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Confidential Treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidentiality request. Omissions are designated as
**. A complete version of this exhibit has been filed separately with the Securities and Exchange
Commission.
 MEDICALERT® PHR SYSTEM
DEVELOPMENT AND SUPPLY AGREEMENT
 Agreement CapMed MedicAlert
      1.
    
    Definitions.
 (a)
    
    CapMed PHR Software means one or more client, server, or portable flash
memory device resident personal health records management computer programs or program
modules, and all embedded computer programs or program modules, and all compilations and
derivative works thereof, which secure or manage the data stored on the device, including,
without limitation, the partitioning, data-encryption, password protection, auto launching
of user designated information, and data importation, and includes the CapMed server
resident hub programs or program modules required for each discrete remote user to
upgrade the CapMed PHR Software or to access the embedded third party content
  
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on each discrete users remote computer or portable flash memory device as may be necessary
to make the CapMed PHR System fully functional, whether developed as an original, derivative
or compilation work by CapMed under this Agreement and whether integrated with existing
software or embedded computer programs or program modules in the CapMed PHR Software and all
related source code, machine code, schematics, updates, modifications, bug fixes, update
enhancements or other modifications, compilations or derivative works, but excludes the
MedicAlert® Software.(b)
    
    CapMed PHR System means the integrated data base management system designed
to store, manage, transport and communicate personal health and medical information
described in the Patent Application or the Copyright, including the CapMed PHR Software,
the HealthKey, and all related intellectual property, including, without limitation,
software, trade secrets and know-how.(c)
    
    Copyright means the United States Copyright Registration Number TXu-905-251
entitled Personal Health Record for a computer program, and all compilations or derivative
works thereof.(d)
    
    CPT means carriage paid to and as more fully defined by the International
Chamber of Commerce as an Incoterm.(e)
    
    Documentation means all instructions, manuals, diagrams or other written
materials, in printed or binary formats, that describe the functionality or assist in the
use of the CapMed PHR Software, the CapMed PHR System, the HealthKey, the MedicAlert® PHR
System and the MedicAlert PHR Software.(f)
    
    HealthKey means CapMeds proprietary portable flash memory device trademarked
as the Personal HealthKey.(g)
    
    machine code means computer programs or program modules assembled or compiled
in binary form on software media that are readable and usable by machines, but not
generally readable by humans without reverse-assembly, reverse-compiling, or
reverse-engineering techniques.(h)
    
    MedicAlert® enabled offer means the joint promotional effort of the parties
to modify the packaging and the CapMed PHR System to promote MedicAlert® membership and the
MedicAlert® PHR System. Users of the MedicAlert® enabled CapMed PHR System will be able to
subscribe to become a MedicAlert® member and convert to the MedicAlert® PHR System through
various means, including, without limitation, printing out a form and mailing to
MedicAlert, calling a toll-free telephone number or by accessing the MedicAlert Internet
server through the CapMed PHR Software via an Internet connection.(i)
    
    MedicAlert® PHR Software means the fully functional personal health records
data base management software that is modified in order to integrate all of the features,
functions, and specifications of the CapMed PHR Software, the CapMed PHR System and the
HealthKey with the MedicAlert® Software, in order to support the MedicAlert PHR System.
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(j)
    
    MedicAlert® PHR System means the fully functional personal health records
data base management system that integrates all of the features, functions, and
specifications of the CapMed PHR System, the MedicAlert® Software and the MedicAlert PHR
Software.(k)
    
    MedicAlert® Software means one or more server resident programs or program
modules required to verify the remote users identity and to process and synchronize
incoming and outgoing user personal health and medical information on a local MedicAlert
server with a remote client computer or portable flash memory device as may be necessary to
make the MedicAlert® PHR System fully functional, whether developed as an original,
derivative or compilation work by MedicAlert or CapMed under this Agreement and whether
integrated with existing software or embedded computer programs or program modules in the
CapMed PHR Software and all related source code, machine code, schematics, updates,
modifications, bug fixes, update enhancements or other modifications, compilations or
derivative works.(l)
    
    OEM means the original equipment manufacturer and supplier of goods or
services for use and resale as a MedicAlert® branded product.(m)
    
    Patent Application means the United States Patent Application 10/393,751
entitled System, apparatus and method for storage and transportation of personal health
records; all issued patents thereon; all divisions, reissues, continuations and
continuation-in-part patents and patent applications; all corresponding foreign patents and
patent applications; and all related foreign patents and patent applications owned by
Bio-Imaging Technologies, Inc., or its parent or affiliate companies.(n)
    
    Portable flash memory device or portable flash memory device means a portable
nonvolatile electrically erasable programmable read-only memory device that can be
repeatedly erased and written to and from a personal computer via an industry standard
Universal Serial Bus (USB) port, which has been approved by CapMed, such approval not to be
unreasonably withheld.(o)
    
    Software or software means computer program or program modules in
source code or machine code, schematics, updates, modifications, bug fixes, update
enhancements, or other modifications, and all related compilations and derivative works.(p)
    
    Source code or source code means computer programs or program modules on
software media that are human readable without reverse-assembly, reverse-compiling, or
reverse-engineering techniques, and includes, the compiler/assembler/linker.
 2.
    
