Exhibit 10.1





EMPLOYMENT AGREEMENT





This Employment Agreement (Agreement) is made and
entered into as of April 3, 2002 by and between SmartDisk Corporation, a Delaware corporation (the Company), and Michael S. Battaglia (the Executive).





Recitals





A.    The Company desires to ensure
the Executives continued employment with the Company and to compensate him therefor.





B.    The Board
of Directors of the Company (the Board) has determined that this Agreement will reinforce and encourage the Executives attention and dedication to the Company.





C.    The Executive is willing to make his services available to the Company on the terms and conditions hereinafter set forth.





Agreement





NOW, THEREFORE, in
consideration of the premises and mutual covenants set forth herein, the parties agree as follows:





1.    Employment.





1.1    General.    The Company hereby agrees to employ the Executive, and the Executive hereby agrees to serve the Company on the terms and conditions set forth herein. During the term of this
Agreement, which shall continue on an at will basis until terminated in accordance with Section 4 below, Executive shall render services at the Companys principal executive offices in Naples, Florida.





1.2    Duties of Executive.    During the term of this Agreement, the Executive shall
serve as the Chief Executive Officer and President of the Company, shall diligently perform all services as may be assigned to him by or under the direction of the Board and shall exercise such power and authority as may from time to time be
delegated to him by the Board. The Executive shall devote substantially all of his business time and attention to the business and affairs of the Company, render such services to the best of his ability, and use his best efforts to promote the
interests of the Company.





2.    Compensation.





2.1    Base Salary.    The Executive shall receive an initial base salary at the annual rate of $325,000 (the
Base Salary), with such Base Salary payable in installments consistent with the Companys normal payroll schedule, subject to applicable withholding and other taxes. During each year of this Agreement, the Board shall consider the
performance of the Executive for a merit increase of such Base Salary.





2.2    Bonus
Compensation.    In addition to the Base Salary, the Executive shall be eligible to receive bonus compensation (the Bonus Compensation) each year during the term of this Agreement. The Board shall establish a
performance bonus formula pursuant to which the Executive will be able to receive the Bonus Compensation amount, which shall in no event be less than fifty percent of the Base Salary, if the Company achieves certain specified levels of financial
results. Accordingly, during the first year of this Agreement, Executive shall be eligible to receive the Bonus Compensation amount of $162,500.




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3.    Expense Reimbursement and Other Benefits.





3.1    Reimbursable Expenses.    During the term of the Executives
employment hereunder, the Company, upon the submission of proper substantiation by the Executive, shall reimburse the Executive for all reasonable expenses actually and necessarily paid or incurred by the Executive in the course of and pursuant to
the business of the Company.





3.2    Other Benefits.    The
Executive shall be entitled to participate in all medical, dental and hospitalization, group life insurance, and any and all other plans as are presently and hereinafter provided by the Company to its executives. The Executive shall be entitled to
twenty days of paid vacation per year. In no event shall Executive be entitled to accrue and carry forward more than five (5) days of paid vacation from any calendar year to another.





3.3    Working Facilities.    The Company shall furnish the Executive with an office, secretarial help and such other
facilities and services suitable to his position and adequate for the performance of his duties hereunder.





4.    Termination.





4.1    Termination for
Cause.    The Company shall at all times have the right, upon written notice to the Executive, to terminate the Executives employment hereunder for Cause (as hereinafter defined). For purposes of this
Agreement, the term Cause shall mean (i) the failure or refusal of the Executive to perform the duties or render the services reasonably assigned to him from time to time by or under direction of the Board of Directors of the Company
(except during reasonable vacation periods or sick leave), which failure or refusal is not cured within 30 days of written notice (such notice to contain in detail the specific deficiencies observed by the Board); (ii) gross negligence or willful
misconduct by the Executive in the performance of his duties as an employee of the Company, (iii) the conviction of the Executive of a felony; (iv) the material breach by the Executive of any of the provisions of Section .1, 5.2, 5.3 or 5.4 hereof;
(v) the breach by the Executive of his fiduciary duty or duty of trust to the Company, including the commission by the Executive of an act of fraud or embezzlement against the Company, (vi) substance abuse, or (vii) any other material breach by the
Executive of any of the material terms or provisions of this Agreement or any other agreement between the Company and the Executive related to the Executives employment, which other material breach is not cured within thirty (30) business days
of written notice by the Company. Upon any termination pursuant to this Section 4.1, the Executive shall be entitled to receive any salary (other than Bonus Compensation) and employment benefits which shall have accrued prior to the date of
termination, but shall not be entitled to any bonus or severance payments, salary or employment benefits relating to periods subsequent to the date of termination, subject to Executives rights to continue medical and dental coverage under the
Companys group policy, at Executives expense, as may be provided by law.





