Document:

Exhibit
      10.1

    

    EXCLUSIVE
      COLLABORATION AND DISTRIBUTION AGREEMENT

     

    THIS
      EXCLUSIVE COLLABORATION AND DISTRIBUTION AGREEMENT
      (“Agreement”) is made as of this 17th
      day of
      June, 2005 (“Effective Date”), by and between InforMedix, Inc., a Delaware
      corporation with offices at Georgetowne Office Park, 5880 Hubbard Drive,
      Rockville, MD 20852 (“Vendor”), and invivodata, Inc., a Delaware corporation
      with offices at 2100 Wharton Street, Suite 505, Pittsburgh, PA 15203
      (“Distributor”). 

    

    WHEREAS,
      Vendor
      has developed an electronic device and backend software application (the
“Med-eMonitorTM
      System”)
      providing for the storage and dispensing of medication, and the collection
      and
      monitoring of medication compliance and patient outcomes data and is desirous
      of
      utilizing Distributor’s distribution channels; and possesses certain
      Intellectual Property; and

    

    WHEREAS,
      Distributor is established in the field of electronic patient recorded outcomes
      for clinical trials (“ePRO”) and is desirous of obtaining the right to market
      and distribute Vendor’s products, as set forth below; and

    

    WHEREAS,
      each of
      the parties wish to collaborate in their efforts to develop and implement a
      marketing and sales program for the Med-Monitor System; 

    

    NOW
      THEREFORE,
      in
      consideration of the promises and mutual covenants contained herein, and for
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, Vendor and Distributor agree as follows:

    

    1. DEFINITIONS.
      For
      purposes of this Agreement, the following terms shall have the meanings set
      forth below:

    

    Agreement
      shall
      mean this agreement plus all Exhibits. 

    

    Alliance
      shall
      mean the promises, obligations and duties performed by both Vendor and
      Distributor pursuant to the terms of this Agreement. 

    

    Confidential
      Information
      shall
      have the meaning set forth in Section 6.1 herein.

    

    Customers
      shall
      mean those purchasers of the Products described in Exhibit
      A.

    

    Distributor shall
      mean invivodata, Inc. 

    

    
      
        
        

      

      
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    Effective
      Date
      shall be
      the date of the Agreement as set forth in the Introduction.

    

    eDiary
      Companies
      shall
      mean those companies competing with Distributor in the ePRO Market during the
      term of this Agreement.

    

    ePRO
      shall be
      an acronym which refers to the words “electronic patient reported outcomes” as
      those words are commonly used in describing the collection of data by patients
      enrolled in clinical trials sponsored by pharmaceutical companies.

    

    Intellectual
      Property
      shall
      have the meaning set forth in Section 5.5 herein.

    

    Market
      shall
      mean the market for electronic patient reported outcomes (“ePRO”) devices and
      services for the clinical drug trials industry, including Clinical Drug Trials
      Phases I through IV.

    

    Marks
      shall
      have the meaning set forth in Section 5.1 herein.

    

    Master
      Equipment Lease Agreement
      shall
      mean an agreement between Distributor and Vendor for the lease of
      Med-eMonitorTM
      Device
      units as set forth in Exhibit
      F.
      

    

    Master
      License and Services Agreement
      shall
      mean an agreement describing the terms upon which Distributor will obtain and
      Vendor will provide certain services to Distributor and / or its Customers
      in
      connection with the deployment, implementation, customization and support of
      the
      Med-eMonitor System as set forth in Exhibit
      G.

    

    Med-eMonitorTM
      Device shall
      mean the patented device invented and manufactured by Vendor and used by
      patients, that physically contains, organizes, and monitors medication. The
      device includes a handheld device and a cradle. The handheld device contains
      an
      LCD screen, a variety of buttons, and medication storage. The cradle contains
      a
      communications modem, and battery charging capability. 

    

    Med-eMonitorTM
      Firmware shall
      mean the software embedded in the Med-eMonitorTM
      Device
      that operates the device, and provides for communications linkage with the
      Med-eXpert database. 

    

    Med-eMonitorTM
      System shall
      mean the combination of hardware and software comprising the
      Med-eMonitorTM
      Device,
      Med-eMonitorTM
      Firmware, Med-eXpertTM
      Backend
      Software, and Med-eXpertTM
      Database
      providing for the storage and dispensing of medication, and the collection
      and
      monitoring of medication compliance and patient outcomes data; 

    

    Med-eXpertTM
      Backend Software shall
      mean the software that provides for a real-time protocol design tool that
      programs the Med-eMonitor devices with the ePRO protocols, and that enables
      analysis and reporting of data captured by the Med-eMonitorTM
      Device.

    

    Med-eXpertTM
      Backend System shall
      have the same meaning as the Med-eXpertTM
      Backend
      Software. 

    

    Med-eXpertTM
      Database shall
      mean the database which stores all data captured by the Med-eMonitorTM
      Device
      and/or any other device with is operated by the Med-eXpertTM
      Backend
      Software. 

     

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    Products shall
      mean those products or services to be leased, licensed or sold by Vendor to
      Distributor for distribution hereunder as such products, including upgrades
      and
      enhancements, as described in Exhibit
      A
      attached
      hereto, and as may be amended upon the mutual agreement of the parties.

    

    Purchase.
      The term
      purchase shall refer to any procurement of Vendor Products or Services through
      the execution of a either the Master Equipment Lease Agreement as set forth
      in
      Exhibit F, or Master License and Services Agreement as set forth in Exhibit
      G.
      

    

    Services
      shall
      mean those services to be performed by Vendor to Distributor as described in
      Exhibit
      A attached
      hereto,
      as may be amended upon mutual agreement of the parties.

    

    Solutions
      shall
      mean any value creation opportunity that may satisfy a business need of
      Customers resulting from some application of the Med-eMonitorTM
      System.