    Description of Goods and Services.
 (a)
    
    This Agreement is for the development and OEM supply of the MedicAlert® PHR Software.
On MedicAlerts acceptance of the fully functional commercial version of the MedicAlert®
PHR Software, CapMed will become the exclusive United States and nonexclusive worldwide OEM
supplier of client or portable flash memory device personal health records management
computer programs or program modules that integrates all of the features, functions, and
specifications of the CapMed PHR System as it may be modified to perform the functions and
meet the specifications of the MedicAlert® PHR System, and the nonexclusive worldwide OEM
supplier of portable flash memory devices, and MedicAlert will have the exclusive,
worldwide right and
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license to use and resell the MedicAlert® PHR System as a MedicAlert® branded product and
service (provided, however, such nonexclusive worldwide OEM suppliers shall not be permitted
to supply a personal health record system to MedicAlert outside the United States for sale
or distribution in the United States). CapMed will supply MedicAlert with individual
commercial units of the MedicAlert PHR Software on CD-ROM with and subject to CapMeds
standard end-user shrink-wrap software license, and individual commercial units of the
HealthKey in such quantities and packaging as MedicAlert may from time to time specify.(b)
    
    During the term of this Agreement, the parties may, from time to time, desire that
CapMed supply additional goods developed or manufactured by CapMed. The terms and
conditions of the parties agreement governing such additional goods, including, without
limitation, product specifications, manufacturing, delivery, terms of payment, warranties,
default, and remedies upon default, will be governed by the parties separate agreement and
will not be incorporated in this Agreement without the parties express written consent.
 3.
    
    MedicAlert Development.
 (a)
    
    MedicAlert intends to launch publicly the MedicAlert® PHR System as a MedicAlert®
branded product on July 25, 2005. MedicAlert is, by this Agreement, reasonably relying
upon CapMeds technical skills and expertise for the technical success of the MedicAlert®
PHR System as a MedicAlert® branded product. To the extent that the MedicAlert® PHR System
will be a MedicAlert® branded product, CapMed acknowledges that the development,
improvements, and maintenance of the MedicAlert® PHR Software will be tied directly to the
goodwill associated with the MedicAlert® trademark and trade name, and will ensure that the
MedicAlert® PHR Software will meet MedicAlerts high standards for quality and that it
charges MedicAlert its most competitive pricing for all finished goods.(b)
    
    CapMed will be the exclusive United States developer and nonexclusive worldwide
developer, and MedicAlert will be the exclusive worldwide licensee, user, and reseller of
the MedicAlert® PHR Software as a MedicAlert® branded product and service. CapMed will
promptly use its best efforts as a high priority matter to develop, to maintain and to
integrate seamlessly all of the features, functions and specifications of its most current
version of the CapMed PHR Software and the CapMed PHR System, with the MedicAlert® Software
to allow generally, among other things:
 (i)
    
    A user to enter, update, or manage his or her personal health or health care
information on the users local computer, to cause the local computer to automatically
and transparently upload and synchronize such information with the users personal
health and health care information stored on the users local portable flash memory
device, and to cause the local computer to automatically and transparently upload and
synchronize such information via an Internet connection with the users personal health
and health care information stored in the users account on a remote server;(ii)
    
    A remote server operator to enter, update, or manage a users personal health
or health care information to the users account on the remote server, to cause the
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remote server to automatically and transparently upload and synchronize such
information via an Internet connection with the users personal health and health
care information stored on the users local computer, and to cause the users local
computer to automatically and transparently upload and synchronize such information
with the users personal health and health care information stored on the users
local portable flash memory device; and,(iii)
    
    Such other customizations as MedicAlert may reasonably request or require that
are generally available to the CapMed PHR System, including, without limitation,
Profile Customizations, Profile Element Customizations, Pick List Customizations, Web
Link customizations, and Field Level Links customizations. Any additional
customizations or unique product upgrades and/or improvements as MedicAlert may
reasonably request may be provided by CapMed; provided, however, CapMed shall reserve
the right to charge an additional fee to be mutually agreed upon for such
customizations.
 (c)
    
    Within forty-five (45) days of the effective date of this Agreement, CapMed and
MedicAlert will exercise their good faith and best commercial efforts to make and enter a
software escrow agreement pursuant to Section 18 below, and within five (5) days of the
effective date of this Agreement will finalize and execute the attached Schedule A to this
Agreement that will define the scope, project requirements and development responsibilities
to develop, implement and commercially launch a robust, stable and fully functional
commercial version of the MedicAlert® PHR System. The Schedule A will also set forth an
objective milestone driven development, field test, acceptance, implementation and product
launch schedule. All of the terms, conditions and schedules set forth in software escrow
agreement and Schedule A shall be incorporated as material terms and conditions of this
Agreement.(d)
    
    If for any reason either party is unable to meet any of the development or performance
milestones of Schedule A, such party shall be in material breach of this Agreement and the
other party may, but is not obligated to, terminate this Agreement with no further duty or
obligation except as may be expressly set forth in this Agreement. In the event either
party waives this provision as to any specified development or performance milestone, such
waiver will not affect such partys right to terminate this Agreement on the other partys
failure to meet any subsequently specified development or performance milestone.
 4.
    
    Upgrades and Improvements.
 (a)
    
    CapMed will continually **. CapMed will make **.(b)
    
    Any maintenance, including error correction, debugging or other technical assistance
required to remedy any defects in or other malfunctions of the CapMed PHR System which have
a material impact on the MedicAlert® PHR System will be undertaken by CapMed immediately,
commencing ** hours of notification by MedicAlert, and CapMed will ensure that all
personnel necessary to commence and complete as quickly as possible such maintenance are
made available for these purposes. CapMed will **.
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(c)
    
    CapMed will make available all version upgrades and improvements as soon as they are
commercially available to all MedicAlert® PHR System users of the CapMed PHR Software in
machine code via Internet download from the Check for Updates and Update Now tabs on
the Tools menu in the drop down navigation bar of the CapMed PHR Software . For purposes
of this Agreement, version upgrade shall include all CapMed versions, updates,
modifications, bug fixes, enhancements, improvements and other modifications to the CapMed
PHR Software or the MedicAlert PHR Software that are not exclusively developed for the
unique requirements of any other CapMed licensee.
 5.
    
