EMPLOYMENT AGREEMENT

1.

Employment. Upon execution of an investment in the Company by the Employee of $200,000, the Company agrees to employ the Employee for a period of two (2) years from the date of this Agreement: unless Employee violates the terms set forth in Paragraph 7: Termination by the Company for Cause or the Employee voluntarily resigns. The term is automatically renewable annually except by action of the President or the Board of Directors

2.

Duties. The Employee will hold the title of Executive Vice President of Operations and shall report to the President/CEO of the Company. The general scope of the Employee’s duties shall include: to oversee and manage all areas relating to interaction with the FDA, all manufacturing functions and capabilities, all R&D functions, all operational aspects relating to Intellectual Property, all logistical considerations for the Company, including but not limited to service and installation of the FMS (Fluid Management System) unit and distribution of cleaning fluid, overseeing all related vendors and consultants, and other Operations-related duties and functions that may arise from time to time.

The Employee’s duties may be modified from time to time by mutual agreement between the Employee and the President/CEO as they deem to be in the best interest of the Company, provided that the Employee’s duties shall be commensurate with those of a senior executive of the Company.

3.

Extent of Services. The Employee shall devote his full attention, energy and skills to the business of the Company and use his best efforts to fully and competently perform the duties of his office.

4.

Compensation.

a.

Base Salary. $135,000 per year. Initial payment will be monthly and will be according to the Company’s salary schedule. Employee will have an informal performance review in six (6) months and will receive annual salary reviews and potential increases, based on Employee’s performance.

b.

Bonus. The Employee will receive a one-time signing bonus of $15,000 upon execution of this Agreement in recognition of his investment in the Company. The Employee will be eligible for participation in the Company’s bonus plan when completed and approved by the Board of Directors and the Compensation Committee. Bonus will be paid at the first payroll period after employment.

c.

Stock Options. The Employee will receive total stock options to purchase 250,000 shares of the Company’s common stock at $.35 per share. This will be governed by a Company Stock Option Plan to be established by the Company in a timely manner upon hiring of the Employee. Vesting of the 250,000 options will be as follows: 50,000 shares upon execution of this Agreement; the balance in achievement of the following specific milestones:

•

An additional 50,000 shares to vest upon submission of the 510(k) to the FDA for approval of the FMS unit,

•

An additional 50,000 shares to vest upon approval of the 510(k) by the FDA,

•

An additional 50,000 shares to vest upon sale of the first commercial-ready FMS unit,

•

An additional 50,000 shares to vest upon sale of the 50 ^th commercial-ready FMS unit.

The total of these options, assuming all milestones are achieved, will be 250,000, as described above.

d.

Executive Compensation. The Employee will be eligible for executive compensation such as bonus, stock, stock options, deferred compensation, life insurance, etc., as approved by the Board of Directors and the Compensation Committee when such executive compensation plan is completed

5.

Additional Benefits.

a.

Automobile. The Company shall reimburse the Employee for deductible automobile mileage or auto allowance according to its Expense Reporting Procedures.

b.

Business Expense. The Company will reimburse the Employee for all reasonable, deductible and substantiated business expenses per its Expense Reporting Procedures. This includes, but is not limited to such expenses as telephone, cell phone, home office, business meetings, etc.

c.

Benefits. The Employee will be eligible for the Company’s benefits package and executive benefits listed in Paragraph 4.d. which will be implemented as funds become available and upon development and approval by the Compensation Committee. In lieu of, and until a company-sponsored medical benefits program is installed, Employee will receive a monthly amount of $1,000.

d.

Vacation. The Employee will receive a minimum of three (3) weeks’ vacation per year or as per the executive vacation plan when written, whichever is greater.

e.

Education. The Company will support the Employee in his pursuit of continuing education provided sufficient cash flows support tuition reimbursement and he meets the conditions and terms of the tuition reimbursement guidelines as outlined in the Employee Manual when written.

5.

Board of Directors Membership. The Employee, as soon as Myron Schuster is paid and removed from the Board, which action is being pursued as of this writing, will become a member of the Board of Directors of the Company. In any event, regardless of the handling of the situation with Mr. Schuster, Employee shall become a Board member within 30 days of this date.

6.

Non-Compete. Throughout the period of Employee’s employment with the Company, and thereafter for a period of one (1) year, Employee shall not, for any reason whatsoever, directly or indirectly, plan, organize, advise, own, manage, operate, control, be employed by, participate in or be connected in any manner with the ownership, management, operation or control of any business of the following type: the development, marketing and sales of medical devises dedicated or designed to safely manage and dispose of contaminated fluids generated in the operating room and other similar medical locations. For purposes of this Agreement, indirect competition shall be deemed to include any activity by Employee in aid of a competing Business, including but not limited to, being a partner, shareholder, officer, director, member, owner, manager, governor, agent, employee, advisor, consultant or independent contractor of any competing Business.

7.

Intellectual Property. Employee agrees that all right, title and interest of every kind and nature whatsoever, whether now known or unknown, in and to any “Intellectual Property,” defined to include, but not be limited to, any patent rights, trademarks, copyrights, ideas, creations and properties invented, created, written, developed, furnished, produced or disclosed by Employee in the course of rendering his/her services to Company (both before the execution of this Agreement and thereafter) shall, as between the parties, be and remain the sole and exclusive property of Company for any and all purposes and uses whatsoever, and Employee shall have no right, title or interest of any kind or nature therein or thereto, or in and to any results and proceeds therefrom. Employee agrees to assign, and hereby expressly and irrevocably assigns, to Company all worldwide rights, title and interest, in perpetuity, in respect of any and all rights Employee may have or acquire in the Intellectual Property. The assignment of the rights as above shall not lapse if Company has not exercised its rights under the assignment for any period of time or in any jurisdiction or territory. Pursuant to Section 181.78 of the Minnesota Statutes, the preceding sentence does not apply to an invention for which no equipme