4.2    Disability.    The Company shall at all times have the right, upon written notice to the Executive, to terminate the Executives employment hereunder, if the Executive shall, as the
result of mental or physical incapacity, illness or disability, become unable to perform his duties hereunder for in excess of ninety (90) days in any 12-month period. Upon any termination pursuant to this Section 4.2, the Company shall pay to the
Executive (i) pay to the Executive any unpaid Base Salary accrued through the effective date of termination specified in such notice, (ii) pay Executives Base Salary in the manner set forth in Section 2.1 hereof until the date which is twelve
months following such effective date, (iii) pay a pro rata portion of any Bonus Compensation to which the Executive would be otherwise entitled under Section 2.2 based upon the ratio the number of months employed bears to the bonus period of twelve
(12) months. Following the effective date of such termination, the Company shall continue to pay for or provide to the Executive such benefits as may have been provided to the Executive in accordance with Section 3.2 immediately prior to such
termination (subject to changes in the terms of such coverage by the provider as may be applicable to the Company as a whole) for a period ending one year from the date of termination. In addition, the Company shall forgive and extinguish without
seeking satisfaction that portion of the obligation created under that certain promissory note dated April 3, 2002 from the Executive to the order of the Company that is in excess of the underlying collateral of said promissory note. Except as
expressly provided herein, the




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Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however to the provisions of
Section 3.1).





4.3    Death.    In the event of the death of
the Executive during the term of his employment hereunder, the Company shall pay to the estate of the deceased Executive (i) any unpaid Base Salary accrued through the date of Executives date of death, (ii) Executives Base Salary in the
manner set forth in Section 2.1 hereof until the date which is twelve months following such date of death, (iii) pay a pro rata portion of any Bonus Compensation to which the Executive would have otherwise been entitled under Section 2.2 based upon
the ratio the number of months employed bears to the bonus period of twelve (12) months. In addition, the Company shall forgive and extinguish without seeking satisfaction that portion of the obligation created under that certain promissory note
dated April 3, 2002 from the Executive to the order of the Company that is in excess of the underlying collateral of said promissory note. Except as expressly provided herein, the Company shall have no further liability hereunder (other than for
reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however to the provisions of Section 3.1).





4.4    Termination by the Company Without Cause.    At any time, the Company shall have the right to terminate this Agreement and Executives employment with the
Company by providing at least 30 days prior written notice to the Executive; provided, however, that, the Company shall (i) pay to the Executive any unpaid Base Salary accrued through the effective date of termination specified in such notice, (ii)
pay Executives Base Salary in the manner set forth in Section 2.1 hereof until the date which is twelve months following such effective date, (iii) pay a pro rata portion of any Bonus Compensation to which the Executive would be otherwise
entitled under Section 2.2 based upon the ratio the number of months employed bears to the bonus period of twelve (12) months. Following the effective date of such termination, the Company shall continue to pay for or provide to the Executive such
benefits as may have been provided to the Executive in accordance with Section 3.2 immediately prior to such termination (subject to changes in the terms of such coverage by the provider as may be applicable to the Company as a whole) for a period
ending on the earliest of (A) the date of the Executives employment by a third party on a substantially full-time basis, (B) the death of the Executive and (C) one year from the date of termination. In addition, the Company shall forgive and
extinguish without seeking satisfaction that portion of the obligation created under that certain promissory note dated April 3, 2002 from the Executive to the order of the Company that is in excess of the underlying collateral of said promissory
note. Except as expressly provided herein, the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however to the provisions of Section
3.1).





4.5    Termination by Employee.    At any time, the
Executive may terminate this Agreement and Executives employment with the Company by providing at least 30 days prior written notice to the Company. Upon termination of this Agreement pursuant to this Section 4.5, the Executive shall be
entitled to receive any salary (other than Bonus Compensation) and employment benefits which shall have accrued prior to the date of termination, but shall not be entitled to any bonus or severance payments, salary or employment benefits relating to
periods subsequent to the date of termination, subject to Executives rights to continue medical and dental coverage under the Companys group policy at Executives expense, as may be provided by law.





