exv10w3



 





Exhibit 10.3




Distribution Agreement




     This Distribution Agreement (this “Distribution Agreement”) is made and
entered into as of November 13, 2003 (the “Effective Date”) by and between
VISTA Controls, Inc., a California corporation, with offices at 28965 Avenue
Penn, Santa Clarita, CA 91355 (“VISTA”), and DNA Computing Solutions, Inc., a
Delaware corporation with offices at 1240 East Campbell Road, Richardson, Texas
75081 (“DNA”).



Recitals




     Whereas, VISTA and DNA are parties to that certain Technology License and
Marketing Agreement, dated of even date herewith and to which this Distribution
Agreement forms an exhibit (the “License Agreement”), pursuant to which, among
other things, DNA grants VISTA a license to use the Licensed Technology (as
defined in the License Agreement) for the purposes set forth in the License
Agreement;



     Whereas, VISTA and DNA are parties to that certain Technology Transfer and
Support Agreement, dated of even date herewith and which is also attached as an
exhibit to the License Agreement (the “Transfer Agreement”), pursuant to which,
among other things, DNA is transferring to VISTA all information and materials
related to the Licensed Technology;



     Whereas, VISTA desires to appoint DNA as an authorized distributor of the
certain Products (as defined in the License Agreement) set forth on Exhibit A
attached hereto (the “Authorized Products”).



     Whereas, DNA desires to be appointed and serve as a non-exclusive
authorized distributor of the Authorized Products on the terms and conditions
set forth herein.



Agreement




     Now, Therefore, for and in consideration of the foregoing and of the
mutual promises, covenants, conditions, and undertakings hereinafter set forth,
the sufficiency of which is hereby acknowledged, and for other good and
valuable consideration, it is agreed by and between the parties as follows:



Article 1

Definitions




     Capitalized terms used and not defined herein have the meanings given them
in the License Agreement. The following terms have the following meanings:



     “Authorized Products” has the meaning set forth in the recitals to this
Distribution Agreement, and any additional Products VISTA may authorize in
writing from time to time.



     “Charges” has the meaning set forth in Section 6.1 of this Distribution
Agreement.



     “Customer” any Person to which DNA sells, distributes or transfers the
Authorized Products for end use by such Person in the Territory and solely for
the end use for which such Authorized Products are intended as set forth in the
Documentation or otherwise prescribed by VISTA.



     “Customer Agreement” has the meaning set forth in Section 3.5 of this
Distribution Agreement.



     “Distribution Agreement” has the meaning set forth in the first paragraph
hereof.



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     “DNA” has the meaning set forth in the first paragraph hereof.



     “Documentation” means all instructions, documentation and all other
informational materials related to the Authorized Products that have been
provided by VISTA or its designee to DNA or otherwise authorized in writing by
VISTA for sale, distribution or transfer to Customers together with the sale,
distribution or transfer of Authorized Products.



     “Effective Date” has the meaning set forth in the first paragraph hereof.



     “Initial Term” has the meaning set forth in Section 7.1 of this
Distribution Agreement.



     “License Agreement” has the meaning set forth in the recitals to this
Distribution Agreement.



     “Order” has the meaning set forth in Section 5.2 of this Distribution
Agreement.



     “Order Acknowledgement” has the meaning set forth in Section 5.2 of this
Distribution Agreement.



     “Order Confirmation” has the meaning set forth in Section 5.2 of this
Distribution Agreement.



     “Order Date” has the meaning set forth in Section 5.2 of this Distribution
Agreement.



     “Renewal Term” has the meaning set forth in Section 7.1 of this
Distribution Agreement.



     “Rolling Forecast” has the meaning set forth in Section 5.5 of this
Distribution Agreement.



     “Standard Resale Terms” has the meaning set forth in Section 3.4 of this
Distribution Agreement.



     “Term” has the meaning set forth in Section 7.1 of this Distribution
Agreement.



     “Transfer Agreement” has the meaning set forth in the recitals to this
Distribution Agreement.



     “VISTA” has the meaning set forth in the first paragraph hereof.



Article 2

Appointment of Distributor




     2.1 Appointment and Grant of Rights. Subject to the terms and conditions
of the Agreements, VISTA hereby appoints DNA as a non-exclusive authorized
distributor of the Authorized Products and grants DNA a non-transferable,
non-exclusive, non-sublicensable world-wide right to:



          (a) promote, advertise, market, demonstrate, offer for sale, sell,
distribute and transfer the Authorized Products to Customers and potential
Customers in the Territory;



          (b) use, copy, reproduce and display the Promotional Materials (as defined
in the License Agreement) for the purpose of promoting, advertising, marketing,
demonstrating, and offering for sale the Authorized Products to Customers and
potential Customers in the Territory; and



          (c) copy, reproduce and distribute copies of the Documentation only as
necessary for distributing such copies to Customers in the Territory only in
connection with the sale, distribution or transfer of Authorized Products to
Customers as permitted hereunder.



