Exhibit 10.63
EXCLUSIVE DISTRIBUTION AGREEMENT
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REVISED DRAFT - November 4, 2002
Page 1 of 31
INTERNATIONAL DISTRIBUTION AGREEMENT
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This Agreement, to take effect as of the date of its signature by
both parties hereto, is by and between VeriChip Corporation, a Delaware,
U.S.A. corporation having offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America (hereinafter referred to as "VeriChip"
or the "Company"), and Digital Applied Technology Associates, a corporation
duly organized and existing under the laws of The Republic of the
▇▇▇▇▇▇▇▇ Islands, with principal offices at ▇▇▇▇ ▇▇▇▇'▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter referred to as "Distributor"). Distributor and the
Company may hereinafter be referred to as the "Parties" and individually,
as a "Party".
WITNESSETH:
WHEREAS, VeriChip markets highly sophisticated identification
devices and readers; and
WHEREAS, due to the technical nature and use of the Company's
products, users may be properly served only if they have the benefit of
professional pre- and post-sale demonstration, orientation, training and
support; and
WHEREAS, Distributor has represented to the Company that
Distributor possesses experience in the distribution of products and
that it has and will maintain the technical, financial and human
resources required to explain, demonstrate and service the Company's
products in a proper manner; and
WHEREAS, Distributor wishes to be appointed the Company's exclusive
distributor for the marketing, promotion and sale within the Territory
(as hereinafter defined) of the Company's products listed in EXHIBIT "B"
attached hereto (the "Products"); and the Company wishes to make such
appointment, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions hereinafter contained, the Parties hereby agree as follows:
SECTION 1. DEFINITIONS
In this Agreement, capitalized terms shall have the meanings set forth
in this Section 1. Definitions, or elsewhere in the provisions of this
Agreement:
(a) "Agreement" means this "International Distribution Agreement",
and any and all Exhibits referenced herein, signed by both
Parties.
VeriChip Form 1
(b) "Company Confidential Information" means all of the Company's
information already in the possession of, or subsequently
obtained by, Distributor, either (1) in writing and marked with
a restrictive legend, such as "Confidential", or (2) in
writing, orally, visually or by delivery of items which are, at
the time of disclosure or within (thirty) 30 days after its
disclosure, identified as confidential information, all to the
EXCLUSIVE DISTRIBUTION AGREEMENT
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REVISED DRAFT - November 4, 2002
Page 2 of 31
extent that such information or material has not been made
publicly available by the Company. The use of "Company
Confidential Information" is subject to the provisions of
Section 13, hereof.
(c) "Date of Delivery" is the date the Product ordered by
Distributor is delivered F.O.B. Miami, FL, U.S.A. to
Distributor's agent.
(d) "Date of Shipment" is the date a Product is shipped to
Distributor from the Company's distribution center in Miami,
FL, U.S.A., as such date is shown in the corresponding ▇▇▇▇ of
lading.
(e) "Effective Date" means the date this Agreement is accepted by
the Company, as evidenced by the signature of the Company's
representative.
(f) "End User" or "User" is anyone who acquires Products within the
Territory for its own use and not for resale.
(g) "Price List" means the list of the Company's wholesale list
price for the Products, as quoted by the Company from time to
time. The Company's List Price in effect as of the date hereof
is attached hereto as EXHIBIT "C" - Price List.
(h) "Product" or "Products" means each of the Company's product or
products listed in EXHIBIT "B" - Products, attached hereto, and
any copy or part thereof, documentation, updates, or other
materials delivered to Distributor by the Company in conjunction
with the Products. The Company may alter, improve, change or
discontinue any of the Products at any time.
(i) "Purchase Order" means the form attached hereto as EXHIBIT "A" -
Form of Purchase Order for Products, as the Company may amend it
from time to time.
(j) "Quota" means the minimum quantities of Products which
Distributor shall purchase from the Company, as set forth in
EXHIBIT "D" - Quota Requirements, attached hereto. Distributor's
failure to meet such Quota requirements shall be a material
breach of this Agreement, which may be cured within thirty
days (30) by Distributor upon written notice to Company.
(k) "Reseller" and/or "Sub-Distributor means anyone who acquires
Products from Distributor within the Territory for resale to
End Users.
(l) "Territory," means the country or countries listed in EXHIBIT
"E" - Territory, attached hereto.
(m) "Trademarks" means any trademarks, service marks and trade names
which the Company may at any time have adopted, used or
registered, which identify either the Company or the Products,
or are used by the Company in relation to and in connection with
the Products.
(n) "US" or "U.S.A." means the United States of America.
EXCLUSIVE DISTRIBUTION AGREEMENT
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REVISED DRAFT - November 4, 2002
Page 3 of 31
SECTION 2. APPOINTMENT OF EXCLUSIVE DISTRIBUTOR
2.1 Subject to the terms and conditions of this Agreement, the
Company hereby appoints Distributor as the Company's exclusive
distributor of Products in the Territory. During the Term of
this Agreement, as such term is defined in Section 12 below,
Distributor shall have the exclusive right to market, promote
and sell the Products in the Territory, under the Company's name
and Trademarks. Distributor hereby accepts such appointment and
expressly acknowledges and agrees that, pursuant to this
Agreement, Distributor shall only have the rights of Distributor
expressly granted by the Company hereunder. Distributor further
agrees that it shall, at all times, and at its own expense,
carry out to the best of its ability a merchandising policy
designed to promote and maintain the excellence of quality and
enhance the goodwill which is now associated with the name and
reputation of the Company and its Products. Distributor
acknowledges that, by accepting this appointment, it will be
subject to all of the terms and conditions of this Agreement and
to the Company's marketing, sales and merchandising policies as
they now exist or as they may be altered, at the Company's sole
discretion, from time to time, provided, however, that the
Company shall not make any changes that impose a material burden
on Distributor unless such changes are reasonably necessary to
comply with any applicable law, regulation or governmental order
or to improve the prospects of the business. Distributor's
failure to operate in accordance with such policies shall
constitute a material breach entitling the Company to terminate
this Agreement in accordance with Section 16 hereof.
2.2 Distributor agrees that (i) it will market, promote and sell the
Products solely to Resellers, if any, and/or Users within the
Territory; (ii) whenever Distributor places orders for Products
it will do so solely under the Company's authorized form of
Purchase Order, which expressly references and incorporates the
terms and conditions of this Agreement; and (iii) all such
Purchase Orders must be issued and signed by Distributor and
must be accepted in writing signed by the Company. Distributor
further agrees that it will market, promote, and offer for sale
solely those Products the Company specifically approves under
this Agreement, as such are listed in EXHIBIT "B" hereto, or in
any amendment that, from time to time, the Company makes to it
in a writing signed by the Company, and that any Purchase Order
Distributor submits to the Company will list only such approved
Products.
2.3 Distributor shall not, without the prior written
consent of the Company, sell, market or distribute any version
of the Products other than the version the Company shall
designate from time to time as the most current version.
Company shall allow Distributor to sell any and all products
distributor has in its inventory in the event that it possess
versions of product that are not the most recent. Nothing in
this Agreement shall be construed as prohibiting or
placing any restrictions whatsoever on the Company's right (i)
to market, promote, distribute, license or sell any Products
outside the Territory to or for the benefit or use of any
person, firm or company the Company may select in its sole
discretion; Company shall not allow any other Distributor to
resell the Product within the described territory or Distributor
shall have the right to step said resale of products within its
territory. Notwithstanding the foregoing, the Company will
instruct its other distributors not to export Products to the
Territory. If the Company is contacted by someone or some entity
in or out of the Territory requesting to buy Products in the
Territory (i.e. shipped to within the Territory), then the
Company shall refer such person or entity to Distributor.
2.4 In partial consideration of the distribution rights granted by
the Company to the Distributor hereunder, Distributor shall pay
to the Company a non-recurring and non-refundable fee in the
amount of $1.00 (the "Distribution Fee").
EXCLUSIVE DISTRIBUTION AGREEMENT
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REVISED DRAFT - November 4, 2002
Page 4 of 31
The Distribution Fee shall be due and payable in U.S. Dollars on
the date of execution of this Agreement, and shall be fully
earned by the Company when paid.
Distributor hereby expressly agrees that the Distributor Fee
shall not in any way or under any circumstances be credited
against or applied to amounts due for any Products ordered by
Distributor under this Agreement, including without limitation,
Products ordered pursuant to Section 7.2 below.
SECTION 3. PARTIES' RELATIONSHIP
The Parties hereby agree that:
3.1 Distributor is an independent contractor and not an agent of the
Company. This Agreement does not constitute a joint venture,
agency or partnership between the Parties, nor does it create an
employer-employee relationship. Neither Party is a legal
representative, partner, franchisee, employee or associate of
the other, legally or otherwise.
3.2 Neither Party has the power to assume nor will assume or create
any obligations on behalf of the other, nor make any
representations or warranties about the other. Distributor has
no power, express or implied, to accept any order on behalf of
the Company or to bind the Company, either directly or
indirectly, with respect to any order or with respect to any
other contract or matter whatsoever.
3.3 As an independent contractor, Distributor is free to select its
sales personnel and establish their compensation, and manage its
business as it deems appropriate, provided such management is
not in contravention of any policies prescribed by the Company
or in contravention of the terms of this Agreement. Distributor
may appoint sub-distributors within the Territory, provided that
Distributor informs any such sub-distributor of the applicable
rules and regulations (both contained herein and any other
applicable rules and regulations) and Distributor is responsible
for any breach thereof by any such sub-distributor. Distributor
shall have the right to correct any of its reseller and/or
Sub-Distributor's breach within Thirty Days (30) of said
breach becoming known to the Distributor.
