Document:

exv4w43

 

Exhibit–4.43

                    , 2006

CytoCore, Inc.

414 North Orleans Street

Suite 502

Chicago, Illinois 60610

Ladies and Gentlemen:

     This Subscription Agreement (the “Agreement”) sets forth the agreements and
understandings between the undersigned (“Subscriber”) and CytoCore, Inc., a corporation
organized under the laws of Delaware (the “Company”), relating to Subscriber’s subscription
for, and purchase of, the number of shares of common stock, par value $.001 per share (the
“Common Stock”), of the Company set forth on the signature page hereto (the
“Shares”) at a price of $0.00 per Share Also, included in this offering are warrants with
an exercise price of $0.00 per Share.

     1. Conditions to Subscription Acceptance and Closing. Subscriber understands and
agrees that this subscription and the closing of the transactions contemplated hereby (the
“Closing”) is made subject to the following terms and conditions:

          (a) The Company has the right to accept or reject this subscription in whole or in part.
Unless this subscription is rejected by the Company by May 20, 2006 this subscription shall be
deemed accepted in whole.

          (b) On or prior to the date of the Closing, Subscriber shall have furnished the Company with
such information, documents, certificates and opinions as the Company may reasonably require to
evidence the accuracy, completeness or satisfaction of the representations, warranties, covenants,
agreements and conditions herein contained or as the Company otherwise may reasonably require.

     2. Subscriber Representations and Warranties. In connection with Subscriber’s
subscription for, and purchase of, the Shares, Subscriber represents and warrants to the Company
that:

          (a) If Subscriber is a natural person, Subscriber (i) is a bona fide resident of the state or
jurisdiction set forth on the signature page of this Agreement as Subscriber’s home address, and
has no present intention of becoming a resident of any other state or jurisdiction; (ii) is at
least 21 years of age; and (iii) is legally competent to execute this Agreement, the Confidential
Accredited Investor Questionnaire included herewith, and any other documents and instruments
required in connection herewith or therewith, if any (the “Transaction Documents”). If
Subscriber is an entity, the person signing this Agreement and the Transaction Documents on

 

 

behalf of the entity is duly authorized to execute and deliver this Agreement and the Transaction
Documents on behalf of Subscriber. This Agreement and the Transaction Documents constitute the
legal, valid and binding obligations of Subscriber, enforceable in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy, insolvency or similar laws
relating to or affecting generally the enforcement of creditors’ rights and remedies or by other
equitable principles.

          (b) The execution and delivery of this Agreement and the Transaction Documents by Subscriber
do not, and the performance of the terms hereof and thereof will not, contravene any material law,
rule, regulation, order, writ, judgment, injunction, decree, determination or award applicable to
Subscriber, or of the charter, bylaws, operating agreement, partnership agreement or other
governing agreements of Subscriber (if applicable), and will not conflict with, or result in any
breach of, the terms, conditions or provisions of, or constitute a default under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result in or permit the
creation or imposition of any lien, charge or encumbrance upon any of the assets of Subscriber
pursuant to any indenture, mortgage or other agreement or instrument or any judgment, decree, order
or decision to which Subscriber is a party or by which Subscriber is bound.

          (c) Under existing law, no approval, authorization, license, permit or other action by or
filing with any Federal, state, municipal or other governmental commission, board or agency is
required on the part of Subscriber in connection with the execution and delivery by Subscriber of
this Agreement or the Transaction Documents, or the consummation of the transactions contemplated
hereby or thereby.

          (d) There are no actions, suits or proceedings existing, pending or, to the knowledge of
Subscriber, threatened against or affecting Subscriber before any court, arbitrator or governmental
or administrative body or agency that would affect the validity or enforceability of this Agreement
or the Transaction Documents, or that would have a material adverse affect on the ability of
Subscriber to perform Subscriber’s obligations hereunder and there under.

          (e) Subscriber has such knowledge and experience in financial and business matters so as to be
capable of evaluating and understanding, and has evaluated and understood, the merits and risks of
an investment in the Company and the purchase of the Shares, and Subscriber has been given the
opportunity (i) to obtain information and to examine all documents relating to the Company and the
Company’s business, (ii) to ask questions of, and to receive answers from, the Company concerning
the Company, the Company’s business and the terms and conditions of this investment, and (iii) to
obtain any additional information, to the extent the Company possesses such information or could
acquire such information without unreasonable effort or expense, necessary to verify the accuracy
of any information previously furnished. All such questions have been answered to Subscriber’s
full satisfaction, and all information and documents, records and books pertaining to this
investment which Subscriber has requested have been made available to Subscriber.

          (f) Subscriber is able to bear the substantial economic risks of Subscriber’s investment in
the Company and the purchase of the Shares in that, among other factors,

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Subscriber can afford to hold the Shares for an indefinite period and can afford a complete loss of
Subscriber’s investment in the Company.

          (g) No material adverse change in Subscriber’s financial condition has taken place during the
past twelve (12) months, and Subscriber will have sufficient liquidity with respect to Subscriber’s
net worth for an adequate period of time to provide for Subscriber’s needs and contingencies.

          (h) Subscriber is relying solely on Subscriber’s own decision and/or the advice of
Subscriber’s own adviser(s) with respect to an investment in the Company and the purchase of the
Shares, and has neither received nor relied on any communication from the Company or its officers
or agents regarding any legal, investment or tax advice relating to an investment in the Company.

          (i) Subscriber has had an opportunity to read and understand the provisions of this Agreement
and the Transaction Documents, to consult with Subscriber’s adviser(s) or counsel regarding the
operation and consequences of those provisions, and has considered the effect of those provisions
on Subscriber.