    

    Taxes
      shall
      have the meaning set forth in Section 3.2 herein.

    

    Term shall
      have the meaning set forth in Section 9.1 herein. 

    

    Vendor shall
      mean InforMedix, Inc. 

    

    Work
      Statement
      shall
      have the meaning set forth in the Master License and Services Agreement attached
      to this Agreement as Exhibit
      G.

    

    

    2. APPOINTMENT;
      EXCLUSIVITY; COLLABORATION ON MARKETING AND SALES; OBLIGATIONS OF THE
      PARTIES.

    

    2.1 Appointment.
      

    

    (a) Subject
      to the terms and conditions contained herein, Vendor hereby appoints Distributor
      to be the exclusive and sole worldwide distributor among competitive eDiary
      Companies of the Products and Services described in Exhibit
      A
      within
      the Market. For purposes of this Agreement, “exclusive and sole worldwide
      distributor” means that Vendor shall not appoint any other eDiary Company as
      distributor with express or implied authority to sell goods or establish
      locations anywhere in the world with respect to the Market during the Term
      of
      this Agreement; provided,
      however,
      that
      nothing set forth herein shall preclude Vendor from (i) directly servicing
      Customers in the Market, (ii) directly marketing the Products in the Market,
      or
      (iii) directly making sales into or within the Market, provided that none of
      Vendor’s direct sales within the Market shall be to Customers introduced to
      Vendor by Distributor during the term of this Agreement. 

    

    (b) Vendor
      shall not knowingly sell Products to a third party eDiary company who intends
      to
      market or sell Products within the Market. 

    

    2.2 INTENTIONALLY
      LEFT BLANK

    

    2.3 Collaboration
      on Business Planning, Marketing and Sales.

    

    
      
        
        

      

      
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    (a) Distributor
      and Vendor shall co-develop a strategic plan which describes in detail the
      Alliance strategy for marketing, distributing, servicing and supporting the
      Products in the Market during the Term of this Agreement. The Strategic Plan
      shall be reviewed and updated by the parties as necessary on a regular basis.
      Distributor and Vendor each represents and warrants that it shall use its
      commercially reasonable efforts to take the actions and achieve the goals set
      forth in the Strategic Plan.

     

    (b) Distributor
      and Vendor agree to work in good faith to continuously and periodically update
      such Strategic Plan to assure that it is relevant to current market conditions.
      

    

    (c) Distributor
      and Vendor will work with each other’s marketing representatives to present the
      Alliance in sales materials, trade shows and on the companies’ respective
      websites. 

    

    (d)  Distributor
      and Vendor agree to issue a press release to the satisfaction of both parties
      within two business days of the effective date of this Agreement, or within
      a
      time period mutually agreed to by the parties, to announce the formation of
      the
      Alliance. Distributor and Vendor shall work together in good faith to issue
      timely press releases to the satisfaction of both parties about significant
      achievements of the Alliance on an ongoing basis. 

     

    (e)  Distributor
      and Vendor shall identify public speaking and publication opportunities to
      present at trade shows and industry conferences to promote their common
      interests.

    

    2.4 Obligations
      and Representations of Distributor.

    

    (a) Distributor
      represents that it has full power and authority to enter into this Agreement
      and
      perform the obligations hereunder without violating any agreement with any
      third
      party, or any law or regulation and that the person signing this Agreement
      on
      behalf of it has been duly authorized and empowered to execute this Agreement.
      Distributor acknowledges that it has read this Agreement, understands it, has
      had the opportunity to seek legal advice and agrees to be bound by its terms.
      

    

    (b) Distributor
      represents and covenants that it shall market the Products within the Market
      as
      an integral part of Distributor’s product line, worldwide.

    

    (c) Distributor
      represents and covenants that it shall perform all obligations under this
      Agreement in a commercially reasonable manner. 

    

    (d) Distributor
      shall use all appropriate Distributor marketing tools to promote the Products
      with equal prominence to all other Distributor Products.

     

    (e) Distributor
      shall deliver marketing materials describing the Products that contain text,
      graphics, and format mutually agreed by both parties. Distributor shall not
      undertake or permit removal or alteration of any patent numbers, trade names,
      trademarks, notices, nameplates or serial numbers affixed to the Products and
      documentation, without Vendor’s prior written consent.

    

    (f) Distributor
      shall use its commercially reasonable efforts in promoting, marketing,
      supporting and servicing the Products within the Market, and in fulfilling
      its
      other obligations in this Agreement. 

    

    
      
        
        

      

      
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    (g) Distributor
      shall not knowingly sell, transfer or otherwise provide any Products to persons
      or entities that are competing with or developing products to compete with
      Vendor.

    

    (h) Distributor
      shall act in good faith in all its dealings with Vendor and
      Customers.

    

    (i) Distributor
      shall not enter any agreement with Customers that conflicts with any term or
      condition of this Agreement.

    

    (j) Distributor
      shall comply with the terms of this Agreement, including all policies, terms,
      conditions and Vendor policies attached hereto. 

    

    (k) Distributor
      shall not, while this Agreement is in force, commence manufacture of any spare
      parts usable for service and maintenance of the Products nor shall Distributor
      modify any hardware or software with respect to the Products. Vendor’s
      warranties shall not apply to non-Vendor modifications to the
      Products.
      

     

    (l) Distributor
      agrees, to the best of its knowledge, to comply with all United States or
      Foreign laws or regulations, as they may exist from time to time, regarding
      export licenses or the control or regulations of exportation or re-exportation
      of products or technical data sold or supplied to Distributor.

    

    (m) Distributor
      shall pay for the replacement of any Product or demo device lost during the
      sales process.

     

    (n) Distributor
      shall maintain adequate records regarding sales.

