Document:

Distribution and Manufacturing Agreement

    Exhibit
      10.1

    DISTRIBUTION
      AND MANUFACTURING AGREEMENT

    

    This
      Distribution Agreement (the "Agreement") is made by and between Sequiam
      Biometrics, Inc. (“Sequiam”) , a Florida Corporation with offices at 300 Sunport
      Lane, Orlando Florida, 32809, hereinafter referred to as "Manufacturer"),and
      Quasar Group, Inc. (“Quasar”) a Colorado Corporation, with offices at 1746 Cole
      Boulevard Building 21, Suite 225 Golden, CO 80401-3210.

    

    Whereas,
      the parties hereto enter into an agreement on an exclusive basis to set out
      the
      terms and conditions of the distribution of the Manufacturer's products and
      services as listed in Exhibit
      A (hereinafter
      called "Products”.)

    

    The
      parties agree that Sequiam and Quasar will form a new corporation in Switzerland
      with the shares divided 51% to Sequiam and 49% to the Quasar. Sequiam must
      approve the form of corporate charter and bylaws prior to incorporation of
      the
      new company. The new corporation formed will hereinafter be referred to as
      “Distributor”. 

    

    As
      a
      prerequisite of the Swiss Bonny system, the parties will bring to the Swiss
      company capital a minimum of 1.5 Million US Dollars in invisible assets. Based
      on that, the Distributor will make it’s best effort to secure funding via the
      Swiss Bonny program equal to 3 million CHF utilizing the efforts of Quasar
      Group. The funding will comprise a loan with an annual interest rate
      corresponding to the standard commercial credit interest rate in Switzerland
      and
      amortized over a period no longer than 10 years. The funding should have a
      grace
      period of no less than 2 years.

    

    Now
      therefore, in consideration of the mutual covenants, conditions and agreements
      contained herein, and other good and valuable consideration, the receipt and
      sufficiency of which is hereby acknowledged, the parties hereto agree, as
      follows:

    

    Article
      1 - Appointment

    

    
      	1.1  	
              Manufacturer
                Appointment: 

            

    

    Manufacturer
      hereby appoints Distributor for the term of this Agreement as referred to in
      paragraph 2.1. The Distributor hereby accepts such appointment and agrees to
      purchase from Manufacturer all of its requirements as needed for the Products
      for sale in the Territory in the terms of this Agreement. The Territory is
      defined to include the following region: Europe,
      Middle East

    

    
      	 	
              Distributor
                Appointment: 

            

    

    Distributor
      hereby appoints Manufacturer, as its exclusive biometric design and manufacture
      partner to design and manufacture the Products. Manufacturer hereby accepts
      such
      appointment and agrees to provide biometric products for the distributor
      beginning with the products listed in Exhibit A. 

    

    
      	
              1.2

            	
              Distributor
                agrees not to modify or alter the Products without the prior written
                consent of the Manufacturer.

            

    

    

    Article
      2 - Term,
      Performance, Default and Payment

    

    2.1 The
      term
      of this Agreement shall be from July 6th, 2006 until July 6th,
      2016.

    Thereafter,
      this agreement shall be renewed for an additional term of twenty-four (24)
      consecutive months, unless one party provides the other written notice of
      termination at least 12 months prior to the expiration of the then current
      term.
      Any expiration or termination shall not modify or alter any of the rights or
      obligations of the parties, which arose prior to such expiration or
      termination.

    

    
      	2.2  	
              Distributor
                shall pay to the Manufacturer, development costs for custom designs
                which
                shall be determined by the Manufacturer and approved by the Distributor.
                Actual hardware, software, and installation will incur separate charges
                as
                outlined in the distributor price list.

            

    

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
      	2.3  	
              The
                distributor may incur future development costs for any project additions
                that are not within the scope of Exhibit A based on a quote made
                by the
                Manufacturer and accepted by the Distributor.

            

    

    

    
      	2.4  	
              Distributor
                shall be authorized to perform the following functions at it’s own
                expense: 

            

    

    

    A)
      Final
      Product Assembly         

    

    B)
      Sales
      and Marketing          

    

    C)
      Tier 1
      Technical Support         

    

    D)
      Quality Assurance           

    

    E)
      Service and Repair

    

    

    
      	2.5  	
              The
                Distributor is authorized to integrate by itself the Manufacturer
                technology to answer specific customer needs when authorized in writing
                by
                manufacturer to do so. Such authorization will not be unreasonably
                withheld. 

            

    

    
      	2.6  	
              Distributor
                is authorized to offer products on an OEM basis only when approved
                in
                writing by the manufacturer and a case by case basis. Such approval
                will
                not be unreasonably withheld

            

    

    
      	2.7  	
              All
                new available Manufacturer products or solutions must be offered
                to the
                Distributor as long as they do not violate any agreements to do
                so.

            

    

    

    

    Article
      3 - Default

    

    3.1 Events
      of Default.
      Either
      party may terminate this Agreement if:

    

    
      	3.1.1  	
              The
                other party breaches any material term or condition of this Agreement
                and
                fails to cure such breach within sixty (60) days after the due date
                (with
                respect to any payment default) or within ninety (90) days after
                receipt
                of written notice for any other
                breach.

            

    

    

    
      	3.1.2  	
              The
                other party files a voluntary petition or is subject to an involuntary
                petition in bankruptcy or commences a liquidation and dissolution
                or
                voluntarily assigns its assets for the benefit of creditors. In the
                event
                Manufacturer becomes insolvent technical documentation will be provided
                to
                Distributor, such documentation will only be sufficient to provide
                technical support not to build compatible or similar hardware
                units.

            

    

     

    
      	
              3.2

            	
              All
                material provided by the Manufacturer and in possession by Distributor
                shall be returned to the Manufacturer within fourteen (14) days of
                the
                termination and expiration or default of this contract, including
                but not
                limited to computer equipment, design documents and drawings, tests
                and
                diagnostic equipment that was agreed to be developed or otherwise
                produced
                or supplied by the manufacturer. Distributor can retain any inventory
                that
                has been paid for in full on or before the date of
                termination.

            

    

    .

    

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    

    

    

    

    Article
      4 - Distributor’s
      Duties

    

    4.1 Delivery.
      Manufacturer will use all commercially reasonable efforts to deliver the
      Products in accordance with any purchase order. Manufacturer will make all
      reasonable efforts to package product to prevent damage during shipping. After
      the shipment delivery, the products will be controlled by the Distributor who
      will sign the carrier receipt for acceptation. Risk of loss or damage to the
      Products is the Manufacturer responsibility until the products are accepted
      by
      the Distributor. In case of loss or damage of the goods by the carrier, the
      Manufacturer will work in concert with the Distributor on the Manufacturer
      compensation due by the carrier.

    

    
      	
              4.2

            	
              Price.
                The price to be paid by Distributor for any Product purchased from
                Manufacturer is outlined in Distributor price list attached hereto
                as
                Exhibit
                A. Unless otherwise stated and agreed to, prices are listed
                and
                are payable in United States Dollars. Prices are inclusive of those
                items
                specifically identified on Exhibit A and exclusive
                of any item not so specified or described in Exhibit
                A. In addition to the purchase price, Distributor will
                pay
                any and all costs which Manufacturer may incur or pre-pay (without
                any
                obligation on Manufacturer to do so) on behalf of or for the benefit
                of
                Distributor, including, but without limitation, shipping and handling
                fees. All the "extra charges" must be clearly defined by the manufacturer
                with at least 90 days advance notice.

            	
               

            

    

    

    4.3 Price
      Changes. Except
      as
      otherwise agreed, the prices are subject
      to change from time to time. Any price change will be effective thirty (30)
      days
      after written notice from Manufacturer and will apply to  all
      Products ordered by Distributor after the effective date of the change. If
      Manufacturer reduces any product price or offers increased discounts,
      Manufacturer will credit Distributor within thirty (30) days the difference
      between the original product price
      and
      the reduced product price for Distributor's product inventory, including but
      not
      limited to: (i) any Manufacturers product in transit to Distributor, (ii) any
      product in Distributor inventory that was purchased within the previous thirty
      (30) day period. In the event that Manufacturer increases the price of the
      product to Distributor, Manufacturer has the right to limit the purchase
      quantities. 

    

    
      	4.3.1  	
              Pricing
                not specifically specified within Exhibit A shall be calculated according
                to the following formula: (Product cost of manufacture + 19% burden
                rate)*1.15)+ shipping)

            

    

    

    4.4 Payment.

    

    4.4.1 Distributor
      must pay for and must accept all of the Products shipped by Manufacturer
      pursuant to Distributors purchase orders. 

    

    
      	
               

            	
              4.4.2

            	
              Payment
                of any sums due to Manufacturer hereunder must be made by wire transfer
                or
                check in United States Dollars. Unless otherwise agreed to in writing,
                Distributor must pay the Manufacturer the applicable purchase price
                plus
                all additional costs (including such items as duties, tax, freight,
                etc.).
                