SECTION 4. GENERAL OBLIGATIONS OF DISTRIBUTOR
4.1 Marketing. In the marketing, promotion and sales of Products,
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Distributor shall act on its own behalf, and for its own
account, except as otherwise specifically stipulated in this
Agreement, or as separately agreed to in writing by the Parties,
and shall sell the Products at its own prices and under its own
terms and conditions. With respect to the marketing and
distribution of the Products, Distributor shall have the
following obligations:
(a) To use its best efforts to further the promotion,
marketing and distribution of the Products in the
Territory;
(b) To maintain, at its own expense, appropriate offices and
a full range of ALL Products ORDERED as samples and for
demonstration purposes;
(c) To establish and maintain an adequate organization,
infrastructure, personnel and marketing strategy for its
marketing, promotion and sale of the Products in the
Territory;
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REVISED DRAFT - November 4, 2002
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(d) To maintain an adequate balanced inventory of the
Products, sufficient to fill reasonably anticipated
orders from customers and to actively promote orders for
the Products. During any subsequent contractual period,
Distributor shall purchase such minimum quantity of
Products as established by mutual agreement between the
Parties from time to time;
(e) To promptly respond to all inquiries from customers,
including complaints, process all orders, and effect all
shipments of Products;
(f) To pass on or flow-through to its Resellers, if any, and
Users any warning and cautions and other descriptive
literature regarding the proper use of all Products, as
provided by the Company;
(g) To permit the Company to visit Distributor's place of
business and inspect its inventories, service records,
and other relevant documents with reasonable notice to
Distributor.
(h) To maintain throughout the Territory, at Distributor's
sole expense, an adequate sales force dedicated on a
full-time basis to the marketing, promotion and sale of
the Products;
(i) To participate actively in sales or merchandising
programs prepared by the Company; to participate in all
fairs and exhibitions in the Territory where such
participation would, in the judgment of the Company,
promote the Products, and to develop and implement sales
programs for the promotion of the Products. It is
understood that the costs associated with such
participation shall be Distributor's sole
responsibility. Costs associated with setting up fairs
and exhibitions when required by the Company, shall be
equally shared by Distributor and Company.
(j) To assist the Company in all local tax and government
reports or any other local requirements. The Company
will compensate Distributor for any costs which might be
incurred by Distributor in providing such assistance,
provided such costs have been approved by the Company in
advance;
(k) From time to time during the Term of this Agreement and
upon expiration or termination hereof, Distributor will
provide the Company immediately upon request with a list
of the names and addresses of all persons to whom
Distributor has sold the Products and all information
concerning the sale of the Products that the Company may
require. However, during the term of this Agreement and
any and all extensions of same, Company shall not
interfere or contact said customers of Distributor
except for warranty or repair services. Said customer
list is the sole property of Distributor.
4.2 Advertising. Distributor shall diligently undertake to advertise
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the Products in the Territory. The Company will furnish
Distributor, from time to time and without additional charge,
with such marketing and technical materials in the English
language as the Company may, in its sole discretion, deem
necessary or desirable (the "Promotional Materials"). Distributor
may, solely during the Term of this Agreement, utilize such
Promotional Materials in promoting sales of the Products and in
preparing its own advertising materials. Distributor may, in
its own discretion, translate such Promotional Materials from
English into the language of the Territory for distribution in
the Territory, but shall provide them to the Company prior to
any distribution. Distributor shall bear all costs of this
translation and shall be solely responsible for inaccurate,
inconsistent or misleading translations. The Company shall have
ownership rights to all advertising and promotional materials so
translated only upon expiration or termination of this Agreement.
All expenses incurred by Distributor with respect to
the creation and distribution of advertising materials,
advertising and promoting the Products in an adequate fashion
shall be borne by Distributor. Distributor may use the
Promotional Materials and the full range of direct marketing
media, including home shopping, spot, long form television,
direct mail,
EXCLUSIVE DISTRIBUTION AGREEMENT
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REVISED DRAFT - November 4, 2002
Page 6 of 31
telemarketing, live shows, radio and print advertisements,
catalog, Internet and retail, in the marketing and promotion
of the Products in the Territory, to the extent the Company,
in its sole discretion, deems Distributor to have such ability.
Upon expiration or termination of this Agreement, Distributor
shall promptly return to the Company, at no cost to the Company,
all advertising and Promotional Materials translated or
prepared by Distributor. During the term of this Agreement,
the Company shall not furnish any translated material to any
other Distributor.
4.3 Internet. Distributor shall follow the Company's written
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instructions with respect to each of the following: (i) use of
any information about the Company or the Products available on
the Internet; (ii) linking of any site on the Internet to
any other site on the Internet established, operated or sponsored
by the Company; and (iii) use of any of the Trademarks or
Promotional Materials on any site on the Internet. Distributor
acknowledges that it shall cease the activities described in
(i), (ii) and/or (iii) above, if so instructed by the Company.
In no event shall Distributor establish, operate, sponsor
or contribute content to any site on the Internet that
incorporates the word "verichip" as its URL address or any
part of such address.
4.4 Customer Support. Distributor shall handle and promptly settle
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any User's customer complaints concerning the Products,
following the Company's guidance included in the Company's
operations guide provided by the Company to Distributor (the
"Operations Guide"), as amended from time to time in the sole
discretion of the Company. Distributor agrees to assist the
Company in arranging for any customer warranty service. Company
shall bear all costs of any warranty or repair service so long
as the product was used in accordance with the terms of this
agreement.
4.5 Expenses. Distributor assumes full responsibility for all costs
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and expenses which it incurs in carrying out its obligations
hereunder, including but not limited to all rentals, salaries,
commissions, advertising, demonstrations, travel and
accommodation expenses without the right to reimbursement for
any portion thereof from the Company.
4.6 Other General Obligations Of Distributor. Subject to all
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applicable laws and regulations in the Territory, Distributor
undertakes the following obligations within the Territory on a
continuing basis:
(a) Adherence to Business Ethics and Laws
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Distributor shall adhere to the highest principles of
business ethics and in this regard shall:
(1) comply with all laws and regulations in the
Territory (including, without limitation,
applicable healthcare regulatory requirements);
(2) adopt a set of business conduct guidelines (the
"Guidelines"), to be furnished to all its
employees and others who represent Distributor
to the public. Distributor shall ensure that
all such persons clearly understand that they
must comply with the Guidelines. The Guidelines
shall incorporate provisions that:
(i) prohibit the making of payments or gifts
for the purpose of influencing a decision
to award or to continue business with
Distributor;
(ii) require compliance with all laws and
regulations in the Territory, including
without limitation, Government
procurement laws;
(iii) require fair and equitable treatment for
organizations, agencies, companies and
enterprises;
(iv) require that representations be
accurate;
(v) require handling of intellectual
property in accordance with the rights
granted to Distributor;
EXCLUSIVE DISTRIBUTION AGREEMENT
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REVISED DRAFT - November 4, 2002
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(vi) require sales and business practices in
keeping with the principles of free
competition and business ethics and
conduct;
(vii) require full and accurate reporting,
other than financial information, to
appropriate authorities and to
Distributor;
(3) monitor compliance with the above provisions;
and
(4) notify the Company promptly upon discovery of
any instance where Distributor fails to comply
with any one or all of the provisions of this
Section.
Further, Distributor hereby recognizes and agrees to
comply with the U.S. Import/Export regulations, the
Foreign Corrupt Practices Act and laws concerning
International Economic Boycotts, together with
other U.S. laws, to the extent that they are
applicable to U.S. companies in their
international operations. Without limiting the
generality of the foregoing, Distributor agrees not to
re-import the Product back into the United States and
agrees that the Products and all packaging materials
will be marked "made in the U.S.A. for export only".
With the exception of products sold by Distributor
in its United States territory.
(b) Contacts with the Press and Other Media
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Distributor shall not make any statement or distribute
any material concerning the Company to the press or
other communications media, except for (i) materials
provided to Distributor by the Company for publication
and (ii) statements and materials otherwise approved in
writing by the Company. Distributor shall promptly
bring to the Company's attention and deliver to it copies
of any articles in the press of the Territory concerning
the Company and/or the Products of which Distributor may
be aware.
(c) Audits
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The Company will have audit rights of Distributor's
operations on: (i) adherence to Distributor's Guidelines
by Distributor's employees and others who represent
Distributor to the public, (ii) compliance with U.S.
Government Import/Export Regulations and the U.S.
Foreign Corrupt Practices Act, (iii) use and storage
practices for the Company Confidential Information, (iv)
use of the Trademarks; and (v) where there is suspicion
of breach of other provisions of Distributor's
agreements and other contractual documents. The Company
agrees to give Distributor's management no less than
ten (10) business days prior written notice before
exercising any of its Audit rights.
(d) Medical Use
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Distributor represents and warrants that at least one of
the three following criteria is satisfied with respect
to each Product (Distributor should initial one). Except
Distributor shall have the exclusive rights to obtain
and or meet the requirements of (i), (ii), and (iii)
during the term of the Agreement and any and all extensions.
(i) there are no medical approval requirements for
it in the Territory ;
-----------
(ii) it meets all medical product sale requirements
for this type of device in the Territory ;
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or
(iii) it has been granted medical device approval in
the Territory .
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(e) No Exports Outside the Territory
--------------------------------
Distributor shall not sell any Products outside of the
Territory and shall use its best efforts to ensure that
Products it sells are not resold outside of the
Territory.
