Exhibit 10.1

*** Text Omitted and Filed Separately

Confidential Treatment Requested

Under 17 C.F.R. §§ 200.80(b)(4) and 17 C.F.R. 24b-2

EXCLUSIVE DISTRIBUTION AGREEMENT

THIS EXCLUSIVE DISTRIBUTION AGREEMENT (the “Agreement”) is made and entered into
the 1st day of August, 2011 (“Effective Date”), by and between Vermillion Inc.,
a Delaware corporation with its principal business address at 12117 Bee Caves
Rd. Building III, Suite 100, Austin, TX 78738, USA (“Supplier”) and Pronto
Diagnostics Ltd., an Israeli company with registered address at 19a Habarzel
St., Ramat Hachayal, Tel Aviv 69710, Israel (“Distributor”).

NOW, THEREFORE, the parties agree as follows:

 

1. Definitions

Test: OVA1 Test.

Territory: Israel and areas under Palestinian control

Software: the software and any update, upgrade, improvement or new version
thereto, provided by Supplier to Distributor in connection with the Test, all as
required for the interpretation of the results of the Test for each sample.

HMOs: Israeli health maintenance organizations.

 

2. Scope of Appointment

 

  a. Distributor is appointed as exclusive distributor for the Test in the
Territory during the Term (as defined below) and Supplier shall neither sell nor
otherwise be commercially involved with selling Tests in the Territory, nor
appoint any distributor or other representative in the Territory with respect to
the Tests during the Term. If Supplier will wish to sell or otherwise
commercialize future variations or versions of the Test, Distributor would be
first offered by Supplier to receive exclusive rights to distribute, use and
sell those Tests on mutually agreeable terms in the Territory, provided the
Distributor has proven to be successful in launching the first Test.

 

  b. Distributor may solicit and procure Orders (as defined below) only within
the Territory and shall not otherwise solicit orders for the Test or act as the
Supplier’s distributor or representative with respect to any other territories.
Nothing in this Agreement shall be construed as limiting in any manner
Supplier’s marketing or distribution activities or its appointment of other
dealers, distributors, licensees, agents or representatives of any kind outside
the Territory, provided that Supplier shall sell or provide the Tests and/or the
Software outside the Territory only under binding agreements that do not permit
the sale or distribution of the Tests in the Territory. The Supplier shall refer
any commercial inquiries regarding the Test in the Territory to Distributor.

--------------------------------------------------------------------------------

  c. Each party hereby represents, warrants and covenants that the execution,
delivery, and performance of this Agreement in accordance with its terms will
not result in any violation of any agreement or instrument to which it is a
party. Distributor hereby represents and warrants to Supplier that it will
comply with all applicable laws of the Territory in its performance of its
obligations contemplated by this Agreement and that the execution, delivery, and
performance of this Agreement in accordance with its terms will not result in
any violation of any law of the Territory.

 

3. Orders

 

  a. Distributor shall promote and solicit orders for the Test in the Territory
(each, an “Order”) and otherwise provide reasonable assistance and support to
its customers.

 

  b. Distributor shall determine within two (2) months after the Effective Date
whether regulatory approval and/or registration are required for the Test. If
any such regulatory approval and/or registration are required for the Test,
Distributor shall use commercial reasonable efforts to promptly obtain such
regulatory approval and/or registration, as applicable.

 

  c. In order to maintain the exclusivity of its appointment as distributor
under this Agreement, Distributor shall provide commercial reasonable efforts to
sell a minimum of [***] Tests in the first year following regulatory approval
and registration of OVA1 in Israel (if and to the extent required), or the date
upon which it is determined as per subsection (b) above by Distributor that no
regulatory approval and/or registration are required for the Test, as applicable
(such date, the “Minimum Test Start Date”). For any years of the Term following
the first anniversary of the Minimum Test Start Date, the parties will discuss
(over the last 30 days of each prior year) the minimum quantities for the
upcoming year. If the parties cannot agree on minimum quantities by the end of
each such prior year, Supplier shall have the right, exercisable in its sole
discretion, to terminate, the exclusivity of Distributor’s appointment under
this Agreement, subject to a thirty (30) days prior written notice.