    Support.
 (a)
    
    CapMed will promptly upon delivery of each version or version upgrade of the CapMed
PHR Software provide to MedicAlert, at a designated MedicAlert facility, the technical
assistance, training and know-how necessary for MedicAlert to use and maintain the client
and portable flash memory device versions of the MedicAlert® PHR System. MedicAlert will
reimburse CapMed for all reasonable costs associated with such training.(b)
    
    MedicAlert will, at its sole cost and expense, provide primary call center customer
service and support to the users of the MedicAlert® PHR System.(c)
    
    CapMed will provide secondary call center customer service and support to MedicAlerts
customer service representatives during normal business hours (EST/EDT), and will provide
secondary twenty-four (24) hour call center customer service and support on one hundred
twenty (120) day notice after predetermined minimum subscription volumes are achieved.
 6.
    
    MedicAlert® PHR System Cross-Licenses.
 (a)
    
    CapMed hereby grants to MedicAlert the exclusive, worldwide right and license to
undertake, or authorize others to undertake on MedicAlerts behalf, the use and sale of the
MedicAlert® PHR Software, and all corresponding rights under all patent, copyright,
trademark, trade secret and other laws necessary or appropriate for the full enjoyment of
the rights granted hereby.(b)
    
    MedicAlert hereby grants to CapMed the exclusive United States and nonexclusive
worldwide right and license to undertake, or authorize others to undertake on MedicAlerts
behalf, the use of the MedicAlert® Software to the extent it may be integrated in the
MedicAlert® PHR System, and all corresponding rights under all patent, copyright,
trademark, trade secret and other laws necessary or appropriate for the full enjoyment of
the rights granted hereby. CapMed will not, directly or indirectly (such as through
authorization of third parties by way of license or otherwise) distribute or otherwise
exploit the MedicAlert® Software.(c)
    
    The licensed rights granted by each party to the other include the rights:
 (i)
    
    To reproduce and authorize others to reproduce the MedicAlert® PHR Software;(ii)
    
    To publicly distribute and authorize others to publicly distribute machine code
copies of the MedicAlert® PHR Software;
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(iii)
    
    To grant sublicenses authorizing others to publicly distribute machine code
copies of the MedicAlert® PHR Software;(iv)
    
    To publicly display and perform and authorize others to publicly display and
perform portions of the MedicAlert® PHR System for the purpose of promoting the
distribution and sale of the MedicAlert® PHR System and to reproduce and publicly
distribute machine code copies of the MedicAlert® PHR Software for such purposes.
 (d)
    
    Notwithstanding the foregoing, and subject to the restrain against assignment as set
forth more fully in Section 20, below, nothing in this Agreement shall be interpreted or
construed to allow either party to sub-license or assign any of the licensee right granted
herein to any third party; provide, however, that either party may delegate their licensee
rights of Section 6(c) above to their agents or employees, and, provided further, that upon
such delegation the delegating licensee shall remain liable to the other party for the act
of its agents or employees under the terms of this Agreement.(e)
    
    Notwithstanding the foregoing, nothing in this Agreement will otherwise limit or
restrict CapMed from selling or licensing all or any part of the CapMed PHR Software, the
HealthKey, or CapMed PHR System to any third party, and nothing in this Agreement will
otherwise limit or restrict MedicAlert from selling or licensing all or any part of the
MedicAlert® Software to any third party.
 7.
    
    Proprietary Rights
 (a)
    
    Title to the CapMed PHR System, including any enhancements, modifications or
derivatives thereto, other than the MedicAlert® PHR Software, (including all intellectual
property rights pertaining thereto) shall at all times remain and vest solely with CapMed.
MedicAlert agrees that it will not claim or assert title to any such materials or attempt
to transfer any title to End-Users or any third parties.(b)
    
    Title to the MedicAlert® Software, whether as an original, compilation or derivative
work, and any enhancements, modifications or derivatives thereto, (including all
intellectual property rights pertaining thereto) shall at all times remain and vest solely
with MedicAlert. CapMed agrees that it will not claim or assert title to any such
materials or attempt to transfer any title to End-Users or any third parties.(c)
    
    The MedicAlert® PHR System and the MedicAlert PHR Software is a collective, compilation
or derivative work. Title to the MedicAlert® PHR System and the MedicAlert PHR Software
shall at all times remain and vest with MedicAlert; provided however, that title to the
MedicAlert® PHR System and the MedicAlert PHR Software shall not extend to the separate
property contributed by the parties under this cross-license for the sole and limited
purpose of creating the collective, compilation or derivative work. CapMed agrees that it
will not claim or assert title to any such materials or attempt to transfer any title to
End-Users or any third parties.(d)
    
    Each partys proprietary and intellectual property rights (including patent, trademark,
copyright, trade secret and other rights) not expressly licensed to the other party under
this agreement shall remain the separate property of such party.
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(e)
    
    The CapMed PHR Software, either as a stand alone product or as incorporated into the
MedicAlert® PHR System, shall be marked with such copyright, patent or other notices,
proprietary legends, or restrictions as CapMed requires in this agreement or subsequent
written notice by CapMed to MedicAlert. CapMed shall place CapMeds proprietary notices on
each copy of the CapMed PHR Software media and between the title and table of contents in
each copy of the Documentation. In addition to the foregoing, MedicAlert will ensure that
any portable flash memory device that includes the embedded MedicAlert PHR Software and is
covered within the scope of CapMeds pending Patent Application will be marked as patent
pending and, when such patent is actually issued, will be marked as patented with the
patent number.
 8.
    
