Document:

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EXHIBIT 10.27

                         WARP TECHNOLOGY HOLDINGS, INC.

                      NON-QUALIFIED STOCK OPTION AGREEMENT

      1. GRANT OF OPTION.

         Warp Technology Holdings, Inc., a Nevada corporation (the "Company"),
hereby grants to ISIS CAPITAL MANAGEMENT, LLC (the "Consultant"), an option,
pursuant to the Company's 2002 Stock Plan (the "Plan"), to purchase an aggregate
of 20,091,371 shares of Common Stock, par value $0.00001 per share ("Common
Stock"), of the Company at a price of $0.0675 per share, purchasable as set
forth in and subject to the terms and conditions of this option and the Plan.
The date of grant of this option is hereinafter referred to as the "date of
grant," and the date ending twelve (12) months thereafter and each subsequent
successive twelve - (12) month period is hereinafter referred to as the "first
anniversary date," "second anniversary date," "third anniversary date," etc.

      2. EXERCISE OF OPTION AND PROVISIONS FOR TERMINATION.

            (a) Except as otherwise provided herein and subject to the right of
cumulation provided herein, this option may be exercised, prior to the tenth
anniversary date, as to not more than the following number of shares covered by
this option during the respective periods set forth below:

      No shares from and after the date of grant and prior to the First
Milestone Date;

      8,036,548 shares from and after the First Milestone Date;

      3,214,619 shares from and after the Second Milestone Date;

      4,018,274 shares from and after the Third Milestone Date;

      4,821,929 shares from and after the Fourth Milestone Date; and

      The "First Milestone Date" is the date that the closing sale price of the
Company's Common Stock has been at least $0.18 per share (as adjusted for stock
splits, dividends and the like) for a period of ten consecutive trading days;
(ii) the "Second Milestone Date" is the date that the closing sale price of the
Company's Common Stock has been at least $0.25 per share (as adjusted for stock
splits, dividends and the like) for a period of ten consecutive trading days,
(iii) the "Third Milestone Date" is the date that the closing sale price of the
Company's Common Stock has been at least $0.40 per share (as adjusted for stock
splits, dividends and the like) for a period of ten consecutive trading days,
and (iv) the "Fourth Milestone Date" is the date that the closing sale price of
the Company's Common Stock has been at least $0.50 per share (as adjusted for
stock splits, dividends and the like) for a period of ten consecutive trading
days.

      Notwithstanding the foregoing, this option shall be exercisable with
respect to all shares, whether or not previously exercisable, on and after the
fifth anniversary date.

      The right of exercise provided herein shall be cumulative so that if the
option is not exercised to the maximum extent permissible during any such

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period it shall be exercisable, in whole or in part, with respect to all shares
not so purchased at any time during any subsequent period prior until the
expiration or termination of this option.

      This option may not be exercised at any time after the tenth anniversary
date.

            (b) Subject to the conditions hereof, this option shall be
exercisable by the Consultant giving written notice of exercise to the Company,
specifying the number of shares to be purchased and the purchase price to be
paid therefor and accompanied by payment in accordance with Section 3 hereof.
Such exercise shall be effective upon receipt by the Secretary of the Company of
the written notice together with the required payment. The Consultant shall be
entitled to purchase less than the number of shares covered hereby, provided
that no partial exercise of this option shall be for less than five (5) whole
shares.

            (c) Subject to (d) below, if the Consultant ceases to be engaged,
whether under that certain Consulting Agreement dated as of even date herewith
by and between the Company and the Consultant (the "Engagement Agreement") or
otherwise, to provide services to the Company or one of its subsidiaries for any
reason, this option shall immediately terminate; provided, however, that any
portion of this option that was otherwise exercisable on the date of termination
of the Consultant's engagement to provide services whether pursuant to the
Engagement Agreement or otherwise (as applicable, the "Engagement"), may be
exercised within the twelve (12) month period following the date on which the
Consultant ceased to be so engaged, but in no event after the tenth anniversary
date. Any such exercise may be made only to the extent of the number of shares
subject to this option that are purchasable upon the date of such termination of
the Engagement.

            (d) If the Consultant's Engagement is terminated by the Company for
cause as determined under the Engagement Agreement, then all options shall lapse
immediately at the effective time of such termination.

            (g) For purposes hereof, the time of the termination of the
Consultant's Engagement with the Company shall be determined under the
Engagement Agreement, provided, however, that Engagement shall not terminate for
purposes hereof until the expiration of the period Consultant is bound by any
non-compete, non-solicitation, confidentiality or other agreement with the
Company, and Engagement shall not terminate for purposes hereof if, and for as
long as, Consultant serves the Company as a consultant or advisor or other
service provider for any period after which its Engagement has terminated under
the Engagement Agreement until the Company has given written notice that such
services are no longer to be provided. This option shall not be affected in the
event the Consultant does not provide services for a period(s) of time, as the
parties anticipate services will be provided as needed, and not necessarily on a
regular or continual basis, nor will this option be affected if the level, type
or other aspect of the services change, or if any compensation, rates or other
payment terms under, or any other terms of, the Engagement Agreement increase,
decrease or are otherwise changed or amended.

      3. PAYMENT OF PURCHASE PRICE.

            (a) Payment of the purchase price for shares purchased upon exercise
of this option shall be made by (i) delivery to the Company of cash or check
payable to the order of the Company in an amount equal to the purchase price of
such shares, (ii) if the Consultant elects and the Company permits, by delivery
of shares of Common Stock of the Company having a fair market value equal in
amount to the purchase price of such shares, or (iii) by advising the Company,
at the time this option is exercised, to withhold from exercise under this
option the appropriate number of shares, the aggregate market value of

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which on the date of exercise of this option is equal to the aggregate cash
purchase price of the shares being purchased under this option, and such
withholdings shall constitute full payment for the non-withheld option shares
issued upon exercise. The Board of Directors shall have the authority to
determine whether any shares offered by the Consultant in payment of the
purchase price are acceptable to the Company, and the Board's discretion in this
regard shall be absolute.

            (b) For the purposes hereof, the "fair market value" of any share of
the Company's Common Stock to be delivered to the Company in exercise of this
option shall be determined by the Board of Directors in good faith after taking
into consideration all factors that it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length. If, the Company's Common Stock is
publicly traded, "fair market value" shall be determined as of the last business
day for which the prices or quotes discussed in this sentence are available
prior to the date of repurchase (the "Determination Date") and shall mean (i)
the average (on the Determination Date) of the high and low prices of the Common
Stock on the principal national securities exchange on which the Common Stock is
traded, if such Common Stock is then traded on a national securities exchange;
(ii) the last reported sale price (on the Determination Date) of the Common
Stock on the NASDAQ National Market List, if the Common Stock is not then traded
on a national securities exchange; or (iii) the closing bid price (or average of
bid prices) last quoted (on the Determination Date) by an established quotation
service for over-the-counter securities, if the Common Stock is not reported on
the NASDAQ National Market List.

            (c) If the Consultant elects to exercise options by delivery of
shares of Common Stock of the Company, the certificate or certificates
representing the shares of Common Stock of the Company to be delivered shall be
duly executed in blank by the Consultant or shall be accompanied by a stock
power duly executed in blank suitable for purposes of transferring such shares
to the Company. Fractional shares of Common Stock of the Company will not be
accepted in payment of the purchase price of shares acquired upon exercise of
this option.