4.7 Distributor's Representations and Warranties. Distributor hereby
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represents and warrants to the Company that: (i) Distributor is
a business organization duly organized and in good standing in
EXCLUSIVE DISTRIBUTION AGREEMENT
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Page 8 of 31
accordance with the laws of the Republic of the ▇▇▇▇▇▇▇▇ Islands,
recorded with the Register of Corporations, Republic of the
▇▇▇▇▇▇▇▇ Islands_[Public Registry of Commerce] corresponding to its
corporate domicile; (ii) Distributor has duly authorized the
execution and performance of this Agreement; (iii) this
Agreement is lawful and may be performed in accordance with its
terms under all the laws in force in United States of America as of the
date hereof; (iv) Distributor will advise the Company of any
changes in the Republic of the ▇▇▇▇▇▇▇▇ Islands and Distributor's
territories laws which might or will impair the validity of all
or any part of this Agreement; and (v) Distributor is a business
organization and shall have the required personnel duly trained to
market and sell products similar to the Products, transportation to
distribute such Products, warehouses to store them and a computer
system which allows a detailed control of stocks and sales.
SECTION 5. GENERAL OBLIGATIONS OF THE COMPANY; WARRANTIES
5.1 The Company agrees to use its commercially reasonable efforts to
sell Products to Distributor during the Term of this Agreement,
on such terms and prices as set forth herein and in EXHIBIT "C",
attached hereto, but in no event shall the Company be liable to
Distributor for any loss of profits, loss of business, expenses
or costs arising from or alleged to arise from any failure to
deliver. Distributor hereby agrees that the Company shall have
the right to allocate Products, in its sole discretion and in
whatever manner it deems to be in its best interest, among its
distributors without incurring any liability to Distributor.
5.2 The Company warrants that the Products will be free from defects
in material and workmanship. The Company shall replace or
repair, at its option, any Products that are found defective
in material or workmanship, upon written notification by
Distributor identifying each and every defect which
notice must be received prior to the earlier of thirty (30)
days from the date purchased by an End User, or (ii) sixty
(60) days from the Date of Delivery. The Company's obligation
with respect to such Products shall be limited to repair or
replacement, without any further expense to the Company. Any
alteration, defacement of the Products shall void this
limited warranty. THE FOREGOING LIMITED WARRANTY IS
EXPRESSLY MADE IN LIEU OF ANY AND ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. The foregoing limited warranty shall not be
enlarged or affected by, and no liability or obligation shall
arise from the Company's rendering of technical or other
advice or of service, in connection with any of the Products.
Employees, agents, distributors and sales representatives are
not authorized to make warranties. Oral or written statements
made by them do not constitute warranties and shall not be
relied on by Distributor. REPLACEMENT OR REPAIR OF A DEFECTIVE
PRODUCT IS DISTRIBUTOR'S SOLE AND EXCLUSIVE REMEDY FOR CONTRACT,
EXPENSE ARISING OR ALLEGED TO ARISE FROM THE MANUFACTURE,
SALE, DELIVERY OR USE OF THE PRODUCTS. IN NO EVENT
SHALL THE COMPANY BE LIABLE FOR LOSS OF USE OR PROFITS, LOSS OF
BUSINESS, EXPENSES OR COSTS ARISING FROM OR ALLEGED TO ARISE
FROM BUSINESS INTERRUPTION, ATTORNEYS' EXPENSES OR
CONSEQUENTIAL, CONTINGENT, INCIDENTAL OR SPECIAL DAMAGES CAUSED
OR ALLEGED TO BE CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE,
TORT, STRICT LIABILITY, BREACH OF CONTRACT, BREACH OF WARRANTY
OR OTHER BREACH OF DUTY OF OR BY THE COMPANY. Distributor shall
obtain shipping instructions and a return material authorization
from the Company for the return of any item under this
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warranty provision. Compliance with such instructions
shall be a condition precedent to the Company's repair
or replacement options hereunder.
5.3 The Company shall make commercially reasonable efforts to
provide Distributor with the latest Product information and,
upon Distributor's request, any information concerning the
technical aspects of the Products, their use and application.
5.4 The Company does not guarantee the results of, and Distributor
will not be entitled to rely on, any marketing plan of the
Company.
5.5 The Company represents that: (i) it is a corporation duly
incorporated and in good standing under the laws of the State of
Delaware, United States of America; and (ii) it has duly
authorized the execution and performance of this Agreement.
SECTION 6. ORDERS FOR PRODUCTS
6.1 Purchase Orders. Purchase Orders shall be in writing and signed
---------------
by an authorized representative of Distributor. Distributor
shall submit its Purchase Orders for Products to the Company in
writing, by facsimile, overnight reputable overnight courier or,
if agreed to by the Company, e-mail. All Purchase Orders shall
refer to this Agreement, and shall list the Products ordered,
quantities, applicable prices, scheduled delivery dates,
delivery point, shipping instructions and any other information
deemed necessary by the Company. In case of conflicts or
inconsistency between the terms and conditions of this Agreement
and those set forth in any Purchase Orders, acceptances,
correspondence, and other documents forming part of any order
during the Term of this Agreement, this Agreement shall govern
and prevail, and the conflicting or inconsistent terms and
conditions of any such other documents shall be deemed deleted
and shall not be binding upon either Party. Distributor shall
ensure that its Purchase Orders are received by the Company at
least forty-five (45) days prior to the delivery dates requested
in the order.
6.2 Acceptance of Orders. All Purchase Orders from Distributor are
--------------------
subject to acceptance in writing by the Company, at its offices
in Palm Beach, FL U.S.A. The Company may expressly accept or
reject each Purchase Order, or the Company may show its
acceptance by providing to Distributor the appropriate
transaction documents, including, but not limited to, invoices
(showing item, quantity, price, amount due, and other typical
invoice information), and order acknowledgments (confirming
Products and quantities ordered), or by sending the Products to
Distributor. Each Purchase Order shall be deemed to be an offer
by Distributor to purchase the Products pursuant to the terms of
this Agreement, and, if accepted by the Company shall give rise
to a contract on the terms set forth herein to the exclusion of
any additional or contrary terms set forth in the Purchase
Order unless agreed to in writing by Distributor and Company.
Distributor shall either accept or reject the Products within a
thirty- (30) day period after the Date of Delivery.
Distributor's failure to give the Company written notice of
rejection within such thirty- (30) day period shall be deemed
acceptance of the Products by Distributor. Distributor shall
also be deemed to have accepted the Products by signing a
transaction document requiring its signature, or providing the
Products to Resellers, if any, or Users, or making any payment,
including partial
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payments, to the Company for such Products. Distributor may
cancel its Purchase Order in writing prior to its acceptance
by the Company.
6.3 Delivery, Insurance, Title And Risk Of Loss. The Company will
-------------------------------------------
make reasonable efforts to meet Distributor's delivery
requirements for Products ordered by Distributor in any Purchase
Order accepted by the Company. The Company will inform
Distributor of the estimated delivery date and, at Distributor's
request, keep it informed of its status; provided, however, that
in no event shall the Company be liable for the consequences of
any delays in delivery due. Distributor will be responsible for
selecting and working with an export broker or forwarding agent
("export broker") to handle all shipments to the Territory. All
delivery of Products to Distributor shall be F.O.B. at a
mutually agreed port of embarkation (such as dockside at a port
or airport) in Miami, Florida, U.S.A., and will be made
to Distributor's export broker. Except Distributor shall have
the right to pick up product in West Palm Beach, Florida upon
Agreement by Distributor and Company. Distributor shall be responsible
for transportation and insurance of the Products after delivery
to Distributor's export broker. Such insurance shall provide
full coverage from the time the Products are delivered to
Distributor's export broker until Distributor shall have paid
the Company for such Products in full. The Company reserves all
rights with respect to delivered Products permitted by law,
including, without limitation, the rights of rescission,
repossession, resale, and stoppage in transit until the full
amount due from Distributor in respect of all delivered Products
has been paid. Distributor shall be responsible for obtaining
all consents from any government or related authority to export
the Products from the country of shipment and for importing them
into the country of importation. Unless otherwise provided in
this Agreement, "F.O.B." shall be construed in accordance with
INCOTERMS, 2000 of the International Chamber of Commerce.
The Company bears the risk of loss or of damage to the Products
until their delivery to Distributor's export broker, as provided
in the preceding paragraph. Thereafter, Distributor assumes such
risks. Notwithstanding the foregoing, title to each Product will
pass to Distributor over international waters, en-route to the
port of importation in the Territory, as such is specified by
Distributor in the Purchase Order.
6.4 Product Changes. The Company reserves the right, in its sole
---------------
discretion and without incurring any liability to Distributor,
to:
(a) Alter the specifications for any Product;
(b) Discontinue the manufacture of any Product;
(c) Discontinue the development of any new product, whether
or not such product has been announced publicly;
(d) Commence the manufacture and sale of new products having
features which make any Product wholly or partially
obsolete, whether or not Distributor is granted any
distribution rights in respect of such new products;
and/or
(e) Withdraw any Product from marketing at any time.
Notwithstanding the above, the Company shall use reasonable
efforts to provide Distributor with prompt written notice of any
such decisions and shall fill all accepted Purchase Orders from
Distributor for any such altered or discontinued Products of
which manufacturing and commercial deliveries have commenced.
Should government regulations cause Company to withdraw any
product from marketing and product is in transit to Distributor,
distributor shall bear no cost of returning product to Company.
