EMPLOYMENT AGREEMENT

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Exhibit 10.7

EMPLOYMENT AGREEMENT

(for John W. Babich)

EMPLOYMENT AGREEMENT (this "Agreement") dated as of January 1, 2003 (the

"Effective Date"), by and between Biostream, Inc., a Massachusetts corporation

having its principal place of business at 160 Second Street, Cambridge,

Massachusetts 02142 (the "Employer"), and John W. Babich (the "Employee").

WITNESSETH:

WHEREAS, the Employer is engaged in the business of developing and

marketing imaging Pharmaceuticals which detect human disease; and

WHEREAS, the Employee possesses the experience necessary in administration

and general and active supervision and direction of the daily operations of a

biopharmaceutical business in order to fulfill the responsibilities as President

and Chief Scientific Officer of the Employer; and

WHEREAS, the Employer desires to employ the Employee, and the Employee

desires to be employed by the Employer, all in accordance with the terms and

provisions of this Agreement.

NOW, THEREFORE, in consideration of the covenants and promises hereinafter

contained, and for other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the Employer and the Employee

represent, covenant and agree as follows:

1. Employment. The Employer hereby employs the Employee to serve as

President and Chief Scientific Officer of the Employer in accordance with the

terms and provisions of this Agreement, and the Employee hereby accepts such

employment with the Employer. Employee also shall serve as a member of the Board

of Directors of the Employer.

2. Term. The term of this Agreement shall commence on the Effective Date

and shall continue until this Agreement is terminated as hereinafter provided.

3. Compensation. As compensation for all services rendered by the Employee

to the Employer pursuant to this Agreement, the Employer shall pay to the

Employee the following amounts during the term of this Agreement:

(a) Base Compensation. The Employer shall pay to the Employee base

compensation at no less than the rate set forth on Schedule A attached hereto

and herein incorporated by reference (the "Base Compensation"). The Base

Compensation shall be payable pursuant to the Employer's standard payroll

practices, except as otherwise noted on Schedule A. The Base Compensation shall

be reviewed by the compensation committee of the Board of the Employer annually

and increases in the Base Compensation, if any, shall be evidenced by the

updating and initialing of Schedule A by both parties hereto.

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(b) Incentive Bonus. In addition to the Base Compensation, the

Employee shall be eligible to receive an annual fiscal year incentive bonus with

a maximum annual amount equal to seventy-five percent (75%) of the then current

Base Compensation (the "Incentive Bonus"). Payment of the Incentive Bonus shall

be subject to the discretion of the Board and will be based upon accomplishment

of goals provided to the Employee by the CEO from time to time and based upon

scientific progress and achievement of specific corporate milestones. The Board

may elect to award the Incentive Bonus to the Employee in cash or in the

Employer's capital stock (at its then-current fair market value), but a capital

stock bonus requires the consent of the Employee.

4. Vacation and Employee Benefits.

(a) Vacation. The Employee shall be entitled to an annual paid

vacation equal to four weeks annually. Vacation shall be taken at such times so

as not to interfere with the proper operation of the Employer's business.

(b) Benefits Generally. The Employee shall be entitled to receive

and participate in such employee benefits as the Employer shall from time to

time determine to provide to its executives generally. At a minimum, the

Employee shall receive medical and dental insurance at the Employer's expense.

(c) Indemnification Rights. The Employee shall be entitled to

indemnification, including advance reimbursement of expenses, to the fullest

extent permitted by applicable law, and shall be entitled to receive an

indemnification agreement with terms equivalent to any indemnification agreement

that the Employer executes with any of its officers or directors.

(d) Registration Rights. The Employee shall be entitled to the

benefit of any so-called "piggy-back" registration rights and related provisions

that the Employer has granted or grants to any third party on the same basis as

the most favorable provisions received by any such third party.

(e) Participation Rights. The Employee shall be entitled to rights

equivalent to the Employer's outside investors with respect to rights to

purchase additional equity securities issued by the Employer in order to

maintain the Employee's percentage interest in the Employer's equity securities.

5. Stock Incentives.

(a) Options. Pursuant to the provisions of the Company's 1997 Stock

Option Plan, as may be amended from time to time (the "Plan"), and subject to

the vesting provisions described below the Company hereby grants to the Employee

an option to purchase 1,825,000 shares of its Common Stock ($.01 par value) (the

"Optioned Shares") at a price of $0.10 per share, in accordance with and subject

to all the terms and conditions of the Plan and subject to the terms and

conditions hereinafter set forth. Nothing in this section refers to or impinges

upon

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shares currently held by or options (either vested or unvested) previously

granted to the Employee.

(b) Vesting. 20% of the options shall be vested upon Board approval

and the remainder shall be "unvested options." An additional 5% of the options

shall vest on each quarterly (three-month) anniversary of the Effective Date,

provided that the Employee is still employed by the Employer on such date or is

then receiving a Severance Package (as defined in Section 15 below). In the

event of a Change of Control (as defined below), all of the unvested options

immediately shall vest, provided that the Employee is still employed by the

Employer on the date of such Change of Control, or is then receiving a Severance

Package.