     2.2 Restrictions. Except as expressly authorized in this Distribution
Agreement, DNA shall not, and shall not cause or permit others to, in whole or
part (a) reproduce, prepare derivative works based



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upon, distribute copies of, perform, display, make, use, offer for sale,
sell or import any Products or the Promotional Materials or Documentation (b)
reverse engineer, disassemble or decompile any Products or the Promotional
Materials or Documentation or (c) distribute, license, sublicense, lease, rent,
assign, grant a security interest in, or transfer any Products or the
Promotional Materials or Documentation.




     2.3 No Limitation. This Distribution Agreement shall not be construed as
a limitation or restriction on the right of VISTA to, or to cause or permit
others to, promote, advertise, market, demonstrate, license, grant the right to
sublicense, offer for sell, sell, distribute transfer or import any Products,
including, without limitation, the Authorized Products, directly or indirectly
itself or through another Person distributor to any Person, including, without
limitation, any Customer, inside or outside the Territory, whether or not such
efforts are in competition with the performance of DNA’s rights, obligations or
duties hereunder.



Article 3

Distributor Obligations




     3.1 Requirements; Exclusivity. During the Term, DNA shall purchase all of
its requirements for the Authorized Products exclusively from VISTA, and VISTA
shall supply Authorized Products to DNA or directly to Customers pursuant to
the terms and conditions of Orders and this Distribution Agreement. Subject to
and except as otherwise expressly set forth in Section 6.2 of the License
Agreement, DNA shall refrain from promoting, advertising, marketing,
demonstrating, offering for sale, selling, distributing or transferring
products that are competitive with and/or perform or possess the same or
similar functions for or on behalf of any person or entity other than VISTA.
DNA acknowledges and agrees that any violation of this provision shall be a
material breach of this Distribution Agreement and the License Agreement and
that this undertaking will not adversely affect its ability to maintain its
business and operations.



     3.2 Marketing Obligations. DNA agrees to promote, advertise, market,
resell, distribute and otherwise favorably publicize the availability of the
Authorized Products to Customers and potential Customers pursuant to the terms
and conditions set forth herein and in accordance with the License Agreement.



     3.3 Notice Requirement. All Authorized Products, Promotional Materials
and Documentation shall prominently display the trademark, copyright
or other
proprietary notices, or such other notices as the parties may mutually agree
with respect to each Order. DNA shall not, and shall not permit any of its
personnel or any third party to delete or alter in any manner this notice or
any other proprietary legend or restrictive notice contained or included on the
Authorized Products or in any Promotional Materials or Documentation.



     3.4 Standard of Conduct. DNA agrees to conduct its business and perform
its obligations hereunder in a timely and professional manner using qualified
personnel, and at all times in a manner that reflects favorably upon VISTA, its
suppliers and the Authorized Products and VISTA Marks, and their respective
goodwill and reputation, and to promote, advertise, market, represent, display
and demonstrate the Authorized Products prominently, truthfully and fairly.
DNA agrees to avoid deceptive, misleading or unethical practices and to not
make any false or misleading statements, claims or representations with respect
to VISTA or the Authorized Products, or propose terms to Customers or potential
Customers that are inconsistent with the terms and conditions of this
Distribution Agreement. DNA’s employees assigned to perform any services or
obligations hereunder shall have the proper skill, training and background so
as to enable them to perform in a competent and professional manner. DNA shall
offer the Authorized Products for sale only pursuant to VISTA’s standard terms
and conditions for use of the Authorized Products and standard warranties for
the Authorized Products attached hereto as Exhibit B (collectively, the
“Standard Resale Terms”) or such other terms as the parties may mutually agree
upon in writing with respect to each Order. VISTA shall be entitled to alter
and amend the Standard Resale Terms from time to time upon notice to DNA;
provided that all such amendments shall apply prospectively. DNA shall not
offer any terms, conditions or warranties to Customers or potential Customers
in addition to, conflict with



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or are different from the Standard Resale Terms without VISTA’s prior
written consent, and any such deviations from or additions to such Standard
Resale Terms without VISTA’s prior written consent shall be the sole
responsibility of DNA and will not be binding upon VISTA.




