VeriChip Authorized Dealer Agreement AN AGREEMENT, by and between VeriChip Corporation (“VeriChip”) and IR Security & Safety Americas the (“Dealer”)
Exhibit
10.1
VeriChip
Authorized Dealer Agreement
AN
AGREEMENT,
by
and between
VeriChip
Corporation
(“VeriChip”)
and
IR
Security & Safety Americas
the
(“Dealer”)
The
parties mutually agree:
1.
General
This
Agreement governs all transactions hereafter entered into between VeriChip
and
Dealer concerning the Products developed and marketed by VeriChip.
2.
Appointment
Subject
to the terms set forth in this Agreement, VeriChip hereby appoints Dealer,
and
Dealer accepts the appointment by VeriChip, to be a non-exclusive, independent
Dealer of the products (the “Product(s)”) described in Schedule “A” (“Authorized
Products List”). Dealer shall be authorized to deal in additional products
marketed by VeriChip only if VeriChip first signs a new Schedule “A” adding them
to the Authorized Products List and provides written notification of the
addition to Dealer.
3.
Territory
Dealer
shall have the non-exclusive right to promote, sell, and market Products only
in
the geographical territory and or market(s) described in Schedule “B” (the
“Territory”), except as otherwise specifically authorized by VeriChip in
writing. VeriChip reserves the right to designate others to sell any of the
Products in the Territory. Dealer shall not resell Products to any person or
entity that Dealer has reason to believe will ship the Product outside the
Territory.
4.
Government, National and Major Accounts
VeriChip
and Dealer acknowledge that in order to maximize market penetration for the
Products, it might be appropriate for VeriChip, or other authorized VeriChip
dealers, agents or parties, to sell or otherwise market Products to major
end-user accounts, including national accounts, and government accounts, some
of
whom may have multiple end-user locations in different geographic areas
including areas within or outside the Territory. VeriChip shall have the right
to make arrangements directly with such accounts or with other parties to
provide for installation, warranty and regular service and maintenance. Dealer
agrees to use its best efforts to cooperate with VeriChip and other VeriChip
agents or parties to adhere to such guidelines as VeriChip may from time to
time
establish in the implementation of any such programs. VeriChip shall have the
right to designate by written notice to Dealer that such accounts are outside
the
1
Territory
of Dealer and Dealer shall not solicit, market or sell Products to such
designated accounts.
5.
Dealer
Network
Dealer
shall have no right to sublicense any of its rights herein to other dealers
or
similar third party marketers.
6.
Independent Contractor Relationship
Nothing
contained in this Agreement shall create an agency relationship, joint venture,
partnership or other like arrangement between the parties, shall be construed
to
make either party the agent for the other party for any purposes, and neither
party shall have any right whatsoever to incur any liabilities or obligations
on
behalf of or binding upon the other party. Dealer has not been granted a
franchise, and Dealer is not an agent of VeriChip. Neither party shall have
the
power or authority to represent the other party in any manner. Each party will
act as an independent contractor in accordance with the terms of this Agreement
and will not at any time represent orally or in writing to any person or
corporation or other business entity that it has any right, power or authority
not expressly granted by this Agreement. Dealer shall not commit VeriChip to
any
contractual obligation, make any warranties or representations purportedly
on
behalf of or approved by VeriChip with respect to Products other than those
set
forth in VeriChip’s supplied material.
7.
Responsibilities Of VeriChip
Subject
to the terms of this Agreement, VeriChip may at its sole
discretion:
|
(a)
|
provide
Dealer, from time to time, with marketing literature, technical
literature, technical advice and assistance and warranty literature
as
VeriChip deems appropriate for the Products and related
goods;
|
|
(b)
|
conduct
service training and sales and marketing training and programs for
Dealer,
as VeriChip may deem appropriate from time to time;
|
|
(c)
|
engage
in advertising programs, which may include national, local, or cooperative
advertising (on such terms, including cost allocation, as may be
agreed
from time to time by the parties), of such type and nature as VeriChip
deems appropriate for the successful marketing of Products and related
goods
|
8.
Responsibilities of Dealer
Pre-sale
and post-sale support of the Products by Dealer is critical to the reputation
and success of the Products and related goods in the marketplace. Dealer
acknowledges that its ability and commitment to provide such support and to
market Products are extremely important elements in VeriChip’s decision to enter
into this Agreement. Subject to the other provisions of this Agreement, Dealer
specifically agrees as follows:
|
(a)
|
Best
Efforts
-
Dealer shall exercise its best efforts to achieve (in a manner consistent
with the other terms of this Agreement) maximum market penetration
for the
Products in the Territory. Dealer shall provide reasonable marketing
coverage in the Territory. Dealer shall maintain inventories of Products
at their discretion sufficient to meet market demand in a timely
manner.