(c) Change of Control. For purposes of this Agreement "Change of

Control" shall mean the occurrence of one or more of the following events:

(i) any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the

Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes a

"beneficial owner" (as such term is defined in Rule 13d-3 promulgated under the

Exchange Act) (other than the Employer, any trustee or other fiduciary holding

securities under an employee benefit plan of the Employer, or any corporation

owned, directly or indirectly, by the stockholders of the Employer, in

substantially the same proportions as their ownership of stock of the Employer),

or any or group of persons acting in concert becomes a beneficial owner,

directly or indirectly, of securities of the Employer, representing more than

fifty percent (50%) of the combined voting power or fully diluted equity

interest of the Employer's then outstanding equity securities, except as a

result of a financing transaction where all proceeds are received directly by

the Company that is not intended as a sale of the business of the Employer; or

(ii) the stockholders of the Employer approve a merger or consolidation of the

Employer with any other corporation or other entity, other than (A) a merger or

consolidation which would result in the equity securities of the Employer

outstanding immediately prior thereto continuing to represent (either by

remaining outstanding or by being converted into equity securities of the

surviving entity) fifty percent (50%) or more of the outstanding equity interest

of the Employer or such surviving entity outstanding immediately after such

merger or consolidation or (B) a merger or consolidation effected to implement a

recapitalization of the Employer (or similar transaction) in which no "person"

(as hereinabove defined) other than Employee acquires more than fifty percent

(50%) of the equity interest of the Employer's then outstanding securities; or

(iii) the stockholders of the Employer approve a plan of complete liquidation of

the Employer or an agreement for the sale or disposition by the Employer of all

or substantially all of the Employer's assets.

6. Description of Duties. During the term of this Agreement, the Employee

shall be the President and Chief Scientific Officer of the Employer and shall:

(a) Devote on a full time basis all necessary time, best efforts,

professional skills, attention and energies to the fulfillment of the duties

customarily associated with such

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position and the accomplishment of the goals provided by the CEO of the Employer

to the Employee from time to time; and

(b) Act in accordance herewith, and in all accounts be responsible

and responsive to, the Board of Directors and the CEO of Employer.

7. General Services. During the term of this Agreement, the Employee

shall:

(a) Observe the Employer's policies and standards of conduct, as

well as customary standards of business conduct, including any standards

prescribed by law or regulation;

(b) Perform his duties hereunder in a manner that preserves and

protects the Employer's business reputation; and

(c) Do all things and render such services as may be necessary or

beneficial in carrying out any of the foregoing.

8. Non-Disclosure of Proprietary or Confidential Information and

Confidential Communications. For the purposes of this Section 8, the term

"Employer" shall include, and the protections granted the Employer hereunder

shall extend to, ATP Therapeutics, Inc., Biostream Therapeutics, Inc. (f/k/a

Zebra Pharmaceuticals, Inc.), and any other entities now or hereinafter

affiliated, acquired or created by Biostream, Inc. The Employee recognizes and

acknowledges that the marketing plans and business strategy, the names and

addresses of the Employer's customers, the particular needs and application of

such customers for diagnostic imaging techniques, the names and addresses of the

Employer's suppliers, the Employer's purchasing history with its suppliers, the

names and other pertinent data concerning the persons employed by the Employer's

suppliers who are responsible for supplying the Employer with products and

services, the Employer's proprietary computer software programs, trade secrets

and any other confidential and proprietary information concerning the business

or affairs of the Employer (including but not limited to marketing and business

plans and strategies, research protocols, procedures data, results, and cost

information) (hereinafter collectively referred to as the Confidential

Information) constitute a valuable, proprietary, special and unique asset of the

Employer's business. The Employee further recognizes and acknowledges that any

communications, whether written, oral or otherwise, that the Employer or any of

the Employer's employees has with the Employer's existing or prospective

customers and clients and affiliated research institutions and scientists are

extremely confidential (hereinafter the "Confidential Communications"). The term

Confidential Information shall exclude any information that has been made public

through no fault of the Employee.

The Employee shall not, for any reason whatsoever, during or after the

termination of his employment with the Employer, use, disclose or allow access

to, for his own benefit or for that of another, the Confidential Information or

the Confidential Communications (or any part thereof) to any person, firm,

corporation, association or other entity for any reason or for any purpose

whatsoever.

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In the event of a breach or threatened breach by the Employee of the

provisions of this Section, the Employer shall be entitled to an injunction

restraining the Employee from so using, disclosing or allowing access to, in

whole or in part, the Confidential Information and the Confidential

Communications or from rendering any services to any person, firm, corporation,

association or other entity to whom the Confidential Information or the

Confidential Communications, in whole or in part, have been disclosed or are

threatened to be disclosed. Nothing herein shall be construed as prohibiting the

Employer from pursuing any other remedies available to the Employer for such

breach or threatened breach, including, but not limited to, the recovery of

damages and reasonable attorneys' fees from the Employee.

Upon termination of this Agreement by either party for any reason, the

Employee shall return to the Employer any of the Confidential Information,

Confidential Communications, charts, company literature, reports, Employer

credit cards or other proprietary materials of the Employer then in the

Employee's possession and all other materials of the Employer which the Board of

Directors of the Employer requests the Employee to so return.

This Section shall in all respects survive any termination of this

Agreement and shall remain in full force and effect thereafter. In the event

that any provision of this Section 8 shall conflict with any term or condition

of any other confidentiality agreement between the Employer and the Employee,

then the more restrictive provision shall be deemed to apply in order to

accomplish the purposes of this Section 8 and such other agreements, that being

to protect the Employer's Confidential Information and Confidential

Communications.

In the event of the Employee's breach of this Section 8, the Employee

shall immediately and irrevocably forfeit future payments under the Severance

Package as hereinafter defined in Section 15. Nothing in this paragraph shall be

construed to limit or cap the Employer's damages in the event of a breach of

this Section 8.

9. Covenant Not to Compete; Non-solicitation of Employees and Customers.

For the purposes of this Section 9, the term "Employer" shall include, and the

protections granted the Employer hereunder shall extend to, ATP Therapeutics,

Inc., Biostream Therapeutics, Inc. (f/k/a Zebra Pharmaceuticals, Inc.), and any

other entities now or hereinafter affiliated, acquired or created by Biostream,

Inc. The Employee agrees that while employed by the Employer and for a

continuous period of one (1) year following the date of the termination of his

employment with the Employer eit