    Trademark and Trade Name License.
 (a)
    
    CapMed hereby grants to MedicAlert, and MedicAlert hereby grants to CapMed, the
nonexclusive, worldwide, right and license to use, publicly display, and publicly
distribute each others trademarks, service marks, trade names or trade dress in their
individual and joint marketing and sales promotional material in connection with the
MedicAlert® PHR systems; provided, however, that neither party will have the right to use
the others names or marks without having first obtained the others express written
approval, which will be in such partys sole and absolute discretion, to the nature and
content of the marketing or sales promotional materials, the use of such partys trademarks
or trade names in such materials, and the conformity of the trademarks or trade names to
the standardized marks and names used by such party.(b)
    
    Subject to the pre-release approval provisions of subparagraph (a), MedicAlert hereby
grants to CapMed the nonexclusive, worldwide, right and license to modify the CapMed PHR
Software and packaging to promote and include the MedicAlert® enabled offer in all CapMed
branded copies of the CapMed PHR Software.(c)
    
    Each party represents and warrants that all trademarks, service marks, trade names, or
trade dress designated by such party to be used on or in any product packaging or labeling,
or in any sales or marketing promotional materials have been properly authorized for such
use by the owner of such rights, and that the others use of such marks or dress will not
infringe the rights of any third party.(d)
    
    Each party will defend, indemnify, and hold the other party harmless against any and
all claims, demands, or liability, including attorney fees and costs, arising out of or
relating to its breach of any representation or warranty set forth in this section.
 9.
    
    Contract Price.
 (a)
    
    The MedicAlert® PHR System
 (i)
    
    The MedicAlert® PHR System will be priced on ** basis and will include access
to all version upgrades and improvements during the subscription term. The initial **
will be in an amount not to exceed ** on ** subject to ** up to ** on **. Beginning in
the second year, the ** price will be in an amount equal to ** of the MedicAlert **
charged by MedicAlert to the **. Based upon the current pricing model, the ** would be
equal to **.
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(ii)
    
    The hardware component of the HealthKey will be priced on a ** basis in an
amount not to exceed **. CapMed will use reasonable commercial efforts to work with
its OEM suppliers to reduce the HealthKey costs and increase performance.
Notwithstanding the forgoing, nothing in this Agreement shall prohibit or restrict
MedicAlert from purchasing portable flash memory devices direct from any OEM,
including, without limitation, any OEM that CapMed may be purchasing its HealthKey.(iii)
    
    In the event MedicAlert desires to purchase portable flash memory devices
directly from an OEM, MedicAlert shall notify CapMed at least thirty (30) days in
advance and shall provide CapMed with a sample unit of the portable flash memory
device. CapMed will promptly use good faith and its best efforts as a high priority
matter to qualify the portable flash memory device as compatible with the CapMed PHR
Software and the MedicAlert® PHR System, and MedicAlert will pay CapMed the reasonable
cost associated with qualifying such portable flash memory device.(iv)
    
    MedicAlert pay CapMed a ** fee in an amount equal to ** for ** to ** other than
a ** in Section 9(a)(i) ** of the product.
 (b)
    
    The MedicAlert® enabled offer
 (i)
    
    The MedicAlert® enabled offer will be priced on a ** basis in an amount equal
to ** who becomes **.(ii)
    
    In the event of a conversion through the MedicAlert® enabled offer, ** will
be **. Beginning in **, the ** will be ** as ** under Section 9(a)(i), above.
 (c)
    
    All prices exclude packaging. Packaging will be priced in an amount not to exceed **.(d)
    
    In the event a MedicAlert® PHR System user terminates their subscription, MedicAlert
will promptly notify CapMed of such termination and the parties shall block such terminated
subscribers ability to access the MedicAlert server and the CapMed server. In the event
such terminated subscriber resubscribes to the MedicAlert® PHR System, MedicAlert will
promptly notify CapMed of such resubscription and the parties shall again allow the
resubscribed user to access the MedicAlert server and the CapMed server. Notwithstanding
the foregoing, if any subscriber remains inactive for at least two (2) years, then such
subscriber shall be deemed to be a new subscriber for purposes of this Agreement. All
resubscriptions will be priced, and royalties paid, as a renewal subscription.
 10.
    
    Packaging.
 (a)
    
    MedicAlert will provide CapMed with the packaging specifications and any necessary
artwork no later than sixty (60) days in advance of the earliest scheduled shipping date.
If such special packaging will delay the scheduled shipping date, or increase CapMeds cost
to manufacture and/or ship, CapMed will, within fifteen (15) days of receipt of
MedicAlerts notice, provide MedicAlert with notice of any shipping delay or cost increase.
Within ten (10) days of receipt of CapMeds notice, MedicAlert will provide CapMed with
written notice of its acceptance or rejection of any such shipping delay or
  Page 9 of 19




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cost increase. In the event MedicAlert rejects any such shipping delay or cost increase,
CapMed will be under no obligation to include such special packaging in the order. Unless
otherwise agreed to by the parties, MedicAlert bear all of the costs and expenses related to
packaging.(b)
    
    CapMed will place such MedicAlert or MedicAlert health insurance marketing partner
notices, trademarks, symbols and/or legends on or with respect to all copies and all
components of the MedicAlert® PHR System as MedicAlert may reasonably designate in writing,
including, without limitation, in a manner which will cause such material to appear on an
initial screen display upon activation of the MedicAlert® PHR System client software.(c)
    
    CapMed will place such CapMed copyright or patent notices, symbols and/or legends on or
with respect to all copies and all components of the MedicAlert® PHR System as MedicAlert
may reasonably consent in writing, including, without limitation, in a manner which will
cause such material to appear on the About screen from the Help menu of the drop down
navigation bar of the MedicAlert® PHR System client software; provided, however, that
CapMed will not place any CapMed trademark, service mark, symbol and/or legend to brand any
such copy or component as a CapMed product or to otherwise designate the origin of any such
copy or component as other than MedicAlert.
 11.
    