    

    (o)  Confidential
      Obligations and Representation of Distributor. In
      addition, Distributor represents and agrees to be bound by the specified
      confidential obligations and representations set forth in Exhibit
      I.
      

    

    2.5 Obligations
      and Representations of Vendor.

    

    (a) Vendor
      shall act in good faith in all its dealings with Distributor and
      Customers.

    

    (b) Vendor
      agrees to comply with all United States or Foreign laws or regulations, as
      they
      may exist from time to time, regarding export licenses or the control or
      regulations of exportation or re-exportation of products or technical data
      sold
      or supplied to Vendor. 

    

    (c) Vendor
      shall comply with the terms of this Agreement, including all policies, terms,
      conditions and Vendor policies attached hereto.

    

    (d) Vendor
      shall grant Distributor exclusive rights among competitive eDiary Companies
      to
      distribute the Med-eMonitor System in the Market.

    

    (e) Vendor
      will provide an export mechanism from the Med-eMonitor System in a format
      reasonably specified by the Distributor or Customer.

    

    
      
        
        

      

      
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    (f)  Confidential
      Obligations and Representation of Vendor. In
      addition, Vendor represents and agrees to be bound by the specified confidential
      obligations and representations set forth in Exhibit
      J.
      

    

    

    3. CONFIDENTIAL
      PRICING; PAYMENT TERMS.

    

    The
      Pricing for Products and Services to be provided by Vendor pursuant to this
      Agreement shall be as set forth in Exhibit
      E.
      Vendor
      and Distributor agree that all payments to Vendor shall be made in accordance
      with the provisions incorporated within Exhibit
      E. 

    

    4. PRODUCT
      ORDERS.

    

    4.1 Confidential
      Provisions.
      Certain
      matters with respect to Product Orders, Acceptance, Cancellation, Returns and
      Allowances, Minimum Sales, and Regulatory Approvals shall be governed by the
      terms and conditions set forth in Exhibit
      K
      of this
      Agreement.

    

    4.2 Supplies
      and Deliveries.
      Vendor
      shall make reasonable efforts to maintain sufficient inventory and supplies
      to
      enable it to accept delivery times that are commercially reasonable as requested
      by Distributor. 

    

    4.3 Shipment
      Terms.
      All
      Products shall be shipped by Vendor on behalf of Distributor by appropriate
      mode
      of transportation in Vendor’s discretion unless Distributor designates a
      specific mode of shipment in its purchase order. 

    

    4.4 Passage
      of Title.
      The
      parties agree that title to the Products shall not pass to Distributor
      but remains with Vendor at all times pursuant to the terms of the Master
      Equipment Lease Agreement. 

    

    5. INTELLECTUAL
      PROPERTY.

    

    5.1 Confidential
      Provisions.
      Certain
      matters with respect to Intellectual Property shall be governed by the terms
      and
      conditions set forth in Exhibit
      L
      of this
      Agreement.

    

    5.2 Ownership.
      Vendor
      does and shall continue to own all right, title and interest in and to all
      of
      its demonstration units, samples, catalogues, promotional literature, patents,
      patents pending, Marks, copyrighted works and trade secrets and any other
      intellectual property (“Intellectual Property”) that may be provided by Vendor
      to Distributor hereunder, including any modifications or derivative works
      thereof, whether created by Vendor or Distributor. 

    

    5.3 Further
      assurances.
      Distributor agrees that it shall execute all instruments and documents and
      all
      things that may be reasonably necessary to protect the rights of Vendor and
      vest
      in Vendor ownership of the Intellectual Property; and to the extent, by
      operation of this Agreement or otherwise, any Intellectual Property rights
      of
      Vendor shall become vested in Distributor, Distributor agrees that, at the
      request and expense of Vendor, Distributor shall execute all instruments and
      documents and do all things that may be reasonably necessary to protect the
      rights of Vendor and vest or re-vest in Vendor and its assigns all Intellectual
      Property rights therein. Distributor’s cooperation with Vendor with respect to
      this Section 5.6 shall not be unreasonably withheld.

    

    
      
        
        

      

      
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    6. CONFIDENTIALITY. 

    

    6.1 Confidential
      Information.
      Each
      party agrees not to disclose or use any materials or information of the other
      party that is marked “Confidential” or, in the case of orally conveyed
      information, which is confirmed in writing within thirty (30) days of conveyance
      to be confidential (“Confidential Information”) except as may be necessary to
      further the performance of this Agreement; provided,
      however,
      that
      the following types of information are always to be considered Confidential
      Information only if it specifically relates to the subject matter of this
      Agreement and/or the Products: inventions, confidential know-how, trade secrets,
      product specifications, customer lists, prices and financial information. Each
      party further agrees to take such steps to maintain the confidentiality of
      the
      other party’s Confidential Information as it takes with respect to its own
      similar information. The restriction on disclosure above shall not apply to
      that
      information which: (a) is already in the public domain; (b) later becomes
      publicly available through no fault of the party concerned; (c) is disclosed
      to
      a party without restrictions by a third party which is not bound by any
      restrictions not to disclose such information; (d) a party is obligated to
      disclose under a court order or decision by a governmental agency, subject
      to
      such confidentiality orders, etc.,
      as are
      available or obtainable under applicable law or regulation; or (e) is disclosed
      by a party and does not specifically relate to the subject matter of this
      Agreement and/or the Products. The provisions of this Section 6.1 shall survive
      the termination or expiration of this Agreement. 