|
|
|
(b)
|
Sales
Organization
-
Dealer shall train and maintain at each of its offices in the Territory
a
sales force of individuals knowledgeable with respect to the functional
capabilities and operation of the Products.
|
|
|
(c)
|
Installation
and End-user Training
-
Dealer shall ensure that each end-user who acquires any of the Products
from Dealer is provided proper installation support and operational
training.
|
|
2
|
(d)
|
Reports
-
Dealer shall monitor its activities with respect to the Products
and shall
provide VeriChip with a report not less than ten (10) days after
the end
of each month setting forth in reasonable detail the
following:
|
|
|
(i)
|
sales
and inventory for the preceding month;
|
|
|
(ii)
|
sales
analysis within the Territory;
|
|
|
(iii)
|
forecasts
for future sales on a rolling one month, three month (quarter) and
annual
basis;
|
|
|
(iv)
|
service
and support activity.
|
|
|
VeriChip
shall have the right to prescribe the form of such reports and the
level
of detail required from time to time by written notice to
Dealer.
|
||
|
(e)
|
Systems
-
Dealer shall incorporate the Products only into systems or with other
products, including hardware and software, that are compatible with
the
Product. VeriChip shall have the right to publish lists of compatible
and/or incompatible systems and
products.
|
9.
Product Development
VeriChip
reserves the right, in its sole and absolute discretion, to make modifications,
improvements or changes to Products or related goods or to discontinue the
sale
or distribution of any Products or related goods at any time without incurring
any liability whatsoever to Dealer or others. Should Dealer require, VeriChip
will fulfill outstanding accepted orders for such discontinued Products. Should
Dealer have inventory of any Product purchased within sixty (60) days from
VeriChip’s announced discontinuance of such Product, VeriChip will repurchase at
Dealer’s cost such Product subject to receiving Dealer’s order for other
Products of equal value. The cost of shipping and handling any returned Product
shall be borne by Dealer.
10.
Software License
|
(a)
|
The
Products may include software (“Software”) and its media, hardware and
documentation related to software and hardware.
|
|
(b)
|
Software
is normally accompanied by either a separate Software license agreement
to
be presented by Dealer to the end-user for execution at time of sale
and
prior to the delivery of the Product or by a prepackaged Software
license
agreement wherein the end-user accepts the terms of a pre-packaged
Software license agreement by breaking a seal to access the Software.
If
the Software contains a separate Software license for execution by
the
end-user, it is the obligation of Dealer to ensure that such license
is
executed by the end-user and returned to VeriChip.
|
|
(c)
|
Title
to all Software marketed to Dealer under this Agreement will remain
with
VeriChip or VeriChip’s suppliers. Dealer will acquire no rights to any
such Software except that Dealer will be bound by the applicable
end-user
license agreement in respect of any Software it acquires for its
own
use.
|
11.
Purchases
|
(a)
|
Dealer
shall order and purchase Products and related goods from VeriChip
by
written, purchase orders (“Purchase Orders”), which shall (i) be deemed to
incorporate the terms and conditions of this Agreement whether or
not
reference to this Agreement is made, (ii) identify each Product ordered
by
model number, (iii) indicate quantity, price (on a pro forma basis,
with
the invoice price to be determined in accordance with the provisions
of
this Agreement) and shipping instructions and (iv) specify Dealer’s
requested delivery dates. The terms of Dealer’s Purchase Orders shall be
subject to and consistent with the terms
of
|
3
|
this
Agreement and shall be null and void to the extent they vary from,
conflict with or supplement the terms of this Agreement. Purchase
Orders
will bind VeriChip only to the extent accepted by VeriChip’s written
confirmation or delivery.
|
|
|
(b)
|
Delivery
dates given by VeriChip as part of order acknowledgment for accepted
orders for Products or related goods will be honored by VeriChip
on a best
effort basis.
|
|
(c)
|
Accepted
orders for Products or related goods cannot be canceled or modified
by
Dealer without VeriChip’s prior written approval.
|
|
(d)
|
Dealer
must accept all such Products that are not defective. Returned Products
shall be subject to a restocking charge of twenty percent (20%) of
the
invoice price of the Products returned.
|
|
(e)
|
VeriChip
reserves the right to sell replacement tags and straps directly to
the
end-user. Notwithstanding the foregoing, Dealer shall continue to
honour
his service responsibility on the entire system as specified in Section
14. Dealer shall have the right to supply replacement straps and
tags to
the end-user providing these are ordered in the minimum quantities
specified by VeriChip from time to time.
|
|
(f)
|
VeriChip
reserves the right, without limiting its other remedies under this
Agreement, to refuse to supply Products to Dealer and/or to cancel
this
Agreement if (i) Dealer attempts to distribute any Product to persons
or
entities outside of the Territory or assists or permits anyone else
to do
so, (ii) VeriChip receives repeated complaints from end-users of
the
systems regarding the performance of Dealer’s systems incorporating a
Product, and Dealer fails to cure such complaints to VeriChip’s
satisfaction after reasonable notice, or (iii) Dealer has failed
to send
technical staff for training by VeriChip.
|
|
(g)
|
VeriChip
reserves the right to reject or cancel any Purchase Order, in whole
or in
part, if Dealer is then in breach of this Agreement.
|
|
(h)
|
VeriChip
reserves the right to establish minimum purchase quantities of Product
as
defined by VeriChip from time to
time.
|
12.