            

    

    

    
      	
              4.5

            	
              Promotion.
                Distributor will actively promote the sale of the Manufacturer’s Products
                in the Territory as aforementioned in Paragraph 1.1, including information
                and advice to promote the sale of the Products. The Distributor shall
                provide a schedule of planned events (for the duration of this Agreement)
                to the Manufacturer within sixty (60) days of the date hereof. The
                Manufacturer will coordinate with the Distributor for joint participation
                at certain events as deemed necessary by the
                Distributor.

            

    

    

    
      	
              4.6

            	
              Reporting.
                Distributor shall keep Manufacturer informed of Distributor activities
                and
                of market

            

    

    
      	
               

            	
              conditions
                within the Territory through monthly sales reports that provide Customer
                identity and location.

            

    

    

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    

    
      	4.7  	
              Support
                Services.
                Distributor shall provide and maintain, at its own expense, adequate
                customer service facilities and properly trained and necessary staff
                to
                carry out first line support of the Products, including but not limited
                to, reasonable telephone support to Customers, including diagnosing
                problems with the Products purchased by the Customer. Distributor
                will
                also implement all support programs and upgrade procedures for the
                Products as required by Manufacturer from time to time. Manufacturer
                will
                provide hardware support as described in the warranty section of
                this
                agreement. 

            

    

    

    
      	4.8  	
              Customers
                generated by the Distributor activity are the property of the
                Distributor.

            

    

    

    
      	4.9  	
              The
                Manufacturer shall provide products that are matching the local
                certification regulations where financially feasible.
                

            

    

     

    Article
      5 - Manufacturer's
      Rights

    

    
      	
              5.1

            	
              Right
                of Inspection.
                Manufacturer shall have the right, at reasonable times during business
                hours, to inspect the sales and customer records of Distributor with
                two
                (2) working days prior written
                notice.

            

    

    

    

    
      	
              5.2

            	
              Change
                of Design.
                Manufacturer may, at any time and without liability to Distributor,
                improve, modify or discontinue any Product or feature of any Product.
                Manufacturer will not be obliged to make any change or upgrade to
                any
                Product shipped to Distributor prior to the official introduction

                of
                  any change to same. Manufacturer may in writing, without liability
                  to
                  Distributor, fill any order placed by Distributor for any given
                  Product by
                  substituting therefore a modified or changed version of the same,
                  so long
                  as there is no significant loss of performance and/or
                  functionality.

              

            

    

     

     

      5.3
        Distributor will have no access to the Manufacturer’s confidential information
        contained in the server.

      

      

      5.4
        All
        customer lists related to the Product in the territory will be shared by
        the
        Manufacturer and the Distributor. Both parties will be granted reasonable
        access
        to this information at their discretion.

      Article
        6 -Returns

      

      
        	
                6.1

              	
                Defective
                  Product.
                  Distributor may return any Product to Manufacturer that Distributor
                  or its
                  customer finds defective. If Distributor has insufficient inventory
                  to
                  replace customer’s defective merchandise, Distributor shall immediately
                  place an offsetting purchase order greater or equal to the return
                  amount.
                  

              

      

      

      Article
        7 -Trademarks,
        Copyrights and Trade Secrets

      

      
        	
                7.1

              	
                Use.
                  All of the Products that are sold by Distributor directly or indirectly
                  must bear an authorized trademark of the Manufacturer. Distributor
                  may
                  place its private label on Products (or OEM labels approved by
                  manufacturer in writing) at Distributors own expense so long as
                  the
                  Manufacturer’s trademark is still denoted on the product.
                  

              

      

      

      7.2Copying
        Prohibited.
        Distributor may not modify, copy or otherwise reproduce in any way any Product
        Software or Hardware (including materials and any other documentation) supplied
        with any Product sold hereunder. Distributor shall, maintain the integrity
        of
        all copyright and trademarks of Manufacturer as depicted on the
        Products.

      

      
        	7.3  	
                 Survival.
                  Distributor's obligations under the terms of this agreement shall
                  survive
                  the termination of this Agreement, regardless of the cause of said
                  termination.

              

      

      

      
        	
                7.4

              	
                Copyright
                  Protection.
                  Distributor acknowledges that the product firmware is entitled
                  to
                  protection under the Copyright Laws of the United States of America
                  (collectively, the "Copyright
                  Laws").

              

      

    

     

     

    

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    7.5 Confidentiality.
      Each
      party shall keep all proprietary and confidential information of the
 delivering
      party, including, without limitation, its business, prospects, clients,
      technical know-how,
      methods, procedures, data, specifications, designs, software code, and formulas
      not  previously
      disclosed to the public (the "Information") or received by it or its agents,
      affiliates, representatives
      or employees confidentially and shall not, without the delivering party's prior
       written
      consent, disclose, or permit the use of or the disclosure or use by its agents,
      affiliates, representatives
      or employees of, any such Information, other than in connection with its duties
       under
      this Agreement. Moreover, each party agrees to reveal the Information to its
      agents, affiliates, representatives and employees solely for the purpose of
      performing this Agreement and to inform such persons of the confidential nature
      of the Information and obtain the agreement of such persons to act in accordance
      with the terms and conditions of this Section. This provision shall
      survive the termination of this agreement. This provision shall be governed
      by
      Florida Statute 812.081.

    

    

    

    Article
      8 - Intellectual
      Property Infringement

    

    
      	
              8.1

            	
              Notice.
                Each party will promptly notify the other in writing if the party
                becomes
                aware of:

            

    

    

    
      	 	
              8.1.1

            	
              Any
                infringement of any patent, trademark, copyright, trade secret or
                other
                intellectual property rights vested in the Manufacturer (the "Intellectual
                Property Rights") related to the Products; and/or any actual or potential
                claim involving the use of the Products that may infringe on the
                actual or
                alleged Intellectual Property Rights of any other person or
                entity.

            

    

    

    
      	
              8.2

            	
              Indemnity.
                Manufacturer shall not be liable for any and all alleged infringement
                where the Product sold by Distributor has been used in a manner for
                which
                it was not intended by Manufacturer or where any alleged infringement
                as a
                result of modification of the Product, or parts thereof, after its
                sale by
                Manufacturer to Distributor.

            

    

    

    Article
      9 - Manufacturer's Warranties

    

    
      	
              9.1

            	
              Manufacturer's
                Warranties.
                Manufacturer warrants to Distributor, its customers, end users, agents
                and
                representatives, that the Products will perform in accordance with
                Manufacturer's Warranty Policy as in effect from time to time. The
                current
                version of such Warranty Policy is shown in Exhibit
                B hereto
                and shall be the only warranty under this Agreement, if not contrary
                to
                the laws of the United States, until a new warranty is provided to
                Distributor in writing signed by an authorized officer of Manufacturer.
                Any replacement warranty will be provided in advance to Distributor
                in
                writing and approved by the parties. Said approval will not be
                unreasonably withheld. Distributor will provide notice in writing
                within 3
                business days. 

            

    

    

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    Article
      10- Manufacturer's
      Liability

    

    
      	10.1.1  	
              Manufacturer
                shall not have any liability to Distributor or any Customer, in tort,
                contract or otherwise, for claims, losses, damages or injuries arising
                out
                of the design, manufacture, sale, use, licensing or performance of
                any of
                the Products or in connection with any matter of any nature arising
                out of
                or in connection with this
                Agreement.

            

    

    NOTWITHSTANDING
      THE FOREGOING, MANUFACTURER SHALL NOT BE LIABLE TO DISTRIBUTOR OR CUSTOMERS,
      FOR
      ANY INDIRECT, CONSEQUENTIAL, OR SPECIAL DAMAGES WHATSOEVER WHICH ARISE OUT
      OF OR
      IN CONNECTION WITH THIS AGREEMENT, THE DESIGN, MANUFACTURE, SALE, USE, LICENSING
      OR PERFORMANCE OF ANY OF THE PRODUCTS, INCLUDING, WITHOUT LIMITATION, DAMAGES
      ARISING FROM DELAY OF DELIVERY OR FROM LOSS OF PROFITS, DATA, BUSINESS OR
      GOODWILL, EVEN IF MANUFACTURER IS ADVISED OF THE POSSIBILITY OF SUCH
      DAMAGES.

    

    

    Article
      11 - Distributor's
      Warranties

    

    11.1 Warranties
      to Manufacturer.
      Distributor represents and warrants to Manufacturer that:

    

    
      	 	
              11.1.1

            	
              Distributor
                is to be legally incorporated under the laws of Switzerland with
                all
                requisite power to perform under this agreement. Distributor is qualified
                to do business in every jurisdiction where such qualification is
                required.
                

            

    

     

    
      	
              11.2

            	
              Indemnity.
                Distributor shall, at its sole expense, indemnify, defend and hold
                Manufacturer harmless against any representations or warranties made
                by
                Distributor, which representations or warranties were not expressly
                made
                under Manufacturer's Warranty Policy; and such indemnification shall
                extend to any and all actions, suits or proceedings incidental to
                any such
                claims, losses or damages.

            

    

    

    
      	11.3  	
              Remedies.
                The only rights and remedies conferred by this Agreement shall be
                each
                party's cause of action for breach of
                contract.