          (j) Subscriber recognizes that an investment in the Company involves substantial risks in
that, among other factors: (i) successful operation of the Company depends on factors beyond the
control of the Company, and the Company has not had profitable operations from its inception to
date; (ii) investment in the Company is a speculative investment and involves a high degree of risk
of loss; (iii) the Company is engaged in an industry which is highly competitive and subject to
substantial risks; (iv) the Company has a very limited amount of working capital available to it;
and (v) the Shares may not be registered under applicable federal and state securities laws and,
accordingly, it may not be possible to liquidate an investment in the Company in case of immediate
need of funds or any other emergency, if at all. Subscriber has taken full cognizance of, and
understands such risks and has obtained sufficient information to evaluate the merits and risks of
an investment in the Company and the purchase of the Shares.

          (k) Subscriber confirms that none of the Company’s officers nor any of the Company’s agents
have made any representations or warranties concerning an investment in the Company, including,
without limitation, any representations or warranties concerning anticipated financial results, or
the likelihood of success of the operations, of the Company.

          (l) Subscriber is acquiring the Shares for Subscriber’s own account, for investment and not
with a view to, or in connection with, any public offering or distribution of the same and without
any present intention to sell the same at any particular event or circumstance. Subscriber has no
agreement or other arrangement with any person to sell, transfer or pledge any part of the Shares
that would guarantee Subscriber any profit or protect against any loss with respect to the Shares.

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          (m) Subscriber understands that no U.S. Federal or State or International agency has passed on
or made any recommendation or endorsement of an investment in the Shares.

          (n) Subscriber understands that the Shares have not been registered under the Securities Act
of 1933, as amended (the “Act”), or applicable U.S. state securities laws or any securities
laws of any other jurisdiction, and are being offered and sold under an exemption from registration
provided by such laws and the rules and regulations there under. Further, Subscriber understands
that the Company is under no obligation to register the Shares or to comply with any exemption
under any applicable securities laws with respect thereto or any other ownership interest in the
Company. Subscriber may therefore be required to bear the economic risks of an investment in the
Company for an indefinite period of time because the Shares cannot be resold unless registered
under applicable securities laws or unless an exemption from such registration is available.
Subscriber also understands that (i) the exemption provided by Rule 144 under the Act may not be
available because of the conditions and limitations of such rule, and that in the absence of the
availability of such rule, any disposition by Subscriber of any securities of the Company may
require compliance with some other exemption under the Act; and, (ii) the Company is under no
obligation and does not plan to take any action in furtherance of making Rule 144 or any other
exemption so available.

          (o) If Subscriber is required in the future to file a Form 144 with the Securities and
Exchange Commission in connection with sales of Shares or any other ownership interest in the
Company pursuant to Rule 144 under the Act, Subscriber will deliver a copy of such form to the
Company at the same time and each time Subscriber is required to file a copy with the Securities
and Exchange Commission.

          (p) Subscriber is an “accredited investor” as such term is defined in Rule 501(a) promulgated
under the Act. Subscriber will execute and deliver the Confidential Accredited Investor
Questionnaire attached hereto as Exhibit A simultaneously with the execution and delivery
of this Agreement.

          (q) Subscriber agrees that the foregoing representations and warranties will survive the sale
of the Shares to Subscriber, as well as any investigation made by any party relying on same.

          (r) Except as Subscriber shall have clearly and expressly disclosed to the Company, Subscriber
has not authorized any underwriter, broker, dealer, agent or finder to act on Subscriber’s behalf
(nor does Subscriber have any knowledge of any broker, dealer, agent or finder purporting to act on
Subscriber’s behalf) with respect to Subscriber’s purchase of the Shares and Subscriber has not
paid directly or indirectly any commission or similar remuneration with respect to such
acquisition. Subscriber hereby agrees to indemnify and hold harmless the Company and its
directors, officers and agents from and against any cost, expense, claim, liability or damage
arising out of or resulting from a breach of such representation and warranty.

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     3. General Provisions.

          (a) This Agreement will be governed by and construed in accordance with the substantive laws
of the State of Delaware without regard to rules thereof relating to conflicts of laws.

          (b) This Agreement and the Transaction Documents together constitute the entire agreement
between the parties with respect to the subject matter hereof and thereof and supersede any prior
subscription agreement for Shares executed by Subscriber. This Agreement may be amended only by a
writing executed by the parties.

          (c) The Shares will be assigned or transferred only in accordance with applicable law and the
terms of this Agreement and the Transaction Documents.

          (d) This Agreement will survive Subscriber’s death or dissolution and will be binding upon
Subscriber’s successors, heirs, assignees, representatives and distributors.

(Signatures appear on next page.)

* * * * * *

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     IN WITNESS WHEREOF, Subscriber has hereby executed this Agreement as of the date set forth
above.