    

    6.2 Terms
      of this Agreement.
      The
      parties agree that they shall not disclose any of the terms or conditions of
      this Agreement to third parties, except that this provision shall not preclude
      either party from announcing the existence of this Agreement or from providing
      a
      general summary of the intent and purpose of this Agreement as it might affect
      the marketing plans of the parties or their customers

    

    6.3 Regulation
      FD.
      Distributor specifically recognizes and acknowledges that Vendor is subject
      to
      certain rules and regulations by virtue of its status as a publicly traded
      company. As such, Vendor has requested Distributor
      to enter
      into this Agreement, among other reasons, so that Vendor will be exempt from
      any
      requirement to disclose any material nonpublic information provided to
Distributor
      in
      accordance with the exemption set forth in Rule 100(b)(2)(ii) of SEC Regulation
      FD. Accordingly, Distributor
      further
      acknowledges that in the course of the Term of the Agreement, Distributor
      and
      its
      Representatives may become aware of information regarding Vendor that may be
      considered “material non-public information” for purposes of the Securities Act
      of 1933 and the Securities Exchange Act of 1934 and the Rules and Regulations
      promulgated thereunder, including Regulation FD. Distributor
      acknowledges
      that its or its Representatives’ purchase or sale of securities of the
Vendor
      while in
      possession of such material non-public information or its or their informing
      any
      other person of such material non-public information for the purpose of
      purchasing, selling or otherwise dealing in securities of the Distributor is
      prohibited by law and shall constitute a breach of this Agreement.

    

    Distributor
      agrees not to, disclose to any person (i) any material non public information
      made available to Distributor or that Distributor has inspected; (ii) that
      Distributor is engaged in a financial arrangement with Vendor; or (iii) any
      of
      the terms, conditions or other facts with respect to the financial arrangement
      with Vendor, including the status thereof, without the express written consent
      of InforMedix.

    

    
      
        
        

      

      
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    7. WARRANTY;
      DISCLAIMER; LIMITATION OF LIABILITY.

    

    7.1 Product
      Warranty.
      Vendor’s
      warranty, as set forth in Exhibit
      C
      attached
      hereto, shall be the sole and exclusive warranty applicable to the Products
      and
      neither Distributor nor any other person may rely on any other warranties or
      representations, nor shall Distributor be permitted to make any other warranties
      or representations to Customers. Vendor reserves the right to change the
      warranty set forth on Exhibit
      C
      at any
      time with written notice to Distributor.

    

    7.2 Confidential
      provisions concerning Disclaimer
      of Warranties and Limitation of Liability shall
      be
      governed by the terms and conditions set forth in Exhibit M
      of this
      Agreement.

    

    8. INDEMNIFICATION;
      INSURANCE.

    

    8.1 Vendor
      Indemnity.
      Vendor
      hereby agrees to defend, indemnify and hold harmless Distributor from and
      against any and all claims, demands, actions, costs, liabilities, or losses
      arising out of any infringement of any patent, trademark, trade name or
      copyright of any third party or violation of any trade secret or other
      proprietary rights of any third party by any Product or Vendor Intellectual
      Property that has not been modified by Distributor.

    

    Vendor
      hereby agrees to defend, indemnify and hold harmless Distributor, its
      subsidiaries, parent corporations, affiliates, officers, directors, partners,
      shareholders, employees, agents, and their successors and assigns, from and
      against any Losses imposed upon Distributor by any third party arising from
      or
      related to personal injury or property damage which is proximately caused by
      (a)
      any negligence or intentional misconduct of Vendor (or its employees, agents
      or
      representatives) in performing its obligations under this Agreement; or (b)
      any
      material breach of Vendor’s representations and warranties under this
      Agreement.

    

    Vendor
      hereby agrees to defend, indemnify and hold harmless Distributor, its
      subsidiaries, parent corporations, affiliates, officers, directors, partners,
      shareholders, employees, agents, and their successors and assigns, from and
      against any losses, costs or damages imposed upon Distributor by any third
      party
      arising from or related to Vendor’s failure to deliver any Products or Services
      in accordance with any agreed upon schedule.

     

    8.2 Distributor
      Indemnity. 

    

    Distributor
      hereby agrees to defend, indemnify and hold harmless Vendor, its subsidiaries,
      parent corporations, affiliates, officers, directors, partners, shareholders,
      employees, agents, and their successors and assigns, from and against any Losses
      imposed upon Vendor by any third party arising from or related to personal
      injury or property damage which is proximately caused by (a) any negligence
      or
      intentional misconduct of Distributor (or its employees, agents or
      representatives) in performing its obligations under this Agreement; or (b)
      any
      material breach of Distributor’s representations and warranties under this
      Agreement.

    

    

    8.3 Process.
      The
      party seeking indemnification shall (a) promptly notify the indemnifying party
      in writing of such action, (b) give the indemnifying party sole control over
      the
      defense of such action and any related settlement negotiations, and (c)
      cooperate with the indemnifying party in the defense, (including, without
      limitation, by making available to the indemnifying party all documentation
      and
      information in the control of the party seeking indemnification regarding the
      action and by making available personnel to testify and consult with the
      indemnifying party). If either party fails to defend and hold harmless the
      other
      party pursuant to this Section 8, the party to be indemnified may defend the
      action and shall be entitled to recover from the other party any and all
      expenses, including reasonable attorneys’ fees, incurred by it in
      defense.

    

    
      
        
        

      

      
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    8.4 Insurance.
      Confidential provisions concerning Insurance
      shall
      be
      governed by the terms and conditions set forth in Exhibit
      N
      of this
      Agreement. 

    

    9. TERMINATION.

    

    9.1 Confidential
      Provisions.
      Certain
      matters with respect to Termination shall be governed by the terms and
      conditions set forth in Exhibit
      O
      of this
      Agreement.

    

    10. MISCELLANEOUS.

    

    10.1  Relationship
      of the Parties.
      This
      Agreement shall in no way be construed to constitute either party as the
      partner, employee or agent of the other party nor shall either party have the
      authority to bind the other in any respect, accept service of process or other
      notice on the other’s behalf, or make any representation, statement or warranty
      by or on behalf of the other, it being intended that each shall remain an
      independent contractor responsible only for its own actions. 