[***]

 

  d.

Supplier hereby represents and warrants to Distributor that (i) Supplier owns
exclusive title and ownership to the Test and the Software and owns (or will own
prior to release to Distributor) any updates, upgrades, improvements,
inventions, patent rights, trade secrets, know-how in connection therewith;
(ii) Supplier has the right to provide the Test and the Software to Distributor
for purposes of selling same to Distributor’s customers and/or for the purpose
of carrying out the Test; and (iii) that the Test, the Software and any results
generated therewith, and any trademark, trade name or other names, signs or
marks used in connection thereto (the “Marks”), to Supplier’s knowledge, do not
and will not infringe the rights of any third party, including, but not limited
to proprietary rights and intellectual property rights. Supplier shall defend
and hold Distributor harmless from and against any claims of any third party
that the Software infringes any intellectual property right (unless such claims
result from the breach by Distributor of its obligations under

--------------------------------------------------------------------------------

  Section 7 below); provided, however, that Supplier is promptly given the right
to defend such claims with counsel reasonably satisfactory to Distributor, that
Supplier may not settle any such claim or suit without Distributor’s specific
prior agreement and consent in writing if the settlement is not merely
financial, and that Distributor assists and cooperates to the extent reasonably
requested by Supplier.

 

4. Fees.

 

  a. In consideration for the performance of all of Supplier’s obligations under
this Agreement (including but without limitation in connection with the Software
and the approval of reagents’ lots as further detailed below), Distributor shall
pay to Supplier on or before the fifteenth (15th) day of each quarter for all
Tests performed during the preceding quarter at the following rate: a royalty
equal to [***] percent ([***]%) of the amounts invoiced by Distributor to its
customers with respect to the Tests during the preceding quarter (VAT excluded)
but in no event less than the following applicable minimum amount per Test
performed during the quarter:

 

  i. US$[***]/Test with respect to customers for which Distributor reasonably
expects to sell fewer than [***] ([***]) Tests per year (excluding HMO).

 

  ii. US$[***]/Test for any other customers (excluding HMO).

 

  iii. In special cases, and with respect to deals with one of the four HMOs,
the parties will mutually agree on special minimum royalty amounts which shall
not be lower than US$[***]/Test.

 

  b. The list price recommended by Supplier for sale of the Test to
Distributor’s customers is to be [***] US dollars per Test (US$[***]/test) plus
VAT, to the extent applicable, however Distributor will have sole discretion to
set the prices of the Test for its customers and for collecting payment from its
customers. It is further clarified that HMOs will likely reimburse (and pay) at
a lower level than the list price; however, the foregoing shall still apply.

 

  c. Payment will be made by a wire in US funds within fifteen (15) days after
the end of each fiscal quarter. Payment will be accompanied by a reconciliation
of the payment amount to determine how it was calculated. Distributor will be
responsible for paying all withholding taxes in the Territory.

 

  d. Supplier will have customary audit rights on the reconciliation and
reimbursement amount at its discretion upon reasonable coordination with
Distributor and access to any other information reasonably requested related to
the Test sales, sales and marketing activities or related efforts.

 

5. Responsibilities of Distributor.

Distributor shall:

 

  a.

Act for the registration of OVA1 with the Israeli Ministry of Health under the
name of Supplier, which registration, along with any and all other

--------------------------------------------------------------------------------

  licenses, permits, authorizations or approvals obtained under this Agreement,
shall be the property of Supplier, all if and to the extent permitted under any
applicable law; if registration will require a clinical trial the division of
labor and expenses will be [***]% of costs to Supplier, [***]% of the costs to
Distributor.

 

  b. Provide marketing plan and sales projections within sixty (60) days of
signing this agreement.

 

  c. Cause its marketing and sales force to utilize commercially reasonable
efforts to promote and sell the Test in the Territory and to reasonably maximize
sales thereof.