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 11 of 31
6.5 Reports. Distributor hereby agrees that beginning on the
-------
Effective Date of this Agreement, Distributor will deliver to
the Company the following reports:
(a) Monthly reports, covering product type, number of units
and US$ amount; excluding Distributor profit and loss
statements/reports.
(b) Quarterly forecasts of Distributor's projected sales of
Products for the immediately subsequent three (3)
months, which forecasts will be used for planning
purposes only and will not constitute a commitment by
either party;
(c) Inventory reports;
(d) Inventory information, special reports on Distributor's
sales efforts, conditions of the market, and such other
matters as the Company may reasonably request by thirty
(30) days written notice.
All reports under Section 6.5 rendered by Distributor for the
Company shall, in reasonable detail, accurately and fairly
reflect the facts about the activities in Section 6.5
performed by Distributor under or with regard to this
Agreement.
SECTION 7. QUOTA REQUIREMENTS
7.1 Minimum Quotas. Distributor hereby agrees to attain the
--------------
marketing goals agreed upon by Distributor and the Company for
purposes of this Agreement by ordering and taking delivery from
the Company of the Quota of Products set forth in EXHIBIT "D"
hereto. Distributor hereby agrees that the establishment and
achievement of such Quota is of the essence of this Agreement,
and that Distributor's failure to meet its Quota shall
constitute a material breach hereunder, entitling the Company to
terminate this Agreement for cause pursuant to Section 16 hereof
and entitling the Company to seek monetary damages. Except
Distributor shall have Fifteen Days (15) to cure this breach.
7.2 Initial Order. In addition to the Quota requirements set forth
-------------
in EXHIBIT "D" hereto, within 30 days of execution of this
Agreement, Distributor shall place with and deliver to the
Company Distributor's initial Purchase Order for 1,050 VeriChip
microchips, 100 VeriChip readers and 0 service plans to the
Global VeriChip Registry System at the prices set forth in
EXHIBIT "C" - Price List, all in accordance with the terms of
this Agreement.
SECTION 8. PRICES, PRICE CHANGES AND PAYMENTS
8.1 Sales Prices. The Company will sell Products to Distributor at
------------
such sale prices as set forth in EXHIBIT "C" - PRICE LIST,
attached hereto, as amended, and agreed to by Distributor and
Company from time to time ("Sales Price"), plus any related
charges which Distributor must pay to the Company in
accordance with the provisions of Section 8.2 and Section
8.4, below. The Products' Sales Price shall be specified
in the respective Purchase Order. All Sales Prices
are F.O.B. Miami, Florida, U.S.A., unless the Company otherwise
agree in a writing signed by the Company.
8.2 Related Charges: The following are related charges:
---------------
(a) Taxes and Duties: Any taxes and duties resulting from
----------------
the sale of Products, license or related activities
hereunder, as the case may be, except taxes based on the
Company's net income.
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 12 of 31
(b) Additional Charges:
------------------
Depending on the particular Product or circumstances,
additional charges may apply, of which the Company will
inform Distributor in writing.
8.3 Price Increases and Decreases. The Company may increase the
-----------------------------
Sales Price of a Product without previous notice and without any
liability to Distributor. However, an increase does not apply to
Distributor if the Company receives Distributor's signed
Purchase Order before the date of the Company's written notice
to Distributor of such increase. Distributor may cancel a
Purchase Order for a Product affected by a price increase not
later than thirty (30) days from the date of the Company's
notification of such price increase. Distributor receives the
benefit of a decrease in charges up to and including the Date of
Shipment of a Product. Distributor's cancellation of a Purchase
Order for a product affected by a price increase shall not be a
breach of this Agreement. Distributor shall have a reasonable
amount of time to discuss and/or negotiate said product price
increase with Company.
8.4 Invoices and Payments. Payment in full of the Sales Price of each
---------------------
Product and the corresponding Related Charges indicated in Sections
8.1 and 8.2 above shall be due and payable in U.S. dollars to the
Company not later than on the Date of Delivery. Invoices will be
submitted upon shipment; provided, that, if any Related Charges and
other applicable charges are invoiced subsequently to shipment such
shall be payable in full in U.S. dollars not later than thirty (30)
days of the date of such invoices.
All payments shall be made by irrevocable, transferable and
divisible letter of credit opened at Distributor's expense, issued
or confirmed by a U.S. bank acceptable to the Company, in accordance
with the provisions of Section 8.5 hereof.
The Company may cancel a Purchase Order, without any liability, if
Distributor does not make full payment in accordance with these
provisions.
8.5 Letters of Credit. Prior to any shipment, Distributor shall
-----------------
establish a letter of credit in favor of the Company, confirmed by
a U.S. bank acceptable to the Company for an amount equal to 0 US
-
DOLLARS (US$0). The Company shall be authorized to draw on the
letter of credit by presentation of one or more sight drafts
accompanied by specified documents, such as commercial invoice,
▇▇▇▇ of lading or airway ▇▇▇▇ to the bank and to the Distributor.
Distributor agrees to equitably increase the value of the
letter of credit if at any time throughout the Term of this
Agreement, the value of the outstanding Purchase Orders is
greater than the value of the letter of credit. The letter of
credit referenced above must also meet the following
conditions:
(a) It must be obtained, and its related costs paid, by
Distributor;
(b) It must be denominated in U.S. dollars;
(c) It must be irrevocable and in a form, and confirmed by a U.S.
bank, acceptable to the Company;
(d) It must not expire earlier than thirty (30) days after the
estimated Date of Shipment;
(e) It must provide for partial shipments and partial payments
in case of partial shipments; and
(f) It must be negotiable by the Company upon submission to the
confirming bank of the related commercial invoices and
shipping documents.
8.6 Packaging and Shipment. Unless Distributor requests otherwise, all
----------------------
Products ordered by Distributor shall be packed for shipment and
storage in accordance with the Company's standard commercial
practices which Distributor represents and warrants to know and
accept. Any special packaging
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 13 of 31
requirements requested by Distributor shall be at Distributor's
expense.
SECTION 9. LIMITATION TO LIABILITY
9.1 Limitation of Liability and Remedies. Distributor understands and
------------------------------------
agrees that regardless of the basis on which damages can be claimed
by Distributor, Resellers and/or Users, Distributor's, Resellers'
and/or Users' exclusive remedy and the Company's exclusive
liability shall be limited as follows:
(a) Actual Damages. The Company is responsible for the amount
--------------
of any actual loss or damage solely up to the aggregate
payments received by the Company for the Product that is
the subject of the claim.
(b) Consequential Damages. UNDER NO CIRCUMSTANCES, EXCEPT AS
---------------------
REQUIRED BY LAW, SHALL THE COMPANY BE LIABLE FOR ANY
ECONOMIC CONSEQUENTIAL DAMAGES, INCLUDING (1) ANY SPECIAL,
INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES OR DAMAGES
(INCLUDING LOST PROFITS OR SAVINGS) TO DISTRIBUTOR AND/OR
RESELLERS AND/OR USERS, EVEN IF THE COMPANY SHALL HAVE BEEN
ADVISED OF THE POSSIBILITY OF SUCH POTENTIAL LOSS OR DAMAGE,
OR (2) THIRD PARTY CLAIMS AGAINST DISTRIBUTOR AND/OR USERS
FOR LOSSES OR DAMAGES, OR FOR SPECIAL, INCIDENTAL, OR
INDIRECT CHARGES, OR FOR ANY ECONOMIC CONSEQUENTIAL DAMAGES
(INCLUDING LOST PROFITS OR SAVINGS) EVEN IF THE COMPANY
SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH POTENTIAL
LOSS OR DAMAGE.
9.2 Sole Remedies. THE SOLE AND EXCLUSIVE REMEDIES FOR BREACH OF ANY
-------------
AND ALL WARRANTIES AND THE SOLE REMEDIES FOR THE COMPANY'S
LIABILITY IF ANY KIND (INCLUDING LIABILITY FOR NEGLIGENCE) WITH
RESPECT TO THE PRODUCTS AND SERVICES COVERED BY THIS AGREEMENT AND
ALL OTHER PERFORMANCE BY THE COMPANY UNDER OR PURSUANT TO THIS
AGREEMENT SHALL BE LIMITED TO THE REMEDIES PROVIDED IN SECTION 5
HEREOF.
SECTION 10. CHANGES TO AGREEMENT TERMS
10.1 Other than as set forth in Section 8 hereof, for any other changes
to the terms of this Agreement to be valid, Distributor and the
Company must agree upon such changes in writing. Changes are not
retroactive. Additional or different terms in any Purchase Order or
other communication from Distributor are void.
SECTION 11. GOVERNMENT REGULATION AND TAXES
11.1 Import And Export Documentation. Distributor shall be responsible
-------------------------------
for obtaining all licenses and permits and for satisfying all
formalities as may be required to import Products into the
Territory, and for clearing the Products through customs, in
accordance with the laws and regulations in force in the
Territory, and in accordance with the export laws and regulations
of the United States of America.
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 14 of 31
11.2 Registration. Distributor shall obtain, at its own expense, all
------------
necessary registrations, licenses, permits, approvals,
certifications, consents and authorizations or any other permit or
approval that it may need for the performance of its obligations
under this Agreement and shall supply all information in this
respect to the Company.