SUBSCRIBER:

	 	 	 	 	 	 	 	 	 	 	 
	If an Individual (s):	 	 	 	If an Entity:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name of Entity:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	[Name]
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 	 	 

	 	 	 	 	 
	Mailing Address:
	 	 	 	 
	 

	 	 

	 	 

Social Security Number/U.S. Employer Identification Number:                     -                    -                    

	 	 	 	 	 
	Subscription:
	 	 	 	 
	 
	 	 	 	 
	Number of Shares for which Subscription is tendered:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Purchase Price:
	 	 	 	 
	 

	 	 

	 	 
	Aggregate Consideration:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Warrant coverage:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	CytoCore, Inc.

   a Delaware corporation
	 	 	 	 

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 

	 	 	 	 	 
	Date of Acceptance:
	 	 	 	 
	 

	 	 

	 	 

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EXHIBIT A

Confidential Accredited Investor Questionnaire

     The undersigned represents and warrants that he, she or it comes within one of the categories
marked below, and that for any category marked, he, she or it has truthfully set forth the factual
basis or reason the undersigned comes within that category. ALL INFORMATION IN RESPONSE TO THIS
QUESTIONNAIRE WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish such
additional information as is reasonably necessary in order to verify the answers set forth below.

Please mark next to each applicable paragraph:

	 	 	 	 	 	 	 
	                    	 	a. The undersigned is an individual (not a partnership, corporation, etc.)
whose individual net worth, or joint net worth with his or her spouse, presently
exceeds $1,000,000.
	 
	 	 	 	 	 	 
	 	 	 	 	Explanation. In calculating net worth, you may include equity in
personal property and real estate, including your principal residence, cash,
short-term investments, stock and securities. Equity in personal property
and real estate should be based on the appraised fair market value of such
property, less debt secured by such property.
	 
	 	 	 	 	 	 
	                    	 	b. The undersigned is an individual (not a partnership, corporation, etc.) who
had an income in excess of $200,000 in each of the two most recent years, or joint
income with his or her spouse in excess of $300,000 in each of those years (in each
case including foreign income, tax exempt income and the full amount of capital gains
and losses, but excluding any income of other family members and any unrealized capital
appreciation), and has a reasonable expectation of reaching the same income level in
the current year.
	 
	 	 	 	 	 	 
	                    	 	c. The undersigned is a director or executive officer of CytoCore, Inc. or a
subsidiary thereof.

 

 

	 	 	 	 	 	 	 
	                    	 	d. The undersigned is (i) a bank or a savings and loan association, (ii) a
registered broker dealer, (iii) an insurance company, (iv) a registered investment
company or business development company, (v) a licensed small business investment
company, (vi) a plan established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political subdivisions (or any
agency or instrumentality thereof), for the benefit of its employees, if such plan has
total assets in excess of $5,000,000, (vii) an employee benefit plan within the meaning
of Title I of ERISA, if the investment decision is made by a plan fiduciary which is
either a bank, savings and loan association, insurance company or registered investment
adviser or if the plan has total assets in excess of $5,000,000 or is a self-directed
plan with investment decisions made solely by persons that are accredited investors.
	 
	 	 	 	 	 	 
	 	 	Describe entity.
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	                    	 	e. The undersigned is a private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940, as amended.
	 
	 	 	 	 	 	 
	 	 	Describe entity.
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	                    	 	f. The undersigned is a corporation, partnership, business trust or non-profit
organization within the meaning of Section 501(c)(3) of the Internal Revenue Code, as
amended, in each case not formed for the specific purpose of potentially making an
investment in connection herewith and with total assets in excess of $5,000,000.
	 
	 	 	 	 	 	 
	 	 	Describe entity.
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	                    	 	g. The undersigned is a trust (not formed for the specific purpose of
potentially making an investment in connection herewith) with total assets in excess of
$5,000,000, where the purchase is directed by a person with the knowledge and
experience in financial and business matters to capably evaluate the merits and risks
of the prospective investment, as set forth in Rule 506(b)(2)(ii) promulgated under the
Securities Act of 1933, as amended.
	 
	 	 	 	 	 	 
	                    	 	h. The undersigned is an entity all the equity owners of which are “accredited
investors” within one or more of the above categories.

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	 	 	Describe entity.
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

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     The undersigned is aware of the significance of the foregoing representations. The
undersigned is also aware that the above representations made by him, her or it will be relied upon
in connection with any investment made in CytoCore, Inc. pursuant to the accompanying document or
documents.

	 	 	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Signature	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Print name	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Address:exv10w39

 

Exhibit 10.39

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”), dated and effective as of November 15, 2006
(the “Effective Date”), is entered into by and between CYTOCORE, INC., with offices at 414 North
Orleans Street, Chicago, Illilonois 60610 (“Company”), and DR. AUGESTO OCANA, with offices at 20
Foxcroft Drive, Princeton, New Jersey 08540 (the “Executive”).

     In consideration of the mutual promises set forth below and other good and valuable
consideration, the receipt and sufficiency of which the parties acknowledge, the Company and
Executive agree as follows:

          1. Employment. The Company agrees to employ Executive and
Executive accepts employment on the terms and conditions set forth in this Agreement.

          2.  Employment Term. Commencing on the Effective Date, the Company agrees to
employ Executive for a term of three (3) years (“Term”), unless terminated earlier in accordance
with Section 5 below. The period of time for performance hereunder shall be referred to as the
“Employment Period”.

          3. Nature of Employment. During the Employment Period, Executive
shall serve as Chief Executive Officer and a member of the Board of Directors of the Company.
Executive shall have all of the customary powers and duties associated with these positions.
Executive shall report to the Board of Directors of the Company. Executive shall devote his full
time and attention and best efforts to perform successfully his duties and advance the Company’s
interests; provided, however, the Company shall permit Executive to act as an independent director
of other corporations and engage in other professional and business endeavors so long Executive’s
duties in connection therewith do not (i) interfere with his duties and loyalties under this
Agreement or (ii) cause Executive to violate his obligations under Sections 6, 7 and 8 of this
Agreement. Executive shall only engage in such activities or endeavors if they are performed for a
charitable organization or with respect to other organizations redound to the benefit of the
Company. Executive shall advise the Board of Directors of the identity of the organizations he is
associated with from time to time. Executive shall abide by Company policies, procedures and
practices as they may exist and be in force from time to time. Employee shall perform such services
from whatever location he elects, but he will be present at such meetings and functions at the
Company’s headquarters and elsewhere reasonably deemed important to the Company.

