Document:

exhibit101.htm

    
       

      
        

        

      

      Exhibit 10.1

       

       

      
        SEVERANCE
AND RELEASE AGREEMENT

         

        THIS
SEVERANCE AND RELEASE AGREEMENT (the “Agreement”) is made this 20th day of
June 2008 by and between Joseph T. Crowley (the “Employee”), Willow Financial
Bancorp, Inc., a Pennsylvania corporation (the “Company”) and Willow Financial
Bank, a federally chartered savings bank and wholly-owned subsidiary of the
Company (the “Bank”).  The Company and the Bank are sometimes
collectively referred to herein as the Employers.

         

        W I T N E S S E T H:

         

        WHEREAS,
the Employee currently serves as the Senior Vice President and Corporate
Secretary of the Employers;

         

        WHEREAS,
the Employee currently is a party to an Amended and Restated Employment
Agreement with the Company and the Bank, dated as of October 23, 2007, as
amended by Amendment No. 1 thereto, dated as of May 6, 2008 (collectively, the
“Employment Agreement”), setting forth the terms and conditions of his
employment; and

         

        WHEREAS,
the Employers and Employee have had discussions with respect to the termination
of the Employee=s
employment and the payments the Employers would agree to make pursuant to such
termination;

         

        NOW,
THEREFORE, in consideration of the mutual premises and covenants contained
herein, and intending to be legally bound, the parties agree as
follows:

         

        
          	
                   
      

                	
                  1.

                	
                  Termination
      of Employment and Employment Agreement.  Effective as of
      June 30, 2008, the Employee shall no longer be an officer or employee of
      the Employers and shall be deemed to have resigned as an officer and
      employee of the Employers. The Employment Agreement, by mutual agreement
      of the parties hereto, shall be terminated and be of no further force and
      effect as of June 30, 2008 (the “Date of Termination”) and the Executive
      shall be entitled to the rights and payments set forth herein in lieu of
      any rights and payments under the Employment Agreement or under any
      severance plan of the
Employers.

                

        

        
          
             

          

          
            
              	 	
                      1. 

                    	
                      Payments
      and Benefits to the Employee

                    

            

            

            
              	 
      	
                      (a)      The Employers
      agree to pay a gross lump sum amount of $55,497.75 to the Employee within
      five business days following the later of (i)  the Date of
      Termination or (ii) the expiration of the seven day revocation period set
      forth in Section 8(e) below, which amount represents three months of base
      salary.  The gross amount shall be reduced by applicable
      withholding taxes.  Through the Date of Termination and for a
      period of three months thereafter, the Employee will continue to
      participate in the Bank=s
      group health and dental insurance plans on the same terms and cost to the
      Employee as currently being
provided.

                    

            

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

      (b)       The
Employers shall have no obligation to make contributions for service subsequent
to the Date of Termination with respect to their 401(k) Plan or their Employee
Stock Ownership Plan or any other retirement or profit sharing plan on behalf of
the Employee, and the Employee shall have no right to participate in such plans
for service after the Date of Termination.  All of the Employee=s
accrued and vested benefits held under the Employers’ Employee Stock Ownership
Plan, 401(k) Plan, or other retirement or benefit plans as of the Date of
Termination shall be available for distribution, which shall be made in the
ordinary course of business in accordance with such plan terms and past practice
of the Employers.

       

      (c)         The
value of the Employee’s accrued and unpaid vacation and other leave time as of
the Date of Termination shall be paid to the Employee not later than the date of
the payment set forth in Section 2(a) above.

       

      (d)         The
Employee shall not be entitled to a cash bonus for service in 2008 under any
Employer bonus plan.

       

      (e)        
The Employers agree not to object to any application for unemployment
benefits, which may be made by the Employee after the Date of
Termination.

       

      
        
          	
                   
      

                	
                  3.