Prices
|
(a)
|
Product
prices are those in VeriChip’s then current Price List, less the
applicable discount as set out in Schedule “C”. VeriChip reserves the
right to change prices and/or discounts and the effective date of
such
change shall be the 30th
calendar day following notice thereof to Dealer.
|
|
(b)
|
Any
price decrease or discount increase will be applied to Products shipped
after the effective date of price decrease or discount increase.
VeriChip
will provide a credit to Dealer in respect of its inventory of Products
purchased up to ninety (90) days prior to the effective date of any
price
decrease or discount increase, provided that Dealer orders Products
having
a purchase price equal to such credit within such 90 day period.
|
|
(c)
|
Any
price increase or discount decrease will apply to orders received
by
VeriChip after the effective date of price increase or discount
decrease.
|
|
(d)
|
Prices
do not include, and Dealer is responsible for, any sales, use, inventory,
value added and like taxes or duties for Products in its possession,
including Products to which title has not yet passed.
|
|
(e)
|
All
prices are FOB (either Ottawa, Ontario or Ogdensburg, NY). VeriChip
shall
be deemed to have delivered all Products and related goods when such
are
put in the custody of a carrier at the FOB point, at which time all
risk
of loss or damage shall pass to Dealer not withstanding the reservation
of
title by VeriChip as provided in paragraph 13(c)
of this Agreement. Dealer shall bear all costs of freight, freight
insurance and associated costs and shall make all arrangements for
same
from the FOB point. Within fifteen (15) days after receipt of any
Products
or related goods by Dealer, Dealer shall notify VeriChip in writing
of any
defect in or damage to such Products or related goods which occurred
in
shipping prior to the passing of title of the Products to the Dealer.
Failure to do so shall be deemed conclusive proof that such defect
or
damage is not attributable to the fault of VeriChip and shall constitute
a
waiver of all claims against VeriChip arising out of such defect
or
damage.
|
4
13.
Payment
|
(a)
|
Dealer
shall pay for Products in accordance with the terms of VeriChip’s
invoices. The terms of payment are net thirty (30) days from shipment
date
to Dealer. VeriChip shall be entitled to charge and Dealer shall
pay
interest at the rate of two percent (2%) per month from the date
of
shipment on overdue invoices. VeriChip shall have the right to change
the
rate upon thirty (30) days notice. In the alternative, Dealer may
pay for
the Product through a credit company approved by VeriChip, in which
case
VeriChip will initiate the payment transaction with the credit company
when Products are shipped to Dealer.
|
|
(b)
|
The
supply of credit herein shall be at the discretion of VeriChip and
VeriChip reserves the right to withhold delivery of Product if Dealer
does
not meet VeriChip’s credit requirements or the amount of Product ordered,
or the amount of Product which remains unpaid (whether or not overdue)
exceeds the limit established by VeriChip for Dealer. Dealer shall
provide, at VeriChip’s request, an acceptable letter of credit or
guarantee or security in a form and amount determined by
VeriChip.
|
|
(c)
|
Title
to Products (excluding any software or other intellectual property
therein) purchased from VeriChip by Dealer shall pass upon transfer
from
VeriChip’s warehouse to the carrier as stated in 12(e)
above. Notwithstanding the foregoing, VeriChip shall maintain a beneficial
interest in the Product until VeriChip has been paid in
full.
|
|
(d)
|
Without
limiting any other rights it may have under this Agreement and applicable
law, all of VeriChip’s obligations under this Agreement, including
obligations of supply, or any Dealer purchase order, can be suspended
should Dealer be delinquent in making payment for previously shipped
Products.
|
14.