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          4. Compensation.

     (a) Base Salary. During the Employment Period, the Company shall pay
Executive an annual base salary of one hundred eighty thousand dollars ($180,000.00),
payable by the Company in monthly installments of $15,000.00 dollars starting November
15, 2006. Executive’s Base Salary shall be subject to all appropriate federal and state
withholding taxes and shall be payable in accordance with the normal payroll procedures
of the Company. Executive’s salary shall be reviewed annually by the Company’s Board of
Directors (“Board”) and may be increased in the Board’s discretion; provided, however,
that Executive’s annual Base Salary shall not be reduced below one hundred eighty
thousand dollars ($180,000.00) without Executive’s written consent.

     Executive’s annual base salary shall be increased to two hundred four thousand dollars
($204,000.00), payable in monthly increments of seventeen thousand ($17,000.00), at the earlier of
the date on which the Company has raised additional equity of two million five hundred thousand
dollars ($2,500,000.00) at an average price of not less than eighteen cents ($.18) per share, or
six (6) months after the Effective Date.

     In addition, Executive shall receive the sum of forty five thousand dollars ($45,000.00) in
eighteen (18) monthly installments of two thousand five hundred dollars ($2,500.00) commencing in
the month following the Effective Date. In the event of the termination of Executive’s employment
for any reason, any remaining monthly payments shall continue to be made until the sum of forty
five thousand dollars ($45,000) has been paid in full.

     (b) Warrants. During the Employment Period, Executive shall be entitled to
grants of warrants exercisable into common stock of the Company upon the occurrence of
the following events:

     (i) Five hundred thousand (500,000) warrants to purchase five hundred thousand (500,000)
shares of common stock of the Company at a price equal to the closing price of the Company’s common
stock on the first day of Executive’s Employment Period less a discount of thirty-three and one
third per cent (33 1/3%).

     (ii) Three hundred thousand (300,000) warrants to purchase (300,000) shares of common
stock of the Company upon completion of the FDA trials for the Company’s Products (as defined
below) and receipt of all necessary FDA approvals thereof for the sale of the Company’s Products to
the general public in the United States at the closing price of the Company’s common stock on the
OTC Bulletin Board of the Company on the date all such approvals have been received less a discount
of thirty-three and one third per cent (33 1/3%).

     (iii) Five hundred thousand (500,000) warrants to purchase five hundred thousand (500,000)
shares of common stock of the Company on the date that the Company

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has raised five million dollars ($5,000,000) in equity at an average price of not less than twenty
two cents ($.22) per share less a discount to Executive of thirty-three and one third per cent (33
1/3%) from such average price. Executive shall have earned the incentive only if such capital raise
is completed with twelve (12) months from the date of the commencement of the Employment Period.

     (iv) The Company intends to sell its Products through existing channels of distribution.
Executive shall receive two hundred thousand (200,000) warrants to purchase two hundred thousand
(200,000) shares of the common stock of the Company at an exercise price equal to the average
closing price of the common stock of the Company (less a thirty three and one third per cent (33
1/3%) discount to the Executive) during the sixty (60) day period prior to the date on which the
Company has executed distribution agreements with third parties which have confirmed orders of (a)
ten million dollars ($10,000,000) for the Company’s E2 Collector or similar product and (b) fifteen
million dollars ($15,000,000) for its Endometrial scan or similar product (collectively the
“Products”) within twelve (12) months from the date on which the Products have received all
governmental approvals for their sale and the Company has publicly announced that the Products are
available for sale (“Announcement Date”). The foregoing shall be increased to three hundred
thousand (300,000) warrants to purchase three hundred thousand (300,000) shares of common stock of
the Company if any of the distribution companies achieves sales of twenty five million dollars
($25,000,000) of the Company’s Products during the first twelve (12) months after the Announcement
Date and has world-wide sales of all of its products of not less than twenty billion dollars
($20,000,000,000).

     (v) Two hundred thousand (200,000) warrants to purchase two hundred thousand (200,000)
shares of common stock of the Company if a distribution company which has achieved annual sales of
at least twenty five million dollars ($25,000,000) of the Company’s Products during the first
twelve (12) months of sales makes an equity investment of at least two million dollars ($2,000,000)
in the Company.

     (vi) Five hundred thousand (500,000) warrants to purchase five hundred thousand (500,000)
shares of common stock of the Company at such time as the closing price of the Company’s common
stock listed on the OTC Bulletin Board is thirty cents ($.30) or more per share during thirty (30)
days out of any consecutive forty five (45) day period during which the Company’s stock is traded.

     (vii) Five hundred thousand (500,000) warrants to purchase five hundred thousand (500,000)
shares of common stock of the Company at such time as the closing price of the Company’s common
stock listed on the OTC Bulletin Board is fifty ($.50) or more per share during forty five (45)
days out of any consecutive sixty (60) day period during which the Company’s stock is traded

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     (viii) Five hundred thousand (500,000) warrants to purchase five hundred thousand (500,000)
shares of common stock of the Company at such time as the closing price of the Company’s common
stock listed on the OTC Bulletin Board is seventy five cents ($.75) or more per share during forty
five (45) days out of any consecutive sixty (60) day period during which the Company’s stock is
traded.