                	
                  Post-Termination
      Services.  Following the Date of Termination and ending
      on the twelve-month anniversary of the Date of Termination, the Employee
      shall make himself available to the Employers and their subsidiaries
      (including any successor) in connection with the business of the Employers
      and their subsidiaries as may be reasonably requested from time to time by
      the Employers in order to provide advice and counsel to the Employers with
      respect to matters within the Employee’s employment duties prior to the
      Date of Termination.  The Employee shall use his reasonable best
      efforts to provide the services hereunder in person, telephonically,
      electronically or by correspondence as reasonably determined by the
      Employers.  The Employee shall not receive any additional
      compensation for these
services.

                

        

         

        
          	
                  4.  

                	
                  Stock
      Option Plans.  It is acknowledged that no additional
      arrangements are being provided by the Employers to the Employee under any
      of the Company’s stock option plans, including the stock option plans
      previously implemented by Chester Valley Bancorp, Inc. (the “Option
      Plans”), and that awards previously made by the Employers to the Employee
      which have not as yet vested under the Option Plans shall not accelerate
      and are intended to terminate in accordance with the terms of the Option
      Plans.

                

        

         

        
          	
                  5.  

                	
                  Recognition
      and Retention Plans.  It is acknowledged that no
      additional arrangements are being provided by the Employers to the
      Employee under any of the Company’s recognition and retention plans (the
      “RRPs”) and that awards previously made by the Employers to the Employee
      which have not as yet vested or been earned under the RRPs shall not
      accelerate or be deemed earned and are intended to be forfeited in
      accordance with the terms of the RRPs as of the date
      hereof.

                

        

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

        
          	
                  6.  

                	
                  Solicitation
      of Customers; Use of Customer Lists, etc.  The Employee
      acknowledges that, except as required by law or in his own good faith use
      in any proceeding, he has no right personally to use or disclose to any
      person, firm or corporation, information concerning any customer list,
      business secrets or confidential financial information of the Employers
      that he knew was intended by the Employers to be confidential and that he
      did not have reason to believe had been made public (collectively,
      “Confidential Information”).  Accordingly, the Employee
      covenants and agrees that he shall not use or permit the use of any
      Confidential Information, and shall not divulge any Confidential
      Information to any person, firm or corporation, except as may be required
      by applicable law arising out of his employment with or participation in
      the affairs of the Employers.  Further, the Employee agrees that
      he will not solicit any current customer of the Employers for a period of
      twelve (12) months from the Date of Termination for the purpose or intent
      to provide or sell to such customers any banking, financial or business
      services or products on behalf of any person, company or entity other than
      the Employers without the express written consent of the
      Employers.

                

        

         

        
          	
                  7.  

                	
                  Confidentiality;
      Non-Disparagement.

                

        

         

        (a)         Unless
the Employee obtains the prior written consent of the Employers, the Employee
shall at all times keep confidential and shall refrain from using for the
benefit of himself, or any person or entity other than the Employers or their
subsidiaries or affiliates, any material document or information obtained from
the Employers or their subsidiaries, affiliates or predecessors, in the course
of his employment with any of them concerning their properties, operations or
business (unless such document or information is readily ascertainable from
public or published information or trade sources or has otherwise been made
available to the public through no fault of his own) until the same ceases to be
material (or becomes so ascertainable or available); provided, however, that
nothing in this Section 7(a) shall prevent the Employee, with or without the
Employers’ consent, from participating in or disclosing documents or information
in connection with any judicial or administrative investigation, inquiry or
proceeding or the Company's public reporting requirements to the extent that
such participation or disclosure is required under applicable law.  No
disclosure of the contents of this Agreement shall be made by either party to
this Agreement without the prior written consent of the other party; provided
that such disclosure (including disclosures contained in Company press releases
and regulatory filings) may be made as required in accordance with federal
securities and banking laws and regulations.

         

        (b)         The
Employee agrees not to make, either directly or indirectly, or cause to be made,
either directly or indirectly, by any other person or entity, any statement or
comment, whether oral, written, electronic or otherwise, or to take any other
action which disparages or criticizes the Employers,  their present or
former directors, officers, employees, management, practices or services, or
which disrupts or impairs or could disrupt or impair the operations of the
Employers, where such statements, comments or actions are based upon the
Employee=s
employment by the Employers, either as a director, officer or employee, or
knowledge gained as a result of such employment.

