Exhibit 10.15
 
 
FORM OF EXCLUSIVE DISTRIBUTOR AGREEMENT
 

 
This Distribution Agreement (the “Agreement”) is entered into as of
_____________ (the “Effective Date”), by and between Venaxis, Inc., (“Venaxis”)
and [   ] (“Distributor”).
 
BACKGROUND
 
Distributor desires to obtain from Venaxis certain rights to market, distribute
and sell the Products (as defined below) in the Territory (as defined below) and
Venaxis is willing to appoint Distributor to do so, all on the terms and
conditions set forth herein below.
 
AGREEMENT
 
ARTICLE 1:  
REPRESENTATIONS

 
1.1  
Venaxis represents and warrants that it is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado, United
States of America. Venaxis has its principal office and place of business at
1585 S. Perry Street, Castle Rock, CO 80104.

 
1.2  
Distributor represents and warrants that it is a corporation duly organized,
validly existing and in good standing under [   ] laws and regulations.
Distributor has its principal office and place of business at [     ]. Venaxis
represents and warrants that has developed and is the owner of all rights and
interests over the Products.

 
1.3  
Distributor represents and warrants that it possesses the technical know-how and
the sales and marketing personnel to actively promote the sale and use of the
Products.

 
ARTICLE 2:  
TERM

 
This Agreement shall become effective as of the Effective Date and the Agreement
shall continue in full force for a period of four (4) years from the Effective
Date (the “Term” of this Agreement), unless terminated in accordance with
Article 8. Either Venaxis or Distributor may deliver a written notice to the
other of its desire to negotiate a further agreement at least ninety (90) days
prior to the end of the Term or of the extension thereto and, if both parties
desire to negotiate a further agreement, they may consider the provisions of
this Agreement in coming to an agreement.  Nothing in this Agreement, however,
will be construed to obligate either party to enter into a further agreement
with the other party and any further agreement, if any, will not be construed as
an agreement of indefinite duration.  Notwithstanding anything to the contrary,
this Agreement is subject to early termination as provided below.
 
ARTICLE 3:  
DISTRIBUTORSHIP FOR PRODUCTS

 
3.1  
Venaxis hereby appoints Distributor, as exclusive distributor for the sale of
the Venaxis products set forth in Exhibit A attached hereto and made a part
hereof (“Products”) in the “Territory” set forth in Exhibit B attached hereto
(“Territory”).  The Products shall also include any future development, updates
and/or improvement of the Products, unless otherwise indicated by Venaxis upon
written notice thereof.

 
 
 

--------------------------------------------------------------------------------

 
3.2  
Distributor shall refrain from actively seeking customers for the Products
outside the Territory.  For the avoidance of doubt the promotion of the Products
in Distributor’s web pages shall not be held as an infringement of this
provision. Distributor shall refer all orders or inquiries received by it from
sources outside the Territory in connection with the sale, marketing and/or
distribution of the Products outside the Territory. During the Term of this
Agreement or any extension thereto, Venaxis shall not supply Product for sale in
the Territory to any person or company other than Distributor, it being
understood between the parties that Venaxis shall not directly or indirectly
sell or export the Products into the Territory, other than through Distributor,
in accordance with the Agreement.  Venaxis shall refer to Distributor all orders
or inquiries received by it from sources in the Territory in connection with the
sale, marketing and/or distribution of the Product within the Territory.

 
3.3  
Distributor shall list the Products in its catalogs and make such Products
available to its customers. Distributor shall use its best efforts to promote
the Products and shall distribute Product information and promotional materials
broadly to potential customers, all in order to maximize sales of the Products
in the Territory. Such promotion shall include, but shall not be limited to,
trade show displays, training workshops, educational seminars, advertising,
sales sheets, Product information, and other activities related to promoting
Products, including those required as part of the commercialization plan
described below.

 
3.4  
Within thirty (30) days after the Effective Date, Venaxis and Distributor shall
agree on a commercialization plan for the Products within the Territory for the
current calendar year, which plan shall at least include the activities set
forth in Exhibit C attached hereto.  Thereafter, at least sixty (60) days prior
to the end of any calendar year, Distributor shall prepare and submit to Venaxis
a plan for commercialization of the Products for the upcoming calendar year
based on Distributor’s own internal plans and projections for sales of the
Products in the Territory and consistent with the then-existing
commercialization plan.

 
3.5  
Distributor shall use its best efforts to maximize Product sales in the
Territory. During each calendar year, Distributor shall meet the quarterly
minimum performance requirements set forth in Exhibit D1 attached hereto
(collectively, “Minimum Performance Requirements”). If Distributor does not
purchase from Venaxis at least the Minimum Performance Requirements for any two
(2) consecutive quarters during the Term, Venaxis may (i) terminate this
Agreement on a country by country basis or in its entirety, or (ii) convert
Distributor’s appointment to nonexclusive and appoint additional distributors
for the Products in the Territory, in each case at its sole discretion.  Venaxis
shall keep Distributor informed of its commercial strategy and of events
relating to the marketing of the Product.  Upon execution of this Agreement, as
well as during its duration, Venaxis shall promptly supply to Distributor all
such know how and information in connection with the Product as Venaxis
possesses and as Distributor reasonably needs for promotion, distribution and
sale of the Product in the Territory.

 
 
2

--------------------------------------------------------------------------------

 
3.6  
Distributor shall use best efforts to exceed the Minimum Performance
Requirements and to meet the forecasted performance levels agreed to between the
parties (the “Forecasted Performance Levels”). Prior to the end of the first
quarter of the Term, Distributor will provide rolling Forecasted Performance
Levels for the coming four (4) quarters, and shall provide such rolling
Forecasted Performance Levels at the end of each quarter thereafter. Forecasted
Performance Levels are due to Venaxis at least fifteen (15) days after the end
of each quarter, set forth in Exhibit D2.

 
3.7  
Distributor shall complete and send to Venaxis, within the fifteen (15th) day of
each month, a written Sales and Activity Report for the preceding month,
pursuant to the form set forth in Exhibit E attached hereto.

 
3.8  
Distributor shall provide Venaxis on a yearly basis with a written yearly report
reflecting the amounts realized on the sale of the Products, as well as for the
undertaken promotion activities. Such yearly report shall as well contain an
annual forecast, including planned promotion activities, all in the form set
forth in Exhibit F attached hereto.