Service Responsibility
Dealer
acknowledges that the Products may require installation, warranty, and
after-sale servicing and maintenance by skilled, trained and fully qualified
technicians. Dealer will provide for professional, prompt, and expert
installation, warranty and service support for Products sold in the Territory
as
outlined from time to time in VeriChip’s service program. Dealer shall:
|
(a)
|
strictly
adhere to all installation, service and parts inventory policies
and
guidelines established by VeriChip from time to time;
|
|
(b)
|
maintain
proper installation and servicing tools and facilities;
|
|
(c)
|
make
available on-going Product maintenance at each of its offices and
keep on
hand at each such office an inventory of spare parts and/or units
(which
will be obtained solely from VeriChip) sufficient to perform its
warranty
and maintenance obligations;
|
|
(d)
|
employ
a sufficient number of technicians so as to ensure that each installation
and service call for a Product is personally handled only by a technician
who has been properly trained for such Product as stated in section
15
below.
|
|
(e)
|
make
available and provide competent maintenance and service support,
in a
commercially reasonable manner, to all end-users of Products (and
other
Products as VeriChip may request in writing) in the Territory,
irrespective of whether the Product was sold to the end-user by
Dealer.
|
15.
Training Requirement
Dealer
shall send to VeriChip for training all service technicians involved in the
installation and maintenance of the Product or related goods. Dealer shall
also
provide for additional training, as appropriate, at service schools or the
like.
5
16.
Warranty
|
(a)
|
VeriChip
makes no warranties whatsoever as to Software or its media other
than
those set forth in the applicable user license. All other Product
is sold
with a limited warranty enclosed with the Product (the “Limited
Warranty”). The limited warranty shall only apply if the Product is used
in conjunction with compatible systems and products. VeriChip makes
no
warranty whatsoever with respect to any products or systems with
which the
Products are installed or used.
|
|
(b)
|
A
Product replaced in warranty will carry the limited warranty for
the
balance of the warranty period of the Product that it replaces.
Replacement parts and repaired equipment out-of-warranty will carry
a
ninety (90) day warranty on the part, assembly or component that
was
replaced or repaired and shall be subject to the same limitations
and
exclusions as the Limited Warranty for a similar new
Product.
|
|
(c)
|
All
warranty claims will be honored by authorized “Service Centers” of
VeriChip under the guidelines of VeriChip’s Service program. VeriChip’s
sole responsibility shall be to repair or replace Products under
warranty,
in accordance with the procedures set forth from time to time in
VeriChip’s warranty policy.
|
|
NO
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OR
CONDITIONS REGARDING MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE,
RELATING TO THE USE OR PERFORMANCE OF THE PRODUCT, SOFTWARE, DOCUMENTATION
OR SERVICES PROVIDED BY VERICHIP IS MADE BY VERICHIP TO DEALER, ITS
DEALERS OR CUSTOMERS.
|
|
|
(d)
|
All
non-VeriChip hardware, firmware, software, and documentation which
may be
distributed by VeriChip with a Product is sold “as is” without warranty of
any kind by VeriChip, including any implied warranty or condition
regarding merchantability or fitness for a particular purpose. The
sole
warranty with respect to such items is given by the manufacturer
or
producer thereof.
|
|
(e)
|
VeriChip
will not be liable for personal injury or property damages, loss
of profit
or other incidental, consequential or special damages arising out
of the
use or inability to use any Product or any hardware, firmware, software
or
documentation which may be distributed by VeriChip, whether on account
of
Dealer’s negligence or any other cause, or for any damages or losses
(regardless of their nature) caused in whole or in part by Dealer’s
failure to fulfill its responsibilities as set forth in this
Agreement.
|
17.
Limitation of Liability
Dealer
shall ensure the following limitation of liability is communicated to the
appropriate personnel at the end-user.
Limitation
of Liability
This
Product has been designed for use to a) assist personnel in summoning help
when
they are under personal duress, b) assist in the prevention of infant abduction
and/or mother/infant mismatching c) locate assets d) assist in the prevention
of
the loss of assets and/or e) reduce the risk of resident wandering through
remote detection.
The
range, accuracy, function and performance of this Product may vary from the
published specifications due to many factors, including, without limitation,
site impairments from structural effects, metal objects in the vicinity,
placement of the receiver and transmitter, interference from other electrical
devices, atmospheric effects, installation, and maintenance. There may be other
factors, which also affect performance of this Product.
VeriChip
does not guarantee that this Product will a) detect 100% of the calls for
personal assistance, b) detect 100% of infant abductions and/or mother/infant
mismatches, c) locate all assets 100% of the time, d) prevent the loss of assets
and/or e) detect 100% of resident wanderings. VeriChip does not guarantee that
this Product will not return false reports of a)
6
calls
for
personal assistance, b) infant abductions and/or mother/infant mismatches,
c)
location of assets, d) loss of assets and/or e) false reports of resident
wandering.
Monthly
or weekly testing and maintenance of this Product, as described in the Product
documentation, is essential to verify the system is operating correctly and
to
ensure that the probability of detecting an alarm and/or locating the
transmitter are maximized.