      4. DELIVERY OF SHARES.

      The Company shall, upon payment of the purchase price for the number of
shares purchased and paid for, make prompt delivery of such shares to the
Consultant, provided that if any law or regulation requires the Company to take
any action with respect to such shares before the issuance thereof, then the
date of delivery of such shares shall be extended for the period necessary to
complete such action. No shares shall be issued and delivered upon exercise of
any option unless and until, in the opinion of counsel for the Company, any
applicable registration requirements of the Securities Act of 1933, as amended
(the "Act") any applicable listing requirements of any national securities
exchange on which stock of the same class is then listed, and any other
requirements of law or of any regulatory bodies having jurisdiction over such
issuance and delivery, shall have been fully complied with in respect to such
issuance and delivery.

      5. NON-TRANSFERABILITY OF OPTION.

      This option may not be transferred or assigned in any manner by the
holder, except by Consultant to member or other equity owner of Consultant or by
operation of law under the laws applying to dissolution and/or liquidation. The
same restriction on transfer or assignment shall apply to members or other
persons acquiring this option or an interest herein. Further, this option shall
not be pledged, hypothecated or otherwise encumbered, by operation of law or
otherwise, nor shall it be subject to execution, attachment or similar process.
Upon any attempt to transfer, assign, pledge, hypothecate or

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otherwise dispose of this option or of such rights contrary to the provisions
hereof, or upon the levy of any attachment or similar process upon this option
or such rights, this option and such rights shall become null and void.

      6. TRANSFER OF SHARES

      Shares of Common Stock issued upon exercise of this option which have not
been registered under the Act shall be transferable by a holder thereof only
upon compliance with the conditions in this Section. Before making any transfer
of such shares, the holder of shares shall give written notice to the Company of
the holder's intention to make the transfer, describing the manner and
circumstances of the transfer. If in the opinion of the Company's counsel, or of
other counsel acceptable to the Company, the proposed transfer may be effected
without registration under the Act, the Company shall so notify the holder and
the holder shall be entitled to transfer such shares as described in the
holder's notice to the Company. If such counsel opines that the transfer may not
be made without registration under the Act, then the Company shall so notify the
holder, in which event the holder shall not be entitled to transfer the shares
until (i) the Company notifies the holder that it is permissible to proceed with
the transfer, or (ii) registration of the shares under the Act has become
effective. The Company may issue "stop transfer" instructions to its transfer
agent with respect to any or all of the shares of Common Stock issuable upon
exercise of this option as it deems necessary to prevent any violation of the
Act.

      7. NO SPECIAL ENGAGEMENT RIGHTS.

      Nothing contained in the Plan or this Agreement shall be construed or
deemed by any person under any circumstances to bind the Company or any of its
subsidiaries to continue the Engagement of the Consultant for the period within
which this option may be exercised.

      8. RIGHTS AS A STOCKHOLDER.

      The Consultant shall have no rights as a stockholder with respect to any
shares that may be purchased by exercise of this option unless and until a
certificate or certificates representing such shares are duly issued and
delivered to the Consultant. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.

      9. RECAPITALIZATION.

      In the event that dividends are payable in shares of Common Stock or in
the event there are splits, sub-divisions or combinations of shares of Common
Stock subsequent to the date of grant, the number of shares subject to this
option shall be increased or decreased proportionately, as the case may be, and
the number of shares deliverable upon the exercise thereafter of this option
shall be increased or decreased proportionately, as the case may be, without
change in the aggregate purchase price.

      10. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of this
Option shall not limit or affect in any way the right or power of the Company or
its shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the shares
for which this option is exercisable or the rights thereof, or the dissolution
or liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise. However,

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      (a) If, prior to the Company's delivery of all the shares subject to this
option, the Company shall effect a subdivision (split) or combination (reverse
split) of shares or other capital readjustment, the payment of a common stock
dividend, or other increase or reduction of a number of shares of common stock
outstanding, without receiving compensation therefor in money, services or
property, then (i) in the event of an increase in the number of such shares
outstanding, the purchase price shall be proportionately reduced and the number
of option shares then still purchasable shall be proportionately increased; and
(ii) in the event of a reduction in the number of such shares outstanding, the
purchase price payable per share shall be proportionately increased and the
number of option shares then still purchasable shall be proportionately reduced.

      (b) Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or service either upon direct
sales or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the purchase price or the number of option shares
subject to this option.

      11. WITHHOLDING TAXES.

      Whenever shares are to be issued upon exercise of this option, the Company
shall have the right to require the Consultant to remit to the Company an amount
sufficient to satisfy any federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for such shares.

      12. INVESTMENT REPRESENTATION, ETC.

            (a) The Consultant represents that any shares purchased upon
exercise of this option shall be acquired by the Consultant for its or her own
account for investment and not with a view to, or for sale in connection with,
any distribution of such shares, nor with any present intention of distributing
or selling such shares. The Consultant further represents that he or she has
made detailed inquiry concerning the Company, that the officers of the Company
have made available to the Consultant any and all written information that the
Consultant has requested, that the officers of the Company have answered to the
Consultant's satisfaction all inquiries made by the Consultant and that the
Consultant has such knowledge and experience in financial and business matters
that the Consultant is capable of evaluating the merits and risks of an
investment in the Company and able to bear the economic risk of that investment.
By making payment upon exercise of this option, the Consultant shall be deemed
to have reaffirmed, as of the date of such payment, the representations made in
this Section 12.

            (b) Consultant agrees, for himself or herself and its or her heirs
and legal representatives that he or she will enter into any "lock-up" or
similar agreements requested by the Company in connection with any public
offering of shares of the Company's stock.

            (c) All stock certificates representing shares of Common Stock
issued to the Consultant upon exercise of this option shall, unless and until
removed as provided below, have affixed thereto a legend substantially in the
following form:

            "The shares of stock represented by this certificate (i) are subject
      to the restrictions on transfer contained in a Non-Qualified Stock Option
      Agreement dated ______________, 20__, between the Company and the holder
      of this certificate (a copy

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      of which is available without charge from the Company), and (ii) have not
      been registered under the Securities Act of 1933 and may not be
      transferred, sold or otherwise disposed of in the absence of an effective
      registration statement with respect to the shares evidenced by this
      certificate, filed and made effective under the Securities Act of 1933, or
      an opinion of counsel satisfactory to the Company to the effect that
      registration under such Act is not required."

The Company shall issue a new certificate which does not contain such legend if
(i) the shares represented by such certificate are sold pursuant to a
registration statement (including a current prospectus) which has become
effective under the Act, or (ii) the staff of the Securities and Exchange
Commission shall have issued a "no action" letter, reasonably satisfactory to
the Company's counsel, to the effect that such shares may be freely sold and
thereafter traded publicly without registration under the Act, or (iii) the
Company's counsel, or other counsel acceptable to the Company, shall have
rendered an opinion satisfactory to the Company to the effect that such shares
may be freely sold and thereafter publicly traded without registration under the
Act. The Company may, but shall in no event be obligated to register any
securities covered hereby pursuant to the Act. The Company shall not be
obligated to take any other affirmative action in order to cause the exercise of
this option or the issuance of any shares of Common Stock to comply with any law
or regulation of any governmental authority.