5.    Restrictive Covenants.





5.1    Non-competition.    While employed by the Company and for a period of one year following the date of termination
of this Agreement pursuant to Section 4.1, 4.4 or 4.5, the Executive shall not, directly or indirectly (whether as owner, principal, agent, shareholder, employee, partner, lender, venturer with or consultant to any person, firm, partnership,
corporation, limited liability company or other entity), whether or not compensation is received, engage or participate in any activity for any business or entity which is or plans to engage in the marketing and sale of any products or services
which are under active development or are marketed or sold by the Company and/or their respective subsidiaries and affiliates during the term of this Agreement anywhere in the United States; provided, however, that nothing herein shall be deemed to
prevent the Executive from acquiring through market purchases and owning, solely as an investment, less than three percent in the aggregate of the equity securities of any class of any issuer whose shares are registered under §12(b) or 12(g) of
the Securities Exchange Act of 1934, as




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amended, and are listed or admitted for trading on any United States national securities
exchange or are quoted on the National Association of Securities Dealers Automated Quotations System, or any similar system of automated dissemination of quotations of securities prices in common use, so long as the Executive is neither involved in
the management or conduct of the business affairs of such issuer nor a member of any control group (within the meaning of the rules and regulations of the United States Securities and Exchange Commission) of any such issuer. The
Executive acknowledges and agrees that the covenants provided for in this Section 5.1 are reasonable and necessary in terms of time, area and line of business to protect the Companys Trade Secrets (as hereinafter defined). The
Executive further acknowledges and agrees that such covenants are reasonable and necessary in terms of time, area and line of business to protect the Companys legitimate business interests, which include their interests in protecting the
Companys (i) valuable confidential business information, (ii) substantial relationships with customers throughout the United States, and (iii) customer goodwill associated with the ongoing business of the Company. The Executive expressly
authorizes the enforcement of the covenants provided for in this Section 5.1 by (A) the Company and its subsidiaries, (B) the Companys permitted assigns, and (C) any successors to the Companys business. To the extent that the covenant
provided for in this Section 5.1 may later be deemed by a court to be too broad to be enforced with respect to its duration or with respect to any particular activity or geographic area, the court making such determination shall have the power to
reduce the duration or scope of the provision, and to add or delete specific words or phrases to or from the provision. The provision as modified shall then be enforced.





5.2    Nondisclosure.    Executive shall not divulge, communicate, use to the detriment of the Company or for the benefit
of any other person or persons, or misuse in any way, any Confidential Information pertaining to the Company. Any confidential information or data now known or hereafter acquired by the Executive with respect to the Company shall be
deemed a valuable, special and unique asset of the Company that is received by the Executive in confidence and as a fiduciary, and Executive shall remain a fiduciary to the Company with respect to all of such information. For purposes of this
Agreement, the following terms when used in this Agreement have the meanings set forth below:





Confidential Information means confidential data and confidential information relating to the business of the Company (which does not rise to the status of a Trade Secret under applicable law) which is or has been
disclosed to the Executive or of which the Executive became aware as a consequence of or through his employment with the Company and which has value to the Company and is not generally known to the competitors of the Company. Confidential
Information does not include (a) information that is or becomes generally available to the public other than as a result of the Executives disclosure of such information, (b) information that was within the Executives possession prior to
it being furnished to the Executive by or on behalf or its affiliates, including the Company, provided that the source of such information was not known to the Executive to be bound by a confidentiality agreement with or other contractual, legal or
fiduciary obligation of confidentiality to the Company or its affiliates, or any other party with respect to such information, (c) information that becomes available to the Executive on a non-confidential basis from a source other than the Company
or any of its affiliates, provided that such source is not known to the Executive to be bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or its affiliates, or any other
party with respect to such information, (d) information the disclosure of which is required by applicable law or judicial process, or (e) general technical skills or general experience gained by the Executive during the Executives employment
with the Company.





Trade Secrets means information of the Company including, but not
limited to, technical or nontechnical data, formulas, patterns, compilations, programs, financial data, financial plans, product or service plans or lists of actual or potential customers or suppliers which (i) derives economic value, actual or
potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.





