Exhibit 10.1

Non-Qualified Stock Option Agreement

SmartVideo Technologies, Inc., a Delaware corporation (the “Company”), hereby
grants this 18 day of July 18, 2005, 2005 to Justin A. Stanley,
Jr. (“Director”), an option to purchase a maximum of 250,000 (Two Hundred Fifty
Thousand) shares of the Company’s common stock, par value $.001 per share, at
the price of $0.90 per share (“Option Price”), on the following terms and
conditions:

1.    Grant Under 2004 Equity Incentive Plan. This option is granted pursuant to
and is governed by the Company’s 2004 Equity Incentive Plan (the “Plan”), as
amended, and, unless the context otherwise requires, terms used herein shall
have the same meaning as in the Plan. Determinations made in connection with
this option pursuant to the Plan shall be governed by the Plan as it exists on
this date.

2.    Grant as Non-Qualified Stock Option; Other Options. This option is a
non-statutory stock option and is not intended to qualify as an Incentive Stock
Option under Section 422A of the Internal Revenue Code of 1986 (the “Code”).
This option is in addition to any other options heretofore or hereafter granted
to the Director by the Company, but a duplicate original of this instrument
shall not effect the grant of another option.

3.    Extent of Option if Employment Continues. Unless the vesting of the option
accelerates as provided below in this Section 3, if the Director has continued
to be employed by the Company on the following dates, the Director may exercise
this option for the number of shares set opposite the applicable date:

Vesting Schedule:

Options vest over two (2) years at 12.5% or 31,250 Option Shares per Quarter for
an aggregate amount of 50% or 125,00 Option Shares Annually. A detailed Vesting
Schedule is attached as Exhibit A.

Upon a Change in Control (as such term is defined in the Plan), all of the
unvested option will accelerate and be exercisable for a period of twenty (20)
days immediately prior to the scheduled consummation of a Change in Control;
provided, however, that any such acceleration and any exercise of the option
during such five (5) day period shall be (i) conditioned on the consummation of
the Change in Control and (ii) effective only immediately before the
consummation of the Change in Control.

Upon consummation of any Change in Control, the Plan and any outstanding portion
of the option that remains unexercised shall terminate. Notwithstanding the
foregoing, to the extent provision is made in writing in connection with such
Change in Control for the continuation of the Plan and the assumption of options
under the Plan theretofore granted, or for the substitution for such options of
new options covering the stock of a successor company, or a parent or a
subsidiary thereof, with appropriate adjustments as to the number and kinds of
shares or units and exercise prices, then the Plan and the option granted
hereunder shall continue in the manner and under the terms so provided, and the
acceleration and termination provisions set forth in this Section 3 shall be of
no effect. The Company will send written notice of a Change in Control to the
Director not later than a time at which the Company gives notice thereof to its
stockholders.

The foregoing rights are cumulative and, while the Director continues to be
employed by the Company, may be exercised up to and including the date which is
10th years from the date this option is granted. All of the foregoing rights are
subject to Sections 4 and 5, as appropriate, if the Director ceases to be
employed by the Company or dies or suffers a Total Disability while in the
employ of the Company.

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4.    Termination of Employment. If the Director ceases to be employed by the
Company, other than by reason of death or Total Disability as defined in Section
5, no further installments of this option shall become exercisable and this
option shall terminate after the passage of ninety (90) days from the date
employment ceases, but in no event later than the scheduled expiration date. In
such a case, the Director’s only rights hereunder shall be those which are
properly exercised before the termination of this option.

5.    Death; Total Disability. If the Director dies while in the employ of the
Company, this option may be exercised, to the extent of the number of shares
with respect to which the Director could have exercised it on the date of his
death, by his estate, personal representative or beneficiary to whom this option
has been assigned pursuant to Section 10, at any time within one year after the
date of death, but not later than the scheduled expiration date. If the Director
suffers a Total Disability (as defined in the Plan), this option may be
exercised, to the extent of the number of shares with respect to which he could
have exercised it on the date of the Director’s Total Disability, at any time
within one year after the date of the Director’s Total Disability, but not later
than the scheduled expiration date. At the expiration date of such one year
period or the scheduled expiration date, whichever is the earlier, this option
shall terminate and the only rights hereunder shall be those as to which the
option was properly exercised before such termination.

6.    Partial Exercise. Exercise of this option up to the extent above stated
may be made in part at any time and from time to time within the above limits.

7.    Payment of Option Price. Payment of the purchase price for options
exercised by the Director shall be made: (i) in United States dollars in cash or
by check, (ii) with the consent of the Company, through delivery of shares of
Common Stock having a fair market value as of the date of the exercise equal to
the cash exercise price of the options, (iii) any other form of payment
acceptable to the Company, or (iv) any combination of subparagraphs 7(i), 7(ii)
and 7(iii).