 
3.9  
Distributor shall make commercially-reasonable efforts to achieve the agreed
Forecasted Performance Levels. Forecast will be provided quarterly on a monthly
basis. In the event that Distributor fails to achieve the Forecasted Performance
Levels for each year, the parties shall discuss in good faith, measures for
improvement to achieve same.

 
3.10  
The parties shall comply with the terms of a Quality Agreement which shall be in
the form of Exhibit G attached hereto, as such agreement may be amended from
time to time.

 
ARTICLE 4:  
OPERATIONS

 
4.1  
All orders which Venaxis receives for Products from Distributor are subject to
acceptance by Venaxis. Orders issued by Distributor for product purchases
(“Purchase Orders” or “P.O.s”) shall be legally binding on both parties when
accepted by Venaxis, subject to credit verification with respect to Distributor
acceptable to Venaxis.  The Purchase Orders shall be in the form attached hereto
as Exhibit H.   Venaxis shall accept and confirm all of the Distributor’s
Purchase Orders submitted with a lead time of two (2) days.  In the event that
Distributor receives no response from Venaxis regarding the Purchase Order
within five (5) calendar days, Distributor shall resubmit the Purchase Order.

 
Venaxis will use its reasonable best efforts to fill the accepted Purchase
Orders as promptly as practicable, and in any case no later than the required
delivery date. Venaxis will notify Distributor immediately of any factors
concerning the delivery schedule.  Venaxis shall provide safety stock to cover a
two (2) month period of supply of Product.  In the event of shortage or
inability to timely supply the required Product, Venaxis undertakes and agrees
that the amounts available shall be allocated on an equitable basis according to
the forecasts received and that Distributor shall not be treated less favorably
than Venaxis, Venaxis’ affiliates and Venaxis’ other distributors and
licensees.  In the event of inability to supply or shortage, the Parties shall
meet to study possible alternatives.  The Products will be supplied to the
Distributor as finished goods, in final packaged and labeled form, quality
controlled including Product specifications and ready for sale to the ultimate
customer in accordance with the applicable CE laws and regulations.  Subject to
force majeure, Venaxis as an essential obligation of this Agreement shall supply
Distributor with its total requirements of Product in the Territory,
specifically in terms of quantity and quality as requested by Distributor,
provided that the Purchase Order is in line with the terms and conditions set
forth in this Article 4.  If for any reason Venaxis will become unable to
manufacture the Product, Venaxis will immediately notify Distributor and shall
devote its reasonable efforts to find a new source of supply if possible.
 
 
3

--------------------------------------------------------------------------------

 
4.2  
Venaxis agrees to provide inventory with a minimum of six (6) months
shelf-life.  The parties shall discuss in good faith the replacement of any
expired kits.

 
4.3  
Distributor shall pay Venaxis for its Products in USD, according to the invoice
within [    ] days of the invoice date; provided that Venaxis shall have the
right to establish more stringent credit policies depending upon Distributors’
credit history, which policies may include, among others, the requirement of
payment of each product’s purchase price (or a portion thereof) prior to
delivery by Venaxis or the establishment of a letter of credit by a reputable
bank reasonably acceptable to Venaxis. Venaxis may charge a late charge of ten
percent (10%) per month on any delinquent balance hereunder, provided that such
charge will not exceed the maximum amount allowed by law.

 
4.4  
All prices shall be exclusive of customs, duties, taxes, freight, and insurance,
which charges shall be borne solely by Distributor.

 
4.5  
Venaxis shall have the right to change pricing of the Products once per calendar
year, and Venaxis will provide notice of that change within ninety (90) days
prior to the start of the following year.  In the event of material changes in
the competitive environment where the Product shall be marketed, both parties
agree to renegotiate at any time and in good faith the price of the
Products.  Such adjustment in the prices may occur before actual launch of the
Products in the Territory.

 
4.6  
Distributor hereby grants to Venaxis a security interest in the Products and all
proceeds from the Products to secure the timely payment of amounts due under the
Agreement and the performance of Distributor’s obligations.  Venaxis is
expressly authorized at its discretion to file all financing statements or other
notices under applicable law. All shipments for the Products shall be EX-Works
(EXW) Venaxis’ place of distribution. Venaxis shall deliver the Products to
Distributor in packaging, labeling and instructions that are in compliance with
the CE laws and laws and regulations of the Territory as amended from time to
time.  Distributor will assure regulatory survey of the national laws in the
Territory and will inform Venaxis of any specific national requirement that
would be over the CE applicable Directive and that would impact on labeling or
related informative material.  For adapting changes on packaging, labeling and
instructions due to Territory’s law issues, Venaxis will be responsible, at its
expense, on promptly performing them on the consequently artwork after having
received information and specific guidance from Distributor.

 
 
4

--------------------------------------------------------------------------------

 
4.7  
Whenever Venaxis shall deliver or cause to be delivered to a common carrier any
goods ordered by Distributor, whether the particular carrier shall have been
designated in the shipping or routing instructions of Distributor or not,
Venaxis shall not be responsible for any delays or damages in shipment, and the
common carrier to which Venaxis shall deliver goods shipped to Distributor shall
be deemed to be the agent of Distributor.

 
4.8  
Except in case of damage or defect directly attributable to Venaxis’ actions,
Distributor shall not make any claims against Venaxis for any damaged or
defective Products or parts Distributor may appoint sub-distributors to sell
Products within the Territory, subject to the prior written approval of Venaxis
with respect to each sub-distributor.

 
4.9  
Distributor shall use its best efforts to promote demand for sale of the
Products by utilizing advertising and publicity at its own expense. Distributor
shall maintain adequate sales personnel for such purposes.

 
4.10  
Distributor shall act in furtherance of the best interests of Venaxis and at no
time, do, cause or permit to be done or publish any information, act or thing
from whatever source, which is or may be detrimental to the best interests or
reputation of Venaxis. Distributor shall promptly inform Venaxis of any facts or
opinions or developments in the market or Territory likely to be relevant in
relation to the marketing of the Products and any use or resale thereof which is
advantageous or disadvantageous to the interests of Venaxis.

