DEVELOPMENT AND SUPPLY AGREEMENT

1.

Definitions.

(a)

“ CapMed PHR Software ” means one or more client, server, or portable flash memory device resident personal health records management computer programs or program modules, and all embedded computer programs or program modules, and all compilations and derivative works thereof, which secure or manage the data stored on the device, including, without limitation, the partitioning, data-encryption, password protection, auto launching of user designated information, and data importation, and includes the CapMed server resident “hub” programs or program modules required for each discrete remote user to upgrade the CapMed PHR Software or to access the embedded third party content on each discrete user’s remote computer or portable flash memory device as may be necessary to make the CapMed PHR System fully functional, whether developed as an

(b)

“ CapMed PHR System ” means the integrated data base management system designed to store, manage, transport and communicate personal health and medical information described in the Patent Application or the Copyright, including the CapMed PHR Software, the HealthKey, and all related intellectual property, including, without limitation, software, trade secrets and know-how.

(c)

“ Copyright ” means the United States Copyright Registration Number TXu-905-251 entitled Personal Health Record for a computer program, and all compilations or derivative works thereof.

(d)

“ CPT ” means “carriage paid to” and as more fully defined by the International Chamber of Commerce as an Incoterm.

(e)

“ Documentation ” means all instructions, manuals, diagrams or other written materials, in printed or binary formats, that describe the functionality or assist in the use of the CapMed PHR Software, the CapMed PHR System, the HealthKey, the MedicAlert® PHR System and the MedicAlert PHR Software.

(f)

“ HealthKey ” means CapMed’s proprietary portable flash memory device trademarked as the Personal HealthKey ^™ .

(g)

“ machine code ” means computer programs or program modules assembled or compiled in binary form on software media that are readable and usable by machines, but not generally readable by humans without reverse-assembly, reverse-compiling, or reverse-engineering techniques.

(h)

“ MedicAlert® enabled offer ” means the joint promotional effort of the parties to modify the packaging and the CapMed PHR System to promote MedicAlert® membership and the MedicAlert® PHR System. Users of the MedicAlert® enabled CapMed PHR System will be able to subscribe to become a MedicAlert® member and convert to the MedicAlert® PHR System through various means, including, without limitation, printing out a form and mailing to MedicAlert, calling a toll-free telephone number or by accessing the MedicAlert Internet server through the CapMed PHR Software via an Internet connection.

(i)

“MedicAlert® PHR Software ” means the fully functional personal health records data base management software that is modified in order to integrate all of the features, functions, and specifications of the CapMed PHR Software, the CapMed PHR System and the HealthKey with the MedicAlert® Software, in order to support the MedicAlert PHR System.

(j)

“ MedicAlert® PHR System ” means the fully functional personal health records data base management system that integrates all of the features, functions, and specifications of the CapMed PHR System, the MedicAlert® Software and the MedicAlert PHR Software.

(k)

“ MedicAlert® Software ” means one or more server resident programs or program modules required to verify the remote user’s identity and to process and synchronize incoming and outgoing user personal health and medical information on a local MedicAlert server with a remote client computer or portable flash memory device as may be necessary to make the MedicAlert® PHR System fully functional, whether developed as an original, derivative or compilation work by MedicAlert or CapMed under this Agreement and whether integrated with existing software or embedded computer programs or program modules in the CapMed PHR Software and all related source code, machine code, schematics, updates, modifications, bug fixes, update enhancements or other modifications, compilations or derivative works.

(l)

“ OEM ” means the original equipment manufacturer and supplier of goods or services for use and resale as a MedicAlert® branded product.

(m)

“ Patent Application ” means the United States Patent Application 10/393,751 entitled “System, apparatus and method for storage and transportation of personal health records;” all issued patents thereon; all divisions, reissues, continuations and continuation-in-part patents and patent applications; all corresponding foreign patents and patent applications; and all related foreign patents and patent applications owned by Bio-Imaging Technologies, Inc., or its parent or affiliate companies.

(n)

“Portable flash memory device” or “portable flash memory device” means a portable nonvolatile electrically erasable programmable read-only memory device that can be repeatedly erased and written to and from a personal computer via an industry standard Universal Serial Bus (USB) port, which has been approved by CapMed, such approval not to be unreasonably withheld.

(o)

“ Software ” or “ software ” means computer program or program modules in source code or machine code, schematics, updates, modifications, bug fixes, update enhancements, or other modifications, and all related compilations and derivative works.

(p)

“Source code” or “ source code ” means computer programs or program modules on software media that are human readable without reverse-assembly, reverse-compiling, or reverse-engineering techniques, and includes, the compiler/assembler/linker.

2.

Description of Goods and Services .

