Exhibit 10.61
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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 000 Xxxxx Xxxx Xxx, Xxxx Xxxxx, XX
00000, Xxxxxx Xxxxxx of America (hereinafter referred to as "VeriChip" or
the "Company"), and Metro Risk Management LLC, a Florida corporation duly
organized and existing under the laws of Florida, with principal offices at
000 Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 (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.
(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 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.
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(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 xxxx 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.
(k) "Reseller" 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.
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
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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. 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. Distributor shall not sell, advertise or solicit orders
for the Products outside the Territory and shall promptly relay any
such inquiries to the Company.
2.3 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,
notwithstanding that any such person, firm or company may intend to
use or resell the same within the Territory; or (ii) to appoint
other distributors of the Products outside the Territory that may
sell Products outside the territory which Products may be resold in
the Territory. Notwithstanding the foregoing. 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 ONE
DOLLAR UNITED STATES DOLLARS (U.S.$1.00) (the "Distribution Fee").
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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.
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 available Products 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;
(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
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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 warnings 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;
(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;
(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.
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. 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, 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.
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)
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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 any
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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.
4.5 Expenses. Distributor assumes full responsibility for all costs and
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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 applicable
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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;
(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 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
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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".
(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 five (5) 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):
(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 __________; or
(iii) it has been granted medical device approval in the
Territory ____________;.
(e) No Exports Outside the Territory
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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
accordance with the laws of _________________________________,
recorded with the _______________________________ [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
___________________ as of the date hereof; (iv) Distributor will
advise the Company of any changes in ______________________________
laws which might or will impair the validity of all or any part
of this Agreement; and (v) Distributor is a business organization
with 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.
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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 within thirty (30) days from the Date
of Delivery are found defective in material or workmanship, upon
written notification by Distributor identifying each and every
defect. 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, abuse, modification or
misuse, including, but not limited to, neglect or accidental damage
or 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, WARRANTY, NEGLIGENCE, TORT OR
STRICT LIABILITY CLAIMS FOR ANY LOSS, DAMAGE OR 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 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.
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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
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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
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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.
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 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
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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
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to Distributor's export broker. 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
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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.
6.5 Reports. Distributor hereby agrees that beginning on the Effective
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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;
(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) Quarterly financial reports, prepared in accordance with
Generally Accepted Accounting Principles (GAAP); and
(e) Booking, billing, inventory and customer base 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.
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All financial settlements, reports and xxxxxxxx rendered by
Distributor for the Company shall, in reasonable detail, accurately
and fairly reflect the facts about all activities 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
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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.
7.2 Initial Order. In addition to the Quota requirements set forth in
-------------
EXHIBIT "D" hereto, on the date of execution of this Agreement,
Distributor shall place with and deliver to the Company
Distributor's initial Purchase Order for _________ VeriChip
microchips, _______ VeriChip readers and _________ 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 by the Company from time to time ("Sales
Price"), plus any related charges which Distributor must pay to the
Company in accordance with the provisions of Sections 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.
(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.
Page 12 of 31
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 specified by or 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
_____________________ US Dollars (US$_____________________). 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, xxxx of lading or airway
xxxx. 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 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.
Page 13 of 31
(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.
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.
Page 14 of 31
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. The Company may reproduce and retain copies of
such records. The Company, directly or through an independent
auditor, 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.
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. It is understood that the
Page 15 of 31
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 60 (Sixty) 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 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;
Page 16 of 31
(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 will not be
treated as confidential by the Company unless, before
receipt, the Company agrees in writing to do so.
(b) The Company may use any information which Distributor
makes available to the Company, designated as confidential
by Distributor, and the Company may authorize its
affiliates to use such information in their operations;
provided, however, that 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.
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
Page 17 of 31
of this Agreement 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.
(d) Distributor undertakes fully and without any reservation
whatsoever to render to the Company all assistance 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.
(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.
Page 18 of 31
(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 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.
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,
Page 19 of 31
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
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
Page 20 of 31
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 may, in the Company's
sole discretion, 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 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, financial
information, 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
Page 21 of 31
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, in
its sole discretion, deems that Distributor's material
breach is incurable, the Company may terminate this
Agreement without affording Distributor any opportunity to
cure, 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 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.
Page 22 of 31
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 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
Page 23 of 31
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:
If to Distributor:
Metro Risk Management LLC
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxx, XX 00000
Facsimile No.: ___________________
Attention: Xxxx Xxxxxx
Page 24 of 31
If to the Company:
VeriChip Corporation
000 Xxxxx Xxxx Xxx, Xxx. 000
Xxxx Xxxxx, XX 00000
United States of America
Facsimile No.: (000) 000-0000
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 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.
Page 25 of 31
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.
17.15 Section Headings. The section headings contained herein are for
----------------
convenience of reference only and shall not be used in construing
this Agreement.
Page 26 of 31
SECTION 18. SPECIFIC TERMS
18.1 Specific Terms Applicable To Distributor:
----------------------------------------
Territory: The Country of Ecuador
----------------------
Agreement Effective Date: August 20, 2003
---------------
Date this Agreement is accepted by the Company, as shown below by the
signature of the Company's representative].