            

    

    

    Article
      12 - Import/Export
      Restrictions

    

    12.1
      Compliance.
      Distributor shall comply, at its sole cost, with the laws of the defined
      Territory, in performing its obligations and duties hereunder and in any of
      its
      dealings with or relating to Manufacturer and/or any Product.

    

    Distributor
      will use its best efforts to ensure that Customers will similarly comply with
      said laws and export licenses.

    

    Article
      13 - Taxes
      and Other Deductions

    

    
      	
              13.1

            	
              No
                Withholding.
                No deductions of any kind shall be made from any payment of monies
                to
                Manufacturer by Distributor under this Agreement, including the deduction
                or withholding of any taxes imposed by the government(s) or tax
                authorities in the Territory.

            

    

    

    13.2
       Adjustments.

    

    
      	 	
              13.2.1

            	
              If
                Distributor is required by the government or taxing authority of
                the
                Territory to deduct or withhold any taxes or duties from the monies
                payable to Manufacturer by Distributor, then Distributor shall pay
                Manufacturer the gross amount of such monies, so that the net amount
                received by Manufacturer (after withholding or deducting the required
                amount) is equal to the amount originally owed or
                invoiced.

            

    

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
              13.3

            	
              Taxes.
                Except as otherwise expressly provided in this Agreement, Distributor
                shall pay directly, and indemnify Manufacturer against and repay
                Manufacturer on demand for any and all income, franchise, sales,
                use,
                personal property, ad valorem, value-added, stamps or other taxes,
                levies,
                or other fees, together with any loss, liability, claim, costs or
                expenses, interest and penalties incurred by Manufacturer as a result
                of
                Distributor's failure to pay any such taxes when
                due.

            

    

    

    Article
      14 - Mediation
      and/or Litigation

    

    
      	
              14.

            	
              Mediation.
                The parties shall endeavor to resolve any dispute arising out of
                or
                relating to this Agreement by mediation. Unless otherwise agreed,
                the
                parties will each select a mediator and the 2 mediators will select
                a
                third. Jurisdiction for said mediation shall be the State of
                Florida.

            

    

    

    Article
      15 - Entire
      Agreement

    

    
      	
              15.

            	
              Entire
                Agreement.
                This Agreement, together with its attached Exhibits, all of which
                are
                incorporated herein by this reference and made a part hereof, contains
                the
                entire agreement between the parties hereto, and supersedes any and
                all
                other oral or written representations, statements, promises, agreements
                and letters or other expressions of intent of any kind with respect
                to the
                subject matter hereof. This Agreement may not be modified or amended
                without the prior written consent of the parties. However, the foregoing
                shall not limit the right of Manufacturer to amend, from time to
                time in
                its sole discretion, the Prices or the Warranty
                Policy.

            

    

    

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

     

    Article
      16 - Force
      Majeure

    

    
      	16.  	
              Force
                Majeure.
                Neither party hereto shall have any liability for delay or non-fulfillment
                of any terms of this Agreement caused by the party's direct or indirect
                control (but excluding financial inability) such as act of God, force
                Majeure, war, riots or civil disturbance, strikes, accident, fire,
                transportation conditions, labor and/or material shortages, governmental
                controls, regulations and permits and/or
                embargoes.

            

    

    

    

    ACCEPTED
      BY THE UNDERSIGNED FULLY AUTHORIZED AGENTS OF BOTH PARTIES.

    

    

    

    /s/
      David R. Allen__________________

    

    For
      and
      on behalf of: Quasar Group, Inc.

    (Who
      warrants her/his authority hereto)

    

    DATE
      _July
      6, 2006________________

    

    /s/
      Kevin Henderson____________

    

    Kevin
      Henderson

    President

    For
      and
      on behalf of: Sequiam Biometrics, Inc.

    (Who
      warrants his/her authority hereto)

    

    DATE
      _July
      6, 2006________________

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    Product
      Description & Product Pricing

    

    EXHIBIT
      A

    

    
      	
              Components

            	
              Distributors
                cost per unit

            
	
              Any
                Sequiam Products whose availability for distribution or assembly
                in Europe
                is not restricted or prohibited by any contract or agreement that
                pre-dates this agreement; and, any Sequiam product that is not now
                or in
                the future subject to exclusive rights granted to a Sequiam OEM client
                where such client purchases contractual exclusive rights to that
                product
                by paying its development costs.

            	
              As
                described in Article 2

               

               

            
	 	 

    

    

    

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      B

    Manufacturer's
      Warranty

    

    I.  Limited
      Warranty.
      

    

    
      	
              (A)

            	
              Manufacturer
                warrants to Distributor that it has right, title, and interest in
                Product(s) to rightfully transfer to the Distributor free of any
                liens and
                that Product(s) furnished will be new, merchantable, free from defects
                in
                material and workmanship, and will conform to and perform in accordance
                with respective Product specifications for one (1) year from the
                date of
                delivery. Should the Products not perform according to applicable
                Product
                specifications Manufacturer shall repair or replace the Product,
                at
                Manufacturer's sole cost and
                expense.

            

    

    

    
      	
              (B)

            	
              Disclaimer
                of Warranties.
                EXCEPT FOR THE LIMITED WARRANTIES SET FORTH IN SECTION 10.1.1 AND
                IN THIS
                EXHIBIT B, MANUFACTURER MAKES NO WARRANTIES OR REPRESENTATIONS TO
                DISTRIBUTOR OR TO ITS END-USER CUSTOMERS WITH RESPECT TO THE PRODUCTS,
                THE
                PERFORMANCE OF THE PRODUCTS, THE DOCUMENTATION PROVIDED WITH RESPECT
                TO
                THE PRODUCTS, OR ANY SERVICES PROVIDED HEREUNDER. MANUFACTURER EXPRESSLY
                DISCLAIMS ANY AND ALL OTHER WARRANTIES OF ANY KIND, CONCERNING THE
                PRODUCTS, DOCUMENTATION AND SERVICES, WHETHER EXPRESS OR IMPLIED,
                INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS
                FOR A PARTICULAR PURPOSE OR ANY OTHER EXPRESS OR IMPLIED WARRANTY,
                WHETHER
                ARISING IN LAW, CUSTOM, CONDUCT OR
                OTHERWISE.

            

    

    

    (C)  Neither
      Distributor nor its sales representatives, agents or third party Distributors
      or
Marketers
      has the authority to make or bind Manufacturer to any affirmation, warranty,
      

    guarantee,
      or representation, whether written or oral, concerning the
      Products.

    

    
      	
              (D)

            	
              Defective
                Product(s) in warranty will be returned to Distributor for Tier 1
                repair
                or replacement, Distributor may choose to charge reasonable fees
                for this
                service to the end user. The Distributor shall notify the Manufacturer's
                Customer Service Organization to describe the nature of the defective
                product for technical support. Manufacturer will provide electronic
                or
                telephonic technical support for troubleshooting defective product
                at no
                charge. If repair expense to the distributor exceeds 25% of the amount
                distributor paid manufacturer for the product the Manufacturer will
                assess
                the problem and provide shipping instructions including assigning
                a return
                goods authorization number (RGA) to facilitate the shipment of the
                defective Product back to the Manufacturer. Unless otherwise agreed
                by the
                Manufacturer and the Distributor, Manufacturer shall complete repairs
                and
                ship repaired Product(s), or replace Product(s), within fifteen (15)
                business days of receipt of defective Product(s) at Manufacturer
                factory
                location in the Continental United States. The Distributor shall
                bear the
                risk of in-transit loss or damage up to the point the Product(s)
                is placed
                in the possession of the carrier and Manufacturer shall bear the
                cost of
                transportation charges for shipment to Manufacturer of the Product(s)
                to
                be repaired or replaced. For return shipments from Manufacturer to
                Distributor, Manufacturer shall bear the risk of in-transit loss
                or damage
                and shall prepay and bear the cost of transportation charges for
                shipment
                of the Product(s) which has been repaired or replaced. If the Product(s)
                returned is not defective or is not in warranty, Manufacturer shall
                promptly advise Distributor in writing of this. In such cases,
                Manufacturer shall either (1) return the Product(s) to Distributor
                at
                Distributor's expense and risk in its "as-received" condition or
                (2)
                repair the Product(s) if so instructed by Distributor in writing
                and
                charge Distributor for labor, parts, and shipping in accordance with
                Article II "Repairs Not Covered under
                Warranty."

            

    

    

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    

    

    

    
      	
              (E)

            	
              Any
                replacement, repair, modification, installation, or other service
                performed by Manufacturer shall be warranted, commencing with the
                date
                upon which repaired Product(s) is returned to Distributor for the
                remainder of the unexpired period of the warranty or ninety (90)
                days,
                whichever is greater.