     (ix) One million (1,000,000) warrants to purchase one million (1,000,000) of common stock
of the Company at such time as the closing price of the Company’s common stock listed on the OTC
Bulletin Board is one dollar ($1.00) per share during forty five (45) days out of any consecutive
sixty (60) day period during which the Company’s stock is traded;

     (x) Except as otherwise provided herein, the exercise price for all of the above
warrants is the average closing price of the Company’s stock during the prior forty five (45)
trading days less a thirty three and one third per cent discount (33 1/3%) to Executive. However,
the exercise price for the warrants to be issued pursuant to Section 5 (a) (ix) above shall be one
dollar ($1.00) per share for the first five hundred thousand (500,000) shares and one dollar and
fifty cents ($1.50) per share for the balance.

     (xi) The period for Executive to exercise any warrants granted to him shall be three (3)
years from the date of grant. A copy of the form of warrant to be granted by the Company to
Executive is attached hereto as Exhibit A.

     (c) Standard Benefits. Executive may participate in any medical, dental disability,
life insurance and other Executive benefit plans and programs which may be available from time to
time to other Company executives at Executive’s level; provided however, that any such benefits for
the Company executives as a group may be changed, modified, or revoked at the sole discretion of
the Company with at least ninety (90) days’ written notice.

     (d) Reimbursement of Expenses. During the Employment Period, Executive is authorized
to incur reasonable, ordinary, and necessary business expenses in the performance of his duties
under this Agreement and the Company shall reimburse Executive or pay the expenses in accordance
with the policies established by the Company within thirty (30) days of submission of the required
documentation.

     (e) Auto Allowance. The Company will pay Executive a monthly non-accountable automobile allowance in the amount of five hundred dollars ($500.00) per
month, which amount will be increased to eight hundred dollars ($800.00) per month at
such time as the Company has received equity contributions of not less than five million
dollars ($5,000,000).

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     (f) Revenue Incentives. Executive will receive one million warrants
(1,000,000) to purchase one million (1,000,000) shares of common stock of the Company at an
exercise price of the average closing price of the common stock of the Company during the sixty
(60) day period prior to the date on which the Company’s gross revenue from the sale of its
Products exceeds twenty million dollars ($20,000,000) during any consecutive twelve (12) month
period; and a warrant for the purchase of an additional one million (1,000,000) shares of common
stock of the Company at an exercise price of the average closing price of the common stock of the
Company during the sixty (60) day period prior to the date on which the Company’s gross revenue
from the sale of its Products exceeds fifty million dollars ($50,000,000) during any consecutive
twelve (12) month period.

     (g) Acquisition of the Company

     (i) Executive shall receive two and one half million (2,500,000) warrants to purchase
two and one half million (2,500,000) shares of common stock of the Company at an exercise price of
twenty five cents ($.25) per share if the Company is acquired for more than one dollar ($1.00) per
share;

     (ii) Executive will receive three and one half million (3,500,000) warrants to purchase
three and one half million (3,500,000) shares of common stock of the Company at an exercise price
of fifty cents ($.50) if the Company is acquired for more than two dollars ($2.00) per share,

     (iii) Executive will receive five million (5,000,000) warrants to purchase five million
(5,000,000) shares of common stock of the Company at an exercise price of seventy five ($.75) per
share if the Company is acquired for more than three dollars ($3.00) per share; and

     (iv) The awards earned if the Company is acquired are not cumulative.

     5. Termination of Employment Executive’s employment with the Company will
continue throughout the Employment Period, unless earlier terminated pursuant to Section 2 of
this Agreement or any of the following provisions:

     (a) Death. In the event that Executive shall die during his employment by the Company
hereunder, the Company shall pay to Executive’s estate any compensation due that would otherwise
have been payable through the date of his death.

     (b) Disability. In the event that Executive shall become disabled during his
employment by the Company, Executive’s employment hereunder shall terminate and the Company shall
provide Executive with severance payments equal to three (3) months Base

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Salary (based on Executive’s monthly salary on the date of termination). Such severance payments
shall be paid over a period of six (6) months in accordance with the Company’s normal payroll
practices and schedule. For purposes of this Agreement, Executive shall become “disabled” if he
shall become, because of illness or incapacity, unable to perform the essential functions of his
job under this Agreement with reasonable accommodation for a continuous period of 120 days during
his employment by the Company.

     (c) Termination by the Company for Cause. The Company shall have the right
to immediately terminate Executive’s employment at any time for any of the following
reasons (each of which is referred to herein as “Cause”) by giving Executive written notice
of the effective date of termination (which effective date may be the date of such notice):

     (i) the continued and intentional failure by Executive to substantially perform his duties
with the Company, other than any such failure resulting from Executive’s disability (as defined in
subsection (b) above), which is materially detrimental to the Company’s business; provided,
however, that no termination of Executive’s employment shall be for Cause as set forth in this
clause until (A) there shall have been delivered to Executive written notice setting forth that
Executive has committed the conduct set forth in this subsection (i) and specifying the
particulars thereof in reasonable detail, (B) Executive shall have been provided an opportunity to
present his position to the Board, either in writing or in person and (C) Executive shall be given
a thirty (30) day period to cure the conduct specified in the written notice referenced in
subsection (i)(A) above;

     (ii) a breach by Executive of his fiduciary duties as an officer of the Company, which is
materially detrimental to the Company’s business;

     (iii) Executive’s conviction of or plea of nolo contendere to a felony or final non-appealable
conviction of any other crime that incarcerates Executive for a period of one (1) year or longer;
or

     (iv) Executive engages in fraud, embezzlement, or theft involving the Company.