 

  d. Be responsible for carrying out the Test (and purchasing all required
instrumentation, reagents, and service contracts) in its own lab and/or in one
or more third-party labs approved by Supplier in the Territory in accordance
with the Test insert and applicable regulatory requirements, and to provide the
Software to such third party labs.

 

  e. Arrange for translation of the Test insert into the required language for
use in its laboratories.

 

  f. Provide promptly any data to Supplier which reasonably requests and to
which Distributor reasonably has access, including without limitation the
following data on a monthly basis:

 

  i. a count of Tests performed by all of its laboratories using the reporting
function in OVACalc.

 

  ii. specific payor type (i.e., private pay, HMO, government, etc.) for each
Test performed.

 

  iii. additionally, when the Test is carried out by Distributor, Distributor
will also provide the following data:

 

  1. ordering physician’s name and place for each Test performed, and

 

  2. invoiced amount for each Test performed.

 

  g. Use Supplier’s name and Supplier’s then-current names for the Test in its
marketing and promotional efforts and materials, all of which marketing and
promotional efforts and materials are subject to Supplier’s reasonable prior
approval, and not add to, supplement, delete from or modify any sales or
marketing documentation or forms or representations provided by Supplier except
with the prior written consent of Supplier, or make any representations or
warranties regarding the Test on behalf of Supplier or itself other than those
specified in Attachment A hereto and/or explicitly authorized by Supplier in
writing, including the materials provided in accordance with Section 6(d).

 

  h. Not market, promote, sell or solicit orders for or otherwise represent any
test in competition with the Test.

 

  i. Comply with all applicable laws and orders in the Territory in its
performance of its obligations under this Agreement.

--------------------------------------------------------------------------------

6. Certain Responsibilities of Supplier.

Supplier shall, for no additional charge:

 

  a. Train Distributor to run the Test and Software, educate Distributor on a
continuing basis with updated scientific and marketing related information
relevant to the Test, and provide support to Distributor’s staff as reasonably
requested, so as to allow it to provide its customers with updated and accurate
information regarding the Test and its possible use in clinical practice.

 

  b. Administer the proficiency test to all the labs reasonably proposed by
Distributor for conducting the Test.

 

  c. Approve reagent lots on an on-going basis and provide a listing of approved
reagent lots to Distributor for performance of the Test.

 

  d. Provide reasonable market development assistance and materials. These
materials will include such items as peer reviewed articles, committee opinions,
clinical papers, etc. Nothing in this Section 6(d) obligates, or shall be deemed
as obligating, Supplier to create or have created any such materials outside of
its normal course of business in its sole discretion.

 

  e. Participate in marketing related events that Distributor will organize in
the Territory as workshop or lecture at major conferences (maximum of 2
times/yr).

 

  f. Provide to Distributor (i) the Software and other means required for data
analysis, and keep Distributor up-to-date with Software upgrades and new
Software releases; (ii) support with respect to Software bugs and/or
malfunctions; and (iii) reasonable customization, modifications and/or extension
of the Software for the purpose of implementation of the Software with
Distributor’s customers.

 

7. Trademarks and Software.

Subject to the terms of this Agreement, Supplier grants Distributor the
nonexclusive, limited, non-transferrable, revocable and non-sublicensable right
(a) to use and display the Marks during the Term in any sales or marketing
materials developed by Distributor; (b) to use the Software for the purposes set
forth in this Agreement; and (iii) to provide the Software to labs authorized by
Supplier as per Section 6(b) above and subject to a royalty free license
agreement in the form reasonably agreed to by Supplier (such agreement to
include an indemnification clause according to which such lab shall indemnify
and hold Supplier and Distributor harmless from any claim and/or demand
resulting from such lab’s act or omission, it being understood that should
Supplier not be able to negotiate such terms with a particular lab, Distributor
shall propose another lab). Distributor will not use, register or take other
action with respect to any Mark or the Software except to the extent authorized
in advance in writing by Supplier, and, with respect to the Software (or any
part thereof), agrees not to modify, revise, create derivative works or
otherwise make any derivative uses; decompile, reverse engineer or otherwise
attempt to derive the source code; or otherwise use for other than its intended
purpose. No other intellectual property rights or licenses to the Marks,
Software, Test or otherwise are being transferred hereunder, whether expressly,
by implication, estoppel or otherwise, and Distributor acknowledges that all
other rights, title and interest to the Marks, Software and Tests are and shall
remain with Supplier.