Should registration of the Products by the Company be required by
any governmental body, Distributor shall notify the Company and
cooperate with the Company in obtaining such registration in the
Company's name and at the Company's expense. In the event the
applicable laws of the Territory require registration of the
Company's Products in the name of Distributor, the Company may
simultaneously apply for separate registration of the Company's
Products in its name or the registration shall be made transferable
to the Company or to any entity designated by the Company, in case
of termination or expiration of this Agreement and Distributor
shall prepare, at its own expense, all of the applicable transfer
documents required by the laws of the Territory for the transfer or
assignment of the registration. Simultaneously with the execution
of this Agreement, Distributor shall deliver to the Company
completed transfer or assignment documents signed by Distributor,
undated and without designation of a transferee. Distributor hereby
agrees that it will in no way oppose the transfer or assignment of
the registration to the name of the Company or to any other party
which the Company may designate.
11.3 Restrictions To Export. Distributor may actively market, promote
----------------------
and sell Products only within the geographic scope of the
Territory. Distributor shall not market, nor shall Distributor use
anyone else to market, any such Products outside the Territory. If,
unknown to the Company, a Reseller or User acquires Products for
export, the Company's responsibilities, if any, under this
Agreement no longer apply to such Products.
11.4 Compliance with the Laws. Distributor agrees that, in performing
------------------------
its obligations under this Agreement, it shall comply at all times
with all applicable laws, regulations and orders in force in the
Territory. Distributor also agrees to advise the Company of any
change, modification or new law which may affect the performance of
Distributor or the Company with respect to both Parties'
obligations hereunder.
Distributor shall furnish to the Company, from time to time, at the
Company's request and at the Company's reasonable satisfaction, by
affidavit or other reasonable means, affirmative assurances that
the appointment of Distributor hereunder and its activities under
this Agreement are proper and lawful under the law and regulations
in force in the Territory.
11.5 Review Of Distributor's Compliance. The Company may periodically
----------------------------------
review Distributor's compliance with this Agreement. Distributor
agrees to provide the Company with such relevant records as the
Company may request, other than financial records of profit and
losses of Distributor. The Company may reproduce and retain copies,
at the Company's expense, of such records. The Company, directly
or through an independent auditor, at Company's expense, may
conduct a review of Distributor's compliance with this
Agreement on Distributor's premises during Distributor's business
hours. If, during the Company's review of Distributor's compliance
with this Agreement, the Company finds that Distributor has
materially breached the terms of this relationship, the Company
shall be entitled to exercise all its rights under law and equity
and the terms of this Agreement.
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 15 of 31
11.6 Taxes. Any taxes or governmental charges, whether in the Territory
-----
or any other country, now or hereafter imposed upon the sale or
transfer of goods or respect to the transactions contemplated
hereunder (with the exception of income taxes or other taxes
imposed upon the Company and measured by the Company's net income)
shall be the responsibility of, and shall be paid by, Distributor,
and if paid or required to be paid by the Company, the amount
thereof shall be added to and become a part of the amounts payable
by Distributor hereunder. Except for registrations as set forth
in Section 11.2 It is understood that the Company has no obligation
to reimburse Distributor for any taxes or customs duties paid to
import the Products, nor for any other costs or investments
eventually made by Distributor.
SECTION 12. TERM AND RENEWAL OF THIS AGREEMENT
12.1 Term. This Agreement shall become effective as of the Effective
----
Date and shall continue in force for a term of sixty (60) months
from the Effective Date (the "Term").
Any rights and licenses granted to Distributor hereunder shall
extend for the Term of this Agreement, and any renewals thereof,
and shall automatically terminate upon termination or expiration of
this Agreement or any renewals thereof.
12.2 Renewal. Upon written request from Distributor, which must be
-------
delivered to the Company at least thirty (30) days prior to the
expiration of the Term, the Company, in its own discretion, may
negotiate in good faith with Distributor for a renewal of the
Agreement on such terms as the Parties may mutually agree, provided
that, on the date of request, Distributor (i) is not in default of
any material term or condition of this Agreement or any other
agreements between the Company and Distributor, (ii) has met the
Quota requirements set forth herein; and (iii) has satisfied all
monetary obligations owed by Distributor to the Company.
SECTION 13. CONFIDENTIALITY
13.1 Confidential Information. Distributor agrees that the Company has a
------------------------
proprietary interest in any and all Company Confidential
Information provided to Distributor by the Company in connection
with this Agreement or otherwise, whether such information is in
written, oral or visual form.
13.2 Protection Of Company Information. Distributor acknowledges and
---------------------------------
agrees that all Company Confidential Information is confidential
and proprietary to the Company. In this regard,
(a) Distributor agrees to use Company Confidential Information
solely in the discharging of its responsibilities hereunder;
(b) Distributor may disclose Company Confidential Information to
its employees who have the need to know such information;
provided, however, that prior to any such disclosure,
Distributor must have an appropriate confidentiality
agreement with any such employee, binding such employee on
the terms of this Section 13. For a period of three (3) years
from the date of receipt of Company Confidential Information,
Distributor may not disclose such
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 16 of 31
Confidential Information to others (including but not
limited to any affiliates of Distributor) unless, prior
to such disclosure, Distributor has an appropriate
agreement with the other party and such disclosure is
approved by the Company in writing. All such appropriate
agreements must enable Distributor to meet its obligations
hereunder and to enforce the terms and conditions of this
Section;
(c) Distributor shall not make any additional copies of any
writings, documents, programs or other media which contain
Company Confidential Information and are marked "do not
reproduce" or similar language, without the prior written
permission of the Company;
(d) Distributor shall keep all writings, documents or other
media containing Company Confidential Information secure
in locked files at all times, when not in use, to prevent
their loss or unauthorized disclosure, take action to
prevent unauthorized access to any of its premises and
comply with all other reasonable security procedures and
measures which the Company may recommend from time to
time;
(e) Distributor shall segregate Company Confidential
Information at all times from materials of third parties;
(f) Distributor's obligations with respect to Company
Confidential Information will not apply to any information
that (i) is already in its possession without obligation
of confidence; (ii) is independently developed; (iii) is
or becomes publicly available without breach of this
Agreement; (iv) Distributor rightfully receives from a
third party without obligation of confidence; or (v) is
released for disclosure with the Company's written
consent;
(g) Distributor shall, upon termination or expiration of this
Agreement, deliver to the Company all written or
descriptive materials, which contain Company Confidential
Information;
(h) From time to time, the Company may provide Distributor
with copies of documents labeled "For Internal Use Only".
Distributor agrees to limit use of these documents to the
performance of its responsibilities hereunder and not to
make the documents available to any third party.
13.3 Protection Of Distributor Information
-------------------------------------
(a) Distributor understands that the Company does not wish to
receive any information which Distributor, or any third
party, considers confidential or proprietary. Information
that Distributor supplies to the Company shall be
treated as confidential by the Company, unless such
information (i) is or becomes in the public domain,
(ii) is already known to the Company, or (iii) is
independently developed by the Company receipt, the
Company agrees in writing to do so.
(b) The Company may not use any information which Distributor
makes available to the Company, designated as confidential
by Distributor, and the Company may not authorize its
affiliates to use such information in their operations
unless approved by Distributor in writing; provided
the Company shall instruct its personnel to keep
such information confidential by using the same care
and discretion that it uses with similar data which
the Company designates as confidential; further,
the Company shall not disclose any such confidential
information by publication or otherwise to any third
party without the prior written permission of Distributor.
(c) Notwithstanding the foregoing, if the Company conducts an
inspection in accordance with its rights pursuant hereto,
any materials inspected will be treated as confidential
and the Company will not disclose any of them unless
required by law to do so.
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 17 of 31
SECTION 14. INTELLECTUAL PROPERTY MATTERS
14.1 Trademarks. Distributor is hereby authorized to use the Trademarks
----------
within the Territory solely for the Term of this Agreement and
solely for purposes of identifying the Products which Distributor
is authorized to market hereunder. In addition, Distributor is
hereby authorized to use, during the Term of this Agreement and
any extensions thereof and within the Territory, the designation
"Distributor of
VeriChip Products", in its activities hereunder.
(a) Distributor is not granted any right or license to use the
Trademarks or any other trademark or tradename owned by
the Company in such a manner as to cause confusion
concerning the origin of any goods or services.
Promotional, advertising and other materials to be used by
Distributor, which incorporate or display any Trademarks,
other than such material which has been supplied to
Distributor by the Company, shall be subject to the
Company's guidelines or instructions. Distributor agrees
to change or correct, at Distributor's expense, any such
promotional advertising or other material, which in the
Company's reasonable judgment is inaccurate, objectionable
or misleading, or misuses a trademark or tradename owned
by the Company.
(b) Distributor hereby acknowledges the Company's exclusive
right, title and interest in and to the Trademarks.
Distributor acknowledges and agrees that, except for the
limited use of the Trademarks for purposes of marketing
and distributing the Products in conformity with this
Agreement, Distributor will acquire no right, title or
interest of any kind or nature whatsoever in or to the
Trademarks or the goodwill associated therewith.
Distributor recognizes that the Trademarks and any
goodwill attached thereto, belong to the Company, and
Distributor understands and agrees that Distributor's use
of the Trademarks shall inure to the benefit of the
Company. Distributor shall not disparage, bring into
disrepute or reduce the value of any Trademarks.
Distributor shall not at any time do or permit any act to
be done which may in any way impair the rights of the
Company in the Trademarks.
(c) Distributor shall not, without the Company's prior written
consent, remove or alter any Trademarks, trade names,
patent numbers, serial numbers, notices, labels, tags or
other identifying marks, symbols or legends affixed to any
Products, containers or packages except as provided in Section
4.6(a)(4).