      13. MISCELLANEOUS.

            (a) Except as provided herein, this Agreement may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the
Consultant.

            (b) All notices under this Agreement shall be mailed or delivered by
hand to the parties at their respective addresses set forth beneath their names
below or at such other address as may be designated in writing by either of the
parties to one another.

            (c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut, provided, however, that the Revised
Statutes of the State of Nevada shall govern the meaning and enforceability of
terms regarding the Common Stock and rights thereunder.

Date of Grant: AUGUST 4, 2004

WARP TECHNOLOGY HOLDINGS, INC.

By: /s/ Gus Bottazzi

------------------------------
Name: Gus Bottazzi
Title: President

                            CONSULTANT'S ACCEPTANCE

      The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof.

      CONSULTANT

      By: /s/ Ernest C. Mysogland

      ------------------------           Date: August 4, 2004
      Ernest Mysogland
      Member<PAGE>

                                                                    EXHIBIT 10.1

                                   ADVO, INC.

                              EMPLOYMENT AGREEMENT

To S. SCOTT HARDING:

      This Agreement establishes the terms of your employment with ADVO, Inc., a
Delaware corporation (the "COMPANY") and is contingent upon approval of this
Agreement by the Company's Board of Directors (the "BOARD") and upon your
satisfying the Company's normal requirements for employability.

EMPLOYMENT AND DUTIES         You and the Company agree to your employment as
                              Chief Executive Officer ("CEO") on the terms
                              contained below. In such position, you will report
                              directly to the Board. You agree to perform
                              whatever duties the Board may assign you from time
                              to time that are reasonably consistent with
                              services performed by the chief executive officers
                              of similar companies. You will also, without
                              further compensation, serve in such other offices
                              at the Company or its subsidiaries to which you
                              are elected or appointed. During your employment,
                              you agree to devote your full business time,
                              attention, and energies to performing those duties
                              (except as the Board otherwise agrees from time to
                              time). You agree to comply with the
                              noncompetition, secrecy, and other provisions of
                              Exhibit A to this Agreement and with the Company's
                              Stock Ownership Guidelines.

BOARD MEMBERSHIP              The Board will appoint you to a seat on the Board.

TERM OF EMPLOYMENT            Your employment under this Agreement begins as of
                              October 15, 2004 (the "EFFECTIVE DATE"). Unless
                              sooner terminated or later extended under this
                              Agreement, your employment ends at 6:00 p.m.
                              Eastern Time on the third anniversary of the
                              Effective Date (the "INITIAL TERM"). Unless, at
                              least 90 days before the Initial Term (including
                              any extensions) would otherwise expire (an
                              "EXPIRATION DATE"), either you or the Company has
                              notified the other of an intent to terminate this
                              Agreement as of the then upcoming Expiration Date,
                              the Term will automatically extend for one year at
                              a time beginning on each succeeding anniversary of
                              the Effective Date following such Expiration Date.

                              The period running from the Effective Date to the
                              end of your employment under this Agreement is the
                              "TERM."

                              Termination or expiration of this Agreement ends
                              your employment but does not end your obligation
                              to comply with

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                              Exhibit A or the Company's obligation, if any, to
                              make payments under the Payments on Termination
                              and Severance provisions as specified below. If
                              the Company continues to employ you after the Term
                              (such as after a notice of nonrenewal), you will
                              continue to be an at-will employee, but with the
                              notice periods for termination by the Company
                              reduced to 30 days and with no Severance, as
                              provided under EXPIRATION below.

COMPENSATION

      Salary                  The Company will pay you a monthly salary
                              beginning on the Effective Date at the rate of not
                              less than $64,583.33 in accordance with the
                              Company's generally applicable payroll practices,
                              which is equivalent on an annualized basis to
                              $775,000 (the "SALARY"). The Board will review
                              your Salary annually (beginning in January 2006)
                              for increases but will not reduce your Salary
                              during the Term.

      Signing Bonus           You will receive a lump sum payment of $250,000
                              as soon as practicable after the Effective Date.
                              You agree that you will repay this amount if,
                              before May 1, 2005, you resign without Good Reason
                              or are terminated for Cause.

      Equity                  You will be eligible for such option, restricted
      Incentives              stock, and other equity based incentives in
                              connection with your initial employment and in the
                              future as the Compensation and Nomination
                              Committee (the "COMMITTEE") determines. The
                              Committee has approved an initial grant (the
                              "INITIAL GRANT") to you, effective on November 1,
                              2004, of (i) an option for 100,000 shares of the
                              Company's common stock vesting in four equal
                              annual installments beginning on November 1, 2005
                              and (ii) a restricted stock grant for 60,000
                              shares of common stock, of which 10,000 shares
                              will vest on November 1, 2005, 2006, and 2007, and
                              the remaining 30,000 shares will vest on November
                              1, 2007. The initial grants are under and subject
                              to the Company's 1998 Incentive Compensation Plan
                              (the "1998 PLAN"), require continued employment
                              for grant and vesting (except as specified below),
                              and expire in accordance with the terms of the
                              1998 Plan. If either you or the Company provides
                              notice of nonextension of this Agreement as of an
                              upcoming Expiration Date (other than on a
                              termination for Cause) before the final tranche of
                              the options and restricted stock in your Initial
                              Grant has vested and your employment ends
                              accordingly, that tranche will continue to vest as
                              though you had remained employed through the
                              vesting dates for those options and that stock,
                              and you will be treated for purposes of the 1998
                              Plan as if your employment ended on that later
                              date; provided, however, that

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                              if the Severance provision would vest your options
                              and restricted stock under the Initial Grant more
                              rapidly, the Severance provision will govern.

      Bonus                   The Board or the Committee will establish annual
                              bonus targets under which you will be eligible for
                              a target annual bonus equal to 100% of your
                              Salary, determined in a manner consistent with the
                              Company's bonus programs applicable to senior
                              executives.

      Relocation              You agree to relocate to the Windsor, Connecticut
                              area by March 31, 2005 or such later date to which
                              the Board agrees. The Company will cover you under
                              and subject to the terms of its Relocation Policy
                              (Grade Levels M through Q).

      Employee Benefits       While the Company employs you under this
                              Agreement, the Company will provide you with the
                              same benefits as the Company makes generally
                              available from time to time to the Company's
                              senior executives, as those benefits are amended
                              or terminated from time to time. Your
                              participation in the Company's benefit plans will
                              be subject to the terms of the applicable plan
                              documents and the Company's generally applied
                              policies, and the Company in its sole discretion
                              may from time to time adopt, modify, interpret, or
                              discontinue such plans or policies.

      Car Allowance           You will receive a monthly car allowance of $600,
                              which you acknowledge is taxable to you.

      Air Travel              The Company will make its corporate aircraft
                              available to you for personal use to a maximum
                              annual value of such use during this Agreement of
                              $150,000 (prorated from the Effective Date for
                              2004), with that balance to be reduced using the
                              applicable tax rules for valuation of personal air
                              travel. You acknowledge that the use of the plane
                              will, in some instances, be taxable to you.

      Vacation                The Company will provide you with annual vacation,
                              accruing at a rate of 2.08 days per month, and
                              subject to the Company's normal policies regarding
                              vacation.