The
failure to undertake regular testing and maintenance will increase the risk
of
system failure and a) failure to report personal duress calls, b) failure to
detect infant abductions and/or mother/infant mismatches, c) failure to locate
assets, d) failure to prevent the loss of assets and/or e) failure to detect
resident wandering. The failure to undertake regular testing and maintenance
will increase the risk of false reports of a) calls for personal assistance,
b)
infant abductions and/or mother/infant mismatches, c) location of assets, d)
loss of assets and/or e) resident wandering.
VeriChip
hereby disclaims all warranties, express or implied, arising out of or in
connection with any of its Products of the use or performance thereof, including
but not limited to, where allowable by law, all other implied warranties or
conditions of merchantable quality and fitness for a particular purpose and
those arising by statute or otherwise in law or from a course of dealing or
usage of trade.
VeriChip’s
liability to you or anyone claiming through or on behalf of you with respect
to
any claim or loss arising out of the use or misuse of VeriChip’s Product,
defective products or materials, improper installation or maintenance of
VeriChip’s Product or products or the system in which they are incorporated, or
alleged to have resulted from an act or omission of VeriChip or any person,
negligent or otherwise, shall be limited to:
|
a)
|
the
repair or replacement of defective Product or materials supplied
by
VeriChip during the warranty period as set out in the Product
documentation; or, at the option of VeriChip,
|
|
|
b)
|
refund
of the purchase price of the Product supplied by
VeriChip.
|
In
no
event shall VeriChip be liable for general, specific, indirect, consequential,
incidental, exemplary or punitive damages or any losses or expenses suffered
by
you or anyone else, whether or not VeriChip, or its employees, officers, agents,
resellers or installers has been informed of the risk of such loss or expense
and whether or not such losses or expenses were foreseeable.”
18.
Indemnification of VeriChip by Dealer
Dealer
agrees to indemnify and hold VeriChip harmless from and against any and all
loss, damage or cost, including legal expenses and counsel fees, for which
VeriChip becomes liable to third parties by reasons of acts, or failures to
act,
of Dealer in marketing, selling, installing and servicing the Product and/or
its
systems incorporating the Product, including, but not limited to
7
|
(a)
|
representations
and warranties made by Dealer regarding such Product, system or the
Product incorporated therein, or the use or performance of the Product
in
connection with any other system components or software programming,
and
|
|
(b)
|
representations
and warranties made by Dealer in respect of the Products or the system
within which it is incorporated which are not contained in VeriChip
product literature or are not authorized in writing by
VeriChip.
|
|
(c)
|
improper
installation, support or maintenance of any system in which the Product
is
incorporated.
|
19.
Infringement by Product
In
the
event of any claim by a third party against Dealer asserting a patent,
copyright, trade secret or other proprietary right infringement involving the
Product, VeriChip will, at its expense, defend and/or settle such claim, and
will indemnify Dealer against any reasonable cost, legal fees, other expenses
and damages required for such defense or settlement, provided that Dealer
promptly notifies VeriChip in writing of such claim, and furnishes to VeriChip
copies of all letters and other documents relating to the allegation of
infringement. VeriChip shall be given full and sole authority to defend and
settle such claim, action or allegation of infringement. If VeriChip requests,
Dealer agrees to assist and/or cooperate with VeriChip in such defense and/or
settlement. VeriChip shall not be obligated to defend or settle or be liable
for
costs, fees, expenses or damages if the infringement claim arises out of
Dealer’s special specifications, designs, drawings, instructions or other
requirements or out of any addition to or modification of the Product or any
combination thereof with other products after delivery by VeriChip or from
use
of the Product in the practice of a process or system, in which case Dealer
shall assume the defense and/or settlement thereof and pay all costs, fees,
expenses or damages incurred by VeriChip. If any infringement claim is brought
against Dealer or VeriChip, or if in VeriChip’s opinion the Product is likely to
become a subject of a claim of infringement or violation of any patent,
copyright, trade secret or other proprietary right of any third party, VeriChip
shall be entitled at its option: (a) to procure for Dealer the right to continue
the sale and/or use of the Product at VeriChip’s expense by acquiring a license
in the name of VeriChip, (b) to replace or modify the Product so as not to
infringe such third party’s rights while conforming, as closely as possible to
original specifications or (c) to discontinue further supply of the Product.
THE
FOREGOING STATES THE ENTIRE LIABILITY OF VERICHIP AND DEALER IN RESPECT OF
INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADE SECRET OR ANY OTHER PROPRIETARY
RIGHT OF ANY THIRD PARTY AND IS IN LIEU OF ALL WARRANTIES, EXPRESS OR IMPLIED,
IN REGARD THERETO, AND IN NO EVENT SHALL VERICHIP OR DEALER BE LIABLE FOR
DIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED
TO, LOSS OF ANTICIPATED PROFITS OR OTHER ECONOMIC LOSS.
20.