--------------------------------------------------------------------------------

8. Term and Termination.

This Agreement shall be in full force and effect commencing with the Effective
Date and for a period of [***] years following the Minimum Test Start Date, and
may be renewed upon the mutual agreement of the parties for additional periods
of [***] each (collectively, the “Term”).

Notwithstanding the above, if either party materially breaches this Agreement
and such breach continues for a period of thirty (30) days after receipt by the
breaching party of a written notice thereof, the other party may immediately
terminate this Agreement. This Agreement may also be terminated by Supplier
(a) upon the expiration of thirty days (30) prior written notice to Distributor
for any of the following events which have not been resolved during such notice
period: (i) if Distributor shall fail to secure or renew any license, permit,
authorization or approval for the conduct of its business in any significant
area of the Territory, or if any such license, permit, authorization or approval
is revoked or suspended; (ii) upon the institution by or against Distributor of
insolvency, receivership or bankruptcy proceedings; or (iii) if Distributor
breaches any of its material representations, warranties or covenants under this
Agreement, including without limitation those set forth in Sections 5(f)
and 5(j); or (b) immediately if Distributor ceases to do business for more than
thirty (30) days.

Upon termination or expiration of this Agreement for any reason whatsoever,
(i) Distributor shall immediately discontinue any use of the Marks,
(ii) Distributor will cease to promote or solicit orders for the Test, and
(iii) each party will promptly return to the other party (or, at such other
party’s sole discretion, destroy) all Proprietary Information (as defined below)
of the other party, and Distributor will promptly return to Supplier (or, at
Supplier’s sole discretion, destroy) all of Distributor’s copies of the Software
and will use commercial reasonable efforts to return to Supplier all copies of
the Software distributed to labs as per Section 6(b) above. Notwithstanding the
foregoing, the last sentence of Section 4, Section 5.g, the second sentence of
Section 7, and Sections 9-11, 12, 14 and 15 and the obligation of Distributor to
deliver to Supplier payments for Tests performed prior to termination or
expiration, shall survive termination or expiration of this Agreement.

 

9. Proprietary Rights.

Each party acknowledges that, in the course of performing its duties under this
Agreement, it may obtain business, technical or financial information of or
relating to the other party, all of which is confidential and proprietary
(“Proprietary Information”). The receiving party and its employees and agents
shall, at all times, both during the Term and after its termination, keep in
trust and confidence all such Proprietary Information (including for the removal
of doubt the financial terms of this Agreement), and shall not use such
Proprietary Information other than in the course of its duties as expressly
provided in this Agreement; nor shall the receiving party or its employees or
agents disclose any such Proprietary Information to any person without the
disclosing party’s prior written consent. The receiving party shall not be bound
by this Section with respect to information it can document has entered or later
enters the public domain as a result of no act or omission of the receiving
party, or is lawfully

--------------------------------------------------------------------------------

received by the receiving party from third parties without restriction and
without breach of any duty of nondisclosure by any such third party, is
independently developed be the receiving party or must be disclosed pursuant to
a court order, or as required by any governmental or administrative authority or
regulatory agency. Distributor acknowledges and agrees that Supplier owns all
right, title and interest in and to the Test and Software and all related
Proprietary Information, documentation, sales and marketing materials, and all
Marks, as well as all intellectual property rights related to the foregoing and
including any updates to the foregoing.