(d) Distributor undertakes fully and without any reservation
whatsoever to render to the Company all assistance, without
cost to Distributor, as may be necessary in connection
with any matter pertaining to the protection of the
Trademarks, including, without limitation, to assert
no interest in or to, and to withdraw or terminate any
interest in or to, any Trademarks which would limit
the Company's ability to protect those Trademarks.
(e) Distributor shall inform the Company of all registration
and recording requirements with respect to the Trademarks
within any country of the Territory. All registrations of
any Trademarks and domain names which Distributor may
assist the Company to obtain within the Territory will be
in the name of the Company. Distributor shall not
undertake any activities to attempt to register any of the
Company's Trademarks without the Company's prior written
consent. Distributor shall not use, employ or attempt to
register any trademark or tradename which, in the sole
judgment of the Company, is confusingly similar to any of
the Trademarks.
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 18 of 31
(f) Distributor will immediately notify the Company in writing
if any claim of infringement is brought against
Distributor in respect to the use of the Trademarks, or if
Distributor is aware of or suspects any infringement of
the Trademarks by another party. The Company reserves the
right in its sole discretion to institute any proceedings
against any such third party infringers and Distributor
shall refrain from doing so. The Company shall control the
defense or prosecution of any actions concerning
infringement of its Trademarks. Distributor shall
cooperate fully with the Company in any action taken by
the Company against any such third parties, provided that
all expenses of such action, including Distributor's,
shall be borne by the Company and all damages which may be
awarded therefrom shall accrue to the Company.
(g) Upon termination or expiration of this Agreement,
Distributor shall forthwith cease and desist from use of
the Trademarks in any manner. In addition, Distributor
hereby empowers the Company and agrees to reasonably
assist the Company, if requested, to cancel, revoke or
withdraw any governmental registration or authorization
permitting Distributor to use the Trademarks in the
Territory.
Any unauthorized use of the Trademarks by Distributor shall be a
material breach of this Agreement, entitling the Company to
terminate this Agreement in accordance with Section 16 hereof and
to bring an action for infringement of the rights of the Company in
and to the Trademarks.
14.2 Patents And Copyrights. No rights or licenses are granted to
----------------------
Distributor herein by the Company, expressly or by implication,
under any patents or copyrights.
(a) The Company shall defend Distributor against any claim
that any Product provided by the Company hereunder
infringe any patent, copyright or other analogous right
enforceable in the Territory, and the Company shall pay
any resulting damages, costs and attorney's fees finally
awarded by a court or any resulting settlement agreed upon
by the Company, provided that Distributor promptly
notifies the Company in writing of the claim and, further
provided, that the Company has sole control of the defense
and of all related settlement negotiations.
(b) The Company's obligation under this Section is subject to
the condition that if any Product becomes, or in the
Company's opinion is likely to become, the subject of such
a claim, Distributor shall permit the Company, at its
option and expense, either to procure the right of
Distributor to continue marketing or using the item
involved or to replace or modify it so that it becomes
non-infringing. If neither of the foregoing alternatives
is available in terms which are reasonable in the
Company's sole judgment, Distributor hereby agrees that,
upon written request by the Company, Distributor shall
return the item involved to the Company. In such a case,
the Company agrees to grant a credit or refund to
Distributor for the amount of charges of the returned
Product, as well as any and all shipping and costs of
return and applicable taxes thereon.
(c) The Company shall have no obligation to Distributor for
any liability to third parties for any claim based upon
any alteration or modification of any Product or based
upon the combination, operation or use of any Product with
equipment, data or programming not supplied by the
Company.
The foregoing states the entire obligation of the Company in regard of
all intellectual property matters and Distributor shall have no right
to act in the Company's name or on the Company's behalf, with respect
to infringement of patents, copyrights or analogous rights relating to
the Products.
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 19 of 31
SECTION 15. INDEMNIFICATION
15.1 Distributor Indemnification. In addition to damages for which
---------------------------
Distributor may be liable under law or equity or under the terms of
this Agreement or any other applicable agreements, and subject to
the provisions of Section 15.4 - "Indemnification Procedure",
below, Distributor shall indemnify, defend and hold the Company,
its affiliates and all officers, directors, employees and agents
thereof, harmless from and against any and all claims, liabilities,
losses, damages, costs and expenses (including without limitation
reasonable attorney's fees, expenses and settlement costs,
including appeal proceedings) (collectively, "Damages"), which the
Company or any of its Affiliates and all officers, directors,
employees and agents thereof may at any time sustain or incur by
reason of or in connection with any claim, demand or other action
initiated by any person or entity, arising from, related to or
in any way connected with (i) Distributor's conduct under this
Agreement and any other applicable agreements; (ii) Distributor's
breach of this Agreement; (iii) Distributor's failure to comply
with applicable laws and regulations; or (iv) Distributor's
relations with anyone else, particularly regarding statements,
representations or warranties made by Distributor not expressly
authorized in writing by the Company hereunder. Furthermore,
Distributor shall indemnify and hold the Company harmless from and
against any and all claims, costs, damages and liabilities
whatsoever asserted by any employee, agent, or representative of
Distributor under any applicable termination, labor, social
security or other similar laws and regulations.
Distributor shall not be obliged to indemnify the Company from any
such liability, loss, damage, cost or expense, to the extent that
such liability, loss, damage, cost or expense was caused by any
intentional or grossly negligent act or omission or
misrepresentation, or by breach of obligations specified in this
Agreement by the Company.
15.2 Company Indemnification. The Company hereby agrees to indemnify,
-----------------------
defend and hold harmless Distributor, its affiliates and all
officers, directors, employees and agents thereof from all Damages
arising out of: (i) the Company's material breach of this
Agreement, or (ii) the Company's failure to comply with applicable
laws and regulations in the U.S.
The Company's liability hereunder will be limited as follows:
(a) Claims, Demands and Other Actions:
---------------------------------
With respect to the claims, demands and other actions
referred to in Paragraph 15.1, above, to the extent that
any such claim, demand or other action relates to:
(1) any Product sold by Distributor pursuant to any
agreement containing warranties or other
commitments which exceed those warranties
or commitments which the Company extends
hereunder, the Company's obligation to indemnify
Distributor shall be equal to the liabilities,
losses, damages, costs and expenses for which
Distributor would have been liable if the
agreement pursuant to which Distributor sold the
Product involved had not contained such
additional warranties or other commitments;
(2) the failure by Distributor to deliver a Product
by a delivery date committed by the Company, the
Company's obligation to indemnify Distributor, if
any, shall not exceed the liabilities, losses,
damages, costs and expenses for which Distributor
would have been liable if the agreement pursuant
to which Distributor sold the Product involved
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 20 of 31
had contained provisions substantially identical
to those of Section 17.13. "Force Majeure",
hereof.
(b) Certain Distributor Actions:
---------------------------
In any event, the Company shall not be obliged to
indemnify Distributor from any such liability, loss,
damage, cost or expense to the extent that such liability,
loss, damage, cost or expense was caused by any
intentional or grossly negligent act or omission or
misrepresentation, or by any breach of obligations
specified in this Agreement by Distributor.
15.3 Allocation of Expenses
----------------------
In the event a claim is based partially on an indemnified claim
described in Section 15.1 and/or Section 15.2, above, and partially
on a non-indemnified claim, or is based partially on a claim
described in Section 15.1, above, and partially on a claim
described in Section 15.2, above, any payments and reasonable
attorney fees incurred in connection with such claims are to be
apportioned between the Parties in accordance with the degree of
cause attributable to each Party.
15.4 Indemnification Procedure
-------------------------
The liability of Distributor and of the Company under Section 15.1
and Section 15.2, is subject to Distributor or the Company (as the
case may be): (a) having promptly notified the other of any claim,
demand or other action likely to give rise to a claim against the
other; and (b) giving the other all freedom either to join the
defense, or to direct such defense, with a right to come to a
settlement if the other so wishes.
SECTION 16. TERMINATION OF AGREEMENT
Distributor or the Company may terminate this Agreement, prior to
expiration, with or without cause pursuant to the terms of this
Section 16. "Cause" for purposes of this Section is the breach by
any of the Parties of a material term of this Agreement.
16.1 Termination by Distributor. If the Company materially breaches this
--------------------------
Agreement and if such breach remains uncured for thirty (30) days
after Distributor gives the Company written notice of such breach,
Distributor may terminate this Agreement for Cause by delivery of
written notice of termination to the Company, effective thirty (30)
days after the date of such notice. The Company may avoid
termination by curing its breach to Distributor's satisfaction
within the thirty- (30) day cure period.
16.2 Termination by the Company. The Company may terminate this
--------------------------
Agreement for Cause if Distributor materially breaches this
Agreement, by delivering to Distributor written notice of
termination, which shall become effective as follows:
(a) Upon Notice and Reasonable Cure Period: If the Company
--------------------------------------
terminates for Cause, the Company shall allow
Distributor a reasonable time period to cure its
breach, if the Company believes such breach is a
curable breach. The Company's written notice
of termination will indicate the time period the Company
allows Distributor to cure its breach ("Cure Period"),
which may be thirty (30) days or such a longer period as
applicable law may require. Distributor may avoid
termination by curing its breach within such Cure Period
to the Company's satisfaction. If Distributor fails to
cure its breach within the Cure Period, this Agreement
shall terminate
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 21 of 31
without further notice to Distributor effective
immediately upon the expiration of the Cure Period,
or as provided by applicable law.
