AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is entered into effective as of October 7, 2008 (“Effective Date”), between THE CENTER FOR WOUND HEALING, INC., a Nevada corporation (the “Company”) with its principal place of business at 155 White Plains Road, Tarrytown, New York 10591, and David Walz (“Executive”), to provide the terms and conditions for Executive’s employment with the Company and its affiliates from time to time (together, the “Group”).

The Company and Executive have agreed that Executive will be employed by the Company and will serve as an executive officer of the Company, upon the terms and conditions set forth below. This Agreement replaces and supersedes the Employment Agreement between Executive and the Company dated April 1, 2005, as amended (the “2005 Employment Agreement”), except as expressly provided herein.

Accordingly, and in consideration of the mutual obligations set forth in this Agreement, which Executive and the Company agree are sufficient, Executive and the Company agree as follows:

1.     Term of Employment.   Subject to the provisions of Paragraph 4 below, the initial term of this Agreement (the “Initial Term”) begins on the Effective Date and ends on June 30, 2011.  Executive’s employment by the Company pursuant to this Agreement shall be automatically renewed for an additional twelve (12) months following the end of the Initial Term unless either Executive or the Company has provided written notice of its or his intent not to renew on or before January 1, 2011 (a “Renewal Term”).  Following the first Renewal Term, Executive’s employment by the Company pursuant to this Agreement shall be automatically renewed for successive twelve (12) month periods (each, also a “Renewal Term”) following the end of the prior Renewal Term unless either Executive or the Company has provided written notice of its or his intent not to renew no less than 180 days  prior to the expiration of the prior Renewal Term.   Executive’s term of employment under this Agreement (the “Term”) consists of the Initial Term and any Renewal Term(s).  For avoidance of doubt, “Term” as used in this Agreement shall not include any Renewal Term(s) unless this Agreement is extended in accordance with this Paragraph 1.  

Executive shall receive the following compensation and/or reimbursement for expenses:

(a)            Base Salary .  Executive’s annual base salary for each fiscal year during the Term shall be $285,000, payable in equal monthly or more frequent installments as are customary under the Company's payroll practices from time to time, and subject to annual cost-of-living increases (calculated by reference to U.S. Department of Labor’s Consumer Price Index for Urban Consumers, New York, Northern New Jersey and Long Island (NY, NJ, CT, PA) for each applicable year) to take effect on January 1 during each calendar year of the Term (the “Base Salary”) not to exceed 4% per annum.  The Board (or a committee thereof) will review the Base Salary at least annually and may (or may not) increase it beyond Executive’s annual cost-of-living increases at any time for any reason, in its sole discretion.  Executive’s Base Salary (as increased from time to time) shall not be reduced without his written consent.

(b)            Signing Bonus .  Executive shall be eligible for a one-time bonus in the gross amount of $10,000 upon the full and complete execution of this Agreement. Such bonus shall be paid as soon as is practicable after such execution, but in no event later than March 15 of Executive’s taxable year following the taxable year in which the bonus is earned.

(c)            Annual Performance Bonus .  In addition to the foregoing, Executive shall be eligible to receive an annual cash performance bonus (the “Annual Bonus”) for each fiscal year ending during the Term if Executive remains employed by the Company on the last day of such fiscal year and the Company achieves the following Gross Margin for the applicable fiscal year:

Subject to the provisions of Paragraph 4 hereof, the Annual Bonus shall be paid as soon as possible after the close of the applicable fiscal year, but in no event later than March 15 of Executive’s taxable year following the taxable year in which the bonus is earned.  The amount of Executive’s Annual Bonus shall be established by the Board in its sole discretion following the close of the applicable fiscal year, provided, however, that the minimum Annual Bonus for any fiscal year shall be no less than $50,000 and the maximum Annual Bonus shall be no more than 50% of Executive’s then-existing Base Salary, provided that the Company achieves the Gross Margin targets described above.   The parties acknowledge and agree that Executive has already earned an Annual Performance bonus for fiscal year 2008 in the gross amount of $50,000, which shall be paid in no event later than March 15, 2009.

Gross Margin shall be calculated by the Company and the Company’s determination of Gross Margin shall be final and not subject to challenge by Executive.  Generally, however, “Gross Margin” means the result of net sales less direct wound care center (the “Centers”) costs (the “cost of sales” or “COS”) including direct and hospital contract labor payroll costs, heath insurance and employee benefit costs associated with this direct labor, medical director fees and other labor costs that may be paid on a 1099 basis; rental, finance charges and depreciation costs of leasehold improvements and furniture, fixtures and equipment used in the Centers; advertising, marketing, promotion and Center grand opening costs that are directly assigned to Centers; automobile expense incurred by Center employees; patient transportation costs; equipment maintenance; software expense, including current expense and amortization costs; property and casualty and other liability insurance costs allocated to the Centers; non-cash compensation to Center employees (both “HMA” and “NYHWC” payroll personnel); oxygen and medical supplies costs; amortization costs of contract and other intangible assets directly associated with a Center; and other costs that may be appropriately allocated to the Cost of Sales as determined by the company’s Chief Executive Officer.

