecute or sue any of the Released Persons either affirmatively
      or
      by way of cross-complaint, indemnity claim, defense or counterclaim or in any
      other manner or at all on any Claim covered by this General Release. I further
      agree that in the event I should bring a Claim seeking damages against the
      Company, or in the event I should seek to recover against the Company in any
      Claim brought by a governmental agency on my behalf, this General Release shall
      serve as a complete defense to such Claims. I further agree that I am not aware
      of any pending charge or complaint of the type described in paragraph 2 as
      of
      the execution of this General Release. 

    

    6.
      I
      agree that neither this General Release, nor the furnishing of the consideration
      for this General Release, shall be deemed or construed at any time to be an
      admission by the Company, any Released Party or myself of any improper or
      unlawful conduct.

     

    7.
      I
      agree that this General Release is confidential and agree not to disclose any
      information regarding the terms of this General Release, except to my immediate
      family and any tax, legal or other counsel I have consulted regarding the
      meaning or effect hereof or as required by law, and I will instruct each of
      the
      foregoing not to disclose the same to anyone. 

    

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    8.
      Any
      non-disclosure provision in this General Release does not prohibit or restrict
      me (or my attorney) from responding to any inquiry about this General Release
      or
      its underlying facts and circumstances by the Securities and Exchange
      Commission, the National Association of Securities Dealers, Inc. or any other
      self-regulatory organization or governmental entity. 

    

    9.
      Without limitation of any provision of the Agreement, I hereby expressly
      re-affirm my obligations under Sections 1.5,
      1.6,
      1.7,
      1.8,
      1.10,
      3.1 and 3.2.
      

    

    10.
      Whenever possible, each provision of this General Release shall be interpreted
      in such manner as to be effective and valid under applicable law, but if any
      provision of this General Release is held to be invalid, illegal or
      unenforceable in any respect under any applicable law or rule in any
      jurisdiction, such invalidity, illegality or unenforceability shall not affect
      any other provision or any other jurisdiction, but this General Release shall
      be
      reformed, construed and enforced in such jurisdiction as if such invalid,
      illegal or unenforceable provision had never been contained herein.

    

         “Affiliate”
means,
      with respect to any Person, any Person that controls, is controlled by or is
      under common control with such Person or an Affiliate of such Person.

    

         “Person”
means
      an individual, a partnership, a limited liability company, a corporation, an
      association, a joint stock company, a trust, a joint venture, an unincorporated
      organization, investment fund, any other business entity and a governmental
      entity or any department, agency or political subdivision thereof.

     

         “Subsidiary”
means,
      with respect to any Person, any corporation, limited liability company,
      partnership, association, or business entity of which (i) if a corporation,
      a majority of the total voting power of shares of stock entitled (without regard
      to the occurrence of any contingency) to vote in the election of directors,
      managers, or trustees thereof is at the time owned or controlled, directly
      or
      indirectly, by that Person or one or more of the other Subsidiaries of that
      Person or a combination thereof, or (ii) if a limited liability company,
      partnership, association, or other business entity (other than a corporation),
      a
      majority of partnership or other similar ownership interest thereof is at the
      time owned or controlled, directly or indirectly, by that Person or one or
      more
      Subsidiaries of that Person or a combination thereof. For purposes hereof,
      a
      Person or Persons shall be deemed to have a majority ownership interest in
      a
      limited liability company, partnership, association, or other business entity
      (other than a corporation) if such Person or Persons shall be allocated a
      majority of limited liability company, partnership, association, or other
      business entity gains or losses or shall be or control any managing director
      or
      general partner of such limited liability company, partnership, association,
      or
      other business entity.