    

    10.2 Notices.
      All
      notices, consents and other communications between the parties shall be in
      writing and shall be sent to the following addresses (or to such other address
      as may be provided to the other party in accordance with this Section 10.2)
      by
      (a) first class mail, certified or registered, return receipt requested, postage
      prepaid, (b) electronic facsimile transmission, (c) overnight couriers services,
      (d) telegram or telex or (e) messenger, and shall be deemed given on the third
      business day following transmission by mail or the first business day following
      delivery by messenger to an overnight courier service, via electronic facsimile
      transmission or via telegram or telex:

    

    If
      to
      Vendor:

    

    C/o
      Bruce
      A. Kehr, MD

    Chairman
      and CEO

    InforMedix,
      Inc.

    Georgetowne
      Office Park

    5880
      Hubbard Drive

    Rockville,
      MD 20852

    Tel:
      301.984.1566

    Fax:
      301.984.9096

    If
      to
      Distributor:

    

    Robert
      T.
      Beggs

    invivodata,
      Inc.

    5615
      Scotts Valley 

    Scotts
      Valley, CA 95066

    Tel:831.438.9550

    Fax:831.440.1770

    

    
      
        
        

      

      
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    10.3  Assignment.
      The
      rights and obligations of either party hereto may not be assigned in any way
      without the express written consent of the other party hereto, except that
      either Party may assign or transfer this Agreement, in whole or in part, to
      any
      of its affiliates or to any successors in the case of a merger, reorganization,
      acquisition, consolidation, or sale of all, or substantially all, of its capital
      stock or assets. 

    

    10.4 Governing
      Law.
      All
      questions concerning the validity, operation, interpretation, and construction
      of this Agreement and all legal relations arising from this Agreement shall
      be
      governed by and determined in accordance with the laws of the State of Delaware,
      and without reference to any choice of law or conflict of law principles
      thereof.

    

    10.5 Jurisdiction.
      The
      parties agree that all actions or proceedings arising directly, indirectly
      or
      otherwise in connection with, out of, related to or from this Agreement shall
      be
      litigated only in federal or state courts located in either the State of
      Maryland or the Commonwealth of Pennsylvania at the discretion of the party
      who
      initiates the action or proceeding. 

    

    

    10.6 Confidential
      Provisions concerning
      Arbitration, Equitable Remedies, and Survival shall be governed by the terms
      and
      conditions set forth in Exhibit
      P
      of this
      Agreement.

    

    10.7 Severability.
      If
      any
      provision herein shall be held to be invalid or unenforceable for any reason,
      such provision shall, to the extent of such invalidity or unenforceability,
      be
      severed, but without in any way affecting the remainder of such provision or
      any
      other provision contained herein, all of which shall continue in full force
      and
      effect, and provided that the ability of either party to obtain substantially
      the bargained-for performance of the other shall not have been thereby impaired.
      In such event, the parties shall use their best efforts to replace such
      provision with a provision which, to the extent permitted by applicable law,
      achieves the purposes intended by the invalid or unenforceable provision. Any
      deviation by either party from the terms of the provisions of this Agreement
      required to comply with applicable laws, rules or regulations shall not be
      considered a breach of this Agreement. 

    

    10.8  Force
      Majeure.
      Except
      with respect to payment obligations hereunder, each party shall be excused
      from
      performance of its obligations hereunder to the extent and for such period
      of
      time as such performance is prevented by an act of God, fire, flood, earthquake,
      transportation disruption, war, insurrection, or other cause beyond the
      reasonable control of such party, or labor dispute, provided that the
      non-performing party shall provide to the other party prompt written notice
      detailing the force majeure event and the non-performing party uses reasonable
      efforts to avoid or remove such causes of nonperformance and continues
      performance hereunder with reasonable dispatch when such causes are removed.
      If
      the force majeure event continues beyond a period of thirty (30) days after
      receipt of written notice by the performing party, the performing party may,
      in
      its discretion, terminate this Agreement without recourse from the
      non-performing party. 

    

    10.9  Counterparts.
      This
      Agreement may be executed in counterparts, each of which when so executed and
      delivered shall constitute a complete and original instrument but all of which
      together shall constitute one and the same agreement, and it shall not be
      necessary when making proof of this Agreement or any counterpart hereof to
      account for any other counterpart. 

    

    10.10  Entire
      Agreement.
      This
      Agreement, including the Exhibits attached hereto, constitutes the entire
      agreement between Vendor and Distributor concerning the subject matter hereof
      and supersedes all prior and contemporaneous agreements between the parties.
      No
      party is relying upon any warranties, representations, or inducements not set
      forth herein. 

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    10.11 Waiver.
      No delay
      or failure by either party to exercise or enforce at any time any right or
      provision of this Agreement shall be considered a waiver thereof or of such
      party’s right thereafter to exercise or enforce each and every right and
      provision of this Agreement. A waiver to be valid shall be in writing, but
      need
      not be supported by consideration. A valid waiver of any provision of this
      Agreement with respect to a particular situation or event shall not constitute
      a
      waiver of such provision with respect to other situations or
      events.

    

    10.12 No
      Franchise.
      Nothing
      contained in this Agreement shall be construed to create a franchise or make
      either party the franchisee of the other. Distributor hereby releases any claims
      that Vendor has violated any franchise disclosure or other franchisor obligation
      in connection with the creation of this Agreement.

    

    10.13 Amendment.
      The
      parties may jointly amend this Agreement or any Exhibit attached hereto by
      setting forth the amendment in writing, executing the amendment and attaching
      the amendment to this Agreement, the terms of which executed amendment shall
      then supersede any conflicting terms herein.

    
      
        
          

          --

        

        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    WHEREFORE,
      the
      parties hereto or their authorized agents have caused this Agreement to be
      signed on the day and year first above written. 