 
4.11  
Each Party shall procure and maintain in full force and effect such insurance
policies as are adequate to cover its respective obligations hereunder and which
are consistent with reasonable business practices of prudent company similarly
situated. Each Party shall at all times provide to the other Party with current
proof of such insurance upon request.  Venaxis shall be named as an insured
party on Distributor’s insurance regarding the Products.

 
4.12  
Without prejudice to Distributor’s obligation to prepare its own literature to
support sales of the Venaxis Products in the Territory, Venaxis shall provide to
Distributor without charge English language technical data sheets and sales
promotion literature in quantities as reasonably determined by Distributor and
Venaxis. Copyright in all such materials and documents shall remain with Venaxis
Distributor shall translate or otherwise tailor any marketing materials for use
in the Territory, as may have been provided by Venaxis in English, in a manner
consistent with local language law and custom, at its sole expense. Venaxis must
approve all translations prior to use. Distributor will inform Venaxis about the
new materials developed. Venaxis covenants that it shall supply to Distributor,
without charge to Distributor, as soon as practicable, evaluation kits in the
amounts solely decided by Venaxis.

 
 
5

--------------------------------------------------------------------------------

 
4.13  
Unless Venaxis shall have authorized or permitted the return of Products,
Venaxis shall not be obligated to accept from Distributor any Products returned,
nor to make any exchange thereof, nor to credit Distributor therefore, except
for returns of Products allowed under Article 9 below.

 
4.14  
Distributor shall accurately maintain all records as are necessary or
appropriate to satisfy applicable laws or regulations in the Territory or as are
otherwise reasonably requested by Venaxis, and in any event in accordance with
generally accepted accounting principles, consistently applied.

 
4.15  
Venaxis shall have the right, at its expense, at least once per calendar year
and upon reasonable notice thereof, to inspect Distributor’s facilities in order
to verify compliance of such facilities and Distributor’s operations regarding
the Products with the laws of the Territory and to meet with Distributor’s
personnel.

 
4.16  
Distributor shall not make, offer, promise or authorize any payment, loan, gift,
donation, or other giving of money or things of value, directly or indirectly,
whether directly or through its shareholders, affiliates, partners, officers,
employees, agents or representatives, whether in cash or kind, and whether or
not pursuant to written contract, to or for the use of any government official,
any political party or official thereof, or any candidate for political office,
for the purpose of influencing or inducing any official act or decision in order
to further the activities contemplated by this Agreement, or otherwise violate
in any manner the United States Foreign Corrupt Practices Act, as informed to
Distributor by Venaxis from time to time,  or any applicable convention, law or
regulation prohibiting illicit payments to government officials, their agents or
instruments or to third parties, including any anti-corruption laws in the
Territory and the U.S. Anti-Boycott Act, as informed to Distributor by Venaxis
from time to time.  If for any reason this Agreement or either party hereto is
the subject of any governmental review, inquiry or investigation under the
United States Foreign Corrupt Practices Act or similar law, Distributor shall
cooperate fully and will promptly respond to requests to provide documents,
information and assistance made in connection with such review, inquiry or
investigation.

 
ARTICLE 5:  
REGULATORY REQUIREMENTS

 
5.1  
Distributor shall devote its best reasonable efforts to obtain for the benefit
of Venaxis and its Products, at the sole cost of Distributor, any and all
necessary licenses, permits, registrations, consents or other local regulatory
clearances required in relation to the import, promotion, marketing, supply and
sale of the Products at a limited local level in the Territory, including
customs authorizations (collectively, the “Authorizations”). Venaxis represents
and warrants to Distributor that has appointed EMERGO as EU authorized
representative in the European Union pursuant the applicable Medical Devices
Directive.  Venaxis itself or through its authorized representative shall notify
to the competent authority of the Territory of the placement of the Product in
the Territory’s market.  Venaxis represents and warrants that has obtained the
CE Certification for the Products.  Venaxis shall maintain, at Venaxis’ charge,
the CE Certification for the Products during the term of this
Agreement.  Venaxis shall, at its expense, apply for, obtain and maintain any
and all necessary permits, licenses, registrations, consents or other regulatory
clearances required in relation to the import, manufacture, commercialization,
marketing, supply and use of the Products in the European Union.  Venaxis shall
manage, at is sole cost, all regulatory matters for the Products at the European
Union level.

 
 
6

--------------------------------------------------------------------------------

 
Venaxis shall provide Distributor any information and support which may
reasonably be requested to discharge its regulatory duties under this Agreement.
 
Venaxis covenants that, upon request and free of charge, it shall provide to
Distributor the information regarding the Products necessary to obtain the
Authorizations, Distributor acknowledging that Venaxis makes no warranties or
representations that Distributor will be successful in obtaining such
Authorizations
 
5.2  
In order to market an in vitro medical device (IVD) in Europe, the device shall
have the CE marking in conformance with the following Directive: Directive
98/79/EC of the European Parliament and of the Council of 27 October 1998 on in
vitro diagnostic medical devices (IVDD/98/79/EC) in its latest version.  As
distributor of the Products, Distributor agrees to fully comply with the
requirements set forth by the European In-Vitro-Diagnostic Medical Device
Directive (98/79/EC) any European legal provisions amending or replacing this
directive and any related laws or regulations of the Territory, including the
following:

 
(i)  
Keep records to trace the Products delivered to end-user customers by serial or
lot number. Such records must be stored at least five (5) years from the sale of
the product to Distributor’s customer and, if requested, be presented to its
national authorities, Venaxis or EU Authorized Representative (Emergo);

 
(ii)  
Ensure that any claim presented in Distributor’s promotional material is
supported by appropriate validation data;

 
(iii)  
Not change any part or aspect of a system which is validated and CE marked as a
combination  (e.g. change applications, sell non-system reagents or provide
application advice without proper validation or sell consumables not
manufactured or authorized by Venaxis);

 
(iv)  
Follow Venaxis’ instructions for installation and preventive maintenance; and

 
(v)  
Inform Venaxis without delay of any case of a reportable incident or near
incident and follow all instructions given by Venaxis as reaction to the
reported incident or near incident, utilizing form as provided in Exhibit I

 
 
7

--------------------------------------------------------------------------------

 
 
 

  Venaxis’ Technical     Services Department    
Telephone:  _______________________________
   
Facsimile:  ________________________________
   
Email:  ___________________________________
 

 
5.3  
Distributor shall comply with all laws and regulations in the Territory
applicable to the Products and Distributor’s activities pursuant to this
Agreement, and it shall promptly advise Venaxis of any change or proposed change
thereto.