            

    

    

    (F) The
      warranties herein do not extend to Product(s) to the extent that such Product(s)
      have

    (1) been
      subject to misuse, neglect, accident, or abuse not caused by
      Manufacturer;

    
      	(2)  	
              been
                wired, repaired, or altered by anyone other than Manufacturer without
                Manufacturer's approval;

            

    

    (3) been
      improperly used by any personnel, including Distributor and
      Customer;

    
      	 	
              (4)

            	
              been
                used in violation of the appropriate written instructions furnished
                to
                Distributor; or

            

    

    
      	(5)  	
              been
                subjected to improper temperature, humidity, or other environmental
                conditions, and such action is the cause of the damage or
                malfunction.

            

    

    

    
      	II.  	
              Repairs
                Not Covered under Warranty

            

    

    

    (A)
      Any
      defect that requires less than 25% of the distributor cost to purchase the
      product to repair.

    

    (B) In
      addition to repairs provided for under the "Warranty" section of this
      policy.

    

    (C) Repair
      pursuant to this Article II shall be performed and billed at Manufacturer's
      prevailing repair charge rates.

    

    

    
      
        
        

      

      
        11Prepared and filed by St Ives Financial

Exhibit 10.1

SAVIENT PHARMACEUTICALS, INC.

EMPLOYMENT AGREEMENT

FOR

BRIAN J.
      HAYDEN

	  SENIOR VICE PRESIDENT – CHIEF FINANCIAL OFFICER & TREASURER

	  

Back to Contents

Contents

	

    	

    
	 	 
	Article 1.   Term of Employment	1
	 	 
	Article 2.   Definitions	1
	 	 
	Article 3.   Position and Responsibilities	5
	 	 
	Article 4.   Standard of Care	5
	 	 
	Article 5.   Compensation	6
	 	 
	Article 6.   Expenses	8
	 	 
	Article 7.   Employment Terminations	8
	 	 
	Article 8.   Change in Control	15
	 	 
	Article 9.   Assignment	18
	 	 
	Article 10. Legal Fees and Notice	19
	 	 
	Article 11. Confidentiality and Noncompetition	19
	 	 
	Article 12. Outplacement Assistance	20
	 	 
	Article 13. Miscellaneous	20
	 	 
	Article 14. Governing Law	22

Back to Contents

Employment Agreement

This Agreement is made, entered into, and is effective as of the Effective Date, by and between the Company and the Executive. 

Article 1.      Term of Employment

	1.1	
 The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company in accordance with the terms and conditions set forth herein, for a period of three (3) years, commencing as of the Effective Date.

	 	 
	1.2	
 Commencing on the third (3rd) anniversary of the Effective Date, and each anniversary thereafter, the term of this Agreement shall automatically be extended for one (1) additional year, unless at least ninety (90) days prior to such anniversary, the Company or the Executive shall have given notice in accordance with Section 10.2 hereof that it or he does not wish to extend the term of the Agreement. 

Article 2.      Definitions

	
2.1	
“Agreement” means this Employment Agreement.

	 	 
	
2.2	
“Annual Bonus” means the annual bonus to be paid to the Executive in accordance with the Company’s annual bonus program as described in Section 5.3 herein.

	 	 
	
2.3	
“Base Salary” means the salary of record paid to the Executive as annual salary, pursuant to Section 5.2, excluding amounts received under incentive or other bonus plans, whether or not deferred.

	 	 
	
2.4	
“Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act.

	 	 
	
2.5	
“Beneficiary” means the persons or entities designated or deemed designated by the Executive pursuant to Section 13.6 herein.

	 	 
	
2.6	
“Board” or “Board of Directors” means the Board of Directors of the Company.

	 	 
	
2.7	
“Cause” means: 

	 	 

	 	(a) 	Executive materially breached
      any of the terms of this Agreement and failed to correct such breach within
    fifteen (15) days after written notice thereof from the Company; 
	 	 	 	 

1

	 	(b)	  Executive has been convicted
    of a criminal offense involving a felony giving rise to a sentence of imprisonment;
	 	 	 
	 	(c)	
 Executive has breached a fiduciary trust for the purpose of gaining a personal profit, including, without limitation, embezzlement; or

	 	 	 
	 	(d)	
 Despite adequate warnings, Executive intentionally and willfully failed to perform reasonably assigned duties within the normal and customary scope of the Position. 

	 	 
	
2.8	
“Change in Control” or “CIC” of the Company shall be deemed to have occurred as of the first day that any one or more of the following conditions is satisfied: 

	 	 	 
	 	(a) 	Any consolidation or merger in which
    the Company is not the continuing or surviving entity or pursuant to which
    shares of the Common Stock would be converted into cash, securities, or other
    property, other than (i) a merger of the Company in which the holders of
    the Common Stock immediately prior to the merger have the same proportionate
    ownership of common stock of the surviving corporation immediately after
    the merger, or (ii) a consolidation or merger which would result in the voting
    securities of the Company outstanding immediately prior thereto continuing
    to represent (by being converted into voting securities of the continuing
    or surviving entity) more than 50% of the combined voting power of the voting
    securities of the continuing or surviving entity immediately after such consolidation
    or merger and which would result in the members of the Board immediately
    prior to such consolidation or merger (including for this purpose any individuals
    whose election or nomination for election was approved by a vote of at least
    two-thirds of such members) constituting a majority of the Board (or equivalent
    governing body) of the continuing or surviving entity immediately after such
    consolidation or merger; 

	 	 	 
	 	(b) 	Any sale, lease, exchange, or other
    transfer (in one transaction or a series of related transactions) of all
    or substantially all the Company’s assets; 

	 	 	 
	 	(c)	 The Company’s stockholders approve any plan or proposal for the liquidation or dissolution of the Company; 

		 	 
		
(d)	
Any Person shall become the Beneficial Owner of forty (40) percent or more of the Common Stock other than pursuant to a plan or arrangement entered into by such Person and the Company; or

2

	 	(e) 	During any period of two consecutive
    years, individuals who at the beginning of such period constitute the entire
    Board of Directors shall cease for any reason to constitute a majority of
    the Board unless the election or nomination for election by the Company’s stockholders of each new director was approved by a vote of at lest two-thirds of the directors then still in office who were directors at the beginning of the period.

	 	 
	
2.9	
“CIC Severance Benefits” means the payment of severance compensation associated with a Qualifying Termination occurring subsequent to a Change in Control, as described in Section 8.3.

	 	 
	
2.10	
“Code” means the United States Internal Revenue Code of 1986, as amended.

	 	 
	
2.11	
“Common Stock” means the common stock of the Company, $.01 par value.

	 	 
	
2.12	
“Compensation Committee” means the Compensation and Stock Option Committee of the Board, or any other committee appointed by the Board to perform the functions of such committee.

	 	 
	
2.13	
“Company” means Savient Pharmaceuticals, Inc., a Delaware corporation, or any Successor Company thereto as provided in Section 9.1 herein.

	 	 
	
2.14	
“Director” means any individual who is a member of the Board of Directors of the Company.

	 	 
	
2.15	
“Disability” or “Disabled” means for all purposes of this Agreement, the meaning ascribed to such term in the Company’s long-term disability plan, or in any successor to such plan.

	 	 
	
2.16	
“Effective Date” means July 5, 2006.

	 	 
	
2.17	
“Effective Date of Termination” means the date on which a termination of the Executive’s employment occurs.

	 	 
	
2.18	
“Employment Date” means July 5, 2006. 

	 	 
	
2.19	
“Executive” means Brian J. Hayden.

	 	 
	
2.20	
“Good Reason” shall mean, without the Executive’s express written consent, the occurrence of any one or more of the following:

	 	 	 
	
 	
(a)	
Reducing the Executive’s Base Salary;

	 	 	 
	
 	
(b)	
Failing to maintain Executive’s amount of benefits under or relative level of participation in the Company’s employee benefit or retirement plans, policies, practices, or arrangements in which the Executive participates as of the Effective Date of this Agreement; provided, however, that any such change to the Company’s employee benefit or retirement plans, policies, practices, or arrangements after the Effective Date that applies consistently to all executive officers of the Company or is required by applicable law shall not be deemed to constitute Good Reason;

3

	 	(c) 	
 Failing to require any Successor Company to assume and agree to perform the Company’s obligations hereunder; 

	 	 	 
	 	(d) 	
 The occurrence of any one or more of the following events on or after the announcement of the transaction which leads to the CIC and up to twenty-four (24) calendar months following the effective date of a CIC:

	 	 	 	 
	 	 	(1) 	Requiring Executive to be based
    at a location that requires the Executive to travel at least an additional
    thirty-five (35) miles per day;

	 	 	 
	 	 	(2) 	Requiring Executive to report to a position which is at a lower level than the highest level to which Executive reported within the six (6) months prior to the CIC; 

	 	 	 
	 	 	(3) 	Demoting Executive to a level lower than Executive’s level in the Company as of the Effective Date; or

	 	 	 
	 	 	(4) 	A material diminution of the scope or authority of Executive’s position, duties or responsibilities as in effect immediately prior to the effective date of a CIC.

	 	 
	2.21	
 “Notice of Termination” means a written noticewhich shall indicate the specific termination provision in this Agreement relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provisions so indicated, and, where applicable, shall specifically include notice pursuant to Section 1.2 that Company has elected not to renew this Agreement.