PLACE OF EMPLOYMENT           Your principal place of employment will be at the
                              corporate offices at Windsor, Connecticut or such
                              other offices as the Company may establish from
                              time to time as its executive offices and to which
                              it assigns you. You understand and agree that your
                              employment will require travel from time to time.

EXPENSES                      The Company will reimburse you for reasonable and
                              necessary travel and other business-related
                              expenses you incur in performing

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                              your duties for the Company under this Agreement.
                              You must itemize and substantiate all requests for
                              reimbursements. You must submit requests for
                              reimbursement in accordance with the policies and
                              practices of the Company.

NO OTHER EMPLOYMENT           While the Company employs you, you agree that you
                              will not, without the Board's prior written
                              consent, directly or indirectly, provide services
                              for which you receive compensation to any other
                              person or organization, nor will you otherwise
                              engage in activities that would conflict or
                              interfere with your faithful performance of your
                              duties as an employee of the Company. (This
                              prohibition excludes any work performed at the
                              Company's direction.) You may be involved in
                              charitable and professional activities and, with
                              the Board's consent, serve on for profit boards
                              and advisory committees, provided that this
                              permission does not override your other
                              obligations under this Agreement and Exhibit A.
                              You may manage your personal investments, as long
                              as the management takes only minimal amounts of
                              time, is consistent with the provisions of the NO
                              CONFLICTS OF INTEREST Section and the NO
                              COMPETITION Section in Exhibit A, and is otherwise
                              consistent with the policies and practices of the
                              Company.

                              You represent to the Company that you are not
                              subject to any agreement, commitment, or policy of
                              any third party or current or former employer that
                              would prevent you from entering into or performing
                              your duties under this Agreement, and you agree
                              that you will not enter into any agreement or
                              commitment or agree to any policy that would
                              prevent or hinder your performance of duties and
                              obligations under this Agreement, including
                              Exhibit A.

NO CONFLICTS OF INTEREST      You confirm that you have fully disclosed to the
                              Company, to the best of your knowledge, all
                              circumstances under which you, your spouse, your
                              immediate relatives, and other persons who reside
                              in your household have or may have a conflict of
                              interest with the Company. You further agree to
                              fully disclose to the Company any such
                              circumstances that might arise during your
                              employment upon your becoming aware of such
                              circumstances. You agree to comply fully with the
                              Company's policy and practices relating to
                              conflicts of interest and its Code of Business
                              Ethics and Conduct.

TERMINATION                   The Company may terminate your employment or you
                              may resign at any time in accordance with this
                              section.

      For Cause               The Company may terminate your employment for
                              "CAUSE" if you:

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                                    (i) fail to comply with any of the material
                                    terms of this Agreement, including Exhibit
                                    A, or neglect or refuse to attend to the
                                    material duties you have been assigned;

                                    (ii) commit an act of fraud, material
                                    dishonesty, intentional misappropriation, or
                                    gross negligence with respect to the Company
                                    or otherwise act with willful disregard for
                                    the Company's best interests, or engage in
                                    conduct likely to result in any of the
                                    foregoing; or

                                    (iii) commit, are convicted of or plead
                                    guilty or no contest to a felony (or to a
                                    felony charge reduced to misdemeanor), or,
                                    with respect to your employment, to any
                                    misdemeanor (other than a traffic violation)
                                    or, with respect to your employment,
                                    knowingly violate any federal or state
                                    securities or tax laws.

                              Your termination for Cause will be effective
                              immediately upon the Company's mailing or written
                              transmission of notice of such termination. Before
                              terminating your employment for Cause under
                              clauses (i) - (ii) above, the Company will specify
                              in writing to you the nature of the act, omission,
                              refusal, or failure that it deems to constitute
                              Cause and, if the Board reasonably considers the
                              situation to be correctable, give you 30 days
                              after you receive such notice to correct the
                              situation (and thus avoid termination for Cause),
                              unless the Company agrees to extend the time for
                              correction. You agree that the Board will have the
                              discretion to determine Cause and whether your
                              correction is sufficient.

      Without Cause           Subject to the provisions below under Payments on
                              Termination and Severance, the Company may
                              terminate your employment without Cause.

      Disability              If you become "disabled" (as defined below), the
                              Company may terminate your employment. You are
                              "DISABLED" if you are unable, for more than 90
                              consecutive days or for shorter periods
                              aggregating six months during the Term, despite
                              whatever reasonable accommodations the law
                              requires, to render services to the Company
                              because of physical or mental disability,
                              incapacity, or illness.

      Good Reason             You may resign for Good Reason. "GOOD REASON" for
                              this purpose means that, without your consent, the
                              Company has materially breached this Agreement
                              (and your actions or omissions did not primarily
                              cause or materially contribute to the breach) or
                              the Board assigns you duties materially
                              inconsistent with, or

                                     Page 5
<PAGE>

                              substantially diminishes, your status or
                              responsibilities as CEO without your consent. GOOD
                              REASON excludes the results of any action the
                              Company takes to comply with the directions of a
                              governmental entity (such as placing you on
                              administrative leave) and also excludes, for the
                              first 90 days following a Change in Control (as
                              defined in Exhibit C), any diminution in your
                              position as a result of a Change in Control
                              (during which 90 day period you agree to assist
                              with any transition). You agree that this
                              employment relationship does not contemplate any
                              grounds for constructive termination other than as
                              Good Reason provides.

                              You must give written notice to the Company of
                              your intention to resign for Good Reason within 30
                              days after the occurrence of the event that you
                              assert entitles you to resign for Good Reason or
                              you will waive your rights as to that reason. In
                              the notice, you must state the condition that you
                              consider provides you with Good Reason and you
                              must give the Company an opportunity to cure the
                              condition within 30 days after your notice (with
                              the 30 day period shortened to 10 days if the
                              failure relates to a nonpayment of Salary and such
                              nonpayment is not cured within five days after you
                              provide written notice of such nonpayment to the
                              Company). If the Company fails to cure the
                              condition, your resignation will be effective on
                              the 45th day (or the 20th day for nonpayment of
                              Salary) after your notice (unless the Board has
                              previously waived such notice period in writing or
                              agreed to a shorter notice period).

                              You will not be treated as resigning for Good
                              Reason if the Company already had Cause to
                              terminate your employment as of the date of your
                              notice of resignation.

      Without Good            You may resign without Good Reason upon 60 days'
      Reason                  prior written notice to the Company (unless the
                              Board has, in writing, previously waived such
                              notice or authorized a shorter notice period).
                              Your notice to the Company of nonextension of the
                              Term will be a resignation.

      Death                   If you die during the Term, the Term will end as
                              of the date of your death.

      Payments on             Upon any termination of your employment under
      Termination             this Agreement, the Company will pay you any
                              unpaid portion of your Salary pro-rated through
                              the last day of the Term (and, in the Committee's
                              discretion, part or all of any annual bonuses
                              already determined by such date but not yet paid),
                              reimburse any substantiated but unreimbursed
                              business expenses, pay any accrued and unused
                              vacation time (to the extent consistent with the
                              Company's policies

                                     Page 6
<PAGE>

                              and applicable laws), and provide such other
                              benefits as applicable laws or the terms of the
                              benefits require. Except to the extent the law
                              requires otherwise or as provided in the Severance
                              paragraph, neither you nor your beneficiary or
                              estate will have any rights or claims under this
                              Agreement or otherwise to receive severance or any
                              other compensation, or to participate in any other
                              plan, arrangement, or benefit, after such
                              termination or resignation.