    Product Order and Confirmation.
 (a)
    
    All orders will be made in accordance with forms agreed by both parties. Each order
will indicate the goods and quantity of each of the goods to be purchased, as well as the
desired schedule of delivery date(s).(b)
    
    Within 3 business days of receipt of such purchase order, CapMed will provide
MedicAlert with a written confirmation of such order, which confirm the goods and quantity
of each of the goods, and fix a schedule of delivery dates(s) as close as commercially
practicable to the desired schedule of delivery date(s).12.   Delivery and Terms of Payment.(a)
    
    CapMed will use its best efforts to meet MedicAlerts orders, and will give such orders
first priority in distributing its available stock and in manufacturing new stock,
regardless of whether the terms and conditions for MedicAlerts purchase is on less
favorable terms than other customers of CapMed. If CapMed for any reason is not able to
ship on the scheduled shipping date, CapMed will notify MedicAlert in writing at least five
(5) business days before the scheduled shipping date, such written notification will also
include an estimate of the rescheduled shipping quantities and dates.(b)
    
    The delivery of all goods under this Agreement will be CPT MedicAlerts principal place
of business.(c)
    
    Payments:
 (i)
    
    All payments under this Agreement are due net of any relevant taxes within **.(ii)
    
    All payments under this Agreement for HealthKeys are due, net of any relevant
taxes as follows:
  
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(1)
    
    ** due at **; and(2)
    
    ** due within **.
 13.
    
    Inspection on Receipt and Replacements. MedicAlert will, within seven (7) business
days of delivery receipt, inspect the goods and packaging and inform CapMed in writing of any
nonconformance with the specification or any express CapMed warranty hereunder. Such written
notice will include the method of inspection, the details and nature of the discovered
defects, and request replacements. MedicAlert will, at CapMeds expense, return the defective
goods to CapMed, and within a commercially reasonable time for the first priority
manufacturing of new goods from CapMeds receipt of the returns, CapMed will deliver
replacements to MedicAlert. Any replacements will also be subject to these inspection and
acceptance procedures.
 14.
    
    Warranties.
 (a)
    
    As a material inducement to this Agreement, CapMed represents and warrants to
MedicAlert that:
 (i)
    
    the MedicAlert® PHR System will strictly comply with the descriptions
(including performance capabilities, completeness, specifications, configurations, and
function) in this Agreement;(ii)
    
    all computer programs or program modules will operate in conformance with the
specifications;(iii)
    
    all Documents will be functional and comprehensible for their intended users;(iv)
    
    all delivered goods will be merchantable and will be fit for their intended
purpose, and will be free from defects in materials and manufacturing for a period of
twelve (12) months of normal use from the date of each individual users subscription;(v)
    
    CapMed has good title to the CapMed PHR System;(vi)
    
    the CapMed PHR System is free and clear of any and all third party liens,
judgments, or encumbrances;(vii)
    
    the CapMed PHR System will not violate or in any way infringe upon the rights
of third parties, including property, contractual, employment, fiduciary, trade
secrets, proprietary information and nondisclosure rights, or any trademark, service
mark, trade name, trade dress, copyright, or issued patent rights;.(viii)
    
    MedicAlerts intended use or resale of all delivered goods will not violate or in any
way infringe upon the rights of third parties, including, without limitation, property,
contractual, employment, trade secret, proprietary information and nondisclosure
rights, or trademark, copyright or patent rights.
 (b)
    
    As a material inducement to this Agreement, MedicAlert represents and warrants to
CapMed that:
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(i)
    
    the MedicAlert® Software will strictly comply with the descriptions (including
performance capabilities, completeness, specifications, configurations, and function)
in this Agreement;(ii)
    
    it has good title to the MedicAlert® Software;(iii)
    
    the MedicAlert® Software is free and clear of any and all third party liens,
judgments, or encumbrances;(iv)
    
    the MedicAlert® Software will not violate or in any way infringe upon the
rights of third parties, including property, contractual, employment, fiduciary, trade
secrets, proprietary information and nondisclosure rights, or any trademark, service
mark, trade name, trade dress, copyright, or patent rights;
 (c)
    
    CapMed will provide MedicAlert with repaired or replacement units free of charge for
all defective goods during the warranty period. All costs and expenses arising out of or
related to any such warranty repair or replacement will be borne by CapMed.
 15.
    