Restrictions
Dealer
shall not alter or modify any of the Products or their constituent elements
and
shall not:
|
(a)
|
reverse
engineer, interrogate, or decode any of the Products or program components
of the Products; or
|
|
(b)
|
attempt
to bypass or to defeat any protection methods which have been applied
by
VeriChip to prevent unauthorized uses of the Products;
or
|
|
(c)
|
attempt
any other procedure to put any of the program components into human
readable form.
|
8
21.
Intellectual Property Rights
|
(a)
|
Dealer
acknowledges and agrees that it has no right, title or interest in
or to
the name “VeriChip” or to any logos, trade-names, or trademarks
(registered or not) (collectively the “Marks”) used in connection with
VeriChip or any goods or services from time to time marketed by VeriChip
(including, without limitation, with respect to the Products). Dealer
shall not use the Marks in any way in connection with marketing or
servicing goods or services, other than in accordance with the provisions
of this Agreement or except as may be expressly authorized by VeriChip
in
writing. Under no circumstances shall Dealer deface, alter, remove
or
cover a ▇▇▇▇, insignia, serial number or lettering which is on a
Product
at the time of delivery.
|
|
(b)
|
Dealer
shall not include the name “VeriChip” or any variation thereof in any
portion of Dealer’s name or any name under which Dealer does business. In
accordance with the above, Dealer shall have the right to use the
trademark “VeriChip” in its approved standard form solely in connection
with the sales, advertising and promotion of the Products and not
for any
other purpose. Dealer shall not use any ▇▇▇▇ or name other than as
herein
permitted in connection with the sale of Products.
|
|
(c)
|
Dealer
will abide by any usage rules established from time to time by VeriChip
in
respect to its Marks.
|
|
(d)
|
Dealer
may refer to itself as a “Authorized VeriChip Dealer” in connection with
the promotion, sale, marketing or service of Authorized Products
in the
Territory, provided such right shall cease upon termination of this
Agreement. Dealer shall submit to VeriChip full particulars prior
to use
of the same and shall not proceed with such use until VeriChip’s written
approval shall have been obtained.
|
|
(e)
|
Dealer
acknowledges that any and all of the patents, designs, trademarks,
copyrights, and other rights including any unpatented confidential
production method used or embodied in connection with the Product
will
remain the sole property of VeriChip. Except as expressed in this
Agreement, nothing in this Agreement shall be construed as granting
or
conferring to Dealer or its’ customers any rights by license or otherwise,
expressly implied or otherwise, for such patents, designs, trademarks,
copyrights or other rights, including any unpatented confidential
production method.
|
22.
Term
|
(a)
|
The
effective date of this Agreement is the date it is signed by VeriChip.
This Agreement shall extend for one (1) year following its effective
date
and shall be automatically renewed thereafter from year to year.
Either
party may terminate this Agreement on not less than ninety (90) days
written notice to the other.
|
|
(b)
|
Other
than as set forth above, termination or cancellation shall not relieve
either party of obligations incurred prior thereto (including Dealer’s
obligations to pay the purchase price of the Product theretofore
shipped
to Dealer and to continue to comply fully with Dealer’s representations
and warranties set forth herein).
|
|
(c)
|
VeriChip
shall have the right at any time thereafter to terminate or cancel
this
Agreement upon giving written notice to Dealer and which shall be
effective immediately if: (i) Dealer fails to meet the terms of payment
hereunder for any two (2) months in any twelve (12) consecutive months
of
the term of this Agreement; (ii) a petition of bankruptcy has been
filed
by or against Dealer; (iii) Dealer has made an assignment for the
benefit
of creditors; (iv) a trustee, receiver or liquidator or similar person
has
been appointed or applied for by Dealer or has taken possession of
its
assets; (v) Dealer becomes insolvent; (vi) there is a bulk sale or
attempted bulk sale of Dealer’s assets; (vii) there is an institution of
proceedings for the dissolution or liquidation of Dealer’s assets by a
third party; (viii) Dealer fails an audit of its service and support
capability conducted by VeriChip as referenced in section 14
and does not rectify the problem within the time specified by VeriChip;
or
(ix) if there is any other breach of the provisions of this Agreement
by
Dealer and Dealer does not rectify such breach within thirty (30)
days of
written notification from VeriChip. Dealer agrees to immediately
notify
VeriChip of any circumstances that would give VeriChip grounds to
terminate this Agreement.
|
9
|
(d)
|
VeriChip
shall not by reason of the termination of this Agreement be liable
to
Dealer for any loss, reimbursement, compensation or damages including,
without limitation, the loss of present or prospective profits on
sales or
anticipated sales or of expenditures, investments or commitments
made
either in connection therewith or in connection with the establishment,
development or maintenance of Dealer’s business.
|
|
(e)
|
On
termination of this Agreement, Dealer agrees that it shall upon the
effective date of the termination or cancellation: (i) refrain from
exercising or attempting to exercise any right or privilege granted
to it
under this Agreement; (ii) discontinue its use of and relinquish
any and
all rights to the Marks that VeriChip has authorized or permitted
Dealer
to use (iii) to return or destroy all promotional, advertising or
technical material bearing such designations, and any other material
furnished to Dealer free of charge by VeriChip during the term of
this
Agreement.
|
23.