                              Because you will hold a senior executive position
                              at a public company, you agree that if the Board
                              determines it had Cause to terminate your
                              employment within 90 days after your termination
                              without Cause or resignation for Good Reason, the
                              Company may instead treat the termination or
                              resignation as termination for Cause, and you
                              agree to repay any payments the Company made since
                              the date of termination of employment that the
                              Company would not have paid on a termination for
                              Cause and to forfeit any incentive compensation
                              that would have been forfeited, provided that this
                              provision does not require any restitution with
                              respect to medical benefits you or your family has
                              received.

Severance                     In addition to the foregoing payments, if, before
                              the next scheduled Expiration Date and except as
                              EXPIRATION provides, the Company terminates your
                              employment without Cause or you resign for Good
                              Reason, the Company will

                                    pay you severance equal to your Salary, as
                                    then in effect, for 24 months on the same
                                    schedule as though you had remained employed
                                    during such period, even though you are no
                                    longer employed (the "SEVERANCE PERIOD"),

                                    in lieu of any bonus for the year of
                                    termination, pay you an additional year's
                                    Salary, ratably over the Severance Period,

                                    fully vest the options and restricted stock
                                    in your Initial Grant and allow those
                                    options to be exercised (subject to any
                                    overriding provisions in the plans under
                                    which they are granted) during the Severance
                                    Period, and

                                    pay any premiums for your continued coverage
                                    under post-employment health coverage for
                                    the shorter of the Severance Period or the
                                    period for which you are eligible for and do
                                    elect continuation coverage from the Company
                                    under COBRA.

                              If the payments under Severance are in connection
                              with a termination without Cause or resignation
                              for Good Reason within

                                     Page 7
<PAGE>

                              six months following a Change in Control, the
                              Company will make any cash payments in a single
                              lump sum payment within 30 days after completion
                              of the determination under PARACHUTE PAYMENTS
                              below.

                              You are not required to mitigate amounts payable
                              under the Severance paragraph by seeking other
                              employment or otherwise, nor must you pay over to
                              the Company amounts earned under subsequent
                              employment; however, you agree to return any
                              Severance payments if you fail to comply with
                              Exhibit A.

                              You agree that the Company's payment of Severance
                              is conditioned on your providing a customary
                              general release of all claims relating to your
                              employment, compensation, and termination and such
                              other matters as the Company requests on
                              termination.

EXPIRATION                    Expiration of this Agreement, whether because of
                              notice of non-renewal or otherwise, does not
                              constitute termination without Cause nor provide
                              you with Good Reason and does not entitle you to
                              Severance.

ASSIGNMENT                    The Company may assign or otherwise transfer this
                              Agreement and any and all of its rights, duties,
                              obligations, or interests under it

                                    to any of its affiliates or subsidiaries or

                                    to any business entity that at any time by
                                    merger, consolidation, or otherwise acquires
                                    substantially all of the Company's stock or
                                    assets or to which the Company transfers
                                    substantially all of its assets.

                              Upon such assignment or transfer, any such
                              business entity will be treated as substituted for
                              the Company for all purposes. You agree that such
                              assignment or transfer does not by itself entitle
                              you to Severance. This Agreement binds and
                              benefits the Company, its successors or assigns,
                              and your heirs and the personal representatives of
                              your estate. Without the Board's prior written
                              consent, you may not assign or delegate this
                              Agreement or any rights, duties, obligations, or
                              interests under it.

                              You specifically agree that the assignment will,
                              unless the Company provides otherwise, include the
                              restrictive covenants of Exhibit A, including the
                              noncompetition and nonsolicitation provisions.

                                     Page 8
<PAGE>

SEVERABILITY                  If the final determination of an arbitrator or a
                              court of competent jurisdiction declares, after
                              the expiration of the time within which judicial
                              review (if permitted) of such determination may be
                              perfected, that any term or provision of this
                              Agreement (including any provision of Exhibit A)
                              is invalid or unenforceable, the remaining terms
                              and provisions will be unimpaired, and the invalid
                              or unenforceable term or provision will be deemed
                              replaced by a term or provision that is valid and
                              enforceable and that comes closest to expressing
                              the intention of the invalid or unenforceable term
                              or provision.

AMENDMENT; WAIVER             Neither you nor the Company may modify, amend, or
                              waive the terms of this Agreement other than by a
                              written instrument signed by you and by another
                              executive officer of the Company duly authorized
                              by the Board. Either party's waiver of the other
                              party's compliance with any provision of this
                              Agreement is not a waiver of any other provision
                              of this Agreement or of any subsequent breach by
                              such party of a provision of this Agreement.

WITHHOLDING                   The Company will reduce its compensatory payments
                              to you for withholding and FICA taxes and any
                              other withholdings and contributions required by
                              law.

GOVERNING LAW                 The laws of the State of Connecticut (other than
                              its conflict of laws provisions) govern this
                              Agreement.

NOTICES                       Notices must be given in writing by personal
                              delivery or by overnight delivery. You should send
                              or deliver your notices to the Company's corporate
                              headquarters, addressed to the Chair of the
                              Committee. The Company will send or deliver any
                              notice given to you at your address as reflected
                              on the Company's personnel records. You and the
                              Company may change the address for notice by like
                              notice to the other. You and the Company agree
                              that notice is received on the date it is
                              personally delivered or the date of guaranteed
                              delivery by the overnight service.

PARACHUTE PAYMENTS            The Company will make the payments under this
                              Agreement without regard to whether the
                              deductibility of such payments (or any other
                              payments or benefits) would be limited or
                              precluded by Section 280G of the Internal Revenue
                              Code of 1986 (the "CODE") and without regard to
                              whether such payments would subject you to the
                              federal excise tax levied on certain "excess
                              parachute payments" under Section 4999 of the
                              Code; provided, however, that if the Total
                              After-Tax Payments (as defined below) would be
                              increased by the reduction or elimination of any
                              payment and/or other benefit (including the
                              vesting of your options) under this

                                     Page 9
<PAGE>

                              Agreement, then the amounts payable under this
                              Agreement will be reduced or eliminated as
                              follows: (i) first, by reducing or eliminating any
                              cash payments or other benefits (other than the
                              vesting of any options or stock) and (ii) second,
                              by reducing or eliminating the vesting of your
                              options and stock that occurs as a result of such
                              Change of Control, to the extent necessary to
                              maximize the Total After-Tax Payments. The
                              Company's independent, certified public accounting
                              firm will determine whether and to what extent
                              payments or vesting under this Agreement are
                              required to be reduced in accordance with the
                              preceding sentence. If there is an underpayment or
                              overpayment under this Agreement (as determined
                              after the application of this paragraph), the
                              amount of such underpayment or overpayment will be
                              immediately paid to you or refunded by you, as the
                              case may be, with interest at the applicable
                              federal rate provided for in Section 7872(f)(2) of
                              the Code. For purposes of this Agreement, "TOTAL
                              AFTER-TAX PAYMENTS" means the total of all
                              "parachute payments" (as that term is defined in
                              Section 280G(b)(2) of the Code) made to you or for
                              your benefit (whether made under the Agreement or
                              otherwise), after reduction for all applicable
                              federal taxes (including, without limitation, the
                              tax described in Section 4999 of the Code).