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

        (c)         Each
of the Employers and the Employee covenants and agrees that upon any
adjudication that such party has violated the terms of this Section 7, the party
asserting such a violation shall be entitled to seek and be awarded damages
together with such party=s
costs, reasonable attorneys=
fees and expenses in connection with enforcing the terms hereof.

         

        
          	
                  8.  

                	
                  Release
      of the Employers and Related
  Parties.

                

        

         

        (a)         In
consideration of the payments and benefits to be provided to the Employee
pursuant to this Agreement, the sufficiency of which is acknowledged hereby, the
Employee, with the intention of binding himself and his heirs, executors,
administrators and assigns, does hereby release, remise, acquit and forever
discharge the Company and its subsidiaries and affiliates, including the Bank
(the “Company
Affiliated Group”), their present and former officers, directors,
executives, agents, attorneys and employees, and the successors, predecessors
and assigns of each of the foregoing (collectively, the “Company
Released Parties”), of and from any and all claims, actions, causes of
action, complaints, charges, demands, rights, damages, debts, sums of money,
accounts, financial obligations, suits, expenses, attorneys’ fees and
liabilities of whatever kind or nature in law, equity or otherwise, whether
accrued, absolute, contingent, unliquidated or otherwise and whether now known
or unknown, suspected or unsuspected, which the Employee, individually or as a
member of a class, now has, owns or holds, or has at any time heretofore had,
owned or held, against any Company Released Party in any capacity, including,
without limitation, any and all claims (i) arising out of or in any way
connected with the Employee’s service to any member of the Company Affiliated
Group (or the predecessors thereof) in any capacity, or the termination of such
service in any such capacity, (ii) for severance or vacation benefits, unpaid
wages, salary or incentive payments, (iii) for breach of contract, wrongful
discharge, impairment of economic opportunity, defamation, intentional
infliction of emotional harm or other tort, (iv) for any violation of applicable
state and local labor and employment laws (including, without limitation, all
laws concerning unlawful and unfair labor and employment practices) and (v) for
employment discrimination under any applicable federal, state or local statute,
provision, order or regulation, and including, without limitation, any claim
under Title VII of the Civil Rights Act of 1964 (“Title
VII”), the Civil Rights Act of 1988, the Fair Labor Standards Act, the
Americans with Disabilities Act (“ADA”),
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
the Age Discrimination in Employment Act (“ADEA”)
and any similar or analogous state statute, excepting only:

         

        (A)         the
rights of the Employee (i) relating to any vested stock options held by the
Employee under the Option Plans (collectively, the “Equity
Arrangements”) and (ii) as a stockholder of the Company;

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

        
          (B)        the
right of the Employee to receive COBRA continuation coverage in accordance with
applicable law;

           

          (C)        rights
to indemnification the Employee may have under (i) applicable corporate law,
(ii) the articles of incorporation, charter or bylaws of any Company Released
Party, (iii) any other agreement between the Employee and a Company Released
Party, or (iv) as an insured under any director’s and officer’s liability
insurance policy now or previously in force; and

           

          (D)     
  claims for benefits under any health, disability, retirement, life
insurance or other similar “employee benefit plan” (within the meaning of
Section 3(3) of ERISA) of the Company Affiliated Group (the “Company
Benefit Plans”).

           

          (b)              The
Employee acknowledges and agrees that the release of claims set forth in this
Section 8 is not to be construed in any way as an admission of any liability
whatsoever by any Company Released Party, with any such liability being
expressly denied.

           

          (c)              The
release of claims set forth in this Section 8 applies to any relief no matter
how called, including, without limitation, wages, back pay, front pay,
compensatory damages, liquidated damages, punitive damages, damages for pain or
suffering, costs, and attorney’s fees and expenses.