     Notwithstanding the foregoing, no failure to perform by Executive after Executive gives
notice of termination shall constitute Cause for purposes of this Agreement.

     If the Company terminates Executive’s employment for Cause as defined above, Executive shall
only be entitled to any compensation due that would otherwise have been payable through the date
of his termination, and the Company shall have no further obligations hereunder from and after
the effective date of termination.

     (d) Termination by the Company Without Cause. The Company shall have the right to
terminate Executive without Cause for any reason at any time upon at least ninety (90) days’
prior written notice to Executive. If the Company terminates Executive’s employment without Cause,
Executive shall be entitled to severance payments as set forth in subsection (g) below.

     (e) Voluntary Termination by Executive for “Good Reason”. Executive may at any time
terminate this Agreement for “Good Reason” upon at least ninety (90) days’

6

 

prior written notice to the Company. For purposes of this Agreement, “Good Reason” shall mean any
one or more of the following: a reduction by the Company without Executive’s consent of Executive’s
position, duties, responsibilities, or status with the Company that represents an adverse change in
his position, duties, responsibilities, or status, or the removal of Executive from or any failure
to reelect Executive to any of the positions referred to in
Section 3 above, but
specifically excluding any action in connection with the termination of Executive’s employment for
death, disability, or Cause (as defined herein);

     (i) a reduction by the Company of the compensation Executive has become entitled to without
Executive’s consent.

     (ii) any material breach by the Company of any provision of this Agreement or any other
agreement between the Company or any of its subsidiaries and Executive that, in any case, is not
cured within fourteen (14) days of the Company’s receipt of written notice from Executive of such
breach; or

     (iii) the insolvency of or the filing by the Company of a petition for bankruptcy of the
Company, which petition is not dismissed within sixty (60) days; or

     If Executive terminates this Agreement for Good Reason, Executive shall be entitled to
severance payments as set forth in subsection (g) below.

     (f) Voluntary Termination by Executive. Executive may terminate this Agreement at any
time upon delivering at least ninety (90) days’ prior written notice of resignation to the
Company. In the event of such termination by Executive (other than for Good Reason), Executive
shall only be entitled to compensation that would otherwise have been payable through the date of
the termination of his employment.

     (g) Compensation
Upon Termination Without Cause or For Good Reason. In the event of a
termination of this Agreement by the Company without Cause or by Executive for Good Reason, the
Company shall pay to Executive as severance pay and in lieu of any further compensation for
periods subsequent to the termination, an amount in cash equal to the sum of (i) twelve (12)
months’ Base Salary divided into twelve (12) equal monthly installments payable in accordance with
the Company’s customary practice (which payments shall be calculated using Executive’s Base Salary
at the time of termination), with the first installment to be paid within thirty (30) days
following termination and (ii) the full amount of any performance bonus that Executive was
eligible to receive for the year during which the termination of this Agreement occurs. In
addition, Executive shall be entitled, for a period of twelve (12) months, to continue to receive
the standard benefits under the plans and programs described in Section 4 (c) above. Executive
shall be entitled to receive any Warrants which would have been granted to Executive within six
(6) months following such termination as if the Employment Period had not terminated shall be
granted to Executive.

7

 

     (h) No Mitigation or Set-Off. Executive will not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment. The Company shall have
no right of set-off or counterclaim in respect of any claim, debt of obligation against any
payment to or for the benefit of Executive provided for in this Agreement, except as expressly
provided herein.

     6. Non-Disclosure. The Company agrees to provide Executive with its
Confidential Information (as defined below) during the Employment Period. During the
Employment Period and at all times thereafter, Executive shall keep secret and retain in
strictest confidence, and shall not, without the prior written consent of a majority of the
members of the Board of Directors of the Company, furnish, make available or disclose to
any third party or use for the benefit of himself or any third party, except in the
furtherance of his job duties with the Company, any Confidential Information. Executive
shall not, at any time after his employment with the Company has ended (for whatever
reason), use or divulge to any person or entity, directly or indirectly, any Confidential
Information, or use any Confidential Information in subsequent employment, work or
business of any nature. As used in this Agreement, “Confidential Information” shall mean
any information relating to the business or affairs of the Company and its affiliates and
predecessors, including, but not limited to, trade secrets, information relating to financial
statements, operations manuals, systems manuals, customer identities, customer profiles,
customer preferences, partner or investor identities, Executives, suppliers, project designs,
project methods, advertising programs, advertising techniques, target markets, servicing
methods, equipment, programs, strategies and information, computer programs and
models, technology, market analyses, profit margins, pricing information, cost structure,
past, current or future marketing strategies, or any other proprietary information used by
the Company or its affiliates; provided however, that Confidential Information shall not
include any information which is in the public domain or becomes known in the industry
through no wrongful act on the part of Executive. Executive acknowledges that the
Confidential Information is vital, sensitive, confidential and proprietary to the Company
and that he is under a contractual and common law duty to not disclose the Confidential
Information to any third party at any time.