     

    BY
      SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT: 

    

    (a) I
      HAVE READ IT CAREFULLY; 

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

       

    

    (b) I
      UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS,
      INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
      ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED;
      THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND
      THE
      EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; 

    

    (c) I
      VOLUNTARILY CONSENT TO EVERYTHING IN IT; 

    

    (d) I
      HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY (VIA THE AGREEMENT AND THIS
      RELEASE) BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND
      CONSIDERATION, I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION; 

    

    (e) I
      HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE
      SUBSTANTIALLY IN ITS FINAL FORM ON ___, ___TO CONSIDER IT AND THE CHANGES MADE
      SINCE THE ___, ___VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART
      THE REQUIRED 21-DAY PERIOD; 

    

    (f) THE
      CHANGES TO THE AGREEMENT SINCE ___, ___EITHER ARE NOT MATERIAL OR WERE MADE
      AT
      MY REQUEST. 

    

    (g) I
      UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE
      IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
      EIGHTH DAY FOLLOWING EXECUTION OF THE AGREEMENT; 

    

    (h) I
      HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE
      OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND 

    

    (i) I
      AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED,
      CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED
      REPRESENTATIVE OF THE COMPANY AND BY ME. 

     

    Charles
      A. Zona

    

    DATE:
      ___________ __, ______ 

    

    
      
         

      

      
        22EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into this 18th
day of July, 2003, by and between Renal Tech International, LLC, (the
"Company"), and Al Kraus ("Employee").

      The Company wishes to employ Employee as Chief Financial 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 Managers 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 fifth 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, the
Company hereby agrees to (a) pay Employee an annual base compensation of
$200,000 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) grant Options for that number of Membership
Units equal to 5% of the outstanding Membership Units of the equity of the
Company determined and granted on the date hereof at an exercise price of $1.00
per Unit (the "Options"), said number of units to vest as follows: 25% on the
first anniversary of this Agreement and 25% on each of the next three subsequent
anniversaries, subject to the terms hereof. Notwithstanding anything set forth
herein to the contrary, in the event of the issuance of additional Membership
Units, granting of options to third parties or the issuance of securities
convertible or exercisable into Membership Units 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 until such time as the
Company obtains additional equity (including any form of financing that converts
to equity) capital of $20 million. It is also understood that the Employee's
Options will be adjusted on the same basis as all other Unit holders to account
for any stock split, stock dividend, combination or recapitalization.

<PAGE>

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. (a) Employee may receive such discretionary bonuses as the
Board of Managers, in its sole discretion and from time to time, deem
appropriate; and (b) Employee shall be entitled to receive a bonus of up to
$100,000 upon achieving the milestones set forth in Appendix A.

      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 Managers 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 Managers 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.

<PAGE>

      4.2   In the event that the Board of Managers 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 Managers 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 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.

<PAGE>

      (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 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:

<PAGE>

                  (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 Managers contemplated by Section 4.5
hereof is consummated.

                  (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 Princeton, 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 Princeton, New Jersey.
This clause (ii), however, shall in no way limit the complete discretion of
the Board of Managers 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 Princeton, N.J., Employee shall
have the right, for 120 days after the decision of the Board of Managers to
relocate, to elect (by written notice to the Board of Managers) 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

<PAGE>

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.

      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

<PAGE>

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 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 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 Managers.  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.

<PAGE>

      (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 July 18,
2003.

      IN WITNESS WHEREOF, the parties have executed this Agreement.

RENALTECH INTERNATIONAL, LLC                    EMPLOYEE

By: /s/ Bruce Davis                             /s/ Al Kraus
    -----------------------------------         --------------------
      Bruce Davis, Acting President and         Al Kraus
      Chief Executive Officer

Approved and Accepted:

Board of Managers

By: /s/ Joseph Rubin
   -------------------------

<PAGE>

                       Appendix A - Management Targets

Completion Date   Target

Q4 03             Commence Beta-Sorb Pivotal Human Clinical Trial-50 patients

Q4 03             DMC Meeting FDA, approval to continue trial

Q4 03             Conclude 20mm financing round

Q1 04             Initiate Cohort B of Pivotal Trial

Q3 04             Conclude Commercial Polymer Supply Agreement

3Q 04             Complete Beta-Sorb Pivotal Human Trial-50 patients

3Q 04             Consolidate Company Operations in Princeton NJ

4Q 04             Complete Data Analysis and Study Report

4Q 04             Submit Beta-Sorb Marketing Application

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