           

          (d)              The
Employee specifically acknowledges that his acceptance of the terms of the
release of claims set forth in this Section 8 is, among other things, a specific
waiver of his rights, claims and causes of action under Title VII, ADEA, ADA and
any state or local law or regulation in respect of discrimination of any
kind.

           

          (e)               The
Employee shall have a period of 21 days to consider whether to execute this
Agreement. To the extent the Employee has executed this Agreement within less
than twenty-one (21) days after its delivery to him, the Employee hereby
acknowledges that his decision to execute this Agreement prior to the expiration
of such twenty-one (21) day period was entirely voluntary.  If
the Employee accepts the terms hereof and executes this Agreement, he may
thereafter, for a period of 7 days following (and not including) the date of
execution, revoke this Agreement. If no such revocation occurs, this Agreement
shall become irrevocable in its entirety, and binding and enforceable against
the Employee, on the day next following the day on which the foregoing seven-day
period has elapsed. Any revocation of this Agreement shall be deemed for all
purposes a revocation of this Agreement in its entirety.

           

          (f)               The
Employee acknowledges and agrees that he has not, with respect to any
transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Company Released Party with any
governmental agency, court or tribunal.

          
            
              
              

            

            
              5

              
                

              

            

            
              
              

            

          

        

      

      (g)               In
addition to any other remedy available to the Employers hereunder, in the event
that, as a result of a challenge brought by an Employee Released Party (as
defined below), the release of claims set forth in Section 8 becomes null and
void or is otherwise determined not to be enforceable, then the Employers’
obligation to make any additional payments or to provide any additional benefits
this Agreement shall immediately cease to be of any force and effect, and the
Employee shall promptly return to the Employers any payments or benefits
(including those set forth in Section 2(a) hereof) the provision of which by the
Employers was conditioned on the enforceability of this Agreement.

       

      (h)               The
Employee acknowledges that (i) he is executing this Agreement voluntarily and
without any duress or undue influence by any of the parties hereto, (ii) he has
been advised to consult with an attorney of his choice and has been given an
opportunity to do so, and (iii) he has carefully read this Agreement and the
releases contained herein and understands its contents and
consequences.

       

        
9.      Release of
Claims by the Employers.

       

      
        (a)            The
Employers, with the intention of binding themselves and their subsidiaries,
affiliates, predecessors and successors and their directors and officers
(collectively, the “Releasing Entities”), do hereby release, remise, acquit and
forever discharge the Employee and his heirs, estate, executors, administrators
and assigns (collectively, the “Employee
Released Parties”), of and from any and all claims, actions, causes of
action, complaints, charges, demands, rights, damages, debts, sums of money,
accounts, financial obligations, suits, expenses, attorneys’ fees and
liabilities of whatever kind or nature in law, equity or otherwise, whether
accrued, absolute, contingent, unliquidated or otherwise and whether now known
or unknown, suspected or unsuspected, which the Employers and their
subsidiaries, affiliates, predecessors and successors, individually or as a
member of a class, now have, own or hold, or have at any time heretofore had,
owned or held, against any Employee Released Party, excepting only:

         

        (A)           rights
of the Releasing Entities under this Agreement, the Employment Agreement, the
Equity Arrangements and the Company Benefit Plans;

         

        (B)           rights
of the Releasing Entities arising by reason of the Employee having (i) committed
a crime or an act or omission to act which constitutes fraud, willful misconduct
or gross negligence; or (ii) made any representation or warranty to the
Employers which is materially false or misleading; and

         

        (C)           rights
of the Releasing Entities pursuant to any mortgage or loan agreement between any
Releasing Entity and the Employee or in connection with any indebtedness or
overdraft owed by the Employee to any Releasing Entity.

         

        (b)              The
Releasing Entities acknowledge and agree that the release of claims set forth in
this Section 9 is not to be construed in any way as an admission of any
liability whatsoever by any Employee Released Party, with any such liability
being expressly denied.