 
5.4  
Distributor shall co-operate with Venaxis in the recall of any of the Products
for safety checks or modifications. Venaxis shall establish and maintain a lot
tracing and recall system which enables it to identify and recall Products.  A
separate Vigilance Agreement relating to the Products shall be implemented by
the Parties prior to the distribution of the Products by the Distributor.

 
ARTICLE 6:  
INTELLECTUAL PROPERTY

 
6.1  
During the Term of this Agreement, Venaxis grants to Distributor an exclusive
license to (i) use the name and Trademarks (as defined below) of Venaxis only in
connection with the distribution and sale of the Products under this Agreement
in the Territory; (ii) indicate to the public that Distributor is a distributor
for the Products; and (iii) advertise the Products (in the Territory) under the
Trademarks.  Distributor will not, however, use Venaxis’ name or Trademarks, or
any marks or trade names confusingly similar, in any unauthorized manner, such
as, for example, in a corporate name, any fictitious business name, in
connection with products not authorized under this Agreement or outside the
Territory. “Trademarks” shall mean any trademark, logo, service mark, trade
name, whether or not registered, that are used or adopted by Venaxis from time
to time to represent or describe the Products. Venaxis represents and warrants
that is the owner of the Trademarks and that it holds all rights herein and that
it will hold such rights during, at least, the term of this Agreement, and that
furthermore is entitled to grant the Trademark’s license granted herein

 
6.2  
At the request and expense of Venaxis, Distributor shall reasonably assist
Venaxis and its counsel in registering and taking whatever steps as are
necessary to adequately protect the Trademarks under the laws of the
Territory.  Such registrations, including the applications therefor, will remain
the sole and exclusive property of Venaxis.

 
6.3  
Distributor shall notify Venaxis promptly in writing if it becomes aware of or
suspects any infringement of any of the Trademarks.  Venaxis will have the sole
right, to take action regarding any alleged infringement of any of the
Trademarks.  Distributor will reasonably cooperate with Venaxis in any such
action at Venaxis expense.

 
 
8

--------------------------------------------------------------------------------

 
6.4  
Distributor shall not, without the prior written consent of Venaxis, remove or
alter any patent numbers, trade names, trademarks, trademark registration
numbers, notices, serial numbers, labels, tags or other identifying marks,
symbols or legends affixed to any Products, containers or packages, or use any
such items other than in connection with the Products.  Distributor will not use
Venaxis’ marks in any manner which is contrary to Venaxis’ instructions.

 
6.5  
Except for the limited rights specified above in this Article, nothing herein
will grant to Distributor any right, title or interest in Venaxis’ name or
Trademarks, or in any other intellectual property rights of
Venaxis.  Distributor hereby acknowledges and agrees that (i) Venaxis is the
exclusive owner of the Trademarks, and (ii) that there is a great value and good
will associated with the Trademarks and that any enhanced value or goodwill
accruing to the Trademarks as a result of Distributor's use of the Trademarks
will inure to the sole benefit of Venaxis.  Distributor hereby agrees not to
challenge or assist others in challenging the Trademarks or any other
intellectual property rights of Venaxis in any manner, including challenging the
validity and/or ownership of the Trademarks or any other intellectual property
rights of Venaxis, or the registration thereof or attempt to register any
trademarks, marks or trade names confusingly similar to Venaxis’ name or
Trademarks at any time during or after the Term of this Agreement.

 
6.6  
Distributor shall submit any intended use of any Trademarks or other
designations for the Products for the prior approval of Venaxis.  Distributor
may never use the Trademarks in any manner that would disparage Venaxis or cause
harm or damage to Venaxis’ business or reputation.  Venaxis shall have the right
to exercise quality control over Distributor's use of the Trademarks and over
the Products to a degree reasonably necessary to maintain the validity of the
Trademarks and to protect the goodwill associated therewith.  Venaxis shall have
the right to prescribe quality standards and may change them from time to time
upon notice thereof to Distributor.  Distributor shall use the Trademarks only
in a manner and form (i) designed to maintain the high quality of the
Trademarks, (ii) consistent with the use of the Trademarks by Venaxis and
general industry standards, (iii) that protects Venaxis’ ownership interest
therein, (iv) that complies with all applicable laws, rules, and regulations,
and (v) that conforms to Venaxis’ reasonable quality standards as notified to
Distributor.

 
6.7  
Distributor acknowledges that Venaxis has exclusive control of Distributor’s
right to register and use any domain name using Venaxis’ name or the
Trademarks.  Distributor also acknowledges that Venaxis has exclusive control
over Distributor’s use of the same on the internet and social media.  Venaxis
reserves the right to establish and implement policies, that shall be in
compliance with CE laws and regulations, regarding Distributor’s use of Venaxis’
name and the Trademarks on the internet and on social media websites.

 
6.8  
Venaxis has either applied for or received trademark registration (or equivalent
under the laws of the Territory) with the appropriate regulatory agencies in the
U.K. for the “APPY1” and “APPYREADER” Trademarks and with the appropriate
regulatory agencies in the United States for the “Venaxis” Trademark.

 
 
9

--------------------------------------------------------------------------------

 
6.9  
Venaxis represents and warrants that, to its knowledge, the marketing,
distribution and sale of the Products in the Territory under the Trademarks does
not infringe third party’s intellectual or industrial property rights.  Venaxis
shall obtain and maintain in full force and effect in the Territory during the
Term of this Agreement, at its expense, any intellectual property over the
Products, and in particular the Trademarks.  Venaxis is committed to review any
infringement of the intellectual property in respect to the Products and at
Venaxis’ sole discretion, shall prosecute at its expense any of these
violations.

 
ARTICLE 7:  
PROPRIETARY RIGHTS, CONFIDENTIALITY, NON- COMPETITION

 
7.1  
Each Party of this Agreement owns confidential business and technical
information, know-how and trade secrets, as well as documents, materials and
other items embodying such information (collectively the “Confidential
Information”).The Confidential Information includes, but is not limited to (i)
marketing and sales information, plans and techniques; (ii) business plans,
reports and data; (iv) financial plans, reports and data; (v) sources of
materials or suppliers; (vi) customer lists and customer data; (vii) formulas,
recipes, compositions, ingredients and materials; (viii) prototypes, blueprints,
sketches, schematics and drawings; (ix) computer programs, disks, data,
documentation, printouts and other software items and (x) contractual
arrangements.  It is understood that Confidential Information will not include
information in the public domain or that is required by law to be disclosed.