    

    VENDOR

    

    

    
      	By_________________________________	 	 
	
               Name:
                Arthur T. Healey

            	 	 
	
               Title:
                Chief Financial Officer

            	 	 
	 	 	 
	 	 	 
	
               DISTRIBUTOR

            	 	 
	 	 	 
	By_________________________________	 	 
	
               Name:
                Robert T. Beggs

            	 	 
	
               Title:
                Chief Financial Officer

            	 	 

    

     

     

    
      
        
        

      

      
        12Exhibit
      10.1

    (excerpted
      from May 13, 2005 Proxy Statement)

    

    

    Description
      of the 2005 Equity Incentive Plan

    

    The
      2005
      Equity Incentive Plan would govern grants of stock-based awards to employee
      and
      director participants awarded after May 2, 2005. Whether or not the
      2005
      Equity Incentive Plan is approved, the 1996 and 1997 Stock Option Plans will
      remain in effect. If the 2005 Equity Incentive Plan is approved, a maximum
      of
      2.0 million shares of Common Stock will be reserved for issuance under
      the
      2005 Equity Incentive Plan. As of April 29, 2005, options for 560,573
      shares remain available for grant under the 1996 and 1997 Stock Option Plans,
      as
      amended by stockholders in 2004. If the 2005 Equity Incentive Plan is approved,
      the Compensation Committee will not grant any additional options under the
      1996
      and 1997 Stock Option Plans and the number of shares reserved under the 1996
      and
      1997 Stock Option Plans will be reduced to approximately 3,987,119 shares
      to cover the number of options outstanding under such plans as of April 29,
      2005. 

    

    Based
      on
      the recommendation of the Compensation Committee, the Board of Directors has
      unanimously approved the 2005 Equity Incentive Plan. The 2005 Equity Incentive
      Plan is designed to support the Company's long-term business objectives in
      a
      manner consistent with our executive compensation philosophy. The Board of
      Directors believes that by allowing the Company to continue to offer its key
      employees and directors long-term, performance-based compensation through the
      2005 Equity Incentive Plan, the Company will promote the following key
      objectives: 

    

    •
      aligning the interest of employees with those of the stockholders through
      increased employee ownership of the Company; and 

    

    •
      attracting, motivating and retaining experienced and highly qualified employees
      who will contribute to the Company's financial success. 

    

    The
      2005
      Equity Incentive Plan provides for a variety of equity award vehicles to
      maintain flexibility. The 2005 Equity Incentive Plan will permit the grant
      of
      stock options, stock appreciation rights, restricted stock awards, deferred
      stock awards and performance awards (collectively referred to as "incentive
      awards"). Stock options are the only equity awards currently available to
      employees and directors under the 1996 and 1997 Stock Option Plans.

    

    Key
      employees and directors of the Company and its subsidiaries are eligible to
      receive incentive awards under the 2005 Equity Incentive Plan. The relative
      mix
      of equity compensation to total compensation increases in relation to a
      participant's role in influencing stockholder value. 

    

    The
      2005
      Equity Incentive Plan is designed to meet the requirements for deductibility
      of
      executive compensation under Section 162(m) of the Internal Revenue
      Code of
      1986, as amended (the "Code") with respect to stock options and stock
      appreciation rights under the 2005 Equity Incentive Plan that are intended
      to
      qualify as "performance-based compensation" under Code Section 162(m).
      Also, in order to meet Code Section 162(m) requirements, the 2005 Equity
      Incentive Plan provides limits on the number and type of shares that any one
      participant may receive during any calendar year, as described below.

    

    The
      following is a summary of the 2005 Equity Incentive Plan. The full text of
      the
      2005 Equity Incentive Plan is attached to this Proxy Statement as
      Exhibit A, and the following summary is qualified in its entirety by
      reference to this Exhibit. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Plan
      Administration

    

    The
      selection of potential participants in the 2005 Equity Incentive Plan, the
      level
      of participation of each participant and the terms and conditions of all
      incentive awards shall be determined by the Compensation Committee. It is
      intended that each member of the Compensation Committee will be an "independent
      director" for purposes of the Company's Corporate Governance Guidelines, the
      Compensation Committee's Charter and the NASD listing requirements. The
      Compensation Committee shall consist of two or more directors of the Company,
      each of whom shall be a "Non-Employee Director" within the meaning of
      Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and
      an
      "outside director" within the meaning of Section 162(m) of the Code.
      Currently, the Compensation Committee is comprised of three Directors, each
      meeting the independence criteria. 

    

    The
      Compensation Committee shall have full power and authority to administer and
      interpret the 2005 Equity Incentive Plan. Determinations of the Compensation
      Committee as to any question which may arise with respect to the interpretation
      of the provisions of the 2005 Equity Incentive Plan and incentive awards granted
      thereunder shall be final. The Committee may take any action with regard to
      the
      2005 Equity Incentive Plan as it shall deem desirable to effectuate the plan's
      purpose, so long as said actions are not inconsistent with the provisions of
      the
      2005 Equity Incentive Plan. The Compensation Committee may authorize and
      establish such rules, regulations and revisions as it may deem advisable to
      make
      the 2005 Equity Incentive Plan and incentive awards granted thereunder effective
      or provide for their administration. 

    

    Limitations
      on Plan Awards

    

    If
      the
      2005 Equity Incentive Plan is approved, the Board of Directors will reserve
      a
      maximum of 2.0 million shares for issuance pursuant to stock options,
      stock
      appreciation rights, restricted stock awards, deferred stock awards and
      performance awards under the 2005 Equity Incentive Plan. A participant may
      receive multiple incentive awards under the 2005 Equity Incentive Plan. A
      maximum of 500,000 shares may be granted under the 2005 Equity Incentive Plan
      to
      an individual pursuant to stock options and stock appreciation rights awarded
      during any calendar year. 