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

      

      
        (c)         
    The release of claims set forth in this Section 9 applies to
any relief no matter how called, including, without limitation, compensatory
damages, liquidated damages, punitive damages, damages for pain or suffering,
costs, and attorney’s fees and expenses.

         

        (d)             
Nothing herein shall be deemed, nor does anything contained herein purport, to
be a waiver of any right or claim or cause of action which by law the Employers
are not permitted to waive.

         

        (e)            
 The Employers acknowledge and agree that they have not, with respect to
any transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Employee Released Party with any
governmental agency, court or tribunal.

         

        
          	
                       
      10.

                	
                  Representation.  The
      Employers and the Employee represent that they have reviewed this
      Agreement, and that each of them is fully aware of the content of this
      Agreement and of its legal effect, and acknowledge that this is a legally
      valid and binding obligation of the
  parties.

                

        

         

        
          	
                       
      11.

                	
                  Withholding.  The
      Employers may make such provisions as they deem appropriate for the
      withholding pursuant to federal or state income tax laws of such amounts
      as the Employers determine they are required to withhold in connection
      with the payments to be made pursuant to this
      Agreement.

                

        

         

        
          	
                       
      12.  

                	
                  Amendment
      and Waiver.  The terms of this Agreement may not be
      modified other than in writing signed by the parties.  No term
      or condition of this Agreement shall be deemed to have been waived, nor
      shall there be any estoppel against enforcement of any provision of this
      Agreement, except by written instrument of the party charged with such
      waiver or estoppel.  No such written waiver shall be deemed a
      continuing waiver unless specifically stated therein, and each such waiver
      shall operate only as to the specific term or condition for the future or
      as to any act other than that specifically
  waived.

                

        

         

        
          	
                       
      13.

                	
                  Notices.  All
      notices, demands, consents or other communication required or permitted
      hereunder shall be in writing and shall be deemed to have been given when:
      (i) personally delivered, or (ii) sent postage prepaid by registered or
      certified mail, return receipt requested, such receipt showing delivery to
      have been made, or (iii) sent overnight by prepaid receipt courier
      addressed as follows:

                

        

         

        
          
            	
                    If to the
      Employee:

                  	
                    Joseph
      T. Crowley

                    At
      his last address on file with

                    the
      Employers

                  

          

        

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

      

      
        	
                If to the
      Employers:

              	
                Willow
      Financial Bank

                170 South Warner Road

                Wayne,
      Pennsylvania 19087

                Attention:  Donna M. Coughey

                President and Chief Executive
Officer

              

      

       

      
        
          	
                   
      

                	
                  14.

                	
                  Entire
      Agreement.  This Agreement incorporates the entire
      understanding among the parties relating to the subject matter hereof,
      recites the sole consideration for the promises exchanged and supersedes
      any prior agreements between the Employers and the Employee with respect
      to the subject matter hereof, including but not limited to the Employment
      Agreement.  In reaching this Agreement, no party has relied upon
      any representation or promise except those set forth
      herein.

                

        

         

        
          	
                  15.  

                	
                  Invalid
      Provisions: If any provision of this Agreement is held to be
      illegal, invalid or unenforceable under present or future laws effective
      during the term of this Agreement, such provision shall be fully severable
      and this Agreement shall be construed and enforced as if such illegal,
      invalid or unenforceable provision had never comprised a part of this
      Agreement, and the remaining provisions of this Agreement shall remain in
      full force and effect and shall not be affected by the illegal, invalid or
      unenforceable provision or by its deletion from this
      Agreement.

                

        

         

        
          	
                  16.  

                	
                  Bind
      and Inure.  This Agreement shall be binding upon and
      inure to the benefit of the Employee and the Employers and their
      respective heirs and/or successors and permitted
      assigns.

                

        

         

        
          	
                  17.

                	
                  Governing
      Law.  This Agreement shall be governed by and construed
      in accordance with the laws of the Commonwealth of Pennsylvania, except to
      the extent that applicable federal law preempts the laws of Commonwealth
      of Pennsylvania.