8.    Agreement to Purchase for Investment. By acceptance of this option, the
Director agrees that a purchase of shares under this option will not be made
with a view to their distribution, as that term is used in the Securities Act of
1933, as amended, unless in the opinion of counsel to the Company such
distribution is in compliance with or exempt from the registration and
prospectus requirements of that Act, and the Director agrees to sign a
certificate to such effect at the time of exercising this option and agrees that
the certificate for the shares so purchased may be inscribed with a legend to
ensure compliance with the Securities Act of 1933.

9.    Method of Exercising Option. Subject to the terms and conditions of this
Agreement, this option may be exercised by prior written notice to the Company,
at the principal executive office of the Company, or to such transfer agent as
the Company shall designate. Such notice shall state the election to exercise
this option and the number of shares in respect of which it is being exercised
and shall be signed by the person or persons so exercising this option. Such
notice shall be accompanied by payment of the full purchase price of such
shares, and the Company shall deliver a certificate or certificates representing
such shares as soon as practicable after the notice shall be received. The
certificate or certificates for the shares as to which this option shall have
been so exercised shall be registered in the name of the person or persons so
exercising this option (or, if this option shall be exercised by the Director
and if the Director shall so request in the notice exercising this option, shall
be registered in the name of the Director and another person jointly, with right
of survivorship) and shall be delivered as provided above to or upon the written
order of the person or persons exercising this option. In the event this option
shall be exercised, pursuant to Section 5 hereof, by any person or persons other
than the Director, such notice shall be accompanied by appropriate proof of the
right of such person or persons to exercise this option. All shares that shall
be purchased upon the exercise of this option as provided herein shall be fully
paid and non-assessable.

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10.    Option Not Transferable. This option is not transferable or assignable
except by will or by the laws of descent and distribution. During the Director’s
lifetime only the Director can exercise this option.

11.    No Obligation to Exercise Option. The grant and acceptance of this option
imposes no obligation on the Director to exercise it.

12.    No Rights as Stockholder until Exercise. The Director shall have no
rights as a stockholder with respect to shares subject to this Agreement until a
stock certificate therefor has been issued to the Director and is fully paid
for. Except as is expressly provided in the Plan with respect to certain changes
in the capitalization of the Company, no adjustment shall be made for dividends
or similar rights for which the record date is prior to the date such stock
certificate is issued.
 
13.    Withholding Taxes. The Director hereby agrees that the Company may
withhold from the Director’s wages the appropriate amount of federal, state and
local withholding taxes attributable to the Director’s exercise of this
Non-Qualified Stock Option. At the Company’s discretion, the amount required to
be withheld may be withheld in cash from such wages, or (with respect to
compensation income attributable to the exercise of this option) in kind from
the Common Shares otherwise deliverable to the optionee on exercise of this
option. The Director further agrees that, if the Company does not withhold an
amount from the Director’s wages sufficient to satisfy the Company’s withholding
obligation, the Director will reimburse the Company on demand, in cash, for the
amount under withheld.

14.    Lock-up Agreement. The Director agrees that the Director will not, for a
period of at least ninety (90) days following the effective date of the
Company’s distribution of securities in an underwritten public offering to the
general public pursuant to a registration statement filed with the Securities
and Exchange Commission, directly or indirectly, sell, offer to sell or
otherwise dispose of the shares purchased upon the exercise of the options
granted hereunder other than any such shares which are included in such public
offering.

15.    Provision of Documentation to Director. By signing this Agreement the
Director acknowledges receipt of a copy of this Agreement and a copy of the
Plan.

16.    Governing Law. This Agreement shall be governed by and interpreted in
accordance with the internal laws of the State of Delaware.
 
IN WITNESS WHEREOF, the Company and the Director have caused this instrument to
be executed as of the day and year first above written, and the Director whose
signature appears below acknowledges receipt of a copy of the Plan and
acceptance of an original copy of this Agreement.

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        OPTIONEE:  
   
   
    By:   /s/ Justin A. Stanley, Jr.  

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Name:    Justin A. Stanley, Jr.
Address:  115 Fuller Lane
 
   Winnetka, IL 60093, U.S.A.
   

 

        SMARTVIDEO TECHNOLOGIES, INC.  
   
   
    By:   /s/ Richard E. Bennett, Jr.  

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Name: Richard E. Bennett, Jr.
Title: President & CEO
   

 
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EXHIBIT A

Name of Director (the “Director”):
Justin A. Stanley, Jr.
Date of this option grant:
July 18, 2005
Number of shares of the Company’s Common Stock subject to this option (“Option
Shares”):
250,000 (Two Hundred Fifty Thousand)
Option exercise price per share: $0.90
Vesting Start Date: July 18, 2005
Percent of Shares Vesting Annually: 50 %
Number of Shares Vesting Annually: 125,00

Vesting Schedule
  

Vesting Date Shares Vested    Percent Vested

July 18, 2005
31,250            12.5 %
October 18, 2005
31,250            12.5 %
January 18, 2006
31,250            12.5 %
April 18, 2006
31,250            12.5 %
July 18, 2006
31,250            12.5 %
October 18, 2006
31,250            12.5 %
January 18, 2007
31,250            12.5 %
April 18, 2007
31,250            12.5 %

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