	 	 
	
2.22	
“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Securities Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.

	 	 
	
2.23	
“Position” shall have the meeting ascribed to it in Section 3.1.

	 	 
	
2.24	
“Qualifying Termination” means any of the events described in Section 8.2 herein, the occurrence of which triggers the payment of CIC Severance Benefits hereunder.

4

	2.25 	
 “Securities Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

	 	 
	2.26	
 “Service Multiple” shall be equal to the quotient resulting from a formula the numerator of which is the lesser of (a) full number of completed months that have elapsed since the Effective Date of this Agreement (but not less than 6 months) and (b) eighteen (18); and the denominator of which is twelve (12);

	 	 
	2.27 	
 “Severance Benefits” means the payment of severance compensation as provided in Sections 7.4 and 7.6 herein, and not payable due to a Change in Control of the Company.

	 	 
	2.28 	
 “Successor Company” shall have the meaning ascribed to it in Section 9.1.

	 	 
	2.29  	
 “Term” shall mean that period of time commencing on the Effective Date and ending on the Effective Date of Termination.

Article 3.      Position and Responsibilities

	
3.1	
During the term of this Agreement, the Executive agrees to serve as Senior Vice President – Chief Financial Officer & Treasurer of the Company, or in such other position which Executive shall agree to accept or to which Executive shall be promoted during the Term.  Executive shall report directly to the President and Chief Executive Officer or such other position which is at a higher position or level in the Company than Executive and as shall be determined by the President and Chief Executive Officer in his sole discretion, and shall maintain the level of duties and responsibilities as in effect as of the Effective Date as set forth in the Offer Letter provided to Executive and dated June 29, 2006, or such other level of duties and
responsibilities as Executive may be assigned during the Term (the “Position”).  

Article 4.      Standard of Care

	4.1 	
 During the term of this Agreement, the Executive agrees to devote substantially his full time, attention, and energies to the Company’s business and shall not be engaged in any other business activity, whether or not such business activity is pursued for gain, profit, or other pecuniary advantage unless such business activity is approved by the Compensation Committee and the Audit & Finance Committee (or, in the event the Compensation Committee and the Audit & Finance Committee ceases to exist, the Board).  However, subject to Article 11 herein and approval by the Compensation Committee and the Audit & Finance Committee (or the Board, as the case may be), the Executive may serve as a director of other companies which do not compete with the
Company so long as such service is not injurious to the Company. 

5

Article 5.      Compensation

	
5.1	
As remuneration for all services to be rendered by the Executive during the term of this Agreement, and as consideration for complying with the covenants herein, the Company shall pay and provide to the Executive those items set forth in Sections 5.2 through 5.8.

	 	 
	
5.2	
Base Salary.  The Company shall pay the Executive a Base Salary in an amount which shall be established from time to time by the Board of Directors of the Company or the Board’s designee; provided, however, that such Base Salary shall not be less than THREE HUNDRED TEN THOUSAND DOLLARS (US$310,000) per year. 

	 	 	 
	 	(a)	
 This Base Salary shall be paid to the Executive in equal installments throughout the year, consistent with the normal payroll practices of the Company. 

	 	 	 
	 	(b)	The Base Salary shall be reviewed
    at least annually following the Effective Date of this Agreement, while this
    Agreement is in force, to ascertain whether, in the judgment of the Board
    or the Board’s designee, such Base Salary should be increased based primarily on the performance of the Executive during the year. If so increased, the Base Salary as stated above shall, likewise, be increased for all purposes of this Agreement and shall not, in any event, be decreased in any year.

	 	 
	
5.3	
Annual Bonus.  In addition to his Base Salary, the Executive shall be entitled to participate in the Company’s annual short-term incentive program, as such program may exist from time to time, at a level commensurate with the Position.  The percentage of Base Salary targeted as annual short-term incentive compensation shall be established for the Position by the Company’s Compensation Committee in its sole discretion (the “targeted Annual Bonus award”). Executive acknowledges that the amount of annual short-term incentive, if any, to be awarded shall be at the sole discretion of the Company’s Compensation Committee, may be less or more than the targeted Annual bonus award, will be prorated from the Effective Date for the
remainder of the calendar year 2006 and will be based on a number of factors set in advance by the Compensation Committee for each calendar year, including the Company’s performance and the Executive’s individual performance. Nothing in this Section 5.3 shall be construed as obligating the Company or the Board to refrain from changing, and/or amending the short-term incentive program, so long as such changes are equally applicable to all executive employees in the Company. 

6

	
5.4	
Long-Term Incentives.  The Executive shall be eligible to participate in the Company’s long-term incentive plan, as such shall be amended or superseded from time to time provided, however, that nothing in this Section 5.4 shall be construed as obligating the Company or the Board to refrain from changing, and/or amending the long-term incentive plan, so long as such changes are equally applicable to all executive employees in the Company. Executive acknowledges that any awards under the Company’s long-term incentive plan in 2007 based on performance in 2006 may, in the discretion of the Compensation Committee, be prorated from the Effective Date for the remainder of the calendar year 2006.

	 	 
	
5.5	
Retirement Benefits.  The Company shall provide to the Executive participation in any Company qualified and nonqualified defined benefit and defined contribution retirement plans as may be established during the term of this Agreement; provided, however, that nothing in this Section 5.5 shall be construed as obligating the Company to refrain from changing, and/or amending the nonqualified retirement programs, so long as such changes are equally applicable to all executive employees in the Company.

	 	 
	
5.6	
Employee Benefits.  During the Term, and as otherwise provided within the provisions of each of the respective plans, the Company shall provide to the Executive all benefits to which other executives and employees of the Company are entitled to receive, as commensurate with the Position, subject to the eligibility requirements and other provisions of such arrangements as applicable to executives of the Company generally.  

	 	 	 
	
 	
(a)	
Such benefits shall include, but shall not be limited to, group term life insurance, health, dental and life insurance, and short-term and long-term disability. 

	 	 	 
	
 	
(b)	
The Executive shall likewise participate in any additional benefit as may be established during the term of this Agreement, by standard written policy of the Company.

	 	 
	
5.7	
Vacation.  The Executive shall be entitled to, in accordance with and pursuant to Company policy, such paid vacation as is customary for the Position within the Company, but in any event not less than twenty (20) paid vacation days during each calendar year, pro-rated for partial years of employment; provided, however, that without prior written approval, Executive may carry forward into the next year no more than ten (10) unused vacation days from the current year.

	 	 
	
5.8	
Right to Change Plans. The Company shall not be obligated to institute, maintain, or refrain from changing, amending, or discontinuing any benefit plan, program, or perquisite, so long as such changes are equally applicable to all executive employees in the Company.

7

Article 6. Expenses

	
6.1	
Upon presentation of appropriate documentation, the Company shall pay, or reimburse the Executive for all ordinary and necessary expenses, in a reasonable amount, which the Executive incurs in performing his duties under this Agreement including, but not limited to, travel, entertainment, professional licensing fees, dues and subscriptions, and all dues, fees, and expenses associated with membership in various professional, business, and civic associations and societies.

Article 7. Employment Terminations

	
7.1	
Termination Due to Death. In the event the Executive’s employment is terminated while this Agreement is in force by reason of death, the Company’s obligations under this Agreement shall immediately expire. Notwithstanding the foregoing, the Company shall be obligated to pay to the Executive the following: 

	 	 	 
	
 	
(a)	
Base Salary through the Effective Date of Termination; 

	 	 	 
	
 	
(b)	
An amount equal to the Executive’s unpaid targeted Annual Bonus award, established for the fiscal year in which such termination is effective, multiplied by a fraction, the numerator of which is the number of completed days in the then-existing fiscal year through the Effective Date of Termination, and the denominator of which is three hundred sixty-five (365);

	 	 	 
	
 	
(c)	
All outstanding long-term incentive awards shall be subject to the treatment provided under the applicable long-term incentive plan of the Company; 

	 	 	 
	
 	
(d)	
Accrued but unused vacation pay through the Effective Date of Termination; and 

	 	 	 
	
 	
(e)	
All other rights and benefits the Executive is vested in, including any accrued but unpaid Annual Bonus award for the prior year, pursuant to other plans and programs of the Company.

	 	 	 
	
 	
(f)	
The benefits described in Sections 7.1(a) and (d) shall be paid in cash to the Executive in a single lump sum as soon as practicable following the Effective Date of Termination, but in no event beyond thirty (30) days from such date. All other payments due to the Executive upon termination of employment, including those in Sections 7.1(b) and (c), shall be paid in accordance with the terms of such applicable plans or programs. 

8

	
 	
(g)	
With the exception of the covenants contained in Articles 9 and 14 and Sections 7.1(f), 13.3, 13.5, and 13.7 herein (which shall survive such termination), the Company and the Executive thereafter shall have no further obligations under this Agreement.