Events Upon Termination
|
(a)
|
Upon
the effective date of termination, Dealer shall pay VeriChip for
all
Products delivered irrespective of the date of delivery and all other
amounts to which VeriChip is entitled under this Agreement or any
Purchase
Orders. Dealer will have the right to market and distribute, in accordance
with the terms of this Agreement, Products in its inventory which
VeriChip
does not elect to repurchase; after Dealer has sold such Products
or
earlier upon VeriChip’s request, Dealer will return or destroy related
unused advertising and promotion materials, relevant information
including
price lists.
|
|
(b)
|
Termination
will not affect VeriChip’s warranty obligations to
Dealer.
|
|
(c)
|
Regardless
of the reason for termination, Dealer will be required to maintain
the
confidentiality of any confidential/proprietary information it has
received during the course of the Agreement until such information
becomes
part of the public domain through no breach of this Agreement or
if
written permission for disclosure has been given by
VeriChip.
|
24.
Force
Majeure
VeriChip
shall not be liable to Dealer or customers or others, for failure of VeriChip
to
fulfill its obligations under this Agreement, and/or for delays in shipment
or
failure to manufacture or provide Products, documentation, education or other
services if such delay or failure results directly or indirectly from any cause
or event beyond its reasonable control, including but not limited to acts of
God, of civil or military authorities, of public enemy, terrorism, war, riots,
civil disturbances, insurrection, accidents, fire, explosions, earthquakes,
floods, the elements, strikes, labor disputes, shortage of suitable materials,
labor or transportation. Neither VeriChip nor Dealer shall be in default on
any
obligation hereunder if such default results from the aforementioned causes
(which are not within the reasonable control of the party
affected).
25.
Dispute Resolution
In
the
event of any dispute, claim, question or difference arising out of or relating
to this Agreement, the parties hereto shall use their best endeavors to settle
such disputes, claims, questions or differences. To this effect, they shall
consult and negotiate with each other, in good faith and understanding of their
mutual interest, to reach a just and equitable resolution satisfactory to
both parties.
If they do not reach such resolution the disputes, claims, questions or
differences shall be finally settled by Mediation pursuant to (a) below and
in
the event that a resolution is not achieved by mediation by arbitration pursuant
to (b) below:
|
(a)
|
Mediation
shall be conducted in accordance with the “Rules of Procedure for the
Conduct of Mediations” of the Arbitration and Mediation Institute of
Ontario;
|
10
|
(b)
|
Arbitration
shall be final and binding and conducted under the “Rules of Procedure for
the Conduct of Arbitrations” of the Arbitration and Mediation Institute of
Ontario pursuant to The Arbitration Act (1991) S.O. 1991 Chapter
17 if the
arbitration is an arbitration domestic to Canada, and otherwise pursuant
to the International Commercial Arbitration Act, R.S.O. 1990, Chap.
I.9.
In addition to the foregoing, the following shall apply to an
arbitration:
|
|
i)
|
The
Arbitration Tribunal shall consist of one (1)
arbitrator.
|
|
|
ii)
|
The
arbitrator shall be instructed that time is of the essence in proceeding
with his determination of any dispute, claim, questions or
indifference.
|
|
|
iii)
|
The
arbitration shall be conducted in English and shall take place in
Ottawa,
Ontario, or such other place as the parties may agree.
|
|
|
iv)
|
The
arbitration award shall be given in writing and shall be final, binding
on
the parties, not subject to any appeal, and shall deal with the question
of costs of arbitration and all matters related
thereto.
|
|
|
v)
|
Judgment
upon the award rendered may be entered into any court having competent
jurisdiction, or application may be made to such court for a judicial
recognition of the award or an order of enforcement thereof, as the
case
may be.
|
26.
General
|
(a)
|
The
parties agree to observe complete confidentiality with regard to
any
confidential information which is disclosed to one party by another.