Distributor's material breach of this Agreement which the
Company may find susceptible of cure include the
following: If Distributor (1) fails to substantially
comply with any of the terms and conditions of this
Agreement, other related agreements and forms attached
hereto and thereto; (2) fails to meet the minimum Quota
requirements within the specified period; (3) fails,
refuses or neglects to obtain the Company's prior written
approval or consent as required in this Agreement; (4)
fails, refuses, or neglects to promptly pay when due any
amounts Distributor may owe to the Company hereunder; (5)
fails to submit when due any reports, or any other
information or documents required under this Agreement;
(6) fails to observe or maintain any of the
standards or procedures the Company prescribes herein
or otherwise in writing; or (7) in the Company's sole
discretion, Distributor engages or has engaged in any
illegal, fraudulent, unfair or deceptive business
practices.
(b) Upon Written Notice of Termination. If Distributor
----------------------------------
materially breaches this Agreement, and the Company,
deems that Distributor's material breach is incurable,
the Company may terminate this Agreement by
delivering to Distributor the Company's written
notice of termination which shall become effective
immediately upon delivery, or as required by applicable
law.
Distributor's incurable material breach of this Agreement
include the following: (1) If Distributor has falsely made
any of the representations and warranties set forth in
this Agreement, or knowingly maintains false books or
records or submits any false reports to the Company; or
(2) Distributor (and/or its principals) are convicted of a
felony, a fraud, a crime involving moral turpitude, or
found liable in a civil claim for fraud or any unfair or
deceptive act or practice; or (3) Distributor (and/or its
owners) purports to transfer any rights or obligations
under this Agreement or any interest in Distributor to a
third party, without the Company's prior written consent,
or (4) Distributor discloses or divulges, directly or
indirectly, any information the Company may provide to
Distributor as Company Confidential Information; or (5)
Distributor forfeits its legal right to do or to transact
business in the Territory; or (6) Distributor breaches any
terms hereof providing for immediate termination of this
Agreement; or (7) Distributor repudiates this Agreement.
(c) Automatic Termination. Subject to applicable law, this
---------------------
Agreement and each and all rights granted to Distributor
hereunder shall immediately and automatically terminate
upon the occurrence of Distributor's insolvency,
bankruptcy, moratorium, dissolution, liquidation or
reorganization, or upon the occurrence of any other events
that in the Company's sole discretion may substantially
affect Distributor's ability to carry out its obligations
under this Agreement.
16.3 Upon termination or expiration of the term of this Agreement or any
renewal thereof, neither Party shall have any further rights or
obligations hereunder; provided, that, expiration or termination of
this Agreement shall not relieve Distributor or the Company of
their respective obligations incurred prior thereto and that any
obligations, which by their nature extend beyond expiration or
termination of a contract, such as those concerning intellectual
property rights, indemnification and limitation of liabilities
shall survive expiration or termination of this Agreement and
remain in effect until fulfilled, and shall apply to the Parties'
respective successors and assignees. Distributor hereby agrees that
if the
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 22 of 31
Company permits Distributor to perform certain activities
after this Agreement expires or terminates, Distributor will do so
under the terms of this Agreement.
16.4 Distributor and the Company agree that neither Distributor nor the
Company will be liable for any claims or losses the other may incur
by early termination of this Agreement in accordance with the
provisions of this Section. Distributor hereby agrees that, in the
event of termination or upon expiration of this Agreement, the
Company shall have no obligation whatsoever to Distributor, or to
any employee of Distributor, for compensation or for damages of any
kind, whether on account of the loss by Distributor or such
employee of present or prospective sales, investments, compensation
or goodwill or otherwise.
16.5 Distributor hereby agrees that no right or remedy conferred upon or
reserved to the Company under this Agreement is exclusive of any
other right or remedy provided or permitted by law or equity.
SECTION 17. MISCELLANEOUS PROVISIONS
17.1 Prior Agreements. This Agreement contains the entire agreement of
----------------
the Parties with respect to the subject matter hereof and shall
cancel and supersede, as of the date this Agreement is signed by
both Parties, any prior agreements written or oral between the
Parties or their respective legal predecessors with respect to the
subject matter covered by this Agreement.
17.2 Geographic Scope. All of Distributor's rights under this Agreement
----------------
are valid only in the Territory.
17.3 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the internal laws of the State of Florida, United
States of America, applicable to agreements made and to be
performed entirely within Florida, without regard to the conflicts
of law principles of such State. Distributor acknowledges,
represents and warrants that it is aware of the laws of the State
of Florida, and has been duly advised and willfully chooses the
laws of the State of Florida as the governing law for this
Agreement.
The Parties hereby agree that neither the "United Nations
Convention on Contracts for the International Sale of Goods", nor
the Convention on the Limitation Period in the International Sale
of Goods and the Protocol amending such Convention, done at Vienna
April 11, 1980, shall govern the rights, duties and obligations of
the Parties under this Agreement.
17.4 Jurisdiction; Consent to Service of Process
-------------------------------------------
(a) Both of the Parties hereby irrevocably and unconditionally
submit, for themselves and their property, to the
jurisdiction of any court of the State of Florida sitting
in Palm Beach County, Florida, or any Federal court of the
United States of America sitting in the Southern District
of the State of Florida, and any appellate court from any
such court, in any suit, action or proceeding arising out
of or relating to this Agreement, or for recognition or
enforcement of any judgment, and each of the Parties
hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such suit, action or
proceeding may be heard and determined in such State of
Florida court or Federal court. It shall be a condition
precedent to each
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 23 of 31
Party's right to bring any such suit, action or proceeding
that such suit, action or proceeding, in the first instance,
be brought in such State of Florida court or, to the extent
permitted by law, in such Federal court (unless such suit,
action or proceeding is brought solely to obtain discovery
or to enforce a judgment), and if each of such State of
Florida court and such Federal court refuses to accept
jurisdiction with respect thereto, such suit, action or
proceeding may be brought in any other court of competent
jurisdiction. No Party to this Agreement may move to (1)
transfer any such suit, action or proceeding from such
State of Florida court or any Federal court of the United
States of America sitting in the State of Florida, to
another jurisdiction, (2) consolidate any such suit, action
or proceeding brought in such State of Florida court or
Federal court with a suit, action or proceeding in another
jurisdiction, or (3) dismiss any such suit or proceeding
brought in such State of Florida court or any Federal
court of the United States of America sitting in the State
of Florida, for the purpose of bringing the same in another
jurisdiction. Each Party agrees that a final judgment in
any such suit, action or proceeding shall be conclusive
and may be enforced in any other jurisdiction by suit on
the judgment or in any other manner provided by law.
(b) Each of the Parties hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this Agreement
in any State of Florida court sitting in Palm Beach
County, Florida, or any Federal court sitting in the
District of the State of Florida. Each of the Parties
--------
hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding in such
court and further waives the right to object, with respect
to such suit, action or proceeding, that such court does
not have jurisdiction over such Party.
(c) Each of the Parties, hereby irrevocably consents to
service of process in the manner provided for notices in
Section 17.6 hereof. Nothing in this Agreement will affect
the right of either Party to this Agreement to serve
process in any other manner permitted by law.
17.5 Assignment. This Agreement and the rights and obligations hereunder
----------
may not be assigned, delegated or transferred by either Party
without the prior written consent of the other Party; provided,
however, that Distributor's consent shall not be required with
respect to any assignment, delegation or transfer by the Company to
any entity providing financing to the Company, to another division
of the Company or to any affiliate of the Company or division of
such affiliate. This Agreement shall inure to the benefit of the
permitted successors and assigns of the Company. For the purposes
of this Agreement, "affiliate" shall mean any company, natural
person, partnership or other business entity controlled by, under
common control with or controlling either Party to this Agreement.
17.6 Notices. Notices and other communications provided for herein shall
-------
be in writing and shall be delivered by hand or overnight
international courier service, sent by graphic scanning or other
telegraphic communication equipment available to both, the sending
Party and the receiving Party, as follows:
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 24 of 31
If to Distributor:
__________________________________
__________________________________
__________________________________
Facsimile No.: ___________________
Attention: _______________________
If to the Company:
VeriChip Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
United States of America
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
All notices and other communications given to either Party hereto
in accordance with the provisions of this Agreement shall be deemed
to have been given on the date of delivery if delivered by hand or
overnight courier service or on the first business day if sent by
telex, graphic scanning or other telegraphic communications
equipment available to both the sender and the receiver, or on the
date five (5) business days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed
(properly addressed) to such Party as provided in this Section
17.6, or in accordance with the latest unrevised direction from
such Party given in accordance with this Section.
17.7 Amendments. Except as provided elsewhere herein, this Agreement can
----------
be modified only by a specific written agreement duly signed by
persons authorized to sign agreements on behalf of Distributor and
the Company.
17.8 Publicity. Distributor agrees that any publicity or advertising
---------
which shall be released by Distributor in which the Company is
identified in connection with the Products shall be in accordance
with the terms of this Agreement and with such information or data
as the Company may, from time to time, furnish to Distributor for
such purposes. Copies of all such publicity and advertising shall
be forwarded to the Company for its prior written approval.
17.9 Severability. If any provision of this Agreement shall be held by a
------------
court or other tribunal of competent jurisdiction to be invalid,
illegal or unenforceable, or shall be required to be modified, the
validity, legality and enforceability of the remaining provisions
shall not be affected or impaired thereby.
17.10 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which will be deemed an original but all of
which when taken together will constitute one and the same
contract, and shall become effective when one or more such
counterparts have been signed by each of the Parties and delivered
to the other Party.
17.11 Waiver. The waiver by either Party of any instance of the other
------
Party's non-compliance with any obligation or responsibility herein
shall not be deemed a waiver of the waiving Party's remedies for
such non-compliance in the future.