	 	 
	
7.2	
Termination Due to Disability.  In the event that the Executive becomes Disabled during the term of this Agreement and is, therefore, unable to perform his duties herein for more than one hundred eighty (180) total calendar days during any period of twelve (12) consecutive months, or in the event of the Board’s reasonable expectation that the Executive’s Disability will exist for more than a period of one hundred eighty (180) calendar days, the Company shall have the right to terminate the Executive’s active employment as provided in this Agreement. 

	 	 	 
	
 	
(a)	
The Board shall deliver written notice to the Executive of the Company’s intent to terminate for Disability at least thirty (30) calendar days prior to the Effective Date of Termination. 

	 	 	 
	
 	
(b)	
Such Disability to be determined by the Board of Directors of the Company upon receipt of and in reliance on competent medical advice from one (1) or more individuals, selected by the Board, who are qualified to give such professional medical advice.

	 	 	 
	
 	
(c)	
A termination for Disability shall become effective upon the end of the thirty (30) day notice period unless prior to the expiration of such thirty (30) day notice period Executive returns to work with medical documentation of his fitness to resume his duties determined to be acceptable by the Board of Directors in their sole discretion. 

	 	 	 
	
 	
(d)	
Notwithstanding the foregoing, the Company shall be obligated to pay to the Executive the following: 

	 	 	 	 
	
 	 	
(1)	
Base Salary through the Effective Date of Termination; 

	 	 	 	 
	
 	 	
(2)	
An amount equal to the Executive’s unpaid targeted Annual Bonus award, established for the fiscal year in which the Effective Date of Termination occurs, multiplied by a fraction, the numerator of which is the number of completed days in the then-existing fiscal year through the Effective Date of Termination, and the denominator of which is three hundred sixty-five (365);

	 	 	 	 
	
 	 	
(3)	
All outstanding long-term incentive awards shall be subject to the treatment provided under the applicable long-term incentive plan of the Company;

9

	
 	 	
(4)	
Accrued but unused vacation pay through the Effective Date of Termination; and 

	 	 	 	 
	 	
 	
(5)	
All other rights and benefits the Executive is vested in, including any accrued but unpaid Annual Bonus award for the prior year, pursuant to other plans and programs of the Company.

	 	 	 
	
 	
(e)	
The benefits described in Sections 7.2(d)(1) and (d)(4) shall be paid in cash to the Executive in a single lump sum as soon as practicable following the Effective Date of Termination, but in no event beyond thirty (30) days from such date. All other payments due to the Executive upon termination of employment, including those in Sections 7.2(d)(2) and (d)(3), shall be paid in accordance with the terms of such applicable plans or program. 

	 	 	 
	
 	
(f)	
With the exception of the covenants contained in Articles 8, 9, 10, 11, and 14 and Sections 7.2(e), 13.3, 13.5, and 13.7 herein (which shall survive such termination), the Company and the Executive thereafter shall have no further obligations under this Agreement.

	 	 
	7.3	
 Voluntary Termination by the Executive. The Executive may terminate this Agreement at any time by giving Notice of Termination to the Board of Directors of the Company, delivered at least fourteen (14) calendar days prior to the Effective Date of Termination.

		 	 
		
(a)	
The termination automatically shall become effective upon the expiration of the fourteen (14) day notice period. Notwithstanding the foregoing, the Company may waive the fourteen (14) day notice period; however, the Executive shall be entitled to receive all elements of compensation described in Sections 5.1 through 5.6 for the fourteen (14) day notice period, subject to the eligibility and participation requirements of any qualified retirement plan. 

		 	 
		
(b)	
Upon the Effective Date of Termination, following the expiration of the fourteen (14) day notice period, the Company shall pay the Executive his full Base Salary and accrued but unused vacation pay and any accrued but unpaid Annual Bonus award for the prior year, at the rate then in effect, through the Effective Date of Termination, plus all other benefits to which the Executive has a vested right at that time (for this purpose, the Executive shall not be paid any Annual Bonus with respect to the fiscal year in which voluntary termination under this Section occurs).

		 	 
		
(c)	
With the exception of the covenants contained in Articles 8, 9, 11, and 14 and Sections 13.3, 13.5, and 13.7 herein (which shall survive such termination), the Company and the Executive thereafter shall have no further obligations under this Agreement.

10

	7.4	
  Involuntary Termination by the Company without Cause. At all times during the Term, the Board may terminate the Executive’s employment for reasons other than death, Disability, or for Cause, by providing to the Executive a Notice of Termination, at least sixty (60) calendar days (ninety (90) calendar days when termination is due to non-renewal of this Agreement by the Company pursuant to Section 1.2) prior to the Effective Date of Termination; provided, however, that such notice shall not preclude the Company from requiring Executive to leave the Company immediately upon receipt of such notice. A notice of non-renewal by the Company pursuant to Section 1.2 shall be considered a termination pursuant to this Section.

		 	 
		
(a)	
Such Notice of Termination shall be irrevocable absent express, mutual consent of the parties.

		 	 
		
(b)	
Upon the Effective Date of Termination (not a Qualifying Termination), following the expiration of the sixty (60) day notice period (90 days in the case of non-renewal), the Company shall pay and provide to the Executive:

	 	 	 	 
	 	 	(1) 	An amount equal to the Service Multiple
    times the Executive’s annual Base Salary established for the fiscal year in which the Effective Date of Termination occurs;

	 	 	 	 
	 	 	(2) 	An amount equal to the Service Multiple
    times the Executive’s targeted Annual Bonus award established for the
    fiscal year in which the Effective Date of Termination occurs; provided,
    however, that no payment shall be made under this Section 7.4(b)(2) if the
    Effective Date of Termination is less than twelve (12) months after the Effective
    Date of this Agreement;

11

	 	 	(3) 	A continuation of the welfare
      benefits of medical, dental and life insurance coverage (or if continuation
      under the Company’s then current plans is not allowed, then provision
      at the Company’s expense but subject to payment by Executive of those
      payments which Executive would have been obligated to make under the Company’s
      then current plan, of substantially similar welfare benefits from one or
      more third party providers) after the Effective Date of Termination for
      a number of months equal to the Service Multiple times twelve (12). These
      benefits shall be provided to the Executive at the same coverage level
      as in effect as of the Effective Date of Termination, and at the same premium
      cost to the Executive which was paid by the Executive at the time such
      benefits were provided. However, in the event the premium cost and/or level
      of coverage shall change for all employees of the Company, or for management
      employees with respect to supplemental benefits, the cost and/or coverage
      level, likewise, shall change for the Executive in a corresponding manner.
      The continuation of these welfare benefits shall be discontinued if prior
      to the expiration of the period, the Executive has available substantially
      similar benefits at a comparable cost to the Executive from a subsequent
      employer, as determined by the Compensation Committee (or, in the event
    the Compensation Committee ceases to exist, the Board);
	 	 	 	 
	 	 	(4) 	All outstanding long-term
      incentive awards shall be subject to the treatment provided under the applicable
    long-term incentive plan of the Company;
	 	 	 	 
	 	 	(5)	 An amount equal to the Executive’s unpaid Base Salary and accrued but unused vacation pay through the Effective Date of Termination; and

	 	 	 	 
	 	 	(6)	 All other benefits to which the
    Executive has a vested right at the time, according to the provisions of
    the governing plan or program. 

		 	 
		
(c)	
In the event that the Board terminates the Executive’s employment without Cause on or after the date of the announcement of the transaction which leads to a CIC, the Executive shall be entitled to the CIC Severance Benefits as provided in Section 8.3 in lieu of the Severance Benefits outlined in this Section 7.4.

		 	 
		
(d)	
Payment of all of the benefits described in Section 7.4(b)(1) shall be paid in cash to the Executive in equal bi-weekly installments over a period of consecutive months equal to the Service Multiple times twelve (12) and beginning on the fifteenth day of the month following the month in which the Effective Date of Termination occurs.  

		 	 
		
(e)	
Payment of all but forty thousand dollars ($40,000) of the benefits described in Section 7.4(b)(2) shall be paid in cash to the Executive in a single lump sum as soon as practicable following the Effective Date of Termination, but in no event beyond thirty (30) days from such date.  The forty thousand dollars ($40,000) which was withheld shall be paid in cash to the Executive in a single lump sum at the end of the twelve (12) month restrictive period set forth in Sections 11.2 and 11.3 of this Agreement. 

		 	 
		
(f)	
Except as specifically provided in Section 7.4(d) and (e), all other payments due to the Executive upon termination of employment shall be paid in accordance with the terms of such applicable plans or programs. 

12

		
(g)	
With the exception of the covenants contained in Articles 8, 9, 10, 11, 12 and 14 and Sections 7.4, 13.3, 13.5, and 13.7 (which shall survive such termination), the Company and the Executive thereafter shall have no further obligations under this Agreement. 

	 	 
	
7.5	
Termination for Cause. Nothing in this Agreement
shall be construed to prevent the Board from terminating the Executive’s
employment under this Agreement for Cause. 

		 	 
		
(a)	
To be effective, the Notice of Termination must set forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination for Cause. 