    

    Eligibility
      and Participation

    

    Key
      employees and directors of the Company and its subsidiaries qualify as potential
      participants under the 2005 Equity Incentive Plan. The selection of potential
      participants, the level of participation of each participant and the terms
      and
      conditions of all incentive awards shall be determined by the Compensation
      Committee in its sole discretion, subject, however, to the terms and conditions
      of the 2005 Equity Incentive Plan. Non-employee directors shall only be eligible
      to receive stock appreciation rights under the 2005 Equity Incentive Plan.
      

    

    Types
      of Plan Awards

    

    As
      described in the Compensation
      Committee Report,
      the
      Company's current equity compensation awards to employees and directors are
      only
      comprised of stock options. The 2005 Equity Incentive Plan would provide for
      a
      variety of other equity incentives to preserve flexibility. The incentive awards
      that may be issued under the 2005 Equity Incentive Plan are described below.
      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Stock
      Options

    

    The
      number of stock options granted to a participant shall be determined by the
      Compensation Committee in its sole discretion and shall be reflected in an
      option agreement between the participant and the Company. The price per share
      of
      the shares to be purchased pursuant to the exercise of any option shall be
      fixed
      by the Compensation Committee at the time of the grant; provided, however,
      that
      in no event shall the purchase price be less than 100% of the fair market value
      of a share on the date of the grant of the option. 

    

    Stock
      options granted under the 2005 Equity Incentive Plan may be either non-qualified
      stock options or incentive stock options qualifying under Section 422
      of
      the Code. The maximum number of shares of Common Stock that may be subject
      to
      incentive stock options granted to an individual in a given year is 500,000.
      No
      option which is intended to qualify as an incentive stock option shall be
      granted under the 2005 Equity Incentive Plan to any person who, at the time
      of
      such grant, is not an employee of the Company or a subsidiary thereof.

    

    No
      option
      which is intended to qualify as an incentive stock option may be granted under
      the 2005 Equity Incentive Plan to any employee who, at the time the option
      is
      granted, owns shares possessing more than ten percent (10%) of the total
      combined voting power of all classes of stock of the Company, unless the
      exercise price under such option is at least 110% of the Fair Market Value
      of a
      share on the date such option is granted and the duration of such option is
      not
      more than five (5) years. 

    

    The
      duration of any option granted under the 2005 Equity Incentive Plan shall be
      fixed by the Compensation Committee at the time of grant; provided, however,
      that no option shall remain in effect for a period of more than ten
      (10) years from the date upon which it is granted. The vesting schedule
      of
      any option shall be fixed by the Compensation Committee at the time of grant.
      Notwithstanding the foregoing, all or any part of any remaining unexercised
      options granted to a participant under the 2005 Equity Incentive Plan may
      generally be exercised under the following occasions: (a) upon the holder's
      retirement from the Company on or after his or her 65th birthday; (b) upon
      the disability or death of the holder; (c) upon a change in control
      of the
      Company as defined in the 2005 Equity Incentive Plan; or (d) upon special
      circumstances or events which, in the opinion of the Compensation Committee,
      merit special consideration. 

    

    Stock
      Appreciation Rights

    

    A
      stock
      appreciation right entitles the participant, upon settlement, to receive a
      number of shares of Common Stock equal to (a) the product obtained by
      multiplying (1) the excess of the fair market value of a share of our
      Common Stock on the date of settlement over the base price of the right, by
      (2) the applicable number of shares of Common Stock subject to the right
      that has been exercised, divided by (b) the fair market value of a share
      of
      our Common Stock on the date of settlement. Stock appreciation rights may be
      granted on a stand-alone basis or in tandem with a related stock option. The
      base price may not be less than the fair market value of a share of Common
      Stock
      on the date of grant. Under the 2005 Equity Incentive Plan, stock appreciation
      rights are generally subject to the same vesting, exercise and duration
      conditions set forth above for stock options. 

    

    The
      Compensation Committee, in its sole discretion, may limit the amount payable
      upon the exercise of a stock appreciation right. Any such limitation shall
      be
      determined as of the date of grant and shall be reflected in an agreement
      between the participant and the Company. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Restricted
      Stock Awards

    

    A
      restricted stock award represents shares of Common Stock that are issued subject
      to restrictions on transfer and vesting requirements as determined by the
      Compensation Committee. Vesting requirements may be based on the continued
      service of the participant for a specified time period or on the attainment
      of
      specified business performance goals established by the Committee or both.
      Subject to the transfer restrictions and vesting requirements of the award,
      the
      participant will have the same rights as one of the Company's stockholders,
      including all voting and dividend rights, during the restriction period, unless
      the Committee determines otherwise at the time of the grant. All restricted
      stock awards shall be evidenced by an agreement between the participant and
      the
      Company. 

    

    As
      set
      forth in the 2005 Equity Incentive Plan, all restrictions to which a restricted
      stock award is subject shall lapse (a) upon the holder's retirement
      from
      the Company on or after his or her 65th birthday; (b) upon the disability
      or death of the holder; (c) upon a change in control of the Company
      as
      defined in the 2005 Equity Incentive Plan; or (d) upon special
      circumstances or events which, in the opinion of the Compensation Committee,
      merit special consideration. 

    

    Deferred
      Stock Awards

    

    A
      deferred stock award entitles the participant to receive Common Stock at the
      end
      of a specified deferral period. The Compensation Committee shall have the sole
      discretion to establish restrictions on a deferred stock award at the time
      of
      the grant, including the applicable deferral period. Other restrictions may
      include continued service requirements, performance requirements, or both.
      A
      deferred stock award shall be evidenced by an agreement executed on behalf
      of
      the Company and the participant. All restrictions to which a deferred stock
      award is subject shall lapse under the same circumstances set forth above under
      Restricted
      Stock Awards.
      