    Defense and Indemnification.
 (a)
    
    Each party (the Indemnifying Party) will defend, indemnify and hold harmless the
other party (the Indemnified Party) from and against any claims, demands, or liability,
including attorney fees and costs, of any nature, whether accrued, absolute, contingent or
otherwise, arising from or relating to the failure or breach of any of the warranties,
covenants or agreements made by the Indemnifying Party in this Agreement.(b)
    
    CapMed (the Indemnifying Party) will defend, indemnify and hold harmless MedicAlert
(the Indemnified Party) from and against any claims, demands, or liability, including
attorney fees and costs, of any nature, whether accrued, absolute, contingent or otherwise,
arising from or relating to any allegation that the MedicAlert® PHR System or any CapMed
component thereof (excluding only the MedicAlert developed MedicAlert® Software) or that
any activity involving the MedicAlert® PHR System or any CapMed component thereof
(excluding only the MedicAlert developed MedicAlert® Software) violates or in any way
infringes upon the patent rights of third parties. Notwithstanding the foregoing, CapMed
will have no obligation to indemnify MedicAlert against any ** damages as a result of
conduct by MedicAlert which has been finally determined ** to have been ** CapMed will **
MedicAlert **, CapMed will ** as may be necessary **. The defense and indemnity
obligations of this subparagraph are a material inducement to this Agreement, are made
after review and consultation with legal counsel, and constitute the bargained for
allocation of risk between the parties.(c)
    
    Within a reasonable time after the written assertion against the Indemnified Party by a
third person of a claim or liability which would entitle the Indemnified Party to a
defense and indemnification under this Agreement, the Indemnified Party will give the
Indemnifying Party written notice of the claim. The failure or delay of any such notice
that is materially prejudicial to the Indemnifying Partys ability to defend or indemnify
against such claim or liability shall relieve the Indemnifying Party of any obligation of
defense or indemnification with respect to such claim or liability.
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(d)
    
    Upon receipt of timely notice, the Indemnifying Party shall undertake the
responsibility for the defense of such claim, at its own cost and expense. If, within
fifteen (15) days after delivery of the notice of claim by the Indemnified Party, the
Indemnifying Party fails to advise the Indemnified Party of its agreement to contest and
defend against any such claim or if the Indemnifying Party does not participate in such
litigation, proceeding or settlement negotiations, for any reason, then the Indemnified
Party shall have the right, at the Indemnifying Partys cost and expense, to take such
action as the Indemnified Party deems appropriate to defend, contest, settle or compromise
any such claim or liability, and the Indemnifying Party agrees to be bound by any and all
rulings, judgments, compromises, and settlements reached by the Indemnified Party in good
faith, in the same manner as if the Indemnifying Party participated therein. In addition,
in the event that the use or sale of all or any part of the MedicAlert PHR System, other
than the MedicAlert PHR Software, is enjoined, or is likely to be enjoined as a result of a
suit based on alleged infringement or misappropriation of third party intellectual property
rights, MedicAlert agrees that CapMed shall have the option at CapMeds sole cost and
expense to either: (i) procure for itself and MedicAlert the right to continue to use the
MedicAlert PHR System, or (ii) replace or modify the infringing or misappropriating
software so that it becomes non-infringing provided that the replaced or modified software
shall conform in all respects with the specifications required by this Agreement and shall
be subject to all of the terms and conditions of this Agreement, including, without
limitation, all of the express and implied CapMed representations and warranties.(e)
    
    The Indemnified Party shall have the right to participate at its own expense and
through counsel of its own choosing in contesting and defending against any such claim and
in any litigation, proceedings or settlement negotiations with respect thereto. If, upon
advice of the Indemnified Partys counsel, the Indemnified Party would not be adequately
represented by the Indemnifying Partys counsel because of a conflict of interest,
inability to present a defense that would otherwise be available to the Indemnified Party ,
or lack of experience or expertise in matters similar to the underlying claim, the
Indemnified Party shall have the right to be represented by counsel of its own choosing at
its own expense.(f)
    
    Without the written consent of the Indemnified Party, the Indemnifying Party may not
consent to the entry of any judgment with respect to the matter or enter into any
settlement that does not include a provision by which the plaintiff or claimant in the
matter releases the Indemnified Party from all liability with respect to the matter;
provided, however, that in the event that a plaintiff or claimant refuses to release the
Indemnified Party from all liability with respect to the matter after the Indemnifying
Party has exercised its best commercial efforts to obtain a negotiated settlement or
consensual judgment that includes such release, the Indemnifying Party may consent to an
entry of judgment or enter a settlement that does not release the Indemnified Party if
prior to the entry of any such judgment or settlement the Indemnifying Party reasonably
establishes to the Indemnified Party that it can immediately satisfy the judgment or
settlement on entry and irrevocably provides for the immediate satisfaction of the judgment
or settlement on entry.
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(g)
    
    The Indemnifying Party will reimburse the Indemnified Party within thirty (30) days
after presentation of an itemized statement of costs and/or damages for such
indemnification claim as set forth above.
 16.
    
    Limitation of Liability.
 (a)
    
    CAPMED DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTIES AS TO THE SUITABILITY OR MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF THE MEDICALERT® SOFTWARE OR ANY PORTABLE FLASH MEMORY DEVICE OTHER
THAN A HEALTHKEY. IN NO EVENT SHALL CAPMED BE LIABLE TO MEDICALERT FOR ANY MEDICALERT LOST
OR ANTICIPATED PROFITS, OR ANY INCIDENTAL, EXEMPLARY, SPECIAL, OR CONSEQUENTIAL DAMAGES,
REGARDLESS OF WHETHER IT WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN CONNECTION WITH
THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, EITHER THE MEDICALERT PHR SYSTEM OR
MEDICALERT PHR SOFTWARE. THE LIMITATION OF LIABILITY CONTAINED HEREIN REFLECTS AN
ALLOCATION OF RISK BETWEEN THE PARTIES AND WILL SURVIVE AND APPLY EVEN IF ANY LIMITED
REMEDY FAILS OF ITS ESSENTIAL PURPOSE.
 17.
    