In addition, during the Initial Term and during the periods described in the last
sentence of this Section 5.2, the Executive (a) will receive and hold all Confidential Information and Trade Secrets (collectively Company Information) in trust and in strictest confidence, (b) will take reasonable steps to protect the
Company Information from disclosure and will in no event take any action causing, or fail to take




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any action reasonably necessary to prevent, any Company Information to lose its character as Company Information, and
(c) except as required by the Executives duties in the course of his employment by the Company, will not, directly or indirectly, use, disseminate or otherwise disclose any Company Information to any third party without the prior written
consent of the Company, which may be withheld in the Companys absolute discretion. The provisions of this Section 5.2 shall survive the termination of the Executives employment (i) for a period of five years with respect to Confidential
Information, and (ii) with respect to Trade Secrets, for so long as any such information qualifies as a Trade Secret under applicable law.





5.3Nonsolicitation of Employees and Customers.    While employed by the Company and for a period of two years following the later of the date his employment is
terminated hereunder by either the Company or the Executive, the Executive shall not, directly or indirectly, for himself or for any other person, firm, corporation, partnership, association or other entity, (i) attempt to employ or enter into any
contractual arrangement with any employee or former employee of the Company, unless such employee or former employee has not been employed by the Company for a period in excess of three months, and/or (ii) divert or take away, or attempt to divert
or take away, the business or prospects of any of the actual or targeted prospective customers or clients of the Company, nor shall the Executive make known the names and addresses of such customers or any information relating in any manner to the
Companys trade or business relationships with such customers.





5.4    Assignment
Of Inventions.





(a)    Original Development.    The
Executive represents and warrants to the Company that all work that the Executive performs for or on behalf of the Company and its clients, and all work product that the Executive produces in such capacity, including but not limited to software,
documentation, memoranda, ideas, designs, inventions, processes, algorithms, etc. (Work Product), will not knowingly infringe upon or violate any patent, copyright, trade secret, or other property right of any of his former employers or
of any other third party. The Executive will not disclose to the Company, or use in any of his Work Product, any confidential or proprietary information belonging to others, unless both the owner thereof and the Company have consented in writing.





(b)    Disclosure.    The Executive will promptly disclose to
the Company all Work Product developed by him within the scope of his employment with the Company or which relates directly to, or involve the use of, any Company Information, including but not limited to all software, concepts, ideas and designs,
and all documentation, manuals, letters, pamphlets, drafts, memoranda and other writings or tangible things of any kind. The Executive will not disclose them to anyone other than authorized Company personnel.





(c)    Copyright Ownership.    The Executive acknowledges and agrees that all Work
Product which is made by him (solely or jointly with others) within the scope of his employment and which is protectable by copyright is being created at the instance of the Company and is work made for hire, as that term is defined in
the United States Copyright Act (17 USCA, Section 101).





(d)    Assignment.    The Executive hereby assigns to the Company all of his other rights, title and interest (including but not limited to all patent, copyright and trade secret rights) in and
to all Work Products prepared by him, whether patentable or not, made or conceived in whole or in part by him within the scope of his employment hereunder, or that relates directly to, or involves the use of Company Information.





(e)    Documents.    The Executive agrees to execute all documents
reasonably requested by the Company to further evidence the foregoing assignment and to provide all reasonable assistance to the Company (at the Companys expense) in perfecting or protecting any or all of the Companys rights in his Work
Product.





(f)    Pre-existing Inventions Not Assigned.    The
Executive represents that the Executive has indicated on Annex I to this Agreement all inventions, expression of ideas or other Work Product related to the Companys business and created prior to his employment by the




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Company in which the Executive has any right, title or interest that the Executive does not
assign to the Company. If the Executive does not have any such inventions, expressions of ideas, or work product to indicate, the Executive will write none on Annex I. The Executive will not assert any rights under any inventions as
having been made or acquired by him prior to his being employed by the Company, unless such inventions are identified on Annex I.





5.5    Books and Records.    All books, records, reports, writings, notes, notebooks, computer programs, sketches, drawings, blueprints, prototypes, formulas,
photographs, negatives, models, equipment, chemicals, reproductions, proposals, flow sheets, supply contracts, customer lists and other documents and/or things belonging to the Company or embodying or relating to any Confidential Information or
Trade Secrets, whether prepared by the Executive or otherwise coming into the Executives possession shall not be copied, duplicated, replicated, transformed, modified or removed from the premises of the Company except pursuant to the business
of the Company and shall be returned immediately to the Company on termination of the Executives employment hereunder or on the Companys request at any time.