     3.5 Customer Agreements. Prior to the sale, distribution or transfer of
Authorized Products to a Customer, DNA shall require such Customer to enter
into a written agreement providing for the terms of sale of the Authorized
Products by DNA to such Customer, which agreement shall include, at a minimum,
the Standard Resale Terms (or such modified version thereof as agreed to in
writing by VISTA in writing in advance) (each, a “Customer Agreement”). DNA
shall promptly provide such Customer Agreement to VISTA for its review and
approval. No Customer Agreement shall be effective unless and until it has
been countersigned by an authorized representative of VISTA, and DNA shall
ensure that each Customer Agreement includes an express condition to that
effect.



     3.6 Customer Responsibility. Except as otherwise set forth herein
(including Section 4.1 below) or in the License Agreement, DNA shall be solely
responsible for all matters relating to the Customers, including, without
limitation, establishing and enforcing the terms of sale of the Authorized
Products with Customers, contracting with Customers for and consummating the
sale and delivery of the Authorized Products, timely fulfilling all Customer
orders for the Authorized Products, collecting all proceeds from the sale of
Authorized Products to Customers, responding to Customer inquiries and
complaints, providing support and assistance regarding the features, use and
functionality of the Authorized Products and otherwise maintaining the Customer
relationship. DNA acknowledges and agrees that, except as otherwise set forth
herein or in the License Agreement or as otherwise agreed to in writing by
VISTA on a Customer by Customer basis prior to the execution of the applicable
Customer Agreement, VISTA and its suppliers shall have no responsibility,
obligation or liability to the Customers in any manner, including, without
limitation, any obligation to respond to Customer inquiries or complaints or
provide any Authorized Product replacements or refunds directly to any Customer
for any nonconforming Authorized Products.



     3.7 Governmental Approvals. DNA will be responsible for obtaining any
foreign or domestic export or import licenses and government or government
agency approvals required for sale, distribution or transfer of the Authorized
Products by DNA to a Customer or potential Customer prior to sale or delivery
of the Authorized Products to the Customer.



Article 4

VISTA Obligations




     4.1 Product Warranty. Subject to Section 3.6, VISTA will provide DNA and
Customers with the product support included in the warranty provisions set
forth in the Standard Resale Terms for the Authorized Products. The term of
the warranty for the Authorized Products will commence on the date of delivery
of the Authorized Products to the Customer. DNA acknowledges and agrees that
the product warranty shall not extend to any defects resulting from defects in
the Authorized Products if such defect relates to the Licensed Technology.



     4.2 Additional Support. DNA may purchase from VISTA at VISTA’s
then-current rates additional support for the Authorized Products, including,
without limitation, engineering and technical support.



     4.3 Collaboration. VISTA and DNA agree to conduct regular meetings at
least once per year during the Term of this Distribution Agreement for the
purposes of sharing technical and marketing information and strategies relating
to the Authorized Products and fostering a close working relationship. The
parties’ rights in and to any ideas, concepts, processes, methods, techniques,
inventions, materials, strategies, data and other information resulting from
all such collaboration shall be subject to and governed by Article 5 of the
License Agreement.



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Article 5

Ordering and Delivery




     5.1 VISTA Price List. VISTA will provide DNA with a current copy of
VISTA’s standard price list including standard delivery schedules, for
Authorized Products, to be used by DNA solely for its internal purposes and to
provide quotations of prices and estimated delivery schedules for Authorized
Products to potential Customers. The standard price shall be based upon the
Fully Burdened Cost of the Authorized Products as defined in the License
Agreement and as agreed to between VISTA and DNA on at least a yearly basis;
provided, however that VISTA reserves the right to modify the standard price
for Authorized Products based upon unforeseen additional product costs outside
of VISTA’s direct control, including, but not limited to, material cost
increases imposed by outside vendors. DNA acknowledges and agrees that the
standard price list provided by VISTA contains only estimated delivery
schedules, and is not binding on VISTA.



     5.2 Ordering Procedures. DNA shall submit a written purchase order to
VISTA in a form acceptable to VISTA in its sole discretion, via facsimile or
otherwise, for the Authorized Products that DNA desires to purchase pursuant to
the terms of this Distribution Agreement. Each purchase order shall be signed
by an authorized representative of DNA and shall include the following minimum
information:




	(a)	 	Name and description of potential Customer,
including intended end-use of the Authorized Products,
country of ultimate destination for the Authorized Products,
credit information if requested, and a copy of the executed
or proposed Customer Agreement;
	 
	(b)	 	Proposed date of purchase and any time commitments or delivery
schedules;
	 
	(c)	 	Quality, quantity and type of Authorized
Products ordered and all other services, deliverables or
materials ordered in connection therewith;
	 
	(d)	 	Foreign or domestic government licenses and/or
approvals required for sale, distribution or transfer of the
Authorized Products to the potential Customer; and
	 
	(e)	 	Any special terms or other information relevant
to the purchase of the Authorized Products.