                

        

      

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      
        IN
WITNESS WHEREOF, the Company and the Bank have caused this Agreement to be
executed by their duly authorized representatives and the Employee has executed
this Agreement, all as of the day and year first written above.

         

         

        
          	
                    WITNESSES:

                	
                   

                

        

      

       

      
        
          	 
      	
                  WILLOW
      FINANCIAL BANCORP, INC.

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                  /s/
      Sharon E. Lemon             

                	
                  By:

                	
                  /s/
      Donna M. Coughey

                
	 
      	 
      	
                  Donna
      M. Coughey

                
	 
      	 
      	
                  President
      and Chief Executive Officer

                

        

      

       

       

      
        	 
      	
                WILLOW
      FINANCIAL BANK

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                /s/
      Sharon E. Lemon             

              	
                By:

              	
                /s/
      Donna M. Coughey

              
	 
      	 
      	
                Donna
      M. Coughey

              
	 
      	 
      	
                President
      and Chief Executive Officer

              

      

       

       

      
        	 
      	
                EMPLOYEE

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                /s/
      Sharon E. Lemon             

              	
                By:

              	
                /s/
      Joseph T. Crowley

              
	 
      	 
      	
                Joseph
      T. Crowley

              
	 
      	 
      	
                 

              

      

    

     

    
      
        
        

      

      
        9EXHIBIT 10.1
                                                                    ------------

                        ADMINISTRATIVE SERVICES AGREEMENT

         This Administrative Services Agreement (the "Agreement") is entered
June 20, 2008 by and between iVoice, Inc., a New Jersey corporation, with its
principal office at 750 Route 34, Matawan, NJ, 07747 ("iVoice"), and Small Cap
Advisors, Inc., a New Jersey corporation, with its principal office at 750 Route
34, Matawan, NJ, 07747 (the "Company").

         WHEREAS, the Company desires to engage iVoice to provide the Services,
on the terms and subject to the conditions hereinafter set forth.

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

         1. SERVICES

                  1.1 During the term of this Agreement, iVoice shall provide
the following Services to the Company:

                  a. Contract review
                  b. Issuing sales orders
                  c. Invoicing
                  d. Collections
                  e. Review inventory records, warehousing reports, etc.
                  f. Manage employee records
                  g. Process payroll
                  h. Manage insurance coverages (health, liability, etc)
                  i. Accounts Payable
                  j. Accounts Receivable
                  k. Expense reimbursement
                  l. Vendor payments
                  m. Manage cash accounts
                  n. Maintain accounting records
                  o. Prepare periodic tax filings
                  p. Manage quarterly review and year-end audit in conjunction
                     with outside auditors
                  q. Office premises at the headquarters of iVoice.
                  r. Public relations, sales and marketing services.

                  1.2 iVoice shall perform the Services in a timely and
efficient manner, in accordance with all applicable laws, regulations and
ordinances, and shall assign to each of the Services substantially the same
priority as assigned to services of like category performed in its own
operations.

<PAGE>

         2. TERM

                  2.1 The term of this Agreement shall commence on the date
hereof and shall continue on a month to month basis, unless terminated by either
party by providing thirty (30) advance written notice to the non-terminating
party.

         3. FEES

                  In consideration for the Services, the Company shall pay
iVoice a fee of Four Thousand Dollars ($4,000) per month to be adjusted from
time to time to reflect the prevailing rate for such services. Fees shall be
billed monthly and are due thirty (30) days thereafter. Should the Company be
unable to pay the Fees on a timely basis, the past due Fees shall be added to
the Secured Convertible Promissory Note issued on the date hereof.

         4. OBLIGATIONS AND RELATIONSHIP

         Both parties to this Agreement shall at all times act as independent
contractors and, notwithstanding anything contained herein, the relationship
established hereunder between the parties shall not be construed as a
partnership, joint venture or other form of joint enterprise. Except as
expressly authorized by a party hereto, no party shall be authorized to make any
representations or to create or assume any obligation or liability in respect of
or on behalf of the other party, and this Agreement shall not be construed or
constituting either party or the agent of the other party.