     7. Non-Competition. In consideration of the numerous mutual promises
contained in this Agreement between Executive and the Company, including, without
limitation, those involving Confidential Information, and in order to protect the
Company’s Confidential Information (including trade secrets), the value and goodwill of
the Company’s business, and the Company’s legitimate business interests and to reduce the
likelihood of irreparable damage which would occur in the event such information is
provided to or used by a competitor of the Company, Executive agrees that during the
Employment Period and for a period of one (1) year immediately following the
termination of this Agreement (for whatever reason, except as provided in Sections 5(d),
and 5(e) (the “Non-Competition Term”), he will not, directly or indirectly, either through
any form of ownership or as a director, officer, principal, agent, Executive, employer,
adviser, consultant, shareholder, partner, member, manager, or in any other individual or
representative capacity whatsoever, either for his own benefit or for the benefit of any
other person, firm, business, corporation, partnership, governmental or private entity, or
any other entity of whatever kind, without the prior written consent of the Company

8

 

(which consent may be withheld in the Company’s sole discretion), (i) compete for or solicit
business related to cancer diagnostic products or services for or on behalf of any person or
business entity with a place of business in the United States; (ii) own, operate, participate in,
undertake employment with or have any interest in any entity with a place of business in the United
States which competes with the business of the Company, except owning publicly traded stock for
investment purposes only in which Executive owns less than five per cent (5%); (iii) compete or
solicit business competitive with the business of the Company from any customer of the Company; or
(iv) use in any competition, solicitation, or marketing effort any Confidential Information, any
proprietary list, or any information concerning customers of the Company.

     Executive hereby acknowledges that the geographic boundaries, scope of prohibited activities
and the time duration of the provisions of this Section 7 are reasonable and are no broader than
are necessary to protect the legitimate business interests of the Company, including protecting the
value and goodwill of the Company, including its Confidential Information. It is the intent of the
parties that the provisions of this Section 8 shall be enforced to the fullest extent permissible
under the applicable law. The parties agree that if at the time enforcement is sought, a court of
competent jurisdiction adjudges any terms of any provision of this Section 8 to be void, invalid or
unenforceable, such court shall modify or reform such provision so that it is enforceable to the
fullest extent permitted by applicable law or if such modification or reformation is not possible,
shall sever the provision, and enforce the remaining provisions of this Section, which shall remain
in full force and effect.

     This Non-Competition provision can only be revoked or modified by a writing signed by the
parties which specifically states an intent to revoke or modify this provision.

     8. Non-interference or Solicitation

     (a) Executive agrees that, during the Employment Period and for an additional period of
one (1) year after the termination of Executive’s employment (for whatever reason, except as
provided in Sections 5(d)and 5(e)), neither he nor any individual, partner(s), limited partnership,
corporation or other entity or business with which he is in any way affiliated, including without
limitation, any partner, limited partner, director, officer, member, shareholder or Executive of
any such entity or business, will solicit or accept business from, or perform services on behalf
of, any client or customer of the Company with which Executive had contact during the Employment
Period, or in any way encourage them to terminate or otherwise negatively alter their relationship
with the Company. This Section 9 shall not apply if Executive’s employment is terminated pursuant
to Sections 5(d) or 5(e)- However, nothing herein shall prevent Executive from soliciting or
providing goods and services that are competitive with the business of the Company to any client or
customer of the Company.

9

 

     (b) Executive also agrees that during the Employment Period and for an additional period
of one (1) year after the termination of Executive’s employment (for whatever reason, except as
provided in Sections 5(d)and 5(e)) that neither he nor any individual, partner(s), limited
partnership, corporation or other entity or business with which he is in any way affiliated,
including without limitation, any partner, limited partner, director, officer, member, shareholder
or Executive of any such entity or business, will request, solicit, induce or attempt to
influence, directly or indirectly, any employee of the Company to terminate their employment with
the Company. This Section 9 shall not apply if Executive’s employment is terminated pursuant to
Sections 5(d), and 5(e) herein. This Section 8(b) shall not prohibit Executive from soliciting or
hiring any employees whose employment was involuntarily terminated by the Company.

     9. Work Product For purposes of this Section 9, “Work Product” shall mean all
intellectual property rights, including all trade secrets, U.S. and international copyrights,
trademarks, trade names, patentable inventions, discoveries and other intellectual property rights
in any work product that is created in connection with Executive’s work or using the Company’s
materials. For purposes of this Agreement, “Work” shall mean (1) any direct assignments and
required performance by or for the Company, and (2) any other productive output that relates to the
business of the Company and is produced during Executive’s employment by the Company. For this
purpose, Work may be considered present even after normal working hours, away from the Company’s
premises, on an unsupervised basis, alone or with others. Unless otherwise approved in writing by
the Chief Executive Officer or the Board, this Agreement shall apply to all Work Product created in
connection with ail Work conducted before or after the date of this
Agreement.

     The
Company shall own all rights in the Work Product. To this end, all Work Product shall be
considered work made for hire for the Company. If any of the Work Product may not, by operation of
law or agreement, be considered Work made by Executive for hire for the Company (or if ownership of
all rights therein do not otherwise vest exclusively in the Company immediately), Executive agrees
to assign, and upon creation thereof does hereby automatically assign, without further
consideration, the ownership thereof to the Company. Executive hereby irrevocably relinquishes for
the benefit of the Company and its assigns any moral rights in the Work Product recognized by
applicable law. The Company shall have the right to obtain and hold, in whatever name or capacity
it selects, copyrights, registrations, and any other protection available in the Work Product.

     10. Remedies for the Company. The termination of this Agreement by the Company
for Cause shall not be deemed to be a waiver by the Company of any breach by Executive of this
Agreement or any other obligation owed the Company, and, notwithstanding such a termination,
Executive shall be liable for all damages attributable to such a
breach. Because of the special
relationship between Executive and the Company, the confidential nature of the Company’s
developments and the fact that damages may not

10

 

be adequate to enforce the rights of the Company in the event of a breach of this Agreement by
Executive, it is agreed that the Company may seek to enforce all or some of its rights by seeking
an injunction from a court of appropriate jurisdiction.