SUPERSEDING EFFECT            This Agreement supersedes any prior oral or
                              written agreements between you and the Company.
                              This Agreement supersedes all prior or
                              contemporaneous negotiations, commitments,
                              agreements, and writings with respect to the
                              subject matter of this Agreement. All such other
                              negotiations, commitments, agreements, and
                              writings will have no further force or effect; and
                              the parties to any such other negotiation,
                              commitment, agreement, or writing will have no
                              further rights or obligations thereunder.

                        SIGNATURES ON THE PAGE FOLLOWING

                                     Page 10
<PAGE>

If you accept the terms of this Agreement, please sign in the space indicated
below. We understand that you have consulted with counsel to help you understand
your obligations under this Agreement, and we encourage you to consult with any
other advisers you think appropriate.

                                        ADVO, INC.

                                   By: /s/ DONALD S. SCHNEIDER
                                      --------------------------------------
                                   Name: Donald S. Schneider

                                   Title: Senior Vice President, Human Resources

I accept and agree to the terms of employment set
forth in this Agreement:

/s/ S. SCOTT HARDING
--------------------------------
         S. SCOTT HARDING

Dated: October 11, 2004

                                     Page 11
<PAGE>

                                    Exhibit A

        NONCOMPETITION, NONSOLICITATION, AND OTHER RESTRICTIVE COVENANTS

      You agree to the provisions of this Exhibit A in consideration of your
employment by the Company and salary and benefits under this Agreement. You
acknowledge that you will perform services for the Company in a position that
will allow you access to various trade secrets and confidential information
belonging to the Company and its affiliates. You agree that the Company has a
legitimate business interest in preserving its confidential information and
business secrets from unauthorized disclosure, and in protecting its goodwill.
While the Company (or its successor or transferee) employs you and to the end of
the Restricted Period (as defined below), you agree as follows:

NO COMPETITION                You will not, directly or indirectly, be employed
                              by, lend money to, or engage in any Competing
                              Business within the Market Area (each as defined
                              below). That prohibition includes, but is not
                              limited to, acting, either singly or jointly or as
                              agent for, or as an employee of or consultant to,
                              any one or more persons, firms, entities, or
                              corporations directly or indirectly (as a
                              director, independent contractor, representative,
                              consultant, member, or otherwise) that constitutes
                              such a Competing Business. You also will not
                              invest or hold equity or options in any Competing
                              Business, provided that you may own up to 1% of
                              the outstanding capital stock of any corporation
                              that is actively publicly traded without violating
                              this NO COMPETITION covenant, so long as you have
                              no involvement beyond passive investing in such
                              business and you comply with the second sentence
                              of this paragraph. You further agree not to use,
                              incorporate, or otherwise create any business
                              organization or domain name using, any name
                              confusingly similar to "ADVO, INC." or any other
                              name under which the Company does business.

                              If, during the Restricted Period, you are offered
                              and want to accept employment with an existing
                              business or you start or join a new business that
                              engages in activities similar to the Company's,
                              you will inform the Board in writing of the
                              identity of the business, your proposed duties
                              with an existing business or the proposed business
                              plan of your new business, and the proposed
                              starting date of your employment or that new
                              business. You will also inform any existing
                              business of the terms of this Exhibit A. The
                              Company will analyze the proposed employment or
                              the creation of your new business and make a good
                              faith determination as to whether it would
                              threaten the Company's legitimate competitive
                              interests. If the Company determines that the
                              proposed employment or the creation of your new
                              business would not pose an unacceptable

                                     Page 12
<PAGE>

                              threat to its interests, the Company will notify
                              you that it does not object to the employment or
                              the creation of your new business.

                              You acknowledge that, during the portion of the
                              Restricted Period that follows your employment,
                              you may engage in any business activity or gainful
                              employment of any type and in any place except as
                              described above. You acknowledge that you will be
                              reasonably able to earn a livelihood without
                              violating the terms of this Agreement.

                              You understand and agree that the rights and
                              obligations set forth in this NO COMPETITION
                              Section will continue and will survive through the
                              Restricted Period.

Definitions

      Competing               Competing Business means any service or product of
      Business                any person or organization other than the
                              Company and its successors, assigns, or
                              subsidiaries (collectively, the "COMPANY GROUP")
                              that competes with any service or product of the
                              Company Group provided by any member of the
                              Company Group during your employment or upon which
                              or with which you have worked for the Company or
                              the Company Group or about which you acquire
                              knowledge while working for the Company or the
                              Company Group.

      Market Area             The Market Area consists of the United States of
                              America. You agree that the Company provides goods
                              and services both at its facilities and at the
                              locations of its customers or clients and that, by
                              the nature of its business, it operates throughout
                              the Market Area.

      Restricted              For purposes of this Agreement, the RESTRICTED
      Period                  PERIOD begins on the Effective Date and ends on
                              the first anniversary of the date your employment
                              with the Company Group ends for any reason (or, if
                              later, the end of the Severance Period, if any).

NO INTERFERENCE;              During the Restricted Period, you agree that you
NO SOLICITATION               will not, directly or indirectly, whether for
                              yourself or for any other individual or entity
                              (other than the Company or its affiliates or
                              subsidiaries),

                                    solicit for any Competing Business any
                                    person or entity who is, or was, within the
                                    12 months preceding the end of your
                                    employment with the Company, a customer,
                                    customer representative (such as an agency),
                                    a prospect (with respect to which any member
                                    of the Company Group has incurred
                                    substantial costs or with which you have
                                    been involved), or a client of the Company
                                    Group within the Market Area,

                                     Page 13
<PAGE>

                                    with the 12 month period reduced to six
                                    months for prospects with which you have not
                                    been involved;

                                    hire away or endeavor to entice away from
                                    the Company Group any employee (other than
                                    your personal assistant) or any other person
                                    or entity whom the Company Group engages to
                                    perform services or supply products and
                                    including, but not limited to, any
                                    independent contractors, consultants,
                                    engineers, or sales representatives or any
                                    contractor, subcontractor, supplier, or
                                    vendor; or

                                    hire any person (other than your personal
                                    assistant) whom the Company Group employs or
                                    employed within the 12 months preceding the
                                    date as of which you attempt to hire the
                                    person.

SECRECY

      Preserving              Your employment with the Company under (and, if
      Company                 applicable, before) this Agreement will give you
      Confidences             access to Confidential Information (as defined
                              below). You acknowledge and agree that using,
                              disclosing, or publishing any Confidential
                              Information in an unauthorized or improper manner
                              could cause the Company or Company Group to incur
                              substantial loss and damages that could not be
                              readily calculated and for which no remedy at law
                              would be adequate. Accordingly, you agree with the
                              Company that you will not at any time, except in
                              performing your employment duties to the Company
                              or the Company Group under this Agreement (or with
                              the Board's prior written consent), directly or
                              indirectly, use, disclose, or publish, or
                              knowingly or negligently permit others not so
                              authorized to use, disclose, or publish any
                              Confidential Information that you may learn or
                              become aware of, or may have learned or become
                              aware of, because of your prior or continuing
                              employment, ownership, or association with the
                              Company or the Company Group or any of their
                              predecessors, or use any such information in a
                              manner detrimental to the interests of the Company
                              or the Company Group.