		 	 
		
(b)	
In the event this Agreement is terminated by the Board for Cause, the Company shall pay the Executive his Base Salary and accrued vacation pay through the Effective Date of Termination, and the Executive shall immediately thereafter forfeit all rights and benefits (other than vested benefits) he would otherwise have been entitled to receive under this Agreement. The Company and the Executive thereafter shall have no further obligations under this Agreement with the exception of the covenants contained in Articles 9, 10, 11, and 14 and Sections 13.3, 13.5, and 13.9 herein (which shall survive such termination).

	 	 
	
7.6	
Termination for Good Reason. Except where Section 2.20(d) is applicable, this Section 7.6 shall only become effective when at least twelve (12) months have elapsed since the Effective Date of this Agreement.   Prior to this Section 7.6 becoming effective, any notice of termination by Executive may only be given pursuant to Section 7.3.  The Executive shall have sixty (60) days from the date he learns of action taken by the Company that allows the Executive to terminate his employment for Good Reason to provide the Board with a Notice of Termination. 

		 	 
		
(a)	
The Notice of Termination must set forth in reasonable detail the facts and circumstances claimed to provide a basis for such Good Reason termination. 

		 	 
		
(b)	
The Company shall have thirty (30) days to cure such Company action following receipt of the Notice of Termination. 

		 	 
		
(c)	
The Executive is required to continue his employment for the sixty (60) day period following the date in which he provided the Notice of Termination to the Board. The Company may waive the sixty (60) day notice period; however, the Executive shall be entitled to receive all elements of compensation described in Sections 5.1 through 5.6 for the sixty (60) day notice period, subject to the eligibility and participation requirements of any qualified retirement plan. 

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(d)	
Upon a termination of the Executive’s employment for Good Reason during the Term, and following the expiration of the sixty (60) day notice period, the Company shall pay and provide to the Executive the following:

		 	 	 
		
 	
(1)	
An amount equal to the Service Multiple times the Executive’s annual Base Salary established for the fiscal year in which the Effective Date of Termination occurs;

		 	 	 
		
 	
(2)	
An amount equal to the Service Multiple times the Executive’s targeted Annual Bonus award established for the fiscal year in which the Effective Date of Termination occurs;

		 	 	 
		
 	
(3)	
A continuation of the welfare benefits of medical, dental and life insurance coverage (or if continuation under the Company’s then current plans is not allowed, then provision at the Company’s expense but subject to payment by Executive of those payments which Executive would have been obligated to make under the Company’s then current plan, of substantially similar welfare benefits from one or more third party providers) after the Effective Date of Termination for a number of months equal to the Service Multiple times twelve (12). These benefits shall be provided to the Executive at the same coverage level, as in effect as of the Effective Date of Termination and at the same premium cost to the Executive which was paid by the Executive at the
time such benefits were provided. However, in the event the premium cost and/or level of coverage shall change for all employees of the Company, or for management employees with respect to supplemental benefits, the cost and/or coverage level, likewise, shall change for the Executive in a corresponding manner. The continuation of these welfare benefits shall be discontinued prior to the end of the one-and-one-half (1.5) year period in the event the Executive has available substantially similar benefits at a comparable cost to the Executive from a subsequent employer, as determined by the Compensation Committee (or, in the event the Compensation Committee ceases to exist, the Board);

		 	 	 
		
 	
(4)	
All outstanding long-term incentive awards shall be subject to the treatment provided under the applicable long-term incentive plan of the Company;

		 	 	 
		
 	
(5)	
An amount equal to the Executive’s unpaid Base Salary and accrued but unused vacation pay through the Effective Date of Termination; and

		 	 	 
		
 	
(6)	
All other benefits to which the Executive has a vested right at the time, according to the provisions of the governing plan or program.

14

		
(e)	
In the event of termination of Executive’s employment for Good Reason on or after the date of the announcement of the transaction which leads to the CIC and up to twenty-four (24) months following the date of the CIC, the Executive shall be entitled to the CIC Severance Benefits as provided in Section 8.3 in lieu of the Severance Benefits outlined in this Section 7.6.

		 	 
		 (f)	 The Executive’s right to terminate
        employment for Good Reason shall not be affected by the Executive’s
        incapacity due to physical or mental illness unless such incapacity is
    determined to constitute a Disability as provided herein. 
		 	 
		 (g)	 Payment of all but forty thousand dollars
        ($40,000) of the benefits described in Section 7.6(d)(1) and payment
        of all of the benefits described in Section 7.6(d)(2) shall be paid in
        cash to the Executive in a single lump sum as soon as practicable following
        the Effective Date of Termination, but in no event beyond thirty (30)
        days from such date. The forty thousand dollars ($40,000) which was withheld
        shall be paid in cash to the Executive in a single lump sum at the end
        of the twelve (12) month restrictive period set forth in Sections
    11.2 and 11.3 of this Agreement. 
		 	 
		
(h)	
Except as specifically provided in Section 7.6(g), all other payments due to the Executive upon termination of employment shall be paid in accordance with the terms of such applicable plans or programs. 

		 	 
		
(i)	
Notwithstanding anything herein to the contrary, the Company’s payment obligations under this Section 7.6 shall be offset by any amounts that the Company is required to pay to the Executive under a national statutory severance program applicable to such Executive.

		 	 
		
(j)	
With the exceptions of the covenants contained in Articles 8, 9, 10, 11, 12 and 14 and Sections 7.6, 13.3, 13.5, and 13.7 (which shall survive such termination) herein, the Company and the Executive thereafter shall have no further obligations under this Agreement.

Article 8. Change in Control

	
8.1	
Employment Termination Following a Change in Control. The Executive shall be entitled to receive from the Company CIC Severance Benefits if a Notice of Termination for a Qualifying Termination of the Executive has been delivered; provided, that:

		 	 
	
 	
(a)	
The Executive shall not be entitled to receive CIC Severance Benefits if he is terminated for Cause (as provided in Section 7.5 herein), or if his employment with the Company ends due to death, or Disability, or due to voluntary termination of employment by the Executive without Good Reason.

15

	
 	
(b)	
CIC Severance Benefits shall be paid in lieu of all other benefits provided to the Executive under the terms of this Agreement.

	 	 
	
8.2	
Qualifying Termination. The occurrence of any one or more of the following events on or after the date of the announcement of the transaction which leads to the CIC and up to twenty-four (24) months following the date of the CIC shall trigger the payment of CIC Severance Benefits to the Executive under this Agreement:

		 	 
		 (a)	 An involuntary termination of the Executive’s
        employment by the Company for reasons other than Cause, death, or Disability,
    as evidenced by a Notice of Termination delivered by the Company to the Executive;
		 	 
	
 	
(b)	
A voluntary termination by the Executive for Good Reason as evidenced by a Notice of Termination delivered to the Company by the Executive; 

		 	 
	
 	
(c)	
Failure to renew this Agreement (if the Agreement would expire unless renewed within such period), as evidenced by a Notice of Termination delivered by the Company to the Executive; or

		 	 
	
 	
(d)	
The Company or any Successor Company materially breaches any material provision of this Agreement and does not cure such breach within thirty (30) days of receiving a written notice from the Executive with such notice explaining in reasonable detail the facts and circumstances claimed to provide a basis for the Executive’s claim.
	 	 	 

	
8.3	
Severance Benefits Paid upon a Qualifying Termination. In the event the Executive becomes entitled to receive CIC Severance Benefits, the Company shall pay to the Executive and provide him the following:

		 	 
	
 	
(a)	
An amount equal to two (2) times the Executive’s annual Base Salary established for the fiscal year in which the Effective Date of Termination occurs;

		 	 
	
 	
(b)	
An amount equal to two (2) times the Executive’s targeted Annual Bonus award established for the fiscal year in which the Executive’s Effective Date of Termination occurs;

		 	 
	
 	
(c)	
An amount equal to the Executive’s unpaid Base Salary and accrued but unused vacation pay through the Effective Date of Termination;

16

	
 	
(d)	
All outstanding long-term incentive awards shall be subject to the treatment provided under the applicable long-term incentive plan of the Company;

		 	 
	
 	
(e)	
A continuation of the welfare benefits of medical, dental and life insurance coverage for two (2) full years after the Effective Date of Termination (or if continuation under the Company’s then current plans is not allowed, then provision at the Company’s expense but subject to payment by Executive of those payments which Executive would have been obligated to make under the Company’s then current plan, of substantially similar welfare benefits from one or more third party providers).

	 	 	 	 
	
 	
 	
(1)	
These benefits shall be provided to the Executive at the same coverage level, as in effect as of the Effective Date of Termination or, if greater, as in effect sixty (60) days prior to the date of the Change in Control, and at the same premium cost to the Executive which was paid by the Executive at the time such benefits were provided. 

	 	 	 	 
	
 	
 	
(2)	
In the event the premium cost and/or level of coverage shall change for all employees of the Company, or for management employees with respect to supplemental benefits, the cost and/or coverage level, likewise, shall change for the Executive in a corresponding manner. 