 
7.2  
During the Term of this Agreement, each Party may disclose in confidence to the
other Party some of its Confidential Information.  Each Party agrees to keep
such Confidential Information confidential in perpetuity and to not use or
disclose it to anyone without the prior written authorization of the other
Party.  Each Party further agrees not to attempt to discover any Confidential
Information by reverse engineering, decompiling or in any other unauthorized
manner.

 
7.3  
Each Party shall safeguard and maintain the confidentiality of all documents,
materials and other items embodying the Confidential Information of the other
Party in its possession or under its control and shall promptly return all such
materials to the other Party upon demand or upon the termination or expiration
of this Agreement.  Each Party shall provide a declaration confirming that it
has returned to the other Party all documents, materials and other items
embodying the Confidential Information.

 
7.4  
In the event that any of the Parties fails to return, on demand, any documents,
materials or other items belonging to the other Party or embodying the
Confidential Information, or fails to adhere to the provisions of this Agreement
regarding the Confidential Information, the Parties agree that damages would be
difficult to determine, that the affected Party would suffer irreparable harm,
and that such Party would be entitled to an appropriate restraining order,
specific performance, temporary and permanent injunctions, actual and exemplary
damages, attorneys’ fees, court and/or arbitration costs and other related
expenses, as well as any other remedy allowable by law.

 
 
10

--------------------------------------------------------------------------------

 
7.5  
Both Parties agree to require those employees, representatives and agents, and
others under its control, who are dealing with, are exposed to, review or
otherwise utilize the Confidential Information, to agree in writing to safeguard
the Confidential Information according to the terms of this Section 7.

 
7.6  
Both Parties hereby agree that the Confidential Information of the other Party
is, and shall remain, the property of the other Party, and that neither Party
will obtain any right, title, interest or license in or to any of the
Confidential Information of the other Party except for the limited rights set
forth in this Agreement

 
7.7  
During the Term and for [      ] following the expiration of the Term or
termination of this Agreement, Distributor and its affiliates will refrain from
engaging, directly or indirectly, in the manufacturing, marketing, distribution
or sale of any products competitive with or that serve the same indication as
the Products, other than the Products, in the Territory.

 
7.8  
The parties agree that this Article shall survive any expiration or termination
of this Agreement.

 
ARTICLE 8:  
TERMINATION

 
8.1  
Either of the Parties shall have the right to terminate this Agreement by giving
the other Party thirty (30) days’ prior written notice if the other Party
commits a material breach of any of its obligations hereunder and does not
remedy such breach within such thirty (30) day period (if such breach is capable
of being remedied). Material breach shall include, without limitation,
Distributor’s failure to meet its Minimum Performance Requirements set forth in
this Agreement; Distributor’s failure to make any payment under this Agreement;
a transfer of a controlling interest of the stock or substantially all of the
assets of Distributor; any event that has an adverse impact on Distributor’s
business or its reputation in the industry or Territory; and any act of
dishonesty, moral turpitude, deceit or fraud on the part of Distributor’s
owners, directors or managers.

 
8.2  
Either of the Parties shall have the right to terminate this Agreement
immediately by giving the other Party fifteen (15) days’ prior written notice if
the other Party ceases to carry on business as a going concern, is unable to pay
its debts as they fall due, or shall make any composition with its creditors, or
shall go into liquidation or have a receiver appointed in respect of all or any
of its assets.

 
8.3  
This Agreement shall terminate immediately by giving Distributor thirty (30)
days’ written notice, at the sole option of Venaxis, if there is any change in
control or ownership (affecting more than 50% of its shares or assets) with
respect to Distributor not approved in advance and in writing by Venaxis and
such event, would have an adverse impact on Distributor’s business or its
reputation in the industry or Territory.

 
 
11

--------------------------------------------------------------------------------

 
8.4  
In the event of a change in control or ownership with respect to Venaxis, then
Venaxis or its successor shall have the right to terminate this Agreement by
giving Distributor ninety (90) days’ written notice. Indemnification in such a
case shall be described in Exhibit J.

 
8.5  
In the event of termination, this Agreement shall remain applicable to any
orders for Products that Distributor has previously placed and that Venaxis has
accepted.

 
8.6  
In the event of termination of this Agreement other than for breach by
Distributor, Distributor may continue to distribute, market and sell in the
Territory its stock on hand of Products for a period of three (3) months, and
Venaxis will supply Distributor with sufficient Product to fill all orders
accepted by Venaxis prior to the termination of this Agreement.  In any case,
Venaxis shall supply reasonable quantities of Product in order for Distributor
being able to comply with the contractual commitments (i.e. tenders) assumed by
the Distributor before termination. Venaxis, at Distributor’s option, shall
repurchase from Distributor such Products that were purchased by Distributor
during the prior three (3) months (to the extent that the same are in new,
unused, original conditions and all cases are unopened) and that are then in
Distributor’s inventory, at Venaxis’ sales price thereof to Distributor plus
transportation and customs costs. During that time Distributor shall remain
authorized to use the Trademarks for or in connection with this limited
distribution, marketing and sale of the Products.

 
8.7  
Upon the termination or expiration of this Agreement, Distributor shall at
Venaxis cost and expense (a) unless expressly prohibited under applicable law or
regulation, transfer and assign any and all Authorizations to Venaxis in a
timely manner pursuant to the instructions of Venaxis and (b) other than as
provided in Article 8.6 above, cease to use the name and Trademarks of Venaxis
in any form whatsoever, and, on demand, shall (if in electronic form) delete or
(if in any other form) return to Venaxis, all materials bearing the name,
Trademarks and any other intellectual property rights of Venaxis.

 
8.8  
Article 7, this Article 8 and any confidentiality or similar agreements signed
by Distributor and Venaxis during the Term of this Agreement shall survive the
termination or expiration of this Agreement.