      Preserving              You agree not to use in working for the Company
      Others'                 Group and not to disclose to the Company Group any
      Confidences             trade secrets or other information you do not have
                              the right to use or disclose and that the Company
                              Group is not free to use without liability of any
                              kind. You agree to inform the Company promptly in
                              writing of any patents, copyrights, trademarks, or
                              other proprietary rights known to you that the
                              Company or the Company Group might violate because
                              of information you provide.

                                     Page 14
<PAGE>

      Confidential            "CONFIDENTIAL INFORMATION" includes, without
      Information             limitation, any matters protected under the
                              Uniform Trade Secrets Act and any information that
                              the Company or the Company Group has not
                              previously disclosed to the public or to the trade
                              with respect to the Company's or the Company
                              Group's present or future business, including its
                              operations, services, products, research,
                              inventions, invention disclosures, discoveries,
                              drawings, designs, plans, processes, models,
                              technical information, facilities, methods,
                              systems, trade secrets, copyrights, software,
                              source code, object code, patent applications,
                              procedures, manuals, specifications, any other
                              intellectual property, confidential reports, price
                              lists, pricing formulas, customer lists, consumer
                              targeting techniques, financial information
                              (including the revenues, costs, or profits
                              associated with any of the Company's or the
                              Company Group's products or services), business
                              plans, lease structure, projections, prospects,
                              opportunities or strategies, acquisitions or
                              mergers, advertising or promotions, personnel
                              matters, legal matters, any other confidential and
                              proprietary information, and any other information
                              not generally known outside the Company or the
                              Company Group that may be of value to the Company
                              or the Company Group, but excludes any information
                              already properly in the public domain or hereafter
                              acquired from a source other than you in a manner
                              that did not involve a breach of the disclosing
                              party's obligations, or that you prove through
                              documentation you knew other than through your
                              association with the Company. "Confidential
                              Information" also includes, without limitation,
                              confidential and proprietary information and trade
                              secrets that third parties entrust to the Company
                              or the Company Group in confidence.

                              You understand and agree that the rights and
                              obligations set forth in this SECRECY Section will
                              continue indefinitely and will survive termination
                              of this Agreement and your employment with the
                              Company or the Company Group.

EXCLUSIVE PROPERTY            You confirm that all Confidential Information is
                              and must remain the exclusive property of the
                              Company or the relevant member of the Company
                              Group. Any office equipment (including computers)
                              you receive from the Company Group in the course
                              of your employment and all business records,
                              business papers, and business documents you keep
                              or create, whether on digital media or otherwise,
                              in the course of your employment by the Company
                              relating to the Company or any member of the
                              Company Group must be and remain the property of
                              the Company or the relevant member of the Company
                              Group. Upon the termination of this Agreement with
                              the Company or upon the Company's request at

                                     Page 15
<PAGE>

                              any time, you must promptly deliver to the Company
                              or to the relevant member of the Company Group any
                              such office equipment (including computers) and
                              any Confidential Information or other materials
                              (written or otherwise) not available to the public
                              or made available to the public in a manner you
                              know or reasonably should recognize the Company
                              did not authorize, and any copies, excerpts,
                              summaries, compilations, records, or documents you
                              made or that came into your possession during your
                              employment. You agree that you will not, without
                              the Company's consent, retain copies, excerpts,
                              summaries, or compilations of the foregoing
                              information and materials. You understand and
                              agree that the rights and obligations set forth in
                              this EXCLUSIVE PROPERTY Section will continue
                              indefinitely and will survive termination of this
                              Agreement and your employment with the Company
                              Group.

COPYRIGHTS,                   You agree that all records (in whatever media),
DISCOVERIES,                  including written works, documents, papers,
INVENTIONS, AND               notebooks, drawings, designs,technical
PATENTS                       information, source code, object code, processes,
                              methods or other copyrightable or otherwise
                              protected works you conceive, create, author,
                              prepare derivative works from, make, invent, or
                              discover that relate to or result from any work
                              you perform or performed for the Company or the
                              Company Group or that arise from the use or
                              assistance of the Company Group's facilities,
                              materials, personnel, or Confidential Information
                              in the course of your employment (whether or not
                              during usual working hours), whether conceived,
                              created, authored, discovered, made, or invented
                              individually or jointly with others, will be and
                              remain the absolute property of the Company (or
                              another appropriate member of the Company Group,
                              as specified by the Company), as will all the
                              worldwide patent, copyright, trademark, service
                              mark, trade secret, or other intellectual property
                              rights in all such works. (All references in this
                              section to the Company include the members of the
                              Company Group, unless the Company determines
                              otherwise.) You irrevocably and unconditionally
                              waive all rights, wherever in the world
                              enforceable, that vest in you (whether before, on,
                              or after the date of this Agreement) in connection
                              with your authorship of any such copyrightable
                              works in the course of your employment with the
                              Company Group or any predecessor. Without
                              limitation, you waive the right to be identified
                              as the author, inventor, creator, or facilitator
                              (whether solely or jointly) of any such
                              copyrightable works and the right not to have any
                              such works subjected to derogatory treatment. You
                              recognize any such works are "works for hire" for
                              which the Company Group retains all rights, title,
                              and interest to any underlying intellectual
                              property rights, including copyright protections.

                                     Page 16
<PAGE>

                              You will promptly disclose, and hereby grant, and
                              assign all rights, title, and interest in
                              ownership to the Company (or other member of the
                              Company Group, as specified by the Company) for
                              its or their sole use and benefit any and all
                              intellectual property, including all ideas,
                              processes, inventions (whether patentable or not),
                              invention disclosures, discoveries, improvements,
                              technical information, trademarks, service marks,
                              and copyrightable works (whether patentable or
                              not) that you develop, acquire, conceive, reduce
                              to practice, author, or prepare derivative works
                              from (whether or not during usual working hours)
                              while the Company or the Company Group employs
                              you. You will promptly disclose and hereby grant
                              and assign ownership to the Company of all
                              intellectual property, including utility and
                              design patents, copyrights, and trademarks, or
                              service marks, including any associated
                              registrations, applications, renewals, extensions,
                              continuations, continuations-in-part, requests for
                              continued examination, divisions, or reissues
                              thereof or any foreign equivalents thereof (such
                              intellectual property and related rights being
                              referred to collectively as "PROTECTED
                              INTERESTS"), that may at any time be filed or
                              granted for or upon any such intellectual
                              property. In connection therewith:

                                    You will, without charge but at the
                                    Company's expense, promptly execute and
                                    deliver such applications, assignments,
                                    descriptions, and other instruments as the
                                    Company may consider reasonably necessary or
                                    proper to vest title to any Protected
                                    Interests in the Company and to enable it to
                                    obtain and maintain the entire worldwide
                                    right and title thereto; and

                                    You will provide to the Company at its
                                    expense all such assistance as the Company
                                    may reasonably require in the prosecution of
                                    applications for such Protected Interests,
                                    in the prosecution or defense of
                                    interferences that may be declared involving
                                    any such Protected Interests, and in any
                                    litigation in which the Company or the
                                    Company Group may be involved relating to
                                    any such Protected Interests. The Company
                                    will reimburse you for reasonable
                                    out-of-pocket expenses you incur and pay you
                                    reasonable compensation for your time if the
                                    Company Group no longer employs you.