5.6    No Conflict.    The Executive represents to the Company that his execution and performance of this Agreement does
not violate the provisions of any employment, non-competition, confidentiality or other material agreement to which he is a party or by which he is bound. The Executive also agrees to indemnify and hold harmless the Company from any and all damages
and other obligations or liabilities incurred by the Company in connection with any breach of the foregoing representation.





6.    Injunction.    It is recognized and hereby acknowledged by the parties hereto that a breach by the Executive of any of the covenants contained in Section 5 of this Agreement will cause
irreparable harm and damage to the Company, the monetary amount of which may be virtually impossible to ascertain. As a result, the Executive recognizes and hereby acknowledges that the Company shall be entitled to seek an injunction from any court
of competent jurisdiction (without posting a bond or other security) enjoining and restraining any violation of any or all of the covenants contained in Section 5 of this Agreement by the Executive or any of his affiliates, associates, partners or
agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company or the Company may possess.





7.    Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of Florida without
regard to conflicts of laws principles thereof and all questions concerning the validity and construction hereof shall be determined in accordance with the laws of said state.





8.    Entire Agreement.    This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter
hereof and, upon its effectiveness, shall supersede all prior agreements, understandings and arrangements, both oral and written, between the Executive and the Company (or any of its affiliates) with respect to such subject matter. Except for the
obligation to pay all accrued but unpaid salary due the Executive, all such prior agreements, understandings and arrangements for the provision of services by the Executive to the Company and the compensation of the Executive in any form are hereby
terminated, and the Executive hereby releases and forever discharges the Company (as well as its affiliates) from any and all liabilities and obligations of any nature arising out of or in connection with any and all such prior agreements,
understandings or arrangements. This Agreement may not be modified in any way unless by a written instrument signed by both the Company and the Executive.





9.    Notices.    Any notice required or permitted to be given hereunder shall be deemed given when delivered by hand or when deposited in the United States mail, by
registered or certified mail, return receipt requested, postage prepaid, (i) if to the Company, c/o SmartDisk Corporation, 3506 Mercantile Avenue, Naples, Florida 34104, Attention: Daniel E. Reed, Vice President, and (ii) if to the Executive, to his
address as reflected on the payroll records of the Company, or to such other address as either party hereto may from time to time give notice of to the other.





10.    Benefits; Binding Effect.    This Agreement shall be for the benefit of and binding upon the parties hereto and their respective heirs, personal representative,
legal representatives, successors and, where applicable, assigns, including, without limitation, any successor to the Company, whether by merger,




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consolidation, sale of stock, sale of assets or otherwise; provided, however that the Executive shall not delegate his
employment obligations hereunder, or any portion thereof, to any other person.





11.    Severability.    The invalidity of any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall not affect the enforceability of the remaining
portions of this Agreement or any part thereof, all of which are inserted conditionally on their being valid in law, and, in the event that any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall be
declared invalid, this Agreement shall be construed as if such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, or section or sections had not been inserted. If such invalidity is caused by length of time or size
of area, or both, the otherwise invalid provision will be considered to be reduced to a period or area which would cure such invalidity.





12.    Waivers.    The waiver by either party hereto of a breach or violation of any term or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach
or violation.





13.    Damages.    Nothing contained herein shall be construed to
prevent the Company or the Executive from seeking and recovering from the other damages sustained by either or both of them as a result of its or his breach of any term or provision of this Agreement. In the event that either party hereto brings
suit for the collection of any damages resulting from, or for the injunction of any action constituting, a breach of any of the terms or provisions of this Agreement, then the party found to be at fault shall pay all reasonable court costs and
attorneys fees of the other.





14.    Section Headings.    The section
headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.





15.    No Third Party Beneficiary.    Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person other than the
Company, the parties hereto and their respective heirs, personal representatives, legal representatives, successors and assigns, any rights or remedies under or by reason of this Agreement.





IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.





SMARTDISK CORPORATIONBy:

/s/    PETER J. QUINNPeter J. Quinn/s/    MICHAEL S. BATTAGLIAMichael S. Battaglia




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ANNEX I





PRE-EXISTING INVENTIONS





None