 
ARTICLE 9:  
WARRANTIES; LIMITED LIABILITY; INDEMNIFICATION

 
9.1  
Venaxis provides its customers a standard one-year warranty on its APPY READER
and its APPY scanner.  Distributor agrees that it shall submit any claims
related to the above warranty as soon as possible, but in no event later than
one hundred twenty (120) days following delivery of the Products to
Distributor.  Any defective Products within the scope of this warranty will be
repaired or replaced by Venaxis, at Venaxis’ sole discretion, and all charges,
including for labor and material, will be borne by Venaxis.  Distributor
acknowledges that no warranty applies to Products that are consumables or,
except as provided above in this Section 9.1, any other Products.

 
 
12

--------------------------------------------------------------------------------

 
9.2  
Subject to Section 9.1 above, Distributor undertakes to inform Venaxis of any
complaint regarding obvious qualitative defaults or shortcomings of the Product
within fifteen (15) business days after receipt of shipment at Distributor’s
premises.  Distributor shall inform Venaxis about any non-obvious or hidden
defects discovered during the shelf life of the Product within ten (10) business
days after the date of discovery by Distributor.

 
Both parties agree to dedicate their best efforts to find the cause, and if
necessary, to solve the default or shortcoming. In the event that Venaxis does
not acknowledge the defect of such Product which Distributor has found to be
defective, the parties agree to nominate an independent, reputable laboratory,
reasonably acceptable to both parties. The independent laboratory shall carry
out analysis on representative samples of the respective shipment of the Product
and its findings shall be final and binding on the parties. The charges and
costs for such analysis shall be borne by the Party found to be at fault.
 
In cases of justified and properly notified claims or if the findings of the
independent laboratory shows that Distributor’s claims are justified,
Distributor shall return the rejected units of Product to Venaxis, at Venaxis’
expense and Venaxis shall, at Distributor’s option, (i) replace such units of
Product immediately and in any event no later than four (4) weeks from the date
of receipt of the notification at Venaxis’ expense, or (ii) provide credit or
refund in respect of such quantities to Distributor. To the extent payment for
such defective Product had not been made, payment shall be postponed until such
replacement quantities are received and accepted by Distributor. Venaxis
liability under this clause is not limited to the replacement of the Product.
 
9.3  
THE EXPRESS WARRANTY DESCRIBED IN SECTION 9.1 ABOVE CONSTITUTES THE ONLY
WARRANTY WITH RESPECT TO THE PRODUCTS, AND THERE ARE NO OTHER WARRANTIES,
EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE, FOR ANY PRODUCTS FURNISHED
HEREUNDER.  VENAXIS  MAKES NO REPRESENTATION OR WARRANTY OF ANY OTHER KIND, AND,
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW AND REGULATION, VENAXIS
EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED (EITHER IN
FACT OR Y OPERATION OF LAW), WITH RESPECT TO THE PRODUCTS, WHETHER AS TO
MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE OR ANY OTHER MATTER.

 
9.4  
Venaxis’ sole obligation under the warranty described in Section 9.1 will be to
repair or replace, at Venaxis’ option, the defective or non-conforming Products
and to provide indemnification to Distributor as set forth below.  The time
required to repair or replace any defective portion of a Product will not extend
the applicable warranty period set forth in Section 9.1 above.

 
 
13

--------------------------------------------------------------------------------

 
9.5  
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW AND REGULATION, IN NO EVENT
WILL ANY OF THE PARTIES OR ITS AFFILIATES BE LIABLE FOR ANY INCIDENTAL,
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOSS OF USE, REVENUE, OR PROFITS
IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY BREACH HEREOF, OR
DISTRIBUTOR’S OR ANY THIRD PARTY'S USE OF ANY PRODUCTS OR SERVICES PROVIDED
UNDER THIS AGREEMENT.  DISTRIBUTOR’S SOLE REMEDY FOR VENAXIS’ LIABILITY OF ANY
KIND, INCLUDING ANY FAILURE OR DEFICIENCY OF THE PRODUCTS OR NEGLIGENCE WITH
RESPECT TO ANY ITEM FURNISHED UNDER THIS AGREEMENT WILL BE LIMITED TO THE
REMEDIES PROVIDED IN THIS SECTION 9.  THE LIMITATIONS CONTAINED IN THIS SECTION
WILL APPLY EVEN IF ANY LIMITED REMEDY FAILS IN ITS ESSENTIAL PURPOSE.

 
9.6  
Distributor agrees to defend, indemnify and hold harmless Venaxis and its
affiliates from all losses, damages, costs and expenses, including reasonable
attorney’s fees, which Venaxis or its affiliates may incur or be obligated to
pay as a result of any and all claims, demands, causes of action or judgments of
every nature whatsoever in connection with or arising out of (a) Distributor’s
failure to observe and/or communicate to customers any training or warnings
communicated to Distributor by Venaxis regarding the Products, (b) any breach by
Distributor under this Agreement, (c) any violation of law, error, omission,
neglect or breach on Distributor’s part, or on the part of any employee or agent
of Distributor.  The provisions of this Section will survive any expiration or
termination of this Agreement.

 
Venaxis agrees to defend, indemnify and hold harmless Distributor and its
affiliates from all losses, damages, costs and expenses, including reasonable
attorney’s fees, which Distributor or its affiliates may incur or be obligated
to pay as a result of any and all claims, demands, causes of action or judgments
of every nature whatsoever in connection with or arising out of any breach by
Venaxis under this Agreement.  The provisions of this Section will survive any
expiration or termination of this Agreement.
 
9.7  
Venaxis warrants and represents that to Venaxis’ knowledge there are no
investigations, third party written allegations, actions or written claims
against Venaxis, including any pending action against Venaxis, in any court or
by or before any governmental authority with respect to the Products or Venaxis’
obligations set forth herein which may materially and adversely affect Venaxis’
ability to perform its obligations under this Agreement or impact the marketing,
distribution or sale of the Products in the Territory. Venaxis warrants and
represents that as of the date of signature of this Agreement Venaxis has not
received any communication from any regulatory authorities which would
reasonably be expected to adversely impact the supply, marketing, distribution
or sale of the Product in the Territory.