All such orders must be acknowledged in writing by an authorized VISTA
representative (the “Order Acknowledgement”). VISTA reserves the right to
reject any orders of Authorized Products by DNA, in VISTA’s reasonable
discretion. As part of an Order Acknowledgement, VISTA will provide DNA with a
firm price quotation and delivery schedule for the order and all other
applicable terms and conditions relating thereto. DNA may elect to purchase
the Authorized Products and other deliverables pursuant to the terms and
conditions of such Order Acknowledgement by sending VISTA a written order
confirmation within ten (10) days following the date of such Order
Acknowledgement (the “Order Confirmation”). The terms and conditions set forth
in the Order Acknowledgement as accepted by DNA pursuant to the Order
Confirmation are referred to herein as the “Order” and the date on which such
Order Confirmation is received by VISTA is referred to herein as the “Order
Date”. The parties acknowledge and agree that any transactions conducted by
electronic means shall be subject to all terms and conditions of this
Distribution Agreement and shall be binding upon and enforceable against the
parties.




     5.3 Conflicts. In the event of a conflict between the terms of any order
submitted by DNA and an Order Acknowledgement, the terms and conditions of the
Order Acknowledgement shall prevail. Any terms and conditions proposed by DNA
which deviate from, are inconsistent with or in addition to the terms and
conditions set forth in the Order Acknowledgement shall not be binding on VISTA
unless specifically agreed to in writing by VISTA. DNA shall be fully
responsible for any obligations to



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Customers or potential Customers that deviate from, are inconsistent with
or in addition to the terms and conditions of the Order unless VISTA agrees to
the changes in advance in writing.




     5.4 Government Approvals. If a U.S. export license and/or other foreign
or domestic government agency approval is required prior to sale, distribution
or transfer of the Authorized Products, VISTA will not begin preparing the
Authorized Products for shipment until the U.S. export license and such other
required approvals have been obtained, and the delivery schedule will date from
the date on which VISTA receives written notice that the required licenses and
approvals have been obtained and received copies of such licenses and
approvals. The Order will terminate if such licenses and approvals are not
obtained within ninety (90) days after the Order Date.



     5.5 Forecasting. Beginning on the Effective Date and on the first day of
each calendar quarter thereafter during the Term of this Distribution
Agreement, DNA shall provide VISTA with its good faith written estimate, by
quantity, grade, size and delivery date, of its anticipated need for the
Authorized Products for each month in the next ensuing twelve (12) month period
(each such estimate being referred to as the “Rolling Forecast”). The Rolling
Forecasts are to be used by VISTA for raw material procurement and production
planning purposes. DNA’s Rolling Forecasts shall not be binding on VISTA
unless and until VISTA explicitly accepts such Rolling Forecast in writing.



     5.6 Production. VISTA shall not discriminate against DNA in any
commercially unreasonable manner in the allocation of its inventory or current
production among purchasers of Authorized Products; provided, however, that
nothing in this Distribution Agreement prohibit VISTA from allocating
production, inventory or delivery times in favor of any Customer as may be
commercially prudent in VISTA’s best interest. VISTA may commit its inventory
or current production to or for the benefit of the United States Government, or
discontinue any product model included as part of the Authorized Products,
without incurring liability to DNA (except as provided in the Agreements),
Customers or potential Customers or any other party for any damages or losses
suffered by any party for any delay or failure to deliver the Authorized
Products. VISTA shall provide DNA with reasonable advance written notice, but
in any event at least ninety (90) days, before discontinuing one or more
Authorized Product models included as part of the Authorized Products and will
fill Orders that have been accepted by VISTA for such discontinued products if
possible.



     5.7 Delivery. VISTA, or its supplier, manufacturer or other designee,
shall use its commercially reasonable efforts to deliver all Authorized
Products in accordance with the applicable Order. Unless otherwise agreed
between the parties in an Order or otherwise in writing, delivery of Authorized
Products shall be F.O.B. Los Angeles, California, U.S.A.



     5.8 Inspection. In the event VISTA’s third party supplier, manufacturer
or other designee delivers Authorized Products directly to DNA pursuant to an
Order, DNA shall, upon VISTA’s written request, inspect all Authorized
Products, including all components, units, packaging and containers thereof, to
reasonably confirm that they are in compliance with the Order and all
applicable laws and standards. DNA shall promptly notify VISTA of any
suspected nonconforming Authorized Products, and VISTA shall refund or replace
any such nonconforming Authorized Products in accordance with Section 5.8
below.