 

10. Indemnification.

 

  a. Distributor agrees to indemnify, defend and hold harmless Supplier and its
employees, officers, directors and agents from and against any and all damages,
liabilities, costs and expenses (including reasonable attorneys fees and court
costs) incurred by Supplier in a final award by a competent authority as a
result from: (a) Distributor’s breach of any of its representations, warranties
or covenants under this Agreement, including without limitation Section 5(j);
and/or (b) Distributor’s fraud, bad faith or gross negligence with respect to
this Agreement or its performance hereunder; provided, however, that Distributor
is promptly given the right to defend such claims with counsel reasonably
satisfactory to Supplier, that Distributor may not settle any such claim or suit
without Supplier’s specific prior consent in writing if the settlement is not
merely financial, and that Supplier assists and cooperates to the extent
reasonably requested by Distributor.

 

  b.

Supplier shall indemnify, defend and hold harmless Distributor and its
employees, officers, directors and agents from and against any and all damages,
liabilities, costs and expenses (including reasonable attorneys fees and court
costs) incurred by Distributor in a final award by a competent authority as a
result of (a) the breach by Supplier of any representation, warranty, covenant
or obligations contained in this Agreement, and/or (b) any claim, action, demand
or proceeding brought against the Distributor in connection with the Test, the
Software and/or the reagents, to the extent such claim, action, demand or
proceeding is solely due to a defect or error in the Test and/or the Software
supplied by Supplier and/or the reagents authorized by Supplier, and to the
extent not caused by Distributor or any third party (including without
limitation any labs) not under control of Supplier, including without limitation
by any breaches of the terms of this Agreement by Distributor or any such third
party, any failure by Distributor to comply completely with written instructions
or documentation issued by Supplier to Distributor or such third party, any
mishandling of the Test, Software and/or reagents by Distributor or any such
third party, or any combination, modification or alteration of the Test,
Software and/or reagents with any other materials or services by Distributor or
any such third party, and/or (c) as provided in Section 3(d)(iii) above,
provided, however, that Supplier is promptly given the right to defend such
claims with counsel reasonably satisfactory to Distributor, that Supplier may
not settle any such claim or suit without Distributor’s specific prior consent
in writing if the settlement is not merely financial, and that Distributor
assists and cooperates to the extent reasonably requested by Supplier. For
clarification, in the event of any

--------------------------------------------------------------------------------

  claim, action, demand or proceeding brought against the Distributor and due
only in part to any defect or error in the Test and/or the Software supplied by
Supplier and/or the reagents authorized by Supplier, nothing contained herein
shall be construed as derogating from Supplier’s liability to indemnify
Distributor with respect to such Supplier’s part, subject to all the terms and
conditions of this Agreement.

 

  c. Notwithstanding the foregoing, Suppler and Distributor understand that such
items that would reasonably be considered to be “de minimis” shall not be
subject of this Section 10.

 

11. Limitation of Liability.

Except with respect to claims relating to infringement of intellectual property
rights, and/or to breaches of Sections 7 or 9: (a) a party will not be liable
with respect to any subject matter of this agreement or under any contract,
negligence, strict liability or other legal or equitable theory for any
indirect, incidental, special, punitive or consequential damages, and (b) except
indemnification of Distributor by Supplier with respect to third party claims
pursuant to the terms of Section 10(b), the aggregate liability of each party
and its affiliates hereunder is limited to the aggregate amounts paid by
Distributor to Supplier under this Agreement.

 

12. Disclaimer of Warranty.

SUPPLIER DOES NOT MAKE ANY WARRANTIES CONCERNING THE TEST, OTHER THAN THOSE
EXPRESSLY SET FORTH IN SECTION 3.D, IN ATTACHMENT A AND AS MAY BE PROVIDED FROM
TIME TO TIME BY SUPPLIER PURSUANT TO SECTION 6.D ABOVE, AND THE TESTS ARE
OTHERWISE PROVIDED “AS-IS,” WITHOUT ANY WARRANTY OF ANY KIND, WHETHER EXPRESS,
IMPLIED, OR STATUTORY, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE, AS WELL AS ANY WARRANTIES
ARISING FROM COURSE OF DEALING, USAGE OR TRADE PRACTICE.