 
Venaxis shall defend indemnify and hold Distributor, its officers, directors,
employees, agents or representatives harmless from any and all loss or losses
which Distributor may suffer, incur or become liable for as a result of or in
connection with any claim, action, cause of action or demand asserted against
Distributor to the extent such claim is based upon the contention that
Distributor’s attempt to register or notify the Products to the competent
Authorities in the Territory, and/or the distribution, commercialization,
promotion, storage and sale of the Products in the Territory infringes the
patent or other intellectual property rights in the Territory of any third party
(an “Infringement Action
 
 
14

--------------------------------------------------------------------------------

 
9.8  
If an Infringement Action is commenced against Distributor and/or Venaxis, and
if Distributor reasonably determines that the likelihood and consequences of an
unfavourable ruling warrants that Distributor refrain from marketing and selling
the Product in the Territory, or if Distributor agrees to refrain from marketing
and selling the Products in the Territory pursuant to a settlement of an
Infringement Action, or if a court of competent jurisdiction makes a final
determination that the marketing and sale of the Products in the Territory
infringes the patent or other intellectual property rights in the Territory of a
third party and all rights to appeal have been exhausted or expired, then
Distributor may terminate this Agreement upon delivering written notice to
Venaxis.

 
ARTICLE 10:  
MISCELLANEOUS

 
10.1  
Any notice, request, demand or other communications required or permitted
hereunder shall be deemed to be properly given when deposited by registered
(air) mail, postage prepaid, addressed:

 
In the case of Distributor to:
[    ]

In the case of the Venaxis to:
Jeff McGonegal, CFO
Venaxis, Inc.
1585 S. Perry Street
Castle Rock, CO, U.S.A. 80104

Copy to:
Mary Mullany
Ballard Spahr LLP
1735 Market Street, 51st Floor
Philadelphia, PA  19103

10.2  
This Agreement does not constitute Distributor as the agent or legal
representative of Venaxis for any purpose whatsoever. Distributor is not granted
any right or authority to assume or to create any obligation or responsibility,
express or implied, on behalf of or in the name of Venaxis or to bind Venaxis in
any manner.

 
10.3  
This Agreement contains all of the agreements, understandings, representations,
conditions, warranties and covenants made between the parties hereto. Unless set
forth herein, neither party shall be liable for any representations made and all
modifications and amendments hereto must be made in writing.

 
 
15

--------------------------------------------------------------------------------

 
10.4  
The failure of either party at any time to require performance by the other
party of any provision hereof shall not affect in any way the full right to
require such performance at any time thereafter. Furthermore, the waiver of
either party of a breach of any provision hereof shall not be taken or held to
be waiver of the provision itself.

 
10.5  
This Agreement shall be governed by and construed in accordance with the laws of
the State of Colorado, USA The parties specifically disclaim the United Nations
Convention for the International Sale of Goods.

 
10.6  
The parties shall attempt to settle any dispute, controversy or claim arising
out of or relating to this Agreement, without litigation, in good faith, by
submitting each such dispute to appropriate senior management representatives of
each party in an effort to affect a mutually acceptable resolution thereof.  Any
dispute, controversy or claim arising out of or relating to this Agreement that
is not resolved as provided above  after sixty (60) days, shall be submitted to
and solely and exclusively settled by arbitration under the rules of the
International Chamber of Commerce (“ICC”) under its rule of arbitration
(“Rules”) then in force. The arbitration panel shall comprise an arbitrator
appointed in accordance with the Rules, and all awards of the arbitrator shall
be final and binding on the parties and enforceable in any court of competent
jurisdiction. The arbitration shall be in English language and shall be held in
the USA. Nothing herein shall prevent a party from seeking injunctive relief,
where appropriate, from a court of competent jurisdiction pending the outcome of
any arbitration concerning the subject of such arbitration or when authorized by
an arbitrator’s award or when emergency relief is required.

 
10.7  
This Agreement constitutes a personal contract and Distributor shall not
transfer or assign the Agreement or any part hereof without the prior written
consent of Venaxis.

 
10.8  
In the event that any provision of this Agreement is adjudicated invalid,
illegal or unenforceable, such adjudication will not affect the validity,
legality or enforceability of any other provision andthis Agreement will be
construed as though such invalid, illegal or unenforceable provision had never
been contained herein

 
10.9  
This Agreement may be executed in counterparts, each of which will be deemed an
original, but all of which taken together will constitute one and the same
instrument.  Signatures provided herein by facsimile will be deemed to be
sufficient to bind the undersigned.

 
[SIGNATURE PAGE FOLLOWS]

 
16

--------------------------------------------------------------------------------

 
 

 

 
VENAXIS, INC.

BY: _______________________________
Name:
Title:

DISTRIBUTOR

BY: _______________________________
Name:
Title:

 
 
 

 
 

--------------------------------------------------------------------------------

 

 

 
LIST OF EXHIBITS:
 
EXHIBIT A— PRODUCT DESCRIPTION
 
EXHIBIT B—TERRITORY
 
EXHIBIT C—COMMERCIALIZATION PLAN
 
EXHIBIT D1— MINIMUM PERFORMANCE REQUIREMENTS
 
EXHIBIT D2--- YEARLY ROLLING FORECAST
 
EXHIBIT E—SALES AND ACTIVITY REPORT (MONTHLY)
 
EXHIBIT F—SALES AND ACTIVITY REPORT (YEARLY)
 
EXHIBIT G— QUALITY AGREEMENT

EXHIBIT H— FORM OF PURCHASE ORDER

EXHIBIT I--- INCIDENT REPORT

 
 

--------------------------------------------------------------------------------

 
 
 
EXHIBIT A

PRODUCT DESCRIPTION

Name: APPY1

Description: Multi-marker blood test: MRP8/14, CRP, WBC

Indication: 1st Blood Test Designed to Aid in Identification of Patients at low
Risk for Acute Appendicitis

Warranty: Venaxis provides a standard one-year warranty on its APPY READER and
its APPY scanner, as set in Article 9.1.

Product components:
·  
APPY Reader

·  
APPY1 Test Kit: Immunoassay quantitatively measures MRP8/14 and CRP

·  
APPY1 Controls: Containing myeloid-related protein 8/14 (MRP 8/14) and
C-reactive protein (CRP) to be used with the APPY1 Test.

·  
APPY1 QC Cassette:  Intended to be used as an external control to assess the
performance of the APPY Reader

·  
APPY1 Barcode Reader.