         5. LIMITED LIABILITY; INDEMNIFICATION

                  5.1 iVoice shall not be liable to the Company for any loss,
claim, expense or damage, including indirect, special, consequential or
exemplary damages, for any act or omission performed or omitted by it hereunder
so long as its act or omission does not constitute fraud, bad faith or gross
negligence. iVoice shall not be liable to the Company for the consequences of
any failure or delay in performing any Services if the failure shall be caused
by labor disputes, strikes or other events or circumstances beyond its control
and it shall have provided prompt notice to the Company of its inability to
perform Services and the reason therefor.

                  5.2 In any action, suit or proceeding (other than an action by
or in the right of the Company) to which iVoice or any agent or employee of
iVoice performing Services hereunder (an "Indemnitee") was or is a party by
reason of his or its performance or non-performance of Services, the Company
shall indemnify the Indemnitee and hold the Indemnitee harmless from and against
expenses, judgments, fines and amounts paid (with the consent of the Company) in
settlement actually and reasonably incurred by the Indemnitee in connection
therewith if the Indemnitee acted in good faith and provided that the
Indemnitee's conduct does not constitute negligence or misconduct.

                                        2
<PAGE>

         6. CONFIDENTIALITY

         Any and all information obtained by iVoice in connection with the
Services contemplated by this Agreement shall be held in the strictest
confidence and not disclosed to any other person without the prior written
consent of the Company.

         7. NOTICES

                  All notices or other communications required or permitted to
be given pursuant to this Agreement shall be in writing and shall be considered
as duly given on: (a) the date of delivery, if delivered in person against
written receipt therefor, or by nationally recognized overnight delivery service
or (b) five (5) days after mailing if mailed from within the continental United
States by postage pre-paid certified mail, return receipt requested to the party
entitled to receive the same:

                  If to iVoice:            iVoice, Inc.
                                           750 Route 34
                                           Matawan, NJ  07747
                                           Attention: Jerome Mahoney
                                           Telephone: 732-441-7700
                                           Facsimile: 732-441-9895

                  And if to the Company:   Small Cap Advisors, Inc.
                                           c/o iVoice, Inc.
                                           750 Route 34
                                           Matawan, NJ  07747
                                           Attention: Mark Meller
                                           Telephone: 732-441-7700
                                           Facsimile: 732-441-9895

         Any party may change its address by giving notice to the other party
stating its new address. Commencing on the tenth (10th) day after the giving of
such notice, such newly designated address shall be such party's address for the
purpose of all notices or other communications required or permitted to be given
pursuant to this Agreement.

         8. BINDING EFFECT

         This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties and their respective successors.

                                        3
<PAGE>

         9. NO THIRD PARTY BENEFICIARIES

         This Agreement is solely for the benefit of the parties hereto and
shall not confer upon third parties and remedy, claim, cause of action or other
right in addition to those existing without reference to this Agreement.

         10. ENTIRE AGREEMENT

         This Agreement constitutes the entire agreement between the parties
with respect to the subject matters covered hereby and supersedes any prior
agreement or understanding between the parties with respect to those matters.

         11. ASSIGNMENT; AMENDMENT; WAIVER

         This Agreement may not be amended nor may any rights hereunder be
waived except by an instrument in writing signed by the party sought to be
charged with the amendment or waiver. The failure of a party to insist upon
strict adherence to any term of this Agreement on any occasion shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.

         12. GOVERNING LAW

         This Agreement shall be construed in accordance with and governed by
the laws of the State of New Jersey, without giving effect to the provisions,
policies or principles thereof relating to choice or conflict of laws.

         13. HEADINGS

         The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

         {the remainder of this page has been intentionally left blank}

                                        4
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.

                                  IVOICE, INC.

                                  By:
                                      -----------------------------------
                                      Jerry Mahoney
                                      President

                                  SMALL CAP ADVISORS, INC.

                                  By:
                                      -----------------------------------
                                      Mark Meller
                                      President

                                        5

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