    Confidentiality.
 (a)
    
    All intellectual property, knowledge, information, documents, materials, or such other
proprietary information, received by a party from the other party, whether or not it is
designated as confidential or proprietary will, except as specified below, be considered
confidential information. Confidential information includes, without limitation, the
CapMed PHR System, the MedicAlert PHR Software, the identity, personal health records, and
medical information of MedicAlert® members and MedicAlert® PHR System subscribers. The
party receiving such information will refrain from directly or indirectly taking any action
that would constitute or facilitate the unauthorized use or disclosure of such information,
will take any and all lawful measures to prevent the unauthorized use and disclosure of
such information, and will prevent unauthorized persons or entities from obtaining or using
such information.(b)
    
    The provisions of this Section do not apply to any knowledge, information, documents,
materials, or the like, which the receiving party can conclusively establish: (i) has
entered the public domain without the receiving partys breach of any obligation owed to
the disclosing party; (ii) has become known from a source other than the disclosing party
and other than by breach of an obligation of confidentiality owed to the disclosing party
or a third party; (iii) is disclosed by the disclosing party to a third party without
restrictions on its disclosure; or, (iv) is independently developed by the receiving party
without breach of this Agreement.(c)
    
    Notwithstanding the foregoing, nothing in this Agreement will be construed to limit
either partys right to independently develop or acquire one or more goods or services that
are similar to or competitive with the goods or services contemplated by or embodied in the
other partys confidential or proprietary information, or to acquire, by purchase or
license, any rights, organizations or assets thereof, provided that the developing party
  Page 14 of 19




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does not use the other partys confidential or proprietary information in violation of this
Agreement; including, without limitation, MedicAlerts pre-existing right to include a one
page summary of its individual members critical personal health information substantially
in the same form and content as the existing MedicAlert® MED Software (including, without
limitation, name, date of birth, address, health insurance provider and policy number, drug
allergies, and known medical conditions) on a portable flash memory device that is not
integrated in the MedicAlert® PHR System. Each party understands that the other party
evaluates, designs, develops and acquires software and other goods or services, and that the
existing or planned goods or services independently developed, evaluated, designed,
developed or acquired by the other party may contain ideas and concepts similar to those
contained in the goods or services received by the other party. Nothing in this Agreement
will preclude the other party from marketing such developed, designed or acquired goods or
services to others. Each party reserves the right to deal with any other vendor, supplier,
or purchaser on any terms and with respect to any subject matter.(d)
    
    Promptly upon the request of a party, the other party will deliver all copies, notes,
packages, diagrams, computer memory media, and all other materials containing any
confidential or proprietary information of the other party, and destroy all compilations,
analyses and other materials which contain any such confidential information; provided,
however, that the destroying party may retain one copy of the confidential information in a
file accessible only to legal counsel for the sole purpose, in the event of a future
dispute, of proving what information it did or did not receive.(e)
    
    Neither party shall disclose the commercial and financial terms of this Agreement
without the consent of the other party, which consent shall not be unreasonably withheld;
provided, however, if required by law, upon advice from its counsel, CapMed shall be
permitted to disclose the terms of this Agreement upon notice to MedicAlert but without the
consent of MedicAlert; provided, further, that CapMed shall use its commercially reasonable
efforts to keep such confidential information as confidential as possible.(f)
    
    The provisions of this Section will survive the term of this Agreement.
 18.
    
    Term and Termination.
 (a)
    
    The term of this Agreement and any licenses related thereto will be five (5) years from
the effective date of this Agreement, and will automatically renew for successive one (1)
year terms, unless terminated earlier
 (i)
    
    by the mutual consent of both parties;(ii)
    
    by either party for any reason upon one year written notice prior to
termination;(iii)
    
    by a party ceasing to do business with no successor assuming all of such
partys obligations under this Agreement;(iv)
    
    by the insolvency of a party, however such insolvency is evidenced, including,
without limitation, by a general assignment for the benefit of its creditors, or by a
voluntarily or involuntarily filing of a petition in bankruptcy;
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(v)
    
    by the dissolution or liquidation of a party, unless such dissolution or
liquidation is the result of a merger or consolidation with a controlling or affiliated
company;(vi)
    
    by either party on thirty (30) days written notice of the other partys
material breach of a substantive term of this Agreement if such breach is curable
within thirty (30) days and is not cured within such time; or,(vii)
    
    by either party on commercially reasonable written notice of the other partys
material breach of a substantive term of this Agreement if such breach is not curable
within thirty (30) days and the party declared in breach is not then using its best
efforts and acting in good faith to cure such breach as promptly as practicable within
such commercially reasonable notice period.
 (b)
    
    During the ** period immediately following the termination date, MedicAlert and the
MedicAlert® PHR System subscribers will have the limited exclusive, worldwide right and
license to use all and any component of the MedicAlert® PHR Software, and all corresponding
rights under all patent, copyright, trademark, trade secret and other laws as may be
necessary or appropriate for the sole and limited purpose of transferring the MedicAlert®
PHR System subscribers to alternative goods or services that may be competitive with the
CapMed PHR System or the MedicAlert® PHR System and that were not developed in violation of
this Agreement.(c)
    
    In the event that this Agreement is terminated by CapMed without cause, or by
MedicAlert on the insolvency, dissolution or uncured material breach of CapMed, MedicAlert
shall have the irrevocable right and option to purchase an irrevocable, fully paid up,
royalty free, worldwide license to make, use, modify, enhance, further develop, sell, and
sublicense all and any component of the MedicAlert® PHR Software, and all corresponding
rights under all patent, copyright, trademark, trade secret and other laws as may be
necessary or appropriate for the full enjoyment of the rights otherwise granted under this
Agreement.(d)
    