    

    Performance
      Awards

    

    The
      Compensation Committee shall have the authority to grant a participant a
      performance award. The value of the performance award may be linked to the
      market value, book value, net profits or other measure of the value of a share
      of Common Stock, or other specific performance criteria determined by the
      Compensation Committee. The terms and conditions of a performance award shall
      be
      determined by the Compensation Committee in its sole discretion at the time
      of
      the grant and as set forth in the applicable performance award agreement.

    

    Grants
      of Stock Appreciation Rights to Eligible Directors

    

    Each
      eligible non-employee director of the Company who is initially elected to the
      Board of Directors of the Company shall be granted 15,000 stock appreciation
      rights on the date of his or her initial election to the Board of Directors.
      On
      the last day of each fiscal year of the Company, each eligible non-employee
      director shall be granted an additional 6,000 stock appreciation rights. The
      stock appreciation rights granted on the last day of the fiscal year shall
      be
      prorated for directors who are initially elected during the given fiscal year.
      

    

    Termination
      of Employment or Service

    

    Unless
      otherwise provided in a participant's employment and/or other agreement,
      unexercised options and/or rights granted under the 2005 Equity Incentive Plan
      will terminate immediately upon the cessation or termination of the
      participant's employment or service with the Company. However, upon a cessation
      or termination of employment of service without cause, the participant shall
      have ninety (90) days within which to exercise any unexercised options
      and/or rights that the participant could have exercised on the day on which
      such
      employment or service was terminated, provided that such exercise be
      accomplished prior to the expiration of the term of the unexercised option
      and/or right. Notwithstanding the foregoing, if the cessation of employment
      or
      service is due to disability or death, the holder or the representative of
      the
      participant's estate shall have, for at least a period of one (1) year,
      the
      privilege of exercising options and/or rights which are vested but unexercised
      at the time of disability or death. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Unless
      otherwise provided in a participant's employment agreement, the Compensation
      Committee shall determine in its sole discretion at the time of grant of a
      restricted stock award, deferred stock award and/or performance award, the
      affect, if any, that a termination of a participant's employment or service
      with
      the Company shall have on the award. Any and all terms and conditions regarding
      termination, if any, shall be set forth in the applicable award agreement.
      Notwithstanding the foregoing, a participant's interest in a restricted stock
      award, deferred stock award and/or performance award shall terminate immediately
      upon termination for cause. 

    

    Limited
      Transferability

    

    All
      stock
      options, stock appreciation rights, restricted stock awards, deferred stock
      awards, performance awards and all other rights under the 2005 Equity Incentive
      Plan are non-transferable and non-assignable by the holder thereof except to
      the
      extent that the estate of a deceased holder of an award or right may be
      permitted to exercise them. Options and rights may be exercised or surrendered
      during the participant's lifetime only by the participant. 

    

    Adjustments
      for Corporate Changes

    

    In
      the
      event of recapitalizations, reclassifications or other specified events
      affecting the Company or shares of Common Stock, appropriate and equitable
      adjustments may be made to the number and kind of shares of Common Stock
      available for grant, the maximum limitations under the 2005 Equity Incentive
      Plan and the number and kind of shares of Common Stock or other rights and
      prices under outstanding incentive awards. 

    

    Term,
      Modifications and Amendments

    

    The
      2005
      Equity Incentive Plan will have a term of ten years expiring on April 18,
      2015, unless terminated earlier by the Board of Directors. The Board of
      Directors may at any time and from time to time and in any respect amend or
      modify the Plan. The Board of Directors may seek the approval of any amendment
      or modification by the Company's stockholders to the extent necessary or
      advisable in its sole discretion for purposes of compliance with
      Section 162(m) or Section 422 of the Code, the listing requirements
      of
      the NASDAQ National Market or another exchange or securities market or for
      any
      other purpose. No amendment or modification of the 2005 Equity Incentive Plan
      may adversely affect any outstanding incentive award without the consent of
      the
      participant or the permitted transferee of the award. Any material amendment
      by
      the Board of Directors or Compensation Committee, including an amendment which
      would increase the number of shares issuable under the 2005 Equity Incentive
      Plan or to any individual or change the class of participants, will require
      the
      approval of the stockholders of the Company within one (1) year of such
      amendment. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Issuance
      of Shares

    

    The
      Company may postpone the issuance and delivery of shares granted under the
      2005
      Equity Incentive Plan until (a) the admission of such shares to listing
      on
      the applicable principle securities exchange or securities trading market,
      and
      (b) the completion of registration or other qualification of the shares
      under any State or Federal law, rule or regulation as the Company may deem
      advisable. Holders of incentive awards granted under the 2005 Equity Incentive
      Plan shall make representations and furnish information, which in the opinion
      of
      the Company's counsel, is appropriate to permit the Company to issue shares
      in
      compliance with the provisions of the Securities Act of 1933, and the rules
      and
      regulations promulgated thereunder, or any comparable act. 

    

    Income
      Tax Withholding

    

    If
      the
      Company is required to withhold any amounts by reason of Federal, State, local
      or foreign tax rules or regulations with respect to an incentive award granted
      under the 2005 Equity Incentive Plan, the Company shall be entitled to take
      appropriate action in order to ensure compliance with such withholding
      requirements. In order to facilitate payment by the holder of an incentive
      award
      of his or her withholding obligations, the Company may, at its election,
      (a) deduct the appropriate withholding amount from any cash payment
      due to
      the holder, (b) require the holder to pay to the Company the appropriate
      withholding amount in cash, (c) permit the holder to elect to have the
      Company withhold a portion of the shares otherwise to be delivered with respect
      to the incentive award, the fair market value of which is equal to the minimum
      statutory withholding amount, or (d) permit the holder to elect to deliver
      to the Company shares already owned by the holder for at least six
      (6) months, the fair market value of which is equal to the appropriate
      withholding amount.

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