 

13. Force Majeure.

Neither party shall be responsible for delays or failures in performance
resulting from acts beyond the control of such party (including war, whether
declared or not), provided however that (a) both parties use commercially
reasonable efforts to mitigate the effects of any such force majeure events on
their performance under this Agreement, and (b) both parties promptly fulfill
their obligations under this Agreement after such force majeure event ceases.

 

14. Miscellaneous.

 

  a. A party may not assign this Agreement nor will it assign any right or
obligation hereunder without the prior written consent of the other party;
however, either party may assign this agreement to a successor entity or
purchaser of all or substantially all of that portion of its business to which
this Agreement relates, provided that the other party’s rights under this
Agreement shall not be prejudiced thereby. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of the permitted
successors and assigns of the parties.

--------------------------------------------------------------------------------

  b. If any provision of this Agreement is held to be illegal or unenforceable,
that provision shall be limited or eliminated to the minimum extent necessary so
that this Agreement shall otherwise remain in full force and effect and
enforceable.

 

  c. Except as otherwise expressly provided herein, any provision of this
Agreement may be amended or waived only with the written consent of both
parties.

 

  d. This Agreement, including the attachments thereto which are integral part
thereof, is the sole agreement between the parties with respect to the subject
matter hereof and supersedes all prior drafts, agreements or discussions between
the parties with respect thereto (including but not limited to the Nonbinding
Term Sheet dated June 16, 2011), which shall not be used in any manner in the
interpretation of this Agreement.

 

  e. This Agreement is not intended by the parties to constitute or create a
joint venture, pooling arrangement, partnership, agency or formal business
organization of any kind. Supplier and Distributor shall be independent
contractors with each other for all purposes at all times and no party shall act
as or hold itself out as agent for the other, nor shall any party create or
attempt to create liabilities for the other party except to the extent expressly
specified in this Agreement.

 

  f. This Agreement shall be governed by and construed under the laws of the
State of New York without regard to its conflicts of law provisions, and shall
not be governed by the U.N. Convention of Contracts for the International Sale
of Goods. Any dispute that cannot be resolved amicably by the parties through
negotiations within sixty (60) days shall be submitted to the exclusive
jurisdiction of the courts located in New York, New York. Each party consents to
service of process and the personal jurisdiction of such courts.

 

  g. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.

 

15. Notices.

Notices under this Agreement shall be in writing in the English language,
transmitted by facsimile transmission or internationally recognized overnight
delivery service, and deemed delivered (i) one (1) business day after
transmission by facsimile where receipt has been confirmed by facsimile
transmission or (ii) when delivered to the overnight delivery service. Notices
shall be addressed as follows or to such other address as a party may specify in
writing to the other party:

If to Distributor:

Pronto Diagnostics Ltd.

19a Habarzel St, Ramat Hachayal

--------------------------------------------------------------------------------

Tel Aviv 69710, Israel

Attention: Dr. Nir Navot

Telephone: +972.73.2126155

Fax: +972.73.2126144

E-mail: nir@prontodiagnostics.com

If to Supplier:

Vermillion, Inc.

12117 Bee Caves Rd.

Building III, Suite 100

Austin, TX 78738, USA

Attention: President and CEO

Telephone: +1.512.519.0400

Fax: +1.512.439.6980

E-mail: gpage@vermillion.com (with a copy to akohli@vermillion.com)

IN WITNESS WHEREOF, the duly authorized representatives of the parties have
signed this Agreement as of the Effective Date.

 

VERMILLION, INC.     PRONTO DIAGNOSTICS LTD.

/s/ Gail. S. Page

   

/s/ Nir Navot

Name: Gail S. Page     Name: Nir Navot Title:  Chairperson and CEO     Title:
  CEO

 

--------------------------------------------------------------------------------

ATTACHMENT A

[Materials provided by Supplier to Distributor under separate cover.]