Employment Agreement

(a)

serving as a director or member of a committee of any organization or corporation involving no conflict of interest with the interests of the Company;

(b)

serving as a consultant in his area of expertise (in areas other than in connection with the business of the Company), to government, industrial, and academic panels where it does not conflict with the interests of the Company; and

(c)

managing his personal investments or engaging in any other non-competing business; provided that such activities do not materially interfere with the regular performance of his duties and responsibilities under this Agreement as determined by the Company.

Base Compensation. As compensation for the services provided by Individual under this Agreement, the Company shall pay Individual an annual salary of Two Hundred Thousand Dollars ($200,000) ("Base Compensation").

Stock and Stock Options. Individual shall also be eligible to receive shares of Parent’s authorized stock options to purchase shares of Parent’s authorized stock from time to time as determined by the board of directors and detailed herein: Individual will receive Two Hundred Thousand (200,000) stock options, vesting equally per year over three (3) years (i.e., 66,667 shares on July 18, 2006; 66,667 shares on July 18, 2007; and 66,666 on July 18, 2008) at a strike price of $5.00. Further, Individual will receive Ten Thousand (10,000) shares in a restricted stock grant as a signing bonus, payable within thirty (30) days of the Effective Date.

Milestones Options. In addition to the Base Compensation, Individual shall be eligible to receive a milestone bonus determined by the Chief Executive Officer and board of directors, based on the performance of the Company, as detailed herein:

Individual will be granted Fifty Thousand (50,000) stock options of Parent when Individual reaches Five Million Dollars ($5,000,000) in sales for SurgiCount Medical, Inc, vested at grant date.

Individual will be granted Fifty Thousand (50,000) stock options of Parent when Individual obtains a certain mutually agreed milestone as set by Chief Executive Officer, Individual and Health West Marketing, together, vested at grant date.

Voluntary Termination by Individual. Individual shall have the right to voluntarily terminate this Agreement and his employment hereunder at any time during the Employment Term.

Voluntary Termination by the Company. The Company shall have the right to voluntarily terminate this Agreement and Individual’s employment hereunder at any time during the Employment Term.

Termination for Cause. The Company shall have the right to terminate this Agreement and Individual’s employment hereunder at any time for cause. As used in this Agreement, "cause" shall mean (i) refusal by Individual to implement or adhere to a written directive of the Company’s Chief Executive Officer or board of directors other than a directive that would result in illegal or unethical conduct; (ii) material breach of a material term or representation of this Agreement, (iii) Individual’s conviction of a felony, (iv) dishonesty, gross negligence, or other act by Individual materially detrimental to the Company or its good will, or materially damaging to its relationships with its customers, suppliers, or employees; (v)  breach of fiduciary duty, or (vi) misappropriation by Individual of funds from or resources of the Company. Cause shall not be deemed to exist unless the Company shall have first given Individual a written notice thereof specifying in reasonable detail the facts and circumstances alleged to constitute "cause" and ten (10) days after such notice such conduct has, or such circumstances have, as the case may be, not entirely ceased and not been entirely remedied.

Termination Upon Death or for Disability. This Agreement and Individual’s employment hereunder, shall automatically terminate upon Individual’s death or upon written notice to Individual and certification of Individual’s disability by a qualified physician or a panel of qualified physicians if Individual becomes disabled beyond a period of twelve (12) months and is unable to perform the duties contain in this Agreement.

Effect of Termination. In the event that this Agreement and Individual’s employment is voluntarily terminated by Individual pursuant to Section 12(a), or in the event the Company terminates this Agreement for cause pursuant to Section 12(c), all obligations of the Company and all duties, responsibilities and obligations of Individual under this Agreement, except for those obligations set forth in Sections 8, 10, 11 and 17 hereof, shall cease and all unvested stock options and/or unearned milestone bonuses, will be forfeited.

The Company agrees that if Individual is made a party, or is threatened to be made a party, to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding"), by reason of the fact that he is or was a director, officer or employee of the Company or is or was serving at the request of the Company as a director, officer, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether or not the basis of such Proceeding is Individual’s alleged action in an official capacity while serving as a director, officer, member, employee or agent, Individual shall be indemnified and held harmless by the Company to the fullest extent permitted or authorized by the Company's certificate of incorporation or bylaws or, if greater, by the laws of the State of California, against all cost, expense, liability and loss (including, without limitation, attorney's fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by Individual in connection therewith, and such indemnification shall continue as to Individual even if he has ceased to be a director, member, employee or agent of the Company or other entity and shall inure to the benefit of Individual’s heirs, executors and administrators. The Company shall advance to Individual to the extent permitted by law all reasonable costs and expenses incurred by him in connection with a Proceeding within 20 days after receipt by the Company of a written request, with appropriate documentation, for such advance. Such request shall include an undertaking by Individual to repay the amount of such advance if it shall ultimately be determined that he is not entitled to be indemnified against such costs and expenses.

Neither the failure of the Company (including its board of directors, independent legal counsel or stockholders) to have made a determination prior to the commencement of any Proceeding concerning payment of amounts claimed by Individual that indemnification of Individual is proper because he has met the applicable standard of conduct, nor a determination by the Company (including its board of directors, independent legal counsel or stockholders) that Individual has not met such applicable standard of conduct, shall create a presumption that Individual has not met the applicable standard of conduct.

The Company agrees to continue and maintain a directors' and officers' liability insurance policy covering Individual to the extent the Company provides such coverage for its other executive officers.

Promptly after receipt by Individual of notice of any claim or the commencement of any action or proceeding with respect to which Individual is entitled to indemnity hereunder, Individual shall notify the Company in writing of such claim or the commencement of such action or proceeding, and the Company shall (i) assume the defense of such action or proceeding, (ii) employ counsel reasonably satisfactory to Individual, and (iii) pay the reasonable fees and expenses of such counsel. Notwithstanding the preceding sentence, Individual shall be entitled to employ counsel separate from counsel for the Company and from any other party in such action if Individual reasonably determines that a conflict of interest exists which makes representation by counsel chosen by the Company not advisable. In such event, the reasonable fees and disbursements of such separate counsel for Individual shall be paid by the Company to the extent permitted by law.

After the termination of this Agreement and upon the request of Individual, the Company agrees to reimburse Individual for all reasonable travel, legal and other out-of-pocket expenses related to assisting the Company to prepare for or defend against any action, suit, proceeding or claim brought or threatened to be brought against the Company or to prepare for or institute any action, suit, proceeding or claim to be brought or threatened to be brought against a third party arising out of or based upon the transactions contemplated herein and in providing evidence, producing documents or otherwise participating in any such action, suit, proceeding or claim. In the event Individual is required to appear after termination of this Agreement at a judicial or regulatory hearing in connection with Individual's employment hereunder, or Individual's role in connection therewith, the Company agrees to pay Individual a sum, to be mutually agreed upon by Individual and the Company, per diem for each day of his appearance and each day of preparation therefor.

 Company or Parent:

 Individual: