Document:

exv10w1

 

Exhibit 10.1

September 18, 2007

Mr. Robert G. Deuster

25 Cherry Hills Drive

Coto de Caza, CA 92679

Re:     Separation Agreement

Dear Bob:

You have agreed with the Board of Directors that you will retire from your positions with Newport
Corporation (“Newport”). In order to document the terms of this agreement, as we have discussed
Newport and you agree as follows (the “Agreement”):

1. Resignation: You hereby (a) resign as an employee, a director, and an officer of
Newport and of each of its subsidiaries of which you are a director, (b) resign as Newport’s
designated representative on the Board of Directors of Nexx Systems, Inc., and (c) waive notice of
the meeting of Newport’s Board of Directors held on September 12, 2007 at which the terms of your
resignation were discussed.

2. Separation Date: We have agreed that your employment with Newport will terminate
effective as of October 5, 2007 (“Separation Date”). On your Separation Date, you will be issued a
check that will include pay for all time worked through your Separation Date, as well as all
vacation accrued and unused as of your Separation Date. Upon your Separation Date, all benefits
will cease except as set forth herein.

3. Separation Benefits: In consideration for your release provided for in Section 5
below and your agreements in Sections 6 and 7 below, Newport agrees to pay to you the following:

     (a) Severance Pay: Newport will provide you with severance pay equal to $490,000
representing your annual base salary for 2007 as approved by the Compensation Committee, less
applicable federal and state withholding taxes and deductions, which shall be payable in a lump sum
upon the Separation Date.

     (b) AIP Payout: Newport will provide you with an incentive bonus payout for 2007
under Newport’s 2007 Annual Incentive Plan equal to $490,000, representing your target bonus
assuming one hundred percent (100%) achievement of all financial goals and one hundred percent
(100%) payout of the remainder of such target bonus based on overall individual performance. Such
bonus, less applicable federal and state withholding taxes and deductions, shall be payable in a
lump sum on January 15, 2008.

 

 

Mr. Robert G. Deuster

September 18, 2007

Page 2

 

4. Existing Benefits:

     (a) Stock Options: Your outstanding stock options will continue to be governed by
the terms of your stock option agreements (each, an “Option Agreement”) and the 1992 Stock
Incentive Plan or 2001 Stock Incentive Plan (each, a “Plan”), as applicable. Pursuant to the terms
of your Option Agreements and the applicable Plans, all vesting of such options shall cease on your
Separation Date, and you will have a period of ninety (90) days following your Separation Date to
exercise any vested options. All applicable withholding taxes due upon the exercise of such
options must be paid or withheld at the time of such exercise.

     (b) Performance-Based Restricted Stock Units: Pursuant to the terms of your
Restricted Stock Unit Award Agreements and the 2006 Performance-Based Stock Incentive Plan (the
“2006 Plan”), you will not be entitled to receive any additional shares subject to vesting based on
the achievement of 2007 or later financial targets.

     (c) COBRA: You will be eligible to continue your current health insurance
benefits under COBRA. Newport will pay the premiums for such coverage for a period of twelve (12)
months. A certified COBRA package and an election form will be mailed to your home within two
weeks of your Separation Date. If you fail to return your election form and do not elect COBRA
coverage within 60 days of receiving your election form, your ongoing health insurance coverage
will be cancelled.

     (d) Health Insurance Benefits: Your health insurance benefits (medical, dental,
vision, and mental health) will terminate on the last day of the month in which the Separation Date
occurs (but will be eligible for continuation under COBRA as stated above). All life insurance and
disability plans will terminate as of your Separation Date.

     (e) 401(k); ESPP: If you are participating in Newport’s 401(k) Plan and/or
Employee Stock Purchase Plan (ESPP), all contributions will end as of your Separation Date. You
will be reimbursed on your Separation Date for any monies contributed to the ESPP during the
calendar quarter in which your Separation Date occurs.

     (f) Continued Indemnity and Insurance Coverage: Newport will continue to
indemnify you and maintain Directors and Officers insurance coverage for you for a minimum of five
(5) years following your Separation Date. Newport will also continue to comply with applicable
Nevada law regarding indemnification of current and former officers and directors, Newport’s
current bylaws and your Indemnification Agreement dated May 22, 2002, with Newport.

     (g) Supplemental LTD Coverage: Newport will allow you to assume your existing
supplemental long-term disability policy. Following your Separation Date, Newport will notify the
carrier of your change in status, and premiums for continuation of such coverage will be billed
directly to you.

 

 

Mr. Robert G. Deuster

September 18, 2007

Page 3

 

     (h) Miscellaneous: You may keep your Newport-owned cellular phone, and you and Newport
will cooperate to transfer such phone to your personal account no later than October 31, 2007. You
agree to forward all work-related calls to the appropriate personnel at Newport. Newport’s IT
staff will assist you in transferring any personal files on your Newport-owned laptop computer to a
personal computer or to CD-ROMs.

5. Final Settlement and Release of All Claims: As a condition to receiving any of the
separation benefits set forth above under Newport’s policies, you agree that this Agreement
constitutes a full and final settlement of any and all claims, known or unknown, of any kind that
you or your spouse or dependents may have to date against Newport or any of its parent or
affiliated companies and their officers, directors, shareholders, employees, insurers, agents,
successors, or assigns, including without limitation, with respect to your employment by Newport
and the cessation thereof. To the fullest extent allowed by law, you hereby waive and release all
such claims in return for the severance pay and benefits you will receive under this Agreement.

This release also includes any unknown claims that you are not aware of at this time. In that
respect, you waive the protection of any law that might otherwise prevent you from waiving unknown
claims, such as California Labor Code section 1542 which states:

A general release does not extend to claims which the creditor does not know
or suspect to exist in his or her favor at the time of executing the release,
which if known by him or her must have materially affected his or her settlement
with the debtor.

6. Non-Disparagement: You agree to use reasonable best efforts to not make,
participate in the making of, or encourage any current or former Newport employees or any other
person to make, any statements, written or oral, which disparage or defame the goodwill or
reputation of Newport or its products, services, agents, representatives, directors, officers,
shareholders, attorneys, employees, vendors, affiliates, successors or assigns, or any person
acting by, through, under or in concert with any of them. Newport agrees that it will use its
reasonable best efforts to ensure that Newport, the members of its Board of Directors, and
Newport’s officers not make, participate in the making of, or encourage any current or former
Newport employees or other persons to make any statements, written or oral, which disparage or
defame you or your reputation or the services you have performed for Newport. Nothing in this
paragraph shall prohibit either party from providing truthful testimony in response to a subpoena
or other compulsory legal process. Newport shall prepare a press release regarding your
transition, and will provide you with an advance copy of such release for your review and comment
prior to issuing such release.

7. Solicitation or Hiring of Newport Employees: As a material inducement for Newport
to enter into this Agreement, you agree that, for a period extending from the date hereof until
that date which is two (2) years following your Separation Date, you will not, directly or
indirectly, (a) solicit for employment, hire or contract with any employee of Newport or its
subsidiaries, or (b) provide any assistance, advice or services to any other person or entity in
connection with the solicitation for employment or contract, hiring of or contracting with any
employee of Newport or its subsidiaries.

 

 

Mr. Robert G. Deuster

September 18, 2007

Page 4

 

8. Other Provisions:

     (a) You acknowledge that you have executed Newport’s Proprietary Information
Agreement and agree that you will continue to abide by the terms of such agreement.

     (b) You agree to use reasonable efforts to cooperate with Newport in prosecuting
or defending any legal action that relates in any manner to your employment. All reasonable
out-of-pocket expenses incurred by you relating to such cooperation will be reimbursed by Newport.

     (c) You will be solely responsible for directly paying all outstanding amounts on
any Newport credit card, including both business-related and personal charges. You must submit to
Newport within two weeks of your Separation Date proper expense reports for business related
charges in order to be reimbursed for such charges.

     (d) You agree to return all Newport property including, but not limited to, your
badge, access card, keys, manuals, phone card, credit card, computer equipment, etc. to Jeff Coyne
by the end of the business day on your Separation Date.

9. Entire Agreement: You agree that this Agreement sets forth all of the terms of your
agreement with Newport and supersedes any and all agreements between you and Newport relating to
your employment, except that any other agreements you have signed with Newport concerning
confidential information shall remain in effect. You acknowledge that neither Newport nor its
agents or attorneys, has made any promise or representation, express or implied, written or oral,
not contained in this Agreement to induce you to execute this Agreement. You acknowledge that you
have signed this Agreement voluntarily and without coercion, relying only on such promises,
representations and warranties as are contained in this document and understand that you do not
waive any right or claim that may arise after the date this Agreement becomes effective.

10. Modification: By signing below, you acknowledge your understanding that this
Agreement may not be altered, amended, modified, or otherwise changed in any respect except by
another written agreement that specifically refers to this Agreement, executed by your Newport’s
authorized representatives.

11. Severability: Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of this Agreement.

12. Governing Law; Legal and Equitable Remedies: This Agreement is governed by, and is
to be interpreted according to, the laws of the State of California. Each party shall have the
right to enforce this Agreement and any of its provisions by injunction, specific performance or
other equitable relief without prejudice to any other rights or remedies the other party may have
at law or in equity for breach of this Agreement.

 

 

Mr. Robert G. Deuster

September 18, 2007

Page 5

 

We believe that this covers the details of your resignation. If you agree, please execute
this Agreement in the space provided below. Should you have any questions or concerns, please
contact me.

Regards,

/s/ Kenneth F. Potashner

Kenneth F. Potashner

Chairman of the Board

I agree to the terms stated in this Agreement.

	 	 	 	 	 
	/s/ Robert G. Deuster

	 	 
	 	September 18, 2007
	 

	 	 	 	 
	Robert G. Deuster

	 	 	 	Dateexv10w1

 

Exhibit 10.1

STRATEGIC MASTER SERVICES AGREEMENT

     THIS STRATEGIC MASTER SERVICES AGREEMENT (the “Agreement”) is made as of September 14,
2007 (the “Effective Date”) by and between Cato Research Ltd., a North Carolina corporation (“CATO
RESEARCH”), and Sontra Medical Corporation, a Minnesota corporation (“CLIENT”). Each of CATO
RESEARCH and CLIENT may be referred to herein separately as a “Party” and collectively as the
“Parties.” As used in this Agreement, “Affiliates” means any corporation, firm, partnership, or
other entity which is controlled by or is under common control with a Party. For the purpose of
this definition, “control” shall mean the power to direct, or cause the direction of, the
management and policies of an entity through the ownership of at least fifty percent (50%) of the
voting share capital of such entity or any other comparable equity, by contract, or by ownership
interest.

     WHEREAS, CLIENT is engaged in the evaluation and development of new biologics, pharmaceutical
agents, medical devices and/or other life sciences technologies (collectively, “Products”); and

     WHEREAS, CATO RESEARCH is a contract research and development organization (“CRO”) providing a
broad range of services for the evaluation, development and commercialization of Products (“CRO
Services”); and

     WHEREAS, CLIENT wishes to hire CATO RESEARCH, and CATO RESEARCH wishes to be hired by CLIENT,
to assist CLIENT with certain aspects of the evaluation and development of CLIENT’s Products as
specified by CLIENT from time to time.

     NOW, THEREFORE, in consideration of the foregoing premises and the promises, benefits, rights,
and obligations set forth below, the Parties agree as follows:

1. CRO Services. CATO RESEARCH shall provide CRO Services to CLIENT, as reasonably requested by
CLIENT from time to time, in accordance with this Agreement.

2. Request for CRO Services.

     2.1 If CLIENT wants CATO RESEARCH to perform CRO Services, CLIENT shall provide CATO RESEARCH
with sufficient information to enable CATO RESEARCH to understand the CRO Services being requested
and time limitations or other constraints on the project. Within ten (10) business days of its
receipt of this information, CATO RESEARCH shall determine in its sole discretion whether it wishes
to perform the CRO Services requested by CLIENT and, if it wishes to perform such CRO Services,
then CATO RESEARCH shall submit to CLIENT a written “Work Order Request” setting forth the CRO
Service specifications and estimated fees and expenses. CLIENT shall have ten (10) business days
from its receipt of the Work Order Request to review, approve, and return it to CATO RESEARCH. If
CLIENT does not sign and return the Work Order Request to CATO RESEARCH within ten (10) business
days, CATO RESEARCH shall not be obligated to perform the CRO Services described in the Work Order
Request.

     2.2 If, from time to time, CATO RESEARCH considers information from CLIENT concerning
requested CRO Services to be inadequate, or if CLIENT considers the CRO Service specifications,
fees, expenses or other terms presented by CATO RESEARCH in a proposed Work Order Request to be
unacceptable, then CLIENT and CATO RESEARCH shall use reasonable efforts to negotiate in good faith
and in a timely manner to reach a mutually acceptable exchange of information and terms of the Work
Order Request.

 

 

     2.3 Upon execution and delivery of a Work Order Request by authorized representatives of
each of CATO RESEARCH and CLIENT, the Work Order Request shall become part of this Agreement and
shall be known as a “Work Order.” In the event of a conflict between a Work Order and this
Agreement, the terms of this Agreement shall control unless otherwise specifically stated in the
Work Order.

     2.4 Unless otherwise notified by CLIENT, the Parties agree that CATO RESEARCH may assume that
any officer of CLIENT signing a Work Order Request on behalf of CLIENT is authorized to do so.

3. Specification and Amendment of CRO Services.

     3.1 CATO RESEARCH shall use commercially reasonable efforts to perform CRO Services in
accordance with the specifications, instructions, and guidelines in each Work Order and this
Agreement in all material respects. The Parties shall work together in good faith to ensure that
each Work Order clearly describes all methods, requirements, and obligations (other than those set
forth in this Agreement) related to the CRO Services to be performed. In the event that a Work
Order is unclear, ambiguous, or permits different understandings of the CRO Services to be
performed, the Parties shall use good faith efforts to resolve such ambiguity.

     3.2 A Work Order may only be amended in writing with the signature of both Parties.

4. Compensation.

     4.1 CLIENT shall pay CATO RESEARCH for its CRO Services and expenses in accordance with its
current rates on either a time and materials basis or in accordance with a fixed fee, as specified
in the Work Order governing such CRO Services. For CRO Services provided to CLIENT on a time and
materials basis, CATO RESEARCH shall apply a twenty-five percent (25%) strategic discount to the
aggregate cost of such CRO Services as reflected on each monthly invoice for CRO Services during
the term of this Agreement (the “Strategic Discount”). The Parties hereby acknowledge and agree
that the Strategic Discount shall not be applied to CRO Services provided on a fixed fee basis
during the term of this Agreement. For strategic business development purposes, CATO RESEARCH
agrees to provide the initial eighty thousand dollars ($80,000) of CRO Services to CLIENT under
this Agreement, on either a time and materials basis or a fixed fee basis, at no charge to CLIENT,
CLIENT shall reimburse CATO RESEARCH for out-of-pocket expenses reasonably incurred and documented
by CATO RESEARCH while performing CRO Services under this Agreement including, but not limited to,
telephone, facsimile, messenger, postage and other communication costs, document copying and
retrieval, on-site and off-site storage fees, computer research fees and filing fees, reasonable
transportation, lodging, and meal expenses for travel to sites away from CATO RESEARCH’s office,
and travel between CATO RESEARCH offices (collectively, “Expenses”). The Strategic Discount shall
not be applied to Expenses. Travel time shall be billed as work time, with the understanding that,
to the extent practical, CATO RESEARCH shall utilize travel time to perform CRO Services for
CLIENT.

     4.2 All payments shall be sent to Cato Research Ltd., Attn: Finance, 4364 South Alston Avenue,
Durham, NC 27713. CLIENT shall pay CATO RESEARCH for all CRO Service fees and Expenses within
thirty (30) days of the date of CLIENT’s receipt of the invoice for such fees and Expenses. If
CLIENT disputes the amount due, then CLIENT must notify CATO RESEARCH of such dispute by the
payment due date. Both parties will act in good faith to promptly resolve such dispute. If all or
any portion of an invoice remains unpaid thirty (30) days after the date of CLIENT’s receipt of the
invoice, then CATO RESEARCH may assess an administration fee

2

 

on the unpaid and undisputed amount of
0.75% per month from the date of the invoice until paid. CLIENT shall
reimburse CATO RESEARCH on demand for all reasonable out-of-pocket costs and expenses CATO
RESEARCH incurs in enforcing payment of an overdue invoice, including, without limitation,
attorneys’ fees and expenses. Payments received from CLIENT by CATO RESEARCH on an overdue invoice
shall be first applied to costs of collection, then to accrued administration fees, if any, and
then to the unpaid balance of the invoice. If CLIENT has more than one overdue invoice, CATO
RESEARCH may, in its discretion, allocate collection costs among the invoices and apply payments
against the invoices.

     4.3 CATO RESEARCH may in its sole discretion suspend its performance of CRO Services if an
undisputed invoice is one hundred twenty (120) days or more overdue and CATO RESEARCH may refrain
from resuming performance of CRO Services until all overdue undisputed invoices have been paid in
full.

     4.4 Except as otherwise set forth herein, any and all payments made hereunder are
nonrefundable.

5. Term and Termination.

     5.1 The term of this Agreement shall be one (1) year from the Effective Date and the Agreement
shall automatically renew for additional one (1) year terms unless, at least sixty (60) days before
the expiration of any one (1) year term, a Party gives written notice to the other Party that it
does not want to renew this Agreement; provided, however, that if the term of a Work Order extends
beyond the term of this Agreement, then this Agreement will continue in effect until the completion
or termination of such Work Order and all wind-down CRO Services related to such Work Order.

     5.2 Either Party may terminate a Work Order upon the other Party’s material default under this
Agreement with respect to such Work Order, provided that the terminating Party has given the
defaulting Party no less than thirty (30) days’ prior written notice of such default and the
defaulting Party has not cured such default by the end of the notice period.

     5.3 Either party may terminate a Work Order at any time upon no less than forty-five (45)
days’ prior written notice to the other party.

     5.4 Upon early termination of a Work Order, CLIENT shall pay CATO RESEARCH for all CRO
Services rendered and Expenses incurred through the date of termination in accordance with Section
4 above. In the event of early termination, CATO RESEARCH’s compensation under fixed fee
arrangements or for partially completed milestones shall be made on a time and materials basis in
accordance with its current rates and CATO RESEARCH shall be paid for all CRO Services performed
and Expenses incurred through the date of termination.

     5.5 If a Work Order is terminated by CATO RESEARCH pursuant to Section 5.2 or if CLIENT
terminates a Work Order pursuant to Section 5.3, then, in addition to payments made under Section
5.4, CLIENT shall reimburse CATO RESEARCH for any and all non-cancelable obligations of CATO
RESEARCH to third parties related to the terminated Work Order.

     5.6 Upon early termination of a Work Order, CATO RESEARCH shall inform CLIENT of the extent to
which it expects work in progress to be completed as of the termination date and CATO RESEARCH
shall (unless otherwise instructed by CLIENT) take steps to wind down work in progress in an
orderly fashion. In addition to all other amounts payable to CATO RESEARCH, CLIENT shall pay CATO
RESEARCH for such wind-down CRO Services on a time and materials basis at CATO RESEARCH’s current
rates, less any applicable discount, for all

3

 

reasonable and customary wind-down CRO Services
performed and Expenses incurred by CATO RESEARCH. If CLIENT instructs CATO RESEARCH not to complete
such wind-down CRO Services, CATO RESEARCH shall,
upon notification of the termination of the Work Order, promptly cease providing CRO Services
and incurring costs to the extent practicable. In any such event, CLIENT shall be deemed to have
released CATO RESEARCH from all legal liability and to have covenanted not to sue CATO RESEARCH on
any claims related to failure to perform and the failure to complete reasonable and customary
wind-down CRO Services.

     5.7 In addition to termination of this Agreement under Sections 5.1-5.3, at any time CRO
Services under all Work Orders have been completed and there is no request for CRO Services
pending, either Party may terminate this Agreement by giving written notice of termination to the
other Party.

     5.8 Upon early termination or expiration of a Work Order, CATO RESEARCH may return all files
and other materials in its possession related to such Work Order to CLIENT at CLIENT’s reasonable
expense.

     5.9 The remedies provided in Section 5.4 are not meant to limit any additional remedies, to
the extent that they are not inconsistent with such Sections, available to a Party for breach of
this Agreement by the other Party.

6. Location of CRO Services. CATO RESEARCH shall perform the CRO Services at CATO RESEARCH’s
facilities or at such other places as are mutually agreed upon by CATO RESEARCH and CLIENT.

7. Confidential Information.

     7.1 For purposes of this Section, the Party disclosing Confidential Information is known as
“Disclosing Party” and the Party receiving information is known as “Receiving Party.”

     7.2 “Confidential Information” of the Disclosing Party is defined as all disclosures by the
Disclosing Party or its Affiliates, whether written or oral, including, but not limited to,
Disclosing Party’s business plans, financial data, proprietary software, technology under
development, and marketing information, and any information, software, or other materials created
by Receiving Party using, reflecting or including any part of the Confidential Information.
Disclosing Party shall mark all tangible embodiments of Confidential Information as such prior to
providing it to Receiving Party. Confidential Information does not include information that, as
evidenced by Receiving Party’s written records: (a) is in the public domain when Disclosing Party
discloses it to Receiving Party; (b) enters the public domain after Disclosing Party’s disclosure
to Receiving Party and without any fault of Receiving Party; (c) was known to Receiving Party prior
to the disclosure by Disclosing Party, free of any obligation of confidence; (d) is independently
developed by Receiving Party without reference to the Confidential Information; or (e) is
communicated by a third party to Receiving Party free of any obligation of confidence.

     7.3 Receiving Party shall neither use nor reproduce Disclosing Party’s Confidential
Information except as necessary for: (a) negotiations, discussions and consultations with the
personnel or authorized representatives of Disclosing Party; or (b) for the purpose of performing
its obligations under this Agreement. Upon completion of the obligations under this Agreement that
use the Confidential Information, or upon termination of this Agreement, Receiving Party shall,
when requested by Disclosing Party in writing, promptly return to Disclosing Party all of the
Confidential Information provided by Disclosing Party, except that Receiving Party may retain one
(1) copy solely for recordkeeping purposes.

4

 

     7.4 Receiving Party shall not disclose, without the prior written consent of Disclosing Party,
any of Disclosing Party’s Confidential Information to any third party other than Receiving Party’s,
and its Affiliates’, directors, officers, employees, agents and consultants, hospital authorities,
Institutional Review Board members, clinical investigators, and others who must be involved in
fulfilling Receiving Party’s obligations under this
Agreement and who, in each case, (a) need to know such information for the purposes of
performing such obligations and (b) are bound by obligations of confidentiality and non-use at
least as restrictive as those set forth herein. Receiving Party shall take commercially reasonable
steps to prevent the disclosure or use of any such Confidential Information by Receiving Party’s,
and its Affiliates’, directors, officers, employees, agents or consultants except as provided in
this Agreement.

     7.5 If any Disclosing Party Confidential Information is required to be disclosed by Receiving
Party to any government or regulatory authority or court entitled by law to disclosure of the same,
Receiving Party shall promptly notify Disclosing Party thereof, and Receiving Party shall cooperate
with Disclosing Party so as to enable Disclosing Party to: (a) seek an appropriate protective
order; (b) make the confidential nature of the Confidential Information known to such governmental
or regulatory authority or court; and (c) make any applicable claim of confidentiality in respect
of the Confidential Information.

     7.6 For purposes of this Agreement, the Parties hereby acknowledge and agree that, subject to
the exceptions set forth in Section 7.1, this Agreement shall be considered CLIENT’s Confidential
Information; provided, however, that either Party may disclose the terms of this Agreement to
advisors, investors and others on a need-to-know basis under circumstances that reasonably ensure
the confidentiality thereof.

     7.7 Receiving Party’s obligations under this Section 7 shall terminate with respect to any
Confidential Information of Disclosing Party seven (7) years after the date of disclosure.

8. Protected Health Information. The Parties recognize that the Federal Health Insurance
Portability and Accountability Act of 1996 and implementing regulations (“HIPAA”) require written
confidentiality agreements to protect the privacy and security of protected health information (as
defined under HIPAA) that may be acquired in the course of performing this Agreement. The parties
agree to comply with HIPAA and other applicable laws and governmental regulations governing
protected health information.

9. Ownership.

     9.1 CLIENT Proprietary Rights. CLIENT shall own all right, title, and interest in and
to all data, information, improvements, discoveries, inventions, printed materials, and other
works, products, and deliverables that CLIENT provides to CATO RESEARCH hereunder; as well as all
right, title, and interest in and to all data, databases, records, reports, works, products,
deliverables, information, improvements, discoveries or inventions that result, or are generated,
from the CRO Services rendered by CATO RESEARCH to CLIENT hereunder (collectively, the
“Materials”). CATO RESEARCH hereby assigns to CLIENT all of its copyright, trade secret, trademark,
patent, and other propriety right in such Materials. CATO RESEARCH shall, at CLIENT’s request and
expense, assist CLIENT or its nominees to obtain United States and foreign copyright registrations,
trademarks, patents, and other legal protection for the Materials. CATO RESEARCH shall execute all
papers and give all facts known to it that are necessary to secure such United States or foreign
copyright registrations, trademarks, patents, or other legal protection for the Materials and to
transfer to CLIENT all right, title, and interest in and to the Materials.

5

 

     9.2 CATO RESEARCH Proprietary Rights. Notwithstanding the foregoing, CLIENT
acknowledges that within the scope of CATO RESEARCH’s business practice, CATO RESEARCH possesses
certain inventions, processes, know-how, trade secrets, improvements, other intellectual properties
and assets, including analytical methods, procedures and techniques, computer technical expertise
and software, independently developed by CATO RESEARCH that are not related to CLIENT Proprietary
Rights, including any of the foregoing developed during or incidental to performance of the CRO
Services herein, which shall be deemed CATO RESEARCH Proprietary Rights (collectively, “CATO
RESEARCH Proprietary Rights”). CLIENT and CATO RESEARCH agree
that any of CATO RESEARCH’s Proprietary Rights which are used, improved or modified by CATO
RESEARCH under or during the term of this Agreement shall be deemed CATO RESEARCH Proprietary
Rights. CLIENT hereby assigns to CATO RESEARCH all of its copyright, trade secret, trademark,
patent, and other rights in such CATO RESEARCH Proprietary Rights.

10. Representations and Warranties.

     10.1 CATO RESEARCH represents and warrants that it has the experience, capability, personnel
and resources necessary to perform CRO Services under this Agreement in a commercially reasonable
manner. CATO RESEARCH shall be deemed to make this representation and warranty each time it
executes a Work Order Request.

     10.2 CLIENT represents and warrants that it has the ability to comply with and perform all
financial obligations under this Agreement. CLIENT shall be deemed to make this representation and
warranty each time it executes a Work Order Request.

     10.3 Each Party represents and warrants that (a) it has the corporate power and authority to
enter into and perform its obligations under this Agreement and any Work Order; and (b) entering
into and performing this Agreement and any Work Order will not conflict with or result in a
violation of any of the terms or provisions, or constitute a default under any of its
organizational documents, any mortgage, indenture, lease, contract or other agreement or instrument
binding upon it or by which any of its properties are bound, or any permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to it or
its properties. Each Party shall be deemed to make this representation and warranty upon entering
into this Agreement and each time it executes a Work Order Request.

11. Cato Research Personnel.

     11.1 CATO RESEARCH is responsible for all aspects of the labor relations of its personnel
including, but not limited to, wages, benefits, discipline, hiring, firing, promotions, pay raises,
overtime, and job assignments. CLIENT shall have no power or authority in these areas. CATO
RESEARCH agrees to pay all contributions and taxes imposed by any federal or state governmental
authority with respect to or measured by wages, salaries, or other compensation paid by CATO
RESEARCH to persons employed by CATO RESEARCH.

     11.2 CLIENT understands that the performance of CRO Services requires special skills, training
and experience. CLIENT further understands that CATO RESEARCH has expended considerable sums to
train its personnel to perform the CRO Services requested by CLIENT from time to time under this
Agreement, given them access to experienced and highly skilled practitioners at CATO RESEARCH to
enable such personnel to acquire new skills and develop existing skills, and provided its personnel
with opportunities to gain valuable experience in performing CRO Services. When CATO RESEARCH loses
a member of its personnel, it incurs significant expenses in hiring and training his or her
replacement. Accordingly, during the term of this Agreement

6

 

and for a period of one (1) year after
the termination or expiration of this Agreement, CLIENT agrees that it will not hire as an employee
or independent contractor any member of CATO RESEARCH’s personnel that has participated in the
performance of CRO Services under this Agreement without CATO RESEARCH’s written permission and
payment of a fee. CLIENT will pay CATO RESEARCH a fee equal to the hired person’s annual salary in
effect at the time of the violation to reimburse the estimated costs of hiring and training
replacement personnel. Such fee shall be paid to CATO RESEARCH in cash no later than thirty (30)
days after the date on which such employee begins employment or contractual work with CLIENT.

12. Indemnification.

     12.1 CLIENT shall indemnify, defend and hold harmless CATO RESEARCH and its Affiliates, and
the directors, officers, employees and agents of CATO RESEARCH and its Affiliates (each a “CATO
RESEARCH Indemnified Party”), from and against all liability, loss, costs, claims, damages,
expenses, judgments, awards, and settlements, including, without limitation, actual attorneys’ fees
or expenses charged by counsel of the Indemnified Party’s choosing (whether or not these are
covered by insurance), whether in tort or in contract, law or equity, that a CATO RESEARCH
Indemnified Party may incur by reason of or arising out of any claim made or response in any legal
proceeding directly or indirectly resulting from or related to (a) CATO RESEARCH’s CRO Services,
including deliverables, under this Agreement; (b) infringement of, or related to, any intellectual
property or proprietary rights of a third party in relation to CLIENT’s Products, programs,
procedures, materials, data, or other information used by or on behalf of, or furnished by or on
behalf of, CLIENT in connection with this Agreement or CATO RESEARCH’s CRO Services under this
Agreement; (c) material breach of this Agreement by CLIENT or any other person for whose actions
CLIENT is liable under applicable law; (d) the negligence, intentional misconduct or intentional
omission of CLIENT or any employee, contractor, agent or representative of CLIENT; and (e) any
request for deposition, documents, or other information legally compelled, including, without
limitation, by subpoena or by agreement made in lieu of subpoena, in connection with CLIENT’s
litigation, arbitration or other proceeding with any third party; provided, however, that this
indemnification shall not extend to any claims arising out of (i) breach of this Agreement by CATO
RESEARCH or any other person for whose actions CATO RESEARCH is liable under applicable law, (ii)
the violation by CATO RESEARCH, its directors, officers, employees or agents, of applicable law or
other governmental requirement, or (iii) the negligence, intentional misconduct or intentional
omission of CATO RESEARCH or its directors, officers, employees, contractors, agents or
representatives.

     12.2 CATO RESEARCH shall indemnify, defend and hold harmless CLIENT, its Affiliates, and the
directors, officers, employees and agents of CLIENT and its Affiliates (each a “CLIENT Indemnified
Party”) from and against all liability, loss, costs, claims, damages, expenses, judgments, awards,
and settlements, including, without limitation, actual attorneys’ fees and expenses (whether or not
covered by insurance), whether in tort or in contract, law or equity, that a CLIENT Indemnified
Party may reasonably incur by reason of or arising out of any claim made by a third party resulting
from or related to (a) the negligence, intentional misconduct or intentional omission of CATO
RESEARCH or any employee, contractor, agent or representative of CATO RESEARCH; (b) the material
breach of this Agreement by CATO RESEARCH or any other person for whose actions CATO RESEARCH is
liable under applicable law; or (c) the violation by CATO RESEARCH, its directors, officers,
employees or agents, of applicable law or other governmental requirement; provided, however, that
this indemnification shall not extend to any claims arising out of: (i) breach of this Agreement by
CLIENT or any other person for whose actions CLIENT is liable under applicable law; (ii) the
violation by CLIENT, its directors, officers, employees or agents, of applicable law or other
governmental requirement; or (iii) the negligence, intentional misconduct or intentional omission
of CLIENT or its directors, officers, employees, contractors, agents or representatives.
Notwithstanding the foregoing, the Parties hereby acknowledge and agree that CATO

7

 

RESEARCH shall
not be liable for, and this Section 12.2 shall not require CATO RESEARCH to provide indemnification
with respect to, the actions or omissions of any third party whom CATO RESEARCH hires at CLIENT’s
request to provide services hereunder.

13. Insurance.

     13.1 CLIENT shall secure and maintain in full force and effect, at no cost to CATO RESEARCH,
its Affiliates, and their respective officers, directors and employees (collectively, “CATO
RESEARCH Insureds”),
customary insurance coverage for all CLIENT Products and clinical trials or other projects related
to CRO Services, including, without limitation, products liability, general liability, and related
insurance coverage with policy limits in an amount CLIENT’s senior management reasonably determines
to be sufficient to support CLIENT’s indemnification obligations hereunder. Upon completing each
clinical trial for which CATO RESEARCH provides CRO Services (each, an “Agreement Clinical Trial”),
CLIENT also shall maintain in full force and effect, at no cost to the CATO RESEARCH Insureds, an
extended reporting policy for a term of no less than three (3) years after completion of each
Agreement Clinical Trial, which policy shall cover claims first made and/or reported after
completion of such Agreement Clinical Trial.

     13.2 CLIENT’s shall use reasonable efforts to cause CLIENT’s insurance policy(ies) to name the
CATO RESEARCH Insureds as additional named insureds and shall indicate that the policy will not be
canceled or changed until thirty (30) days after written notice of such cancellation or change is
delivered to CATO RESEARCH.

14. Limitation of Liability. Except as set forth in this Agreement, CATO RESEARCH makes no
warranty, either express or implied, including the warranties of merchantability, fitness for a
particular purpose, title and non-infringement as to any matter, including, but not limited to, the
CRO Services, results of CRO Services, deliverables, reports, analyses, documents, memoranda, or
other matter produced or provided under this Agreement. CLIENT agrees that, regardless of the form
of any claim, CLIENT’s sole remedy and CATO RESEARCH’s sole obligation with respect to any claims
made related to or arising out of this Agreement shall be governed by this Agreement and, in all
cases, CLIENT’s remedies shall be limited to, at CATO RESEARCH’s option, correction of the
non-conforming CRO Services or reimbursement of payments (excluding payments for Expenses) made by
CLIENT to CATO RESEARCH for such non-conforming CRO Services under the applicable Work Order during
the six (6) month period immediately preceding the event for which the claim is made. It is
expressly agreed that in no event shall CATO RESEARCH or anyone else who has been involved in the
performance of this Agreement on behalf of CATO RESEARCH be liable for any indirect, consequential,
incidental, special, punitive, or exemplary damages arising from any legal theory, even if such
person had been apprised of the likelihood of such damages occurring; provided that this shall not
limit CATO RESEARCH’s obligations under Section 12 hereof.

15. Investigator Funds.

     15.1 CATO RESEARCH may, at CLIENT’s request, disburse payments to investigators conducting a
clinical study (each, an “Investigator”) for which CATO RESEARCH is providing CRO Services to
CLIENT. CATO RESEARCH will disburse all such payments (each, an “Investigator Fee”) in accordance
with the provisions of the agreement between CLIENT and the Investigator (each, an “Investigator
Agreement”). CATO RESEARCH agrees that it will not unreasonably withhold any Investigator Fee and
it will not impose additional restrictions on the terms of payment for the Investigator Fee set
forth in the Investigator Agreement.

8

 

     15.2 CLIENT shall provide CATO RESEARCH with the funds to pay each Investigator Fee prior to
the date on which CATO RESEARCH is scheduled to disburse such Investigator Fee. If CLIENT does not
provide the funds to CATO RESEARCH, then CATO RESEARCH will not disburse such Investigator Fee
until it receives the funds from CLIENT. In such event, CLIENT shall be deemed to have released
CATO RESEARCH from all legal liability and to have covenanted not to sue CATO RESEARCH on any
claims related to failure to disburse the Investigator Fee.

     15.3 If CLIENT provides CATO RESEARCH with funds in excess of the total Investigator Fees
disbursed by CATO RESEARCH, then CATO RESEARCH shall prepare and send a reconciliation of such
funds to CLIENT within ninety (90) days after the early termination or expiration of the Work Order
under which CATO RESEARCH was disbursing such Investigator Fees and, upon CLIENT’s approval of the
reconciliation, CATO RESEARCH shall return all excess funds to CLIENT.

16. Regulatory Audits. CATO RESEARCH will, on no less than two (2) weeks’ notice, during regular
business hours, permit a regulatory auditor qualified by education, training, and experience, and
who is acceptable to CATO RESEARCH, to have access to CATO RESEARCH’s records pertaining to the CRO
Services provided pursuant to this Agreement for the purpose of auditing and verifying such CRO
Services. The auditor shall report to CLIENT only those facts and conclusions from the audit that
are directly related to CLIENT’s interests. CLIENT shall bear the cost of any audit and CLIENT
shall, in addition to any other payment obligations under this Agreement, pay CATO RESEARCH on a
time and materials basis at its current rates for the CATO RESEARCH personnel assigned to supervise
such audit and any other CATO RESEARCH personnel who are required to participate in such audit. All
information obtained from an audit shall be Confidential Information.

17. Force Majeure; Other Delays.

     17.1 In the event that either party shall be delayed in, hindered in, or prevented from the
performance of any act required under this Agreement by reason of strike, lockout, labor problems,
restrictions of government, judicial orders or decrees, riots, insurrection, terrorism, war, acts
of God, inclement weather, or other causes that are beyond the reasonable control of such party,
then performance of such act shall be excused until the cause is remedied. The delayed party shall
use commercially reasonable efforts to resume performance as soon as possible.

     17.2 CATO RESEARCH will not be liable to CLIENT nor be deemed to have breached this Agreement
for errors, delays or other consequences arising from the failure of CLIENT or any third party not
under CATO RESEARCH’s direct control to provide documents, materials or information in a timely
manner or to otherwise cooperate in order for CATO RESEARCH to perform its obligations, and any
such failure by CLIENT or any third party not under CATO RESEARCH’s direct control shall
automatically extend any timelines affected by such failure to provide documents, materials,
information or cooperation by the period of the delay, unless CLIENT agrees in writing to pay any
additional costs that would be required to meet the original timeline. If CLIENT or any third
party providing services to CLIENT delays or suspends a project hereunder then, at CATO RESEARCH’s
election, either (a) CLIENT will pay the standard daily rate of the CATO RESEARCH personnel
assigned to the project, based on the percentage of their time allocated to the project, for the
period of the delay, in order to keep the then-current team members; or (b) CATO RESEARCH may
re-allocate such personnel at its discretion, and CLIENT will pay the costs of retraining or
reallocating new personnel. In addition, CLIENT will reimburse CATO

9

 

RESEARCH for all
non-cancelable costs and Expenses incurred due to the delay and all timelines will automatically be
adjusted to reflect additional time required due to the delay.

18. Independent Contractor. CATO RESEARCH shall perform CRO Services as an independent contractor
and not as CLIENT’s agent, representative or employee. Neither Party has authority to make any
statement, representation, or commitment of any kind nor to take any action binding on the other
Party without the other Party’s prior written consent.

19. Use of CLIENT’s Name. CLIENT agrees that CATO RESEARCH may use CLIENT’s name as a reference for
prospective clients or in literature relating to CATO RESEARCH’s capabilities, provided that such
use does not violate Section 7 above.

20. Notification. Any notices given hereunder shall be in writing and shall be deemed to have been
given on the earlier of personal receipt by an authorized representative of the Party, or receipt
at the Party’s notice address. Notice may be given by any reliable means including, without
limitation, by mail, overnight courier, facsimile, electronic mail, or personal delivery. All
notices shall be sent to a Party at its address set forth on the signature page of this Agreement,
or to such other address as is given by notice to the other Party.

21. Waiver. No waiver of any right or remedy with respect to any occurrence or event shall be valid
unless it is in writing and executed by the waiving Party. No such valid waiver shall be deemed a
waiver of such right or remedy with respect to such occurrence or event on a continuing basis or in
the future unless the waiver states that it is intended to apply continuously or to future events.
A waiver shall not excuse a subsequent breach of the same term, unless the waiver so states.

22. Severability. If any provisions of this Agreement are determined to be invalid or
unenforceable, those provisions shall be reformed to the extent necessary to comply with law and
the parties’ intent, or struck if necessary, and the validity and effect of the other provisions of
this Agreement shall not be affected.

23. Governing Law; Jurisdiction. This Agreement shall be governed by, construed and interpreted in
accordance with the laws of the State of Delaware. No conflict-of-laws provision shall be invoked
to permit application of the laws of any other jurisdiction. All claims under this Agreement shall
be brought in a judicial district that includes New Castle County, Delaware and the Parties consent
to the jurisdiction of such court.

24. Dispute Resolution. Any controversy, claim or dispute arising out of, in connection with or
relating to this Agreement shall be resolved by binding arbitration pursuant to Exhibit A,
with the arbitrator following the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”) (the “Rules”) in effect as of the day the arbitration demand is made. It is the
intention of the Parties to resolve any such controversy, claim or dispute by private arbitration
without submitting the matter to the AAA. In the event of any inconsistency between the Rules and
Exhibit A, Exhibit A shall control. Notwithstanding the foregoing, if damages for a
breach are not likely to be an adequate remedy, then either Party shall bring an injunction
proceeding before a court of equity in a judicial district that includes New Castle County,
Delaware. The Parties hereby consent to the jurisdiction of such court.

25. Survival. The representations and warranties of the Parties in Section 10 shall survive the
events to which they relate and survive the expiration or earlier termination of this Agreement and
the rights and obligations of the Parties set forth in Sections 4, 5, 7, 8, 9, 11, 12, 13, 14, 19,
23, 24, 25 and 26 shall survive expiration or earlier termination of this Agreement.

10

 

26. Client Obligations. CLIENT shall undertake the following obligations with respect to the
performance of this Agreement, in addition to any other obligations outlined in the applicable Work
Order, and failure to perform such obligations shall constitute a material breach of this
Agreement.

     (a) CLIENT shall use commercially reasonable efforts to deliver all information and materials
required for CATO RESEARCH’s performance of CRO Services in accordance with mutually agreed upon
timelines.

     (b) CLIENT shall immediately apprise CATO RESEARCH of any safety concerns or serious adverse
events related to a Product that is the subject of the CRO Services.

     (c) CLIENT shall use commercially reasonable efforts to not take any actions or participate in
any activities that are intended to or can be reasonably expected to disrupt or interfere with CATO
RESEARCH’s obligations under this Agreement.

27. Assignment. This Agreement may not be assigned by either Party without the prior
written consent of the other Party, which shall not be unreasonably withheld; provided, however,
that either Party may assign this Agreement in connection with a merger or the sale of all or
substantially all of the assigning Party’s assets or stock on the condition that such assignment
shall be solely to the acquirer or purchaser of the assigning Party and such acquirer or purchaser
must assume the assigning Party’s obligations under this Agreement. Notwithstanding the foregoing,
CATO RESEARCH may arrange for its Affiliates to perform CRO Services under this Agreement, with the
understanding that CATO RESEARCH will remain legally responsible for such CRO Services.

28. Freedom to Contract. Except with respect to CRO Services for which CLIENT specifically hires
CATO RESEARCH to perform under this Agreement, (a) CLIENT is not required to use CATO RESEARCH for
any specific work; (b) CLIENT is free to retain others to perform the same or similar CRO Services
as offered by CATO RESEARCH; (c) CATO RESEARCH is not required to provide any CRO Services to
CLIENT; and (d) CATO RESEARCH is free to provide CRO Services to other clients that are similar to
CRO Services provided to CLIENT.

29. Entire Agreement. Exhibits to this Agreement and Work Orders are incorporated into and made a
part of this Agreement. This Agreement, including the incorporated Exhibits and Work Orders,
constitutes the entire agreement between the Parties relating to the subject matter hereof and
supersedes all prior agreements, whether written or oral, relating to the subject matter hereof.
Except as otherwise authorized herein, changes, modifications, and amendments shall be valid only
if made in writing and signed by both Parties. To be effective, any agreement between the Parties
purporting to amend a term of this Agreement must specifically identify that term’s Section number
and state the Parties’ specific intent to amend that term. CATO RESEARCH’s entry into this
Agreement is expressly made conditional on CLIENT’s agreement to the terms set forth herein, not
those in any purchase order, confirmation, or similar form, and CLIENT agrees that any additional
or different terms in any such form, now or in the future, are void even if the form indicates that
it shall control.

30. Execution of Agreement. This Agreement shall be void if it is not signed and returned to CATO
RESEARCH within thirty (30) days after the date written above. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original but all of which together
shall constitute one and the same instrument.

11

 

31. Facsimile Signatures. Facsimile signatures shall be accepted as originals for the purposes of
this Agreement and any and all Work Orders executed hereunder.

12

 

The Parties have executed this Agreement as of the date first written above.

	 	 	 	 	 	 	 
	CATO RESEARCH:	 	CLIENT:
	 

	 	Cato Research Ltd.
	 	 	 	Sontra Medical Corporation
	 

	 	4364 South Alston Avenue
	 	 	 	10 Forge Parkway
	 

	 	Durham, North Carolina 27713-2280
	 	 	 	Franklin, Massachusetts 02141
	 
	 	 	 	 	 	 
	By:

	 	/s/ Allen Cato

	 	By:
	 	/s/ Harry G. Mitchell

	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	Allen Cato

	 	Name:
	 	Harry G. Mitchell

	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	President

	 	Title:
	 	Interim CEO

	 

	 	 
	 	 	 	 

13

 

EXHIBIT A

ARBITRATION PROCEDURES

In the event of arbitration under Section 23, the following rules shall apply:

1. Location and Language. The location of the arbitration shall be in New Castle County, Delaware.
The arbitration shall be conducted in English and any findings and/or decisions shall be rendered
in English.

2. Selection of Arbitrator. The arbitration shall be conducted by one arbitrator who is
independent and disinterested with respect to the parties, this Agreement, and the outcome of the
arbitration (a “neutral arbitrator”). If the parties can not agree on a neutral arbitrator, then
each party shall select a neutral arbitrator, who together shall select a third neutral arbitrator
to conduct the arbitration. The arbitrator will be selected with consideration given to his or her
experience with disputes of the type being submitted (e.g., the nature of the claim and the
technology involved) and will, if possible, be a former judge. It is the intent of the parties
that the final arbitrator be selected within thirty (30) days after the arbitration demand is first
made.

3. Case Management. Prompt resolution of any dispute is important to both parties and the parties
agree that the arbitration of any dispute shall be conducted expeditiously. The arbitrator is
instructed and directed to assume case management initiative and control over the arbitration
process (including scheduling of events, pre-hearing discovery and activities, and the conduct of
the hearing), in order to complete the arbitration as expeditiously as is reasonably practical to
obtain a just resolution of the dispute.

4. Remedies. The arbitrator shall follow and apply the applicable law. The arbitrator shall grant
such legal or equitable remedies and relief in compliance with applicable law that the arbitrator
deems just and equitable, but only to the extent that such remedies or relief could be granted by a
state or federal court and as otherwise limited by the terms in this Agreement. No punitive damages
may be awarded by the arbitrator. No court action may be maintained seeking punitive damages.

5. Expenses. The expenses of the arbitration, including the arbitrator’s fees, expert witness
fees, and attorney’s fees, may be awarded to the prevailing party, in the discretion of the
arbitrator, or may be apportioned between the parties in any manner deemed appropriate by the
arbitrator. Unless and until the arbitrator decides that one party is to pay for all (or a share)
of such expenses, both parties shall share equally in the payment of the arbitrator’s fees as and
when billed by the arbitrator.

6. Confidentiality. The parties shall keep confidential the fact of the arbitration, the dispute
being arbitrated, and the decision of the arbitrator. Notwithstanding the foregoing, (a) the
parties may disclose information about the arbitration to persons who have a need to know, such as
directors, trustees, management employees, witnesses, experts, investors, attorneys, lenders,
insurers, and others who may be directly affected; (b), if a party has stock that is publicly
traded, the party may make such disclosures as are required by applicable securities laws or
listing rules; and (c) if a party is expressly asked by a third party about the dispute or the
arbitration, the party may disclose and acknowledge in general and limited terms that there is a
dispute with the other party which is being (or has been) arbitrated.

14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]