(a)

This Agreement is for the development and OEM supply of the MedicAlert® PHR Software. On MedicAlert’s acceptance of the fully functional commercial version of the MedicAlert® PHR Software, CapMed will become the exclusive United States and nonexclusive worldwide OEM supplier of client or portable flash memory device personal health records management computer programs or program modules that integrates all of the features, functions, and specifications of the CapMed PHR System as it may be modified to perform the functions and meet the specifications of the MedicAlert® PHR System, and the nonexclusive worldwide OEM supplier of portable flash memory devices, and MedicAlert will have the exclusive, worldwide right and license to use and resell the MedicAlert® PHR System as a MedicAlert® branded product and service (provided, however, such nonexclusive worldwide OEM suppliers shall not be permitted to supply a personal health record system to MedicAlert outside the

(b)

During the term of this Agreement, the parties may, from time to time, desire that CapMed supply additional goods developed or manufactured by CapMed. The terms and conditions of the parties agreement governing such additional goods, including, without limitation, product specifications, manufacturing, delivery, terms of payment, warranties, default, and remedies upon default, will be governed by the parties separate agreement and will not be incorporated in this Agreement without the parties express written consent.

3.

MedicAlert Development .

(a)

MedicAlert intends to launch publicly the MedicAlert® PHR System as a MedicAlert® branded product on July 25, 2005. MedicAlert is, by this Agreement, reasonably relying upon CapMed’s technical skills and expertise for the technical success of the MedicAlert® PHR System as a MedicAlert® branded product. To the extent that the MedicAlert® PHR System will be a MedicAlert® branded product, CapMed acknowledges that the development, improvements, and maintenance of the MedicAlert® PHR Software will be tied directly to the goodwill associated with the MedicAlert® trademark and trade name, and will ensure that the MedicAlert® PHR Software will meet MedicAlert’s high standards for quality and that it charges MedicAlert its most competitive pricing for all finished goods.

(b)

CapMed will be the exclusive United States developer and nonexclusive worldwide developer, and MedicAlert will be the exclusive worldwide licensee, user, and reseller of the MedicAlert® PHR Software as a MedicAlert® branded product and service. CapMed will promptly use its best efforts as a high priority matter to develop, to maintain and to integrate seamlessly all of the features, functions and specifications of its most current version of the CapMed PHR Software and the CapMed PHR System, with the MedicAlert® Software to allow generally, among other things:

(i)

A user to enter, update, or manage his or her personal health or health care information on the user’s local computer, to cause the local computer to automatically and transparently upload and synchronize such information with the user’s personal health and health care information stored on the user’s local portable flash memory device, and to cause the local computer to automatically and transparently upload and synchronize such information via an Internet connection with the user’s personal health and health care information stored in the user’s account on a remote server;

(ii)

A remote server operator to enter, update, or manage a user’s personal health or health care information to the user’s account on the remote server, to cause the remote server to automatically and transparently upload and synchronize such information via an Internet connection with the user’s personal health and health care information stored on the user’s local computer, and to cause the user’s local

(iii)

Such other customizations as MedicAlert may reasonably request or require that are generally available to the CapMed PHR System, including, without limitation, Profile Customizations, Profile Element Customizations, Pick List Customizations, Web Link customizations, and Field Level Links customizations. Any additional customizations or unique product upgrades and/or improvements as MedicAlert may reasonably request may be provided by CapMed; provided, however, CapMed shall reserve the right to charge an additional fee to be mutually agreed upon for such customizations.

(c)

Within forty-five (45) days of the effective date of this Agreement, CapMed and MedicAlert will exercise their good faith and best commercial efforts to make and enter a software escrow agreement pursuant to Section 18 below, and within five (5) days of the effective date of this Agreement will finalize and execute the attached Schedule A to this Agreement that will define the scope, project requirements and development responsibilities to develop, implement and commercially launch a robust, stable and fully functional commercial version of the MedicAlert® PHR System. The Schedule A will also set forth an objective milestone driven development, field test, acceptance, implementation and product launch schedule. All of the terms, conditions and schedules set forth in software escrow agreement and Schedule A shall be incorporated as material terms and conditions of this Agreement.

(d)

If for any reason either party is unable to meet any of the development or performance milestones of Schedule A, such party shall be in material breach of this Agreement and the other party may, but is not obligated to, terminate this Agreement with no further duty or obligation except as may be expressly set forth in this Agreement. In the event either party waives this provision as to any specified development or performance milestone, such waiver will not affect such party’s right to terminate this Agreement on the other party’s failure to meet any subsequently specified development or performance milestone.

4.

Upgrades and Improvements .

(a)

CapMed will continually **. CapMed will make **.

(b)

Any maintenance, including error correction, debugging or other technical assistance required to remedy any defects in or other malfunctions of the CapMed PHR System which have a material impact on the MedicAlert® PHR System will be undertaken by CapMed immediately, commencing ** hours of notification by MedicAlert, and CapMed will ensure that all personnel necessary to commence and complete as quickly as possible such maintenance are made available for these purposes. CapMed will **.

(c)

CapMed will make available all version upgrades and improvements as soon as they are commercially available to all MedicAlert® PHR System users of the CapMed PHR Software in machine code via Internet download from the “Check for Updates” and “Update Now” tabs on the “Tools” menu in the drop down navigation bar of the CapMed

5.