For
the purposes hereof, “confidential information” shall mean all financial
information (including without limitation all financial statements,
forecasts and financial records), all operating information (including
without limitation all information relating to pricing and distribution
of
the Products and all customer lists), all technical information (including
without limitation description of the Software and its development)
and
all strategic corporate plans including marketing plans acquired
by a
party from the other party or others employed or engaged by such
party; it
being understood, for greater certainty, that “confidential information”
does not include information which:
|
|
i)
|
is
available to the public or in the public domain or later falls in
the
public domain otherwise than as a result of a breach of this Agreement;
|
|
|
ii)
|
is
disclosed with the prior written approval of the Party supplying
such
information;
|
|
|
iii)
|
is
not identified as confidential information; or
|
|
|
iv)
|
is
compelled by law or judicial process to be
disclosed.
|
|
(b)
|
If
any term of this Agreement shall for any reason be held to be
unenforceable, invalid or illegal, the remainder of this Agreement
shall
remain valid, legal and enforceable according to its terms. This
Agreement
shall be binding upon the successors and permitted assigns of the
parties.
|
|
(c)
|
Should
any dispute be commenced between the parties or their personal
representatives concerning any provision of this Agreement or the
rights
and duties of any person in relation thereto, the party prevailing
in such
dispute shall be entitled, in addition to such other relief as may
be
granted, to a reasonable sum as and for their attorney’s fees in such
proceeding which shall be determined by the court or arbitrator,
as the
case may be in such proceeding or in a separate action brought for
that
purpose.
|
|
(d)
|
This
Agreement may not be modified or amended except in writing signed
by the
parties.
|
|
(e)
|
This
Agreement constitutes the entire Agreement between the parties with
respect to its subject matter and supersedes all prior oral and written
proposals and communications. The terms of this Agreement shall prevail
notwithstanding any variance with the terms and conditions of any
purchase
order submitted by Dealer. No representation or statement not contained
on
the original copy of this Agreement shall be binding on VeriChip
as a
warranty or otherwise.
|
11
|
(f)
|
All
notices under this Agreement shall be in writing and shall be effective
when mailed or otherwise placed in transmission to the other party
at its
office address indicated below or such other address as may be designated
by either party to the other in writing.
|
|
(g)
|
This
Agreement shall be governed by and construed in accordance with the
laws
of the province of Ontario and the laws of Canada applicable therein.
Dealer consents to the jurisdiction and venue of the provincial and
federal courts situated within the province of Ontario upon service
of
process made in accordance with the laws of Ontario and Canada, provided
that VeriChip at its option may commence legal proceedings in any
jurisdiction in which Dealer carries on business and in such case
Dealer
consents to the jurisdiction and venue of the courts situated in
such
jurisdiction upon service made in accordance with the applicable
laws of
such jurisdiction. Dealer further agrees that suits initiated by
Dealer
upon any and all causes of action, whether or not such causes of
action
have arisen under this Agreement and regardless of the legal theory
upon
which such causes of action are based, shall be brought exclusively
in a
provincial or federal court situated within the province of Ontario.
Any
suit between the parties, other than for payment of the purchase
price of
the Products or for indemnification under section 18
of
this Agreement, shall be commenced, if at all, within one (1) year
of the
date that the cause of action accrues.
|
|
(h)
|
This
Agreement or any performance due under it may not be assigned by
Dealer
without the prior written consent of VeriChip. Any purported assignment
by
Dealer or any substantial change in the ownership or control of Dealer
shall permit VeriChip to terminate for cause. Dealer must notify
VeriChip
immediately of any change in control of Dealer. For the purposes
hereof, a
“change in control” means the acquisition by a person of shares
representing at least 50% of the voting shares of Dealer or of any
person
controlling Dealer.
|
|
(i)
|
VeriChip
may assign its interest in this Agreement or any portion thereof
without
the consent of Dealer.
|
|
(j)
|
Dealer
shall pay all sums owing to VeriChip in accordance with the terms
of this
Agreement, without any deduction or abatement and Dealer shall have
no
right of set-off.
|
|
(k)
|
No
waiver by VeriChip of any breach/default shall operate as a waiver
of any
other breach/default or of the same breach/default on a future occasion.
No delay, course of dealing, or omission on the part of VeriChip
in
exercising any right or remedy shall operate as a waiver thereof,
and no
single or partial exercise by VeriChip of any right or remedy shall
preclude any other or further exercise thereof or the exercise of
any
other right or remedy.
|
|
(l)
|
The
provisions of sections 13
and 16
to
23
inclusive shall survive the termination of this
Agreement.
|
|
(m)
|
This
Agreement shall not be binding upon VeriChip until it has been executed
by
VeriChip’s President and CEO.
|
|
(n)
|
This
Agreement shall be executed in duplicate, each copy being considered
an
original but both taken together shall constitute but one
Agreement.
|
12
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement under the
hands
of their duly authorized representatives:
Agreed
to:
/s/
▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
(Signature)
|
Name:
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
|
|
Position:
|
Director,
Business Development
|
|
Date:
|
December
19th,
2005
|
|
Dealer:
|
▇▇▇▇▇▇▇▇▇
▇▇▇▇ Security Technologies
|
|
Address:
|
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
|
|
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
Accepted
by:
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, CEO
Date: 01/04/06
VeriChip
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
13