17.12 Time Limit On Actions. No action, regardless of form, arising out
---------------------
of this Agreement may be brought by either Party more than two (2)
years after the cause of action has occurred; provided, however,
that
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 25 of 31
this paragraph shall not apply to actions involving patents,
copyrights, Trademarks or tradenames, Company Confidential
Information, or actions to compel Distributor, after termination or
expiration of this Agreement, to cease representing itself as a
distributor of the Company.
17.13 Force Majeure. Neither Party shall be liable for failure to perform
-------------
or delay in performing any obligation under this Agreement, except
the obligation to make payments when due, if such failure or delay
is due to force majeure, including, but not limited to, war,
embargo, riot, insurrection, sabotage or other civil unrest; fire,
explosion, flood or other natural disaster; accident or breakdown
of machinery; unavailability of fuel, labor, containers, or
transportation facilities; accidents of navigation, breakdown or
damage of vessels or other conveyances for air, land or sea; other
impediments or hindrances to transportation; strike or other labor
disturbances; government restraints or any other cause beyond the
control of the affected party; provided, however, that the Party so
failing to perform shall (i) as soon as possible, inform the other
Party of the occurrence of the circumstances preventing or delaying
the performance of its obligations, and describe at a reasonable
level of detail the circumstances causing such delay, and (ii)
exert reasonable efforts to eliminate, cure or overcome any of such
cases and to resume performance of its covenants with all possible
speed. In such event, the non-performing Party will be excused from
any further performance or observance of the obligation(s) so
affected for as long as such circumstances prevail and such Party
continues to use its best efforts to recommence performance or
observance whenever and to whatever extent possible without delay.
In the event that, by operation of law or governmental decree, it
becomes illegal to market and sell a Product in the Territory,
Distributor shall be relieved of its obligations under this
Agreement (other than the obligation to make any payment due
hereunder) only to the extent that they relate to such Product. Any
Party so delayed in its performance will be under no liability for
loss or damages suffered by the other Party thereby.
Either Party may convene a meeting between the Parties to discuss
the force majeure and its effect on any obligation under this
Agreement. The Parties shall seek to modify the relevant provisions
in order to accommodate the circumstances caused by the force
majeure. If the Parties fail to agree on such modifications within
thirty (30) calendar days after notice of the force majeure is
delivered, either Party may terminate this Agreement by written
notice to the other Party. Such termination shall be effective
thirty (30) calendar days after the date of the written notice.
17.14 WAIVER OF JURY TRIAL
--------------------
EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT, OR ANY DOCUMENT CONTEMPLATED TO BE EXECUTED OR
DELIVERED IN CONJUNCTION HEREWITH. EACH PARTY HERETO (1), CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (2), ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
MASTER NON-EXCLUSIVE FORM
-------------------------
REVISED DRAFT - August 30, 2002
Page 26 of 31
SECTION 18. SPECIFIC TERMS
18.1 Specific Terms Applicable To Distributor:
----------------------------------------
Distribution Agreement Number: 011
-------------------
Territory: International Territory to Curacao
----------------------------------
and all Caribbean Countries excluding Puerto
--------------------------------------------
Rico with first right of refusal for Cuba
-----------------------------------------
Agreement Effective Date:
----------------------
[Date this Agreement is accepted by the Company,
as shown Below by the signature of the Company's
representative].
Duration: months from Effective Date
-----------------------------
Products: See EXHIBIT "B", hereto.
-----------------------
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be signed by their duly authorized representatives
on the date written below.
DISTRIBUTOR: DATA APPLIED TECHNOLOGY
ASSOCIATES
WITNESSES:
---------------------------------------
a organized and existing
--------------
under the laws of :
-------------
Name: By:
--------------------------- ----------------------------------
Address: Name:
----------------------- --------------------------------
Date: Title:
-------------------------- ------------------------------
Date:
------------------------------
Name:
---------------------------
Address:
-----------------------
Date:
-------------------------
ACCEPTED BY THE COMPANY,
WITNESSES: VERICHIP CORPORATION, a
Delaware Corporation, on the date
shown below:
Name: By: /s/▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------- ----------------------------------
Address: Name: ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------- --------------------------------
Date: Title: President
--------------------------- ------------------------------
Date: 9/25/03
-------------------------------
Name:
---------------------------
Address:
-----------------------
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 27 of 31
Name:
---------------------------
Address:
-----------------------
Date:
--------------------------
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
Page 28 of 31
SECTION 18. SPECIFIC TERMS
18.1 Specific Terms Applicable To Distributor:
----------------------------------------
Distribution Agreement Number: 011
----------------
Territory: Curacao and all Caribbean countries
-----------------------------------
EXCLUDES TERRITORIES OF OTHER COUNTRIES
---------------------------------------
E.G. PUERTO RICO
----------------
Agreement Effective Date: SEPTEMBER 25, 2003
------------------
[Date this Agreement is accepted by the Company,
as shown below].
Duration: 60 months from Effective Date
-----------------------------
Products: See EXHIBIT "B", hereto.
-----------------------
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
to be signed by their duly authorized representatives on the date
written below.
DISTRIBUTOR:
DIGITAL APPLIED TECHNOLOGY ASSOCIATES
WITNESSES:
-----------------------------------------
a corporation organized and existing
-----------
under the laws of Republic of the ▇▇▇▇▇▇▇▇
------------------------
Islands:
-------
Name: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇ By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------- ----------------------------------
Address: Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ V.P.
----------------------- --------------------------------
Date: 9-25-03 Title: Vice President D.A.T.A.
-------------------------- ------------------------------
Date: 09/25/03
------------------------------
Name: /s/ ▇▇▇▇▇▇▇ Acario
---------------------------
Address:
-----------------------
Date:
-------------------------
ACCEPTED BY THE COMPANY,
WITNESSES: VERICHIP CORPORATION, a
Delaware Corporation, on the date
shown below:
Name: By: /s/▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------- ----------------------------------
Address: Name: ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------- --------------------------------
Date: Title: President
--------------------------- ------------------------------
Date: 9/25/03
-------------------------------
Name:
---------------------------
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
Page 29 of 31
EXHIBIT "B"
PRODUCTS
_________________________________________________________
VeriChip Implantable Microchip
_________________________________________________________
Handheld scanners
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
AGREED TO AND ACCEPTED ON THIS 25TH DAY OF SEPTEMBER, 2003, BY:
DISTRIBUTOR: THE COMPANY:
DIGITAL APPLIED TECHNOLOGY ASSOCIATES VERICHIP CORPORATION,
------------------------------------- a Delaware corporation:
a corporation organized and existing under
-----------
the laws of the Republic of the ▇▇▇▇▇▇▇▇
----------------------------
Islands:
-------
By: /s/▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- ----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ V.P. Name: ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------- --------------------------
Title: Vice President of D.A.T.A. Title: President
------------------------------ -------------------------
Date: 9/25/03
-------------------------
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
Page 30 of 31
EXHIBIT "C"
PRICE LIST
1. Microchips $70.00 per unit.
2. Scanners $625.00 per unit.
*The above pricing is good for current version of the tags only.
Future versions will be subject to new pricing, as determined by
the Company from time to time. DISTRIBUTOR SHALL HAVE THE RIGHT
TO DISCUSS AND/OR NEGOTIATE WITH COMPANY NEW PRICING OF SAID
PRODUCTS.
3. Price of Products shall be as determined by the Company from
time to time.
4. The Company, may from time to time and in its own discretion,
increase the sales price of a Product without previous notice
and without any liability to Distributor, subject to the
provisions of Section 8.3 of this Agreement.
AGREED TO AND ACCEPTED ON THIS 25TH DAY OF SEPTEMBER, 2003, BY:
---- --------- ----
DISTRIBUTOR: THE COMPANY:
DIGITAL APPLIED TECHNOLOGY ASSOCIATES VERICHIP CORPORATION
------------------------------------- a Delaware corporation:
a corporation organized and existing under
-----------
the laws of the Republic of the ▇▇▇▇▇▇▇▇
----------------------------
Islands:
-------
By: /s/▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- ----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ V.P. Name: ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------- --------------------------
Title: Vice President of D.A.T.A. Title: President
------------------------------ -------------------------
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
REVISED DRAFT - November 4, 2002
Page 31 of 31
EXHIBIT "D"
QUOTA REQUIREMENTS
During the Term of this Agreement, Distributor shall make the following
minimum purchases of Products:
2003 Minimum purchase for 2003 is satisfied with completion of
-------------------------------------------------------------------
initial order set forth in Section 7.2
-------------------------------------------------------------------
2004 900 Microchips 90 Scanners
-------------------------------------------------------------------
2005 1800 Microchips 180 Scanners
-------------------------------------------------------------------
2006 3600 Microchips 360 Scanners
-------------------------------------------------------------------
2007 5200 Microchips 520 Scanners
-----------------------------------------
Distributor's failure to meet its Quota requirements shall be
a material breach of this Agreement.
AGREED TO AND ACCEPTED ON THIS 25TH DAY OF SEPT, 2003, BY:
DISTRIBUTOR: THE COMPANY:
DIGITAL APPLIED TECHNOLOGY ASSOCIATES VERICHIP CORPORATION,
------------------------------------- a Delaware corporation:
a corporation organized and existing under
-----------
the laws of The Republic of the ▇▇▇▇▇▇▇▇
----------------------------
Islands:
-------
By: /s/▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- ----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ V.P. Name: ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------- --------------------------
Title: Vice President Title: President
------------------------------ -------------------------