                              You and the Company agree that Exhibit C lists and
                              briefly describes works, inventions, discoveries,
                              proprietary information, patents and patent
                              applications, and copyrighted or copyrightable

                                     Page 17
<PAGE>

                              works (including contemplated works) that the
                              Company will not contest are owned (or will be
                              owned) by you or any entity to which you have
                              assigned them. You agree that you have no
                              ownership interest in any other such works or
                              related patents or copyrights that relate in any
                              way to the business of the Company or the Company
                              Group.

                              To the extent, if any, that you own rights to
                              works, inventions, discoveries, proprietary
                              information, and copyrighted or copyrightable
                              works, or other forms of intellectual property
                              that have been or become incorporated in the work
                              product you create for the Company Group, you
                              agree that the Company (and/or, as the Company
                              specifies, other members of the Company Group)
                              will have an unrestricted, non-exclusive,
                              royalty-free, perpetual, transferable license in
                              such intellectual property, including the rights
                              to make, use, sell, offer for sale, and sublicense
                              (through multiple tiers), reproduce, prepare
                              derivative works from, distribute copies of,
                              publicly perform, or publicly display such works
                              and property in whatever form, and you hereby
                              grant such license to the Company (and the Company
                              Group).

                              This COPYRIGHTS, DISCOVERIES, INVENTIONS AND
                              PATENTS section does not apply to an invention
                              that you developed entirely on your own time
                              without using the Company Group's equipment,
                              supplies, facility, or trade secret information
                              except for those inventions that (i) relate to the
                              Company Group's business, or actual or
                              demonstrably anticipated research or development,
                              or (ii) result from any work performed by you for
                              the Company Group.

MAXIMUM LIMITS                You agree that the time, territory, and scope of
                              this Exhibit A are reasonable and necessary for
                              protection of the Company's legitimate business
                              interests. If any of the provisions of Exhibit A
                              are ever deemed to exceed the time, geographic
                              area, or activity limitations the law permits, you
                              and the Company agree to reduce the limitations to
                              the maximum permissible limitation, and you and
                              the Company authorize a court or arbitrator having
                              jurisdiction to reform the provisions to the
                              maximum time, geographic area, and activity
                              limitations the law permits; provided, however,
                              that such reductions apply only with respect to
                              the operation of such provision in the particular
                              jurisdiction with respect to which such
                              adjudication is made.

NO IMPROPER                   You will neither pay nor knowingly or negligently
PAYMENTS                      permit payment of any remuneration to or on behalf
                              of any governmental official other than payments
                              required or permitted by applicable law. You

                                     Page 18
<PAGE>

                              will comply fully with the Foreign Corrupt
                              Practices Act of 1977, as amended. You will not,
                              directly or indirectly,

                                    make or knowingly or negligently permit any
                                    contribution, gift, bribe, rebate, payoff,
                                    influence payment, kickback, or other
                                    payment to any person or entity, private or
                                    public, regardless of what form, whether in
                                    money, property, or services

                                          to obtain favorable treatment for
                                          business secured,

                                          to pay for favorable treatment for
                                          business secured,

                                          to obtain special concessions or for
                                          special concessions already obtained,
                                          or

                                          in violation of any legal requirement,
                                          or

                                    establish or maintain any fund or asset
                                    related to the Company that is not recorded
                                    in the Company's books and records, or

                                    take any action that would violate (or would
                                    be part of a series of actions that would
                                    violate) any U.S. law relating to
                                    international trade or commerce, including
                                    those laws relating to trading with the
                                    enemy, export control, and boycotts of
                                    Israel or Israeli products.

INJUNCTIVE RELIEF             Without limiting the remedies available to the
                              Company, you acknowledge

                                    that a breach of any of the covenants in
                                    this Exhibit A will result in material
                                    irreparable injury to the Company and
                                    Company Group for which there is no adequate
                                    remedy at law, and

                                    that it will not be possible to measure
                                    damages for such injuries precisely.

                              You agree that, if there is a breach or threatened
                              breach, the Company or any member of the Company
                              Group may be entitled to obtain a temporary
                              restraining order and/or a preliminary or
                              permanent injunction restraining you from engaging
                              in activities prohibited by any provisions of this
                              Exhibit A or such other relief as may be required
                              to specifically enforce any of the covenants in
                              this Exhibit A. The Company or any member of the
                              Company

                                     Page 19
<PAGE>

                              Group will, in addition to the remedies provided
                              in this Agreement, be entitled to avail itself of
                              all such other remedies as may now or hereafter
                              exist at law or in equity for compensation and for
                              the specific enforcement of the covenants
                              contained in this Agreement. Resort to any remedy
                              provided for in this Section or provided for by
                              law will not prevent the concurrent or subsequent
                              employment of any other appropriate remedy or
                              remedies, or preclude the Company's or the Company
                              Group's recovery of monetary damages and
                              compensation. You also agree that the Restricted
                              Period or such longer period during which the
                              covenants hereunder by their terms survive will
                              extend for all periods for which a court with
                              personal jurisdiction over you finds that you
                              violated the covenants contained in this Exhibit
                              A.

                                     Page 20
<PAGE>

                                    Exhibit B

                                CHANGE IN CONTROL

      A Change in Control for this purpose means the occurrence of any one or
more of the following events:

                  (i) sale of all or substantially all of the assets of the
                  Company to one or more individuals, entities, or groups acting
                  together;

                  (ii) complete or substantially complete dissolution or
                  liquidation of the Company;

                  (iii) a person, entity, or group acting together acquires or
                  attains ownership of more than 30% of the undiluted total
                  voting power of the Company's then-outstanding securities
                  eligible to vote to elect members of the Board ("COMPANY
                  VOTING SECURITIES");

                  (iv) completion of a merger, consolidation, or reorganization
                  of the Company with or into any other entity unless the
                  holders of the Company Voting Securities outstanding
                  immediately before such completion, together with any trustee
                  or other fiduciary holding securities under a Company benefit
                  plan, hold securities that represent immediately after such
                  merger or consolidation at least 50% of the combined voting
                  power of the then outstanding voting securities of either the
                  Company or the other surviving entity or its ultimate parent;

                  (v) the individuals who constitute the Board immediately
                  before a proxy contest cease to constitute at least a majority
                  of the Board (excluding any Board seat that is vacant or
                  otherwise unoccupied) immediately following the proxy contest;

                  (vi) during any two year period, the individuals who
                  constitute the Board at the beginning of the period (the
                  "INCUMBENT DIRECTORS") cease for any reason to constitute at
                  least a majority of the Board (excluding any Board seat that
                  is vacant or otherwise unoccupied), provided that any
                  individuals that two-thirds of Incumbent Directors approve for
                  service on the Board are treated as Incumbent Directors; or

                  (vii) any other event occurs that the Board determines, in its
                  discretion, would materially alter the structure of the
                  Company's ownership.

            The Board or the Committee will have the same authority to determine
            the existence of a Change in Control under this definition as each
            has under the Company's 1998 Incentive Compensation Plan.

                                     Page 21
<PAGE>

                                    Exhibit C

                   PRIOR WORKS, INVENTIONS, DISCOVERIES, ETC.

                                      None

                                     Page 22

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