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:
Metro Risk Management LLC, an American
Corporation duly organized and existing
WITNESSES: under the laws of the United States:
Name: By: /S/ Xxxx Xxxxxx
--------------------------- ----------------------------------
Address: Name: Xxxx Xxxxxx
----------------------- --------------------------------
Date: August 20, 2003 Title: President
------------------------------
Date: August 20, 2003
Name:
---------------------------
Address:
-----------------------
Date: August 20, 2003
ACCEPTED BY The Company,
WITNESSES: VERICHIP CORPORATION, a
Delaware Corporation, on the date
shown below:
Name: By: /S/Xxxxx Xxxxxx
--------------------------- ----------------------------------
Address: Name: Xxxxx Xxxxxx
----------------------- --------------------------------
Date: August 20, 2003 Title: President
------------------------------
Date: August 20, 2003
Name:
---------------------------
Address:
-----------------------
Date: August 20, 2003
Page 27 of 31
EXHIBIT "A"
Form of Purchase Order For Products
(Check the Current Form)
Page 28 of 31
EXHIBIT "B"
Products
VERICHIP IMPLANTABLE MICROCHIP
AGREED TO AND ACCEPTED ON THIS 20TH DAY OF AUGUST, 2003, BY:
DISTRIBUTOR: THE COMPANY:
Metro Risk Management LLC, VERICHIP CORPORATION
An American Corporation duly organized a Delaware corporation:
and existing under the laws of the
United States:
By: /S/Xxxx Xxxxxx By: /S/Xxxxx Xxxxxx
--------------------------------- ----------------------------
Name: Xxxx Xxxxxx Name: Xxxxx Xxxxxx
------------------------------- --------------------------
Title: President Title: President
------------------------------ -------------------------
Date: August 20, 2003 Date: August 20, 2003
Page 29 of 31
EXHIBIT "C"
PRICE LIST
Microchips: $70.00 per unit
Scanners: $650.00 per unit
AGREED TO AND ACCEPTED ON THIS 20th DAY OF AUGUST, 2003, BY:
DISTRIBUTOR: THE COMPANY:
Metro Risk Management LLC, VERICHIP CORPORATION
an American Corporation duly organized a Delaware corporation:
and existing under the laws of the
United States:
By: /S/Xxxx Xxxxxx By: /S/Xxxxx Xxxxxx
--------------------------------- ----------------------------
Name: Xxxx Xxxxxx Name: Xxxxx Xxxxxx
------------------------------- --------------------------
Title: President Title: President
------------------------------ -------------------------
Date: August 20, 2003 Date: August 20, 2003
Page 30 of 31
EXHIBIT "D"
QUOTA REQUIREMENTS
During the Term of this Agreement, Distributor shall make the following
minimum purchases of Products:
EXCUSIVE DISTRIBUTOR LICENSE: $1.00 cost for Exclusive Distribution License
for The Country of Ecuador
MINIMUM PURCHASE ORDER YEAR 2003:
550 Microchips: units at $70.00 per unit
60 Scanners: units at $650.00 per unit
PURCHASE ORDER YEAR 2004:
600 Microchips: units at $70.00 per unit
60 Scanners: units at $650.00 per unit
PURCHASE ORDER YEAR 2005:
2000 Microchips: units at $70.00 per unit
200 Scanners: units at $650.00 per unit
PURCHASE ORDER YEAR 2006:
3000 Microchips: units at $70.00 per unit
300 Scanners: units at $650.00 per unit
PURCHASE ORDER YEAR 2007:
4500 Microchips: units at $70.00 per unit
450 Scanners: units at $650.00 per unit
Distributor's failure to meet its Quota requirements shall be a material
breach of this Agreement.
AGREED TO AND ACCEPTED ON THIS 20TH DAY OF AUGUST, 2003, BY:
DISTRIBUTOR: THE COMPANY:
Metro Risk Management LLC, VERICHIP CORPORATION
an American Corporation duly organized a Delaware corporation:
and existing under the laws of the
United States:
By: /S/Xxxx Xxxxxx By: /S/Xxxxx Xxxxxx
--------------------------------- ----------------------------
Name: Xxxx Xxxxxx Name: Xxxxx Xxxxxx
------------------------------- --------------------------
Title: President Title: President
------------------------------ -------------------------
Date: August 20, 2003 Date: August 20, 2003
Page 31 of 00
XXXXXXX "X"
XXXXXXXXX
XXX XXXXXXX XX XXXXXXX
----------------------
AGREED TO AND ACCEPTED ON THIS 20TH DAY OF AUGUST, 2003, BY:
DISTRIBUTOR: THE COMPANY:
Metro Risk Management LLC, VERICHIP CORPORATION
an American Corporation duly organized a Delaware corporation:
and existing under the laws of the
United States:
By: /S/Xxxx Xxxxxx By: /S/Xxxxx Xxxxxx
--------------------------------- ----------------------------
Name: Xxxx Xxxxxx Name: Xxxxx Xxxxxx
------------------------------- --------------------------
Title: President Title: President
------------------------------ -------------------------
Date: August 20, 2003 Date: August 20, 2003