Support .

(a)

CapMed will promptly upon delivery of each version or version upgrade of the CapMed PHR Software provide to MedicAlert, at a designated MedicAlert facility, the technical assistance, training and know-how necessary for MedicAlert to use and maintain the client and portable flash memory device versions of the MedicAlert® PHR System. MedicAlert will reimburse CapMed for all reasonable costs associated with such training.

(b)

MedicAlert will, at its sole cost and expense, provide primary call center customer service and support to the user’s of the MedicAlert® PHR System.

(c)

CapMed will provide secondary call center customer service and support to MedicAlert’s customer service representatives during normal business hours (EST/EDT), and will provide secondary twenty-four (24) hour call center customer service and support on one hundred twenty (120) day notice after predetermined minimum subscription volumes are achieved.

6.

MedicAlert® PHR System Cross-Licenses .

(a)

CapMed hereby grants to MedicAlert the exclusive, worldwide right and license to undertake, or authorize others to undertake on MedicAlert’s behalf, the use and sale of the MedicAlert® PHR Software, and all corresponding rights under all patent, copyright, trademark, trade secret and other laws necessary or appropriate for the full enjoyment of the rights granted hereby.

(b)

MedicAlert hereby grants to CapMed the exclusive United States and nonexclusive worldwide right and license to undertake, or authorize others to undertake on MedicAlert’s behalf, the use of the MedicAlert® Software to the extent it may be integrated in the MedicAlert® PHR System, and all corresponding rights under all patent, copyright, trademark, trade secret and other laws necessary or appropriate for the full enjoyment of the rights granted hereby. CapMed will not, directly or indirectly (such as through authorization of third parties by way of license or otherwise) distribute or otherwise exploit the MedicAlert® Software.

(c)

The licensed rights granted by each party to the other include the rights:

(i)

To reproduce and authorize others to reproduce the MedicAlert® PHR Software;

(ii)

To publicly distribute and authorize others to publicly distribute machine code copies of the MedicAlert® PHR Software;

(iii)

To grant sublicenses authorizing others to publicly distribute machine code copies of the MedicAlert® PHR Software;

(iv)

To publicly display and perform and authorize others to publicly display and perform portions of the MedicAlert® PHR System for the purpose of promoting the distribution and sale of the MedicAlert® PHR System and to reproduce and publicly distribute machine code copies of the MedicAlert® PHR Software for such purposes.

(d)

Notwithstanding the foregoing, and subject to the restrain against assignment as set forth more fully in Section 20, below, nothing in this Agreement shall be interpreted or construed to allow either party to sub-license or assign any of the licensee right granted herein to any third party; provide, however, that either party may delegate their licensee rights of Section 6(c) above to their agents or employees, and, provided further, that upon such delegation the delegating licensee shall remain liable to the other party for the act of its agents or employees under the terms of this Agreement.

(e)

Notwithstanding the foregoing, nothing in this Agreement will otherwise limit or restrict CapMed from selling or licensing all or any part of the CapMed PHR Software, the HealthKey, or CapMed PHR System to any third party, and nothing in this Agreement will otherwise limit or restrict MedicAlert from selling or licensing all or any part of the MedicAlert® Software to any third party.

7.

Proprietary Rights

(a)

Title to the CapMed PHR System, including any enhancements, modifications or derivatives thereto, other than the MedicAlert® PHR Software, (including all intellectual property rights pertaining thereto) shall at all times remain and vest solely with CapMed. MedicAlert agrees that it will not claim or assert title to any such materials or attempt to transfer any title to End-Users or any third parties.

(b)

Title to the MedicAlert® Software, whether as an original, compilation or derivative work, and any enhancements, modifications or derivatives thereto, (including all intellectual property rights pertaining thereto) shall at all times remain and vest solely with MedicAlert. CapMed agrees that it will not claim or assert title to any such materials or attempt to transfer any title to End-Users or any third parties.

(c)

The MedicAlert® PHR System and the MedicAlert PHR Software is a collective, compilation or derivative work. Title to the MedicAlert® PHR System and the MedicAlert PHR Software shall at all times remain and vest with MedicAlert; provided however , that title to the MedicAlert® PHR System and the MedicAlert PHR Software shall not extend to the separate property contributed by the parties under this cross-license for the sole and limited purpose of creating the collective, compilation or derivative work. CapMed agrees that it will not claim or assert title to any such materials or attempt to transfer any title to End-Users or any third parties.

(d)

Each party’s proprietary and intellectual property rights (including patent, trademark, copyright, trade secret and other rights) not expressly licensed to the other party under this agreement shall remain the separate property of such party.

(e)

The CapMed PHR Software, either as a stand alone product or as incorporated into the MedicAlert® PHR System, shall be marked with such copyright, patent or other notices, proprietary legends, or restrictions as CapMed requires in this agreement or subsequent written notice by CapMed to MedicAlert. CapMed s