(d)            Benefits .  Executive shall be eligible to participate in all Company benefit plans and programs as are generally available to the Company’s senior executives, and Executive’s benefits shall be based on the terms of the applicable plans as established by the Company from time to time.  Executive shall be entitled to 6 weeks paid vacation per calendar year, which vacation shall be exercised with due regard to the then current requirements of the Company’s business.   Executive shall be entitled to carry over up to two (2) weeks unused vacation from one year to the next (for a maximum of 8 weeks vacation in any calendar year).  Executive’s vacation entitlement may be reviewed by the Board and increased at the Board’s discretion.

(e)            Car Allowance .  Executive shall be entitled to reimbursement for automobile expenses (including insurance, maintenance, lease payments, etc.) up to, but not exceeding, $15,000 per calendar year (but no more than $3,000 per calendar month), plus additional reimbursement for any mileage, tolls or parking for documented business use (with such documentation to be provided in accordance with the Company’s normal expense reimbursement practices and procedures).  Any unused car allowance existing as of December 31 of each calendar year shall be forfeited.   If any automobile expense reimbursed hereunder is considered taxable income to Executive, Executive shall be entitled to a “gross-up” payment from the Company so that his net, after-tax, automobile expenses are fully reimbursed by the Company.  All approved reimbursements and any “gross-up” payment shall be paid within a reasonable time (not later than March 15 of Employee’s taxable year following the taxable year in which an expense was incurred) following the presentation by Employee of appropriate documentation to the Company.  The amount of expenses eligible for reimbursement during any taxable year of Employee under this Agreement will not affect the expenses eligible for reimbursement in any other taxable year of Employee, and Employee’s right to reimbursement of expenses is not subject to liquidation or exchange for another benefit.

(f)            Stock Options .  Pursuant to the 2005 Employment Agreement, Executive was granted options to purchase 210,000 shares of common stock of the Company and pursuant to this Agreement, executive shall be granted the option to purchase an additional 525,000 shares of the Company’s common stock pursuant to the Company’s “Center for Wound Healing 2006 Stock Option Plan, as amended and restated” (the “Option Plan”), as described below.  The Company represents that such shares are not currently registered, but agrees to provide Executive with “piggyback” registration rights should the Company register the shares of any shareholder or warrant holder of the Company’s stock, and shall enter into a Registration Rights Agreement reasonably acceptable to Executive providing for such “piggyback” registration rights.  The terms of such option grant shall be as follows:

(g)            Expense Reimbursement .  Executive shall be entitled to receive prompt reimbursement from the Company of all travel, tolls, parking, entertainment and out-of-pocket expenses which are reasonably and necessarily incurred by Executive in the performance of his duties hereunder; provided, however , that Executive properly accounts for such expenses in accordance with Company’s policies as in effect from time to time, and receives pre-approval from the Board prior to incurring any single expense for which reimbursement will be sought in excess of $5,000.00.  All approved reimbursements shall be paid within a reasonable time (not later than March 15 of Employee’s taxable year following the taxable year in which an expense was incurred) following the presentation by Employee of appropriate documentation to the Company.  The amount of expenses eligible for reimbursement during any taxable year of Employee under this Agreement will not affect the expenses eligible for reimbursement in any other taxable year of Employee, and Employee’s right to reimbursement of expenses is not subject to liquidation or exchange for another benefit.

(i)         Termination by the Company for Cause .  The Board may terminate Executive’s employment for Cause at any time upon written notice.  “Cause” means any of the following: (1) Executive’s material breach of this Agreement, breach of fiduciary duty having a material adverse impact on the Company, material breach of the Company’s employment policies applicable to him, or refusal to follow the lawful directives of the Board consistent with this Agreement that is not corrected (to the extent correctable) within ten (10) days after delivery of written notice to Executive with respect to such breach; (2) Executive’s breach of a fiduciary duty to the Company, material breach of the Company’s employment policies applicable to him, refusal to follow the lawful directives of the Board consistent with this Agreement, or repeated breach of the same provision of this Agreement, each on more than two (2) occasions, regardless of whether such breach has been or may be corrected; (3) Executive’s indictment for or conviction of a felony or any crime involving fraud; (4) Executive’s misappropriation of funds or material property of the Company or any member of the Group; or (5) Executive’s material dishonesty, disloyalty, or willful misconduct.   Notwithstanding the foregoing, any act, or failure to act, based upon the advice of counsel to the Company shall be presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company, and shall not constitute Cause as defined herein.

(ii)                   Termination by the Company without Cause .  The Company may terminate Executive’s employment under this Agreement without Cause upon at least thirty (30) days’ prior written notice to Executive.   Furthermore, for purposes of this Agreement, a failure by the Company to renew this Agreement pursuant to Paragraph 1 hereof shall constitute a termination by the Company without Cause.

(iii)                   Death or Disability .  Executive’s employment by the Company will immediately terminate upon Executive’s death and at the option of either Executive or the Company, exercisable upon written notice to the other party, may terminate upon the Executive’s Disability.  For purposes of this Agreement, “Disability” will occur if (1) Executive becomes eligible for benefits under a long-term disability policy provided by the Company, or (2) Executive has become unable, due to physical or mental illness or incapacity, to substantially perform the essential duties of Executive’s employment, with or without reasonable accommodation, for a period of (A) 90 consecutive days or any consecutive waiting period during which Executive is not eligible for