	 	 	 	 
	
 	
 	
(3)	
The continuation of these welfare benefits shall be discontinued prior to the end of thetwo year period in the event the Executive has available substantially similar benefits at a comparable cost to the Executive from a subsequent employer, as determined by the Compensation Committee (or, in the event the Compensation Committee ceases to exist, the Board). 

	 	 
	
8.4	
Form and Timing of Severance Benefit. Payment of all of the benefits described in Sections 8.3(a) through (c) shall be paid in cash to the Executive in a single lump sum as soon as practicable following the Effective Date of Termination, but in no event beyond thirty (30) days from such date. All other payments due to the Executive upon termination of employment shall be paid in accordance with the terms of such applicable plans or programs.

	 	 
	
8.5	
Excise Tax. In the event that a Change in Control occurs, and a determination is made by the Company pursuant to Section 280G and 4999 of the Code that a golden parachute excise tax is due, the benefits provided to the Executive under this Agreement that are classified as “parachute payments” (as such term is defined in Section 280G of the Code), shall be limited to the amount just necessary to avoid the excise tax.  

17

	
 	
(a)	
This limitation shall be applied if, and only if, such a limitation results in a greater net (of excise tax) cash benefit to the Executive than he would receive had the benefits not been capped and an excise tax been levied.

	 	 
	
8.6	
With the exceptions of the covenants contained in Articles 8, 9, 10, 11, 12 and 14 and Sections 13.3, 13.5, and 13.7 (which shall survive such termination) herein, the Company and the Executive thereafter shall have no further obligations under this Agreement.

Article 9. Assignment

	
9.1	
Assignment by Company. This Agreement may and shall be assigned or transferred to, and shall be binding upon and shall inure to the benefit of any Successor Company, with Successor Company for purposes of this Agreement being defined as a company that (i) acquires greater than fifty percent (50%) of the assets of the Company or (ii) acquires greater than fifty percent (50%) of the outstanding stock of the Company, or (iii) is the surviving entity in the event of a CIC. 

	 	 	 
	
 	
(a)	
Any such Successor Company shall be deemed substituted for all purposes of the “Company” under the terms of this Agreement.

	 	 	 
	
 	
(b)	
Failure of the Company to obtain the agreement of any Successor Company to be bound by the terms of this Agreement prior to the effectiveness of any such succession shall be a breach of this Agreement, and shall immediately entitle the Executive to benefits from the Company in the same amount and on the same terms as the Executive would be entitled to receive in the event of a termination of employment for Good Reason as provided in Section 7.7 (failure not related to a Change in Control) or Section 8.3 (if the failure of assignment follows or is in connection with a Change in Control). 

	 	 	 
	
 	
(c)	
Except as herein provided, this Agreement may not otherwise be assigned by the Company.

	 	 
	
9.2	
Assignment by Executive. This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. 

	 	 	 
	
 	
(a)	
If the Executive dies while any amount would still be payable to him pursuant to this Agreement had he continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement, to the Executive’s Beneficiary. 

18

	
 	
(b)	
If the Executive has not named a Beneficiary, then such amounts shall be paid to the Executive’s devisee, legatee, or other designee, or if there is no such designee, to the Executive’s estate.

Article 10. Legal Fees and Notice

	
10.1	
Payment of Legal Fees. To the extent permitted by law, the Company shall pay all legal fees, costs of litigation, prejudgment interest, and other expenses incurred by Executive in contesting a termination, if Executive prevails.

	 	 
	
10.2	
Notice. Any notices, requests, demands, or other communications provided by this Agreement shall be sufficient if in writing and if sent by registered or certified mail to the Executive at the last address he has filed in writing with the Company or, in the case of the Company, at its principal offices to the attention of the Chief Executive Officer.

Article 11. Confidentiality and Noncompetition

	
11.1	
Disclosure of Information. The Executive recognizes that he has access to and knowledge of confidential and proprietary information of the Company that is essential to the performance of his duties under this Agreement. 

	 	 	 
	
 	
(a)	
The Executive will not, during and for five (5) years after the term of his employment by the Company, in whole or in part, disclose such information to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever, nor shall he make use of any such information for his own purposes, so long as such information has not otherwise been disclosed to the public or is not otherwise in the public domain except as required by law or pursuant to administrative or legal process.

	 	 
	
11.2	
Covenants Regarding Other Employees. During the term of this Agreement, and for a period of twelve (12) months following the Executive’s termination of employment for any reason, the Executive agrees not to actively solicit any employee of the Company to terminate his or her employment with the Company or to interfere in a similar manner with the business of the Company.

	 	 
	
11.3	
Noncompete Following a Termination of Employment. From the Effective Date of this Agreement until six (6) months following the Executive’s Effective Date of Termination for any reason, the Executive will not: (a) directly or indirectly own any equity or proprietary interest in (except for ownership of shares in a publicly traded company not exceeding three percent (3%) of any class of outstanding securities), or be an employee, agent, director, advisor, or consultant to or for any competitor of the Company, whether on his own behalf or on behalf of any person; or (b) undertake any action to induce or cause any customer or client to discontinue any part of its business with the Company. 

19

	
11.4	
Waiver of Covenants Upon a Change in Control. Upon the occurrence of a Change in Control, the Executive shall be released from each of the covenants set forth in Section 11.2 and 11.3, if such Executive is terminated by the Company without Cause or if the Executive terminates his employment with the Company for Good Reason.

Article 12. Outplacement Assistance

	
12.1	
Following a termination of employment, other than for Cause, the Executive shall be reimbursed by the Company for the costs of all outplacement services obtained by the Executive within the one (1) year period after the Effective Date of Termination; provided, however, that the total reimbursement shall be limited to an amount equal to ten percent (10%) of the Executive’s Base Salary as of the effective date of termination.

Article 13. Miscellaneous

	
13.1	
Entire Agreement. With the exception of the Company’s Proprietary Information and Inventions Agreement and the Offer Letter provided to Executive and dated June 29, 2006 (the terms of which are incorporated herein by this reference), this Agreement supersedes any prior agreements, or understandings, oral or written, between the parties hereto or between the Executive and the Company, with respect to the subject matter hereof, and constitutes the entire agreement of the parties with respect thereto.

	 	 
	
13.2	
Modification. This Agreement shall not be varied, altered, modified, canceled, changed, or in any way amended except by mutual agreement of the parties in a written instrument executed by the parties hereto or their legal representatives.

	 	 
	
13.3	
Severability. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect.

	 	 
	
13.4	
Counterparts. This Agreement may be executed in one (1) or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

	 	 
	
13.5	
Tax Withholding. The Company may withhold from any benefits payable under this Agreement all federal, state, city, or other taxes as may be required pursuant to any law or governmental regulation or ruling.

20

	
13.6	
Beneficiaries. To the extent allowed by law, any payments or benefits hereunder due to the Executive at the time of his death shall nonetheless be paid or provided and the Executive may designate one or more persons or entities as the primary and/or contingent beneficiaries of any amounts to be received under this Agreement. Such designation must be in the form of a signed writing acceptable to the Board or the Board’s designee. The Executive may make or change such designation at any time.

	 	 
	
13.7	
Payment Obligation Absolute. Absent actions deliberately or willfully taken by the Executive to materially injure the Company, the Company’s obligation to make the payments and the arrangement provided for herein shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which the Company may have against the Executive or anyone else. 

	 	 	 
	
 	
(a)	
All amounts payable by the Company hereunder shall be paid without notice or demand. Subject to the provisions set forth in Sections 7.4 and 7.6, and Article 11, each and every payment made hereunder by the Company shall be final, and the Company shall not seek to recover all or any part of such payment from the Executive or from whomsoever may be entitled thereto, for any reasons whatsoever.

	 	 	 
	
 	
(b)	
With the exception of the Company’s willful material breach of its payment obligations under Articles 7 and 8 of this Agreement (provided, however, that no such breach shall be deemed to have occurred until the Executive has provided the Board with written notice of such breach and a reasonable opportunity for cure), the restrictive covenants contained in Article 11 are independent of any other contractual obligations in this Agreement or otherwise owed by the Company to the Executive. Except as provided in this paragraph, the existence of any claim or cause of action by Executive against the Company, whether based on this Agreement or otherwise, shall not create a defense to the enforcement by the Company of any restrictive covenant contained
herein.

	 	 	 
	
 	
(c)	
The Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under any provision of this Agreement, and the obtaining of any such other employment shall in no event effect any reduction of the Company’s obligations to make the payments and arrangements required to be made under this Agreement. 

21

Article 14. Governing Law

	
14.1	
To the extent not preempted by federal law, the provisions of this Agreement shall be construed and enforced in accordance with the laws of the state of New Jersey.

IN WITNESS WHEREOF, the Company, through its duly authorized representative, and the Executive have executed this Agreement as of the Effective Date.

	 	Executive:
	 	 
	 	/s/ Brian J. Hayden
	 	     Brian J. Hayden
	 	 	 
	 	 Company:

	 	 
	 	 Savient Pharmaceuticals, Inc. 

	 	 	 
	 	 	 
	 	By:	
/s/ Christopher Clement

	 	 	Christopher Clement

	 	 	President & Chief Executive Officer

22

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