·  
Service Agreement: Service Venaxis will provide to the distributor once the APPY
Reader warranty has expired. The distributor will ship broken APPY Reader(s) to
Venaxis for repair. Venaxis will repair and certify in good working order said
APPY Reader(s) and return to distributor. It will be the distributor
responsibility to keep spare APPY Reader(s) to help support customers while
units are being repaired under service agreement.

Transference Price to Distributor:

Part Number
Product Description
Packaging
Transfer Price (2014)
F10008
APPY Reader
1 unit
 3,184.31 USD
F10000
APPY1 Test Kit
25 tests/kit
1,625 USD
F10005
APPY1 Controls
5 of each level 1 & 2/kit
106.25 USD
F10004
APPY1 QC Cassette
1 unit
127.50 USD
F10010
APPY1 Barcode Reader
1 unit
382.50 USD
tbd
Service Agreement
1 year
750 USD

If Distributor meets and/or exceeds the targeted Annual Total Revenue USD
Minimum Performance Requirements, Distributor will be granted FOC APPY1 Test
Kits (Part Number 10000). The agreed FOC APPY1 Kits will be no more than eight
(8) for any 12 month period of time.

 
 

--------------------------------------------------------------------------------

 

 

EXHIBIT B

Territory:

 
 
 

 
 
 
 
 
EXHIBIT C

COMMERCIALIZATION PLAN
 
 
 

 
 
 
 
 
EXHIBIT D1

MINIMUM PERFORMANCE REQUIREMENTS 2014

 
 
 

 
 
 
 
 
EXHIBIT D2

 FORECASTED PERFORMANCE LEVELS

 
 
 

 
 
 
 
 
EXHIBIT E

SALES AND ACTIVITY REPORT (MONTHLY)
 
 
 

 
 
 
 
 

EXHBIT F

SALES AND ACTIVITY REPORT (YEARLY)
 
 
 
 

 
 
 
 
 
EXHIBIT G

QUALITY AGREEMENT

VENAXIS QUALITY AGREEMENT
DATED 201_ ________, ___

This Quality Agreement (“Agreement”) will serve to document the understandings
and terms relative to the distribution of the APPY1 System.

Upon accepting and executing the Distribution Agreement,
[                     ] (referred to herein as, “distributor”, “you”, “yours”)
agrees to the following terms of the Agreement:

To ensure the required storage conditions are maintained by you at your facility
and throughout your distribution of the APPY1 System to your customers.

To promptly notify VENAXIS should you be become aware of information related to
the APPY1 System that could affect the quality or efficacy of the product
including but not limited to damage during shipping, product not stored at
required storage conditions and product that is delayed in customs.

To promptly notify VENAXIS of any customer or user complaints or the need for
product returns.

To maintain established and adequate procedures to investigate complaints based
on a mutually-agreed severity assessment of each complaint.  These procedures
will categorize how complaints are received, investigated and communicated to
the manufacturer of the product being sold.

To allow, upon reasonable notice VENAXIS or its qualified representative to
audit your facilities and your records related to the Distribution Agreement,
including the storage and distribution of the APPY1 System, and equipment to
ensure that this Quality Agreement is understood and that appropriate procedures
and processes are established to ensure your firm’s compliance with the Quality
Agreement, any regulatory regulations, as well as in any “for cause” situations
VENAXIS may identify.
 
Notices under this Agreement shall be made in writing via email or through the
Venaxis website. Contact information for Notices to VENAXIS under this Agreement
follows:

Quality Assurance Manager
Mark Flipse

Quality Assurance Manager
Senior Manager of Manufacturing

qam@venaxis.com
mflipse@venaxis.com

303-794-2000
303-794-2000 X226

 
 

--------------------------------------------------------------------------------

 

EXHIBIT H

FORM OF PURCHASE ORDER
 
 
 

 
 
 
 
 

EXHIBIT I

INCIDENT REPORT TEMPLATE

   o  Initial Vigilance
Report                                                 o      Final Vigilance
Report
1. 
Competent Authority:
(Destination)
   
Address :
 
 
2. 
Reporting firm name :
 
a) 
 
    o Manufacturer     oAuthorized representative within EEA
 
b) 
Address :
 
 
c) 
Contact person name :
 
 
d) 
Telephone number :
 
 
e) 
Telefax number :
 
 
f) 
Report date :
 
 
3. 
Manufacturer (if not already provided in point 2)
a) 
Name :
 
 
b) 
Address :
 
 
4. 
Information about incident
a) 
Medical device commercial name :
 
 
b) 
Kind of device (e.g. pacemaker, catheter, etc) (*)1 
 
 
c) 
Model or catalogue number :
 
 
d) 
Serial number(s) or lot number(s) :
 
 
e) 
Accessories/associated devices (if applicable) :
 
 
f) 
Software version (if applicable) :
 
 
g) 
Identification number of Notified Body involved in conformity assessment (if
applicable) :
 
 
h) 
Reporting firm is aware of other similar incidents having an impact on the
current report :
    o  Yes         o   No
 
i) 
If yes, the countries to which these have been reported, and the report
reference numbers are listed as follows :
 

 
 
1 (*) Please also include nomenclature ID and which nomenclature system used if
known.

 
 
 

--------------------------------------------------------------------------------

 
 
4.
Information about incident – Continued -
       o Initial Vigilance Report        oFinal Vigilance Report
j) 
Incident reported by
(user or other source) :
 
 
 
 
Address :
 
 
 
Telephone number :
 
 
 
Date reported :
 
 
k) 
Incident date :
 
 
l) 
Incident description :
 
 
 
 
Outcome :
[e.g. death, deterioration in health]
 
 
 
m) 
Manufacturer's preliminary comments :
 
 
n) 
Current location of device
(if known) :
 
 
 
o) 
Expected date of follow-up report :
 
 
p) 
Corrective action (if any) :
 
 
q) 
Projected timing :
 
 
               Note:     
Submission of this report does not, in itself, represent a conclusion by the
manufacturer and/or authorized representative or the competent authority that
the content of this report is complete or accurate, that the device(s) listed
failed in any manner and/or that the device(s) caused or contributed to the
alleged death or
deterioration in the state of the health of any person.

 
 
 

--------------------------------------------------------------------------------

 

 
EXHIBIT J
 
 
INDEMNIFICATION