    If the parties are unable to agree on the purchase price within thirty (30) calendar
days of the termination date, each party shall appoint, within thirty (30) calendar days
thereafter, one appraiser and the two appraisers shall within a period of five (5)
additional days, agree on and appoint an additional appraiser. The appraisers shall be
experienced in valuing licenses. The three appraisers shall, within sixty (60) calendar
days after the appointment of the third appraiser, determine the fair market value of the
license in writing and submit their report to all the parties. The fair market value shall
be determined by taking the arithmetic mean of the two closest appraisers valuations,
shall be final, and shall not be subject to appeal. Each party shall pay for the services
of the appraiser selected by it, plus one-half of the fee charged by the third appraiser.
MedicAlert shall have five (5) days from the appraisal determination of fair market value
to give CapMed written notice of its intent to exercise or waive its rights to exercise the
option. In the event that MedicAlert elects to exercise its option, the purchase price may
be paid by a promissory note secured by the license over a period not to exceed five (5)
years with interest at a rate equal to the Prime Rate.(e)
    
    On completion of all Schedule A milestones and pursuant to the software escrow
agreement, CapMed will deposit with a reputable escrow company previously agreed to
  Page 16 of 19




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by the parties, the Patent, the Copyright, the full and complete CapMed PHR Software in
source code and all related computer files (such as executable program files, compiler,
linker, third-party libraries, etc.), and all Documentation agreed to between the parties as
may be necessary to develop, utilize and understand the CapMed PHR System, and thereafter
shall promptly deposit full and complete documents and source code for any new version,
upgrade, or bug fix. In the event this agreement is terminated for any reason, the escrow
company will deliver all materials held in escrow to MedicAlert under the terms and
conditions of the escrow agreement for MedicAlerts post-termination licensed use under this
Section
 19.
    
    Warranty of Corporate Authority. Each party represents and warrants to the other
that it is a corporation duly organized, validly existing, and in good standing under the laws
of the jurisdiction of formation, and has all requisite corporate power and authority to make
and enter this Agreement.
 20.
    
    Non-Assignability. Neither party may assign, transfer, or otherwise dispose of this
Agreement in whole or in part to any person, firm, or corporation without the prior written
consent of the other party, unless such assignment or transfer is to a parent, subsidiary, or
affiliate company.
 21.
    
    No Special Relationship Between Parties. Nothing in this Agreement creates an agency
relationship, partnership, joint-venture or any other form of special relationship between the
parties.
 22.
    
    Severability. If any provision of this Agreement is held by any court of competent
jurisdiction to be illegal, void, or unenforceable, such provision will be of no force or
effect, and the court will restructure or amend such provision to the minimum extent possible
to be enforceable according to the parties intent as set forth herein. The illegality or
unenforceability of such provision will have no effect upon and will not impair the
enforceability of any other provision of this Agreement.
 23.
    
    Integration. This Agreement, together with all attached exhibits and schedules and
all ancillary agreements between the parties hereto, represent the complete agreement and
understanding of the parties relating to the subject matter hereof and supersede any prior or
contemporaneous agreements, understandings, or representations of the parties, whether oral or
in writing. This Agreement may not be amended or modified except by a writing signed by both
parties.
 24.
    
    Notices. All commercial notices for the order, manufacture, and delivery of goods or
services will be in a commercially reasonable manner consistent with industry standards. All
notices, requests, demands and other communications regarding any partys default under or the
termination of this Agreement will be in writing and will be sufficient in all respects (a) if
delivered personally or by telecopy or email transmission when so delivered, or (b) if given
by an internationally reputable overnight air courier service, two (2) business days after the
date delivered to such courier, delivery charges prepaid.
 25.
    
    Entire Agreement. This Agreement represent the complete agreement and understanding
of the parties relating to the subject matter hereof and supersede any prior or
contemporaneous
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agreements, understandings, or representations of the parties, whether oral or written. This
Agreement may not be amended or modified except by a writing signed by both parties.
 26.
    
    Governing Law & Jurisdiction. This Agreement is made in Turlock, California, and
shall in all respects be deemed a contract of such State governed by the laws of the United
States of America and the State of California. The parties expressly agree to use their best
efforts to informally, among themselves, resolve any dispute arising from or relating to this
Agreement before initiating any litigation.
 27.
    
    Counterparts. This Agreement may be executed in two or more original or telecopy
counterparts, each of which shall be deemed an original and all of which together shall
constitute but one and the same document.
 28.
    
    Captions. Captions are for the convenience of the parties and shall not be used in
interpreting the provisions of this Agreement.
  Bio-Imaging Technologies, Inc.
    
    
    
    Medic Alert Foundation United States, Inc.By:
    
    /s/ Mark L. Weinstein
    
    
    
    By:
    
    /s/ Paul KortschakMark L. Weinstein
President and CEO
Bio-Imaging Technologies, Inc.
    
    
    
    Paul Kortschak
President and CEO
Medic Alert Foundation United States, Inc.Date:
    
    June 20, 2005
    
    
    
    
    
    Date:
    
    June 20, 2005
  Page 18 of 19




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SCHEDULE A
TO
MEDICALERT® PHR SYSTEM
DEVELOPMENT AND SUPPLY AGREEMENT
 MedicAlert E-HealthKey Product Development
MedicAlert Development Team
Responsibilities and Milestones
Field Test Milestones and Implementation Schedule
  Bio-Imaging Technologies, Inc.
    
    
    
    Medic Alert Foundation United States, Inc.By:
    
    /s/ Mark L. Weinstein
    
    
    
    By:
    
    /s/ Paul KortschakMark L. Weinstein
President and CEO
Bio-Imaging Technologies, Inc.
    
    
    
    Paul Kortschak
President and CEO
Medic Alert Foundation United States, Inc.Date:
    
    June 20, 2005
    
    
    
    
    
    Date:
    
    June 20, 2005
 Page 19 of 19