     11. Remedies for Executive

          (a) The termination of this Agreement by Executive for Good Reason shall not be deemed to be
a waiver by Executive of any breach by the Company of this Agreement or any other obligation owed
Executive, and, notwithstanding such a termination, the Company shall be liable for all damages
attributable to such a breach.

          (b) In the event that Executive is terminated for Cause and it is ultimately determined that
the Company lacked Cause, (i) the termination shall be treated as a termination other than for
Cause; (ii) Executive shall have the right to seek remedy for a breach of this Agreement by the
Company, including, but not limited to, any other such damages as may be suffered and/or incurred
by Executive, Executive’s costs incurred during the dispute and reasonable attorneys’ fees in
connection with such dispute; and (iii) Executive shall receive all severance benefits to which he
would have been entitled in the event of a termination by the Company without Cause, as provided
in Section 5(g).

     12.
No Waiver. No waiver or non-action by either party with respect to any breach by
the other party of any provision of this Agreement, nor the waiver or non-action with respect to
the provisions of any similar agreement with other employees or the breach thereof, shall be deemed
or construed to be a waiver of any succeeding breach of such provision, or as a waiver of the
provision itself.

     13. Invalid Provisions. Should any portion of this Agreement be adjusted or held
invalid, unenforceable or void, such holding shall not have the effect of invalidating or voiding
the remainder of this Agreement and the parties hereby agree that the portion so held invalid,
unenforceable, or void shall, if possible, be deemed amended or reduced in scope, or otherwise be
stricken from this Agreement, to the extent required for the purposes of validity and enforcement
thereof.

     14. Successors and Assigns. Neither Executive nor the Company may assign its rights,
duties, or obligations hereunder without consent of the other.

     15. Survival. Unless otherwise provided herein, the provisions of Sections 6, 7, 8 and
9 of this Agreement shall survive Executive’s termination of
employment. Other provisions of this
Agreement shall survive any termination of Executive’s employment to the extent necessary to ensure
the preservation of each party’s respective rights and obligations.

11

 

     16. 
Prior Agreements. This Agreement incorporates the entire agreement between
both parties with respect to the subject matter hereof and supersedes all other prior agreements
(oral or written), documents or other instruments with respect to the matters covered herein.

     17. Governing Law. This Agreement shall be governed by, and interpreted in accordance
with the internal substantive laws of the State of Illinois, without giving effect to the
principles of conflicts of law. Each party hereto hereby irrevocably submits itself to the
exclusive personal jurisdiction of the Federal and State courts sitting in the city of Chicago, and
hereby waives any claims it may have as to inconvenient forum.

     18.  No Oral Modifications. This Agreement may not be changed or terminated
orally, and no change, termination or waiver of this Agreement or of any of the provisions herein
contained shall be binding unless made in writing and signed by both parties, and, in the case of
the Company, by a person designated by the Board or any committee thereof.

     19. Notices.  All notices and other communications required or permitted hereunder shall
be made in writing, and shall be deemed properly given if delivered personally, mailed by certified
mail, postage prepaid and return receipt requested, sent by facsimile, or sent by Express Mail or
Federal Express or other nationally recognized express delivery service, as follows:

	 	 	 	 	 
	 

	 	If to the Company:
	 	CytoCore, Inc., 414 North Orleans
Street, 
Chicago, Illinois
	 

	 	Attention:
	 	Robert McCullough, 
Chief Financial Officer
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Edmund Schaffzin,
	 

	 	 	 	888 Seventh Avenue- Suite 4500,
	 

	 	 	 	New York, New York 10106
	 
	 	 	 	 
	 

	 	If to Executive:
	 	Dr. Augusto Ocana, 
20 Foxcroft Drive

Princeton, New Jersey 08540
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Kevin M. Briody, Esq., 
Gallagher, Briody
& Butler 
155 Village 155 Boulevard,

Princeton, New Jersey 08540

     Notice given by hand, Express Mail, Federal Express, or other such express delivery service shall be effective
upon actual receipt. Notice given by facsimile transmission shall be effective upon actual receipt during the recipient’s
customary business hours, or at the beginning of the recipient’s next business day after receipt if not received during the

12

 

recipient’s customary business hours. All notices sent by facsimile transmission shall be confirmed
promptly after transmission in writing by certified mail or personal delivery.

     Any party may change any address to which notice shall be given to it by giving notice as
provided above of such change in address.

     20. Entire Agreement. The parties expressly agree that this Agreement is contractual in nature
and not a mere recital, and that it contains all the terms and conditions of the agreement between
the parties with respect to the matters set forth herein. All prior negotiations, agreements,
arrangements, understandings and statements between the parties relating to the matters set forth
herein that have occurred at any time or contemporaneously with the
execution of this Agreement
are superseded and merged into this completely integrated Agreement. The Recitals set forth above
shall be deemed to be part of this Agreement.

     21. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which shall constitute
one and the same instrument.

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

	 	 	 	 	 
	 	THE COMPANY: 

CytoCorc,Inc.

 	 
	 	By:  	/s/ Robert McCullough
 	 
	 
	 	EXECUTIVE:	 
	 	 	 	 
	 	By:  	/s/
Augusto Ocana
 	 
	 	 	Dr. Augusto Ocana	 
	 	 	 	 
	 

13

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