     5.9 Refund or Replacement. VISTA shall, at its election, replace or
return the price paid by DNA for any Authorized Product, which is shown to
VISTA’s reasonable satisfaction not to conform to its applicable Order as of
the date of delivery thereof. In order for a replacement to be given, DNA must
promptly, but no later than thirty (30) days following the delivery date
thereof, notify VISTA of such non-conformity, and must return such
nonconforming Authorized Products to VISTA or its designee at DNA’s expense, or
at VISTA’s election, destroy such Authorized Products and provide an executed
certification of destruction for the nonconforming Authorized Products.



     5.10 Quality Issues. DNA shall promptly bring to VISTA’s attention, and
work with VISTA in good faith to address, any significant flaws, design
problems, quality issues or Customer dissatisfaction with the Authorized
Products, including quality issues related to the Licensed Technology. The
parties’ rights in



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and to any ideas, concepts, processes, methods, techniques, inventions,
materials, strategies, data and other information related to any resolving such
flaws, problems, issues or dissatisfaction shall be subject to and governed by
Article 5 of the License Agreement.




Article 6

Charges and Payments




     6.1 Charges. DNA shall pay VISTA the applicable fees and charges for the
Authorized Products (the “Charges”) set forth in the Order and in this
Distribution Agreement in accordance with this Distribution Agreement. All
prices for Authorized Products shall be F.O.B. Los Angeles, California, U.S.A.,
and shall be exclusive of all taxes, fees, excises and/or charges which are now
or may hereafter be imposed (whether by federal, state, municipal or other
public authority) with respect to the sale and shipment of Authorized Products,
including, without limitation, all packaging, shipping, delivery and insurance
costs, all of which shall be the responsibility of DNA.



     6.2 Expenses. Except as otherwise explicitly set forth in this
Distribution Agreement or as otherwise agreed to by the parties in writing,
each party shall bear all of its own expenses incurred in performing its
obligations under this Distribution Agreement. A party will reimburse the
other party for reasonable out-of-pocket costs and expenses required and
actually incurred by such party in performing its obligations hereunder only if
the performing party has (a) obtained the other party’s prior written consent
to reimburse the performing party for such expenses, which consent may be given
or withheld in the non-performing party’s sole discretion, (b) detailed such
expenses on a form acceptable to the other party, and (c) submitted supporting
documentation reasonably satisfactory to the other party.



     6.3 Payment Terms. Unless otherwise agreed to as part of an Order
Acknowledgment, thirty percent (30%) of the Charges set forth in an Order shall
be paid by DNA together with submission of the Order Confirmation therefor.
All other payments hereunder shall be due and payable within thirty (30) days
following the date of such invoice, which invoice shall be dated by VISTA no
earlier than the date submitted to DNA hereunder. DNA agrees to pay a late
charge of one and one-half percent (1.5%) per month or the maximum lawful rate,
whichever is less, for all past due amounts. DNA shall not be entitled to
withhold or otherwise offset any amounts due to VISTA hereunder as a result of
nonpayment by a Customer. Unless otherwise directed by VISTA, all payments to
VISTA hereunder are to be paid in U.S. currency, either by check delivered
VISTA’s address for notices set forth herein, or via wire transfer to the
following VISTA account:



	 	 	 	 	 
	

	 	VISTA Bank Name:	 	 
	

	 	 	
 
	

	 	ABA Routing No.:	 	 
	

	 	 	
 
	

	 	VISTA Account No.:	 	 
	

	 	 	
 







     6.4 Taxes. The Charges do not include, and DNA shall be separately
responsible for the payment of all, taxes assessed in connection with any
Order, including, but not limited to, sales, use, withholding, excise, ad
valorem, value added, import, export or other taxes that may be assessed by any
jurisdiction, and all processing fees and administrative costs associated with
any required U.S. export license or other domestic or foreign government
approval. VISTA may, but is not obligated to, include such taxes, fees and
charges in any invoice or as part of any Order, and in the event VISTA elects
to do so, DNA agrees to pay such amounts directly to VISTA. DNA acknowledges
that VISTA is providing DNA the Authorized Products for resale only. For each
Authorized Product sold by DNA, DNA shall provide VISTA with an executed resale
certificate evidencing that all applicable taxes have been properly paid
thereon by DNA or an exemption certificate evidencing that no taxes were
attributable thereto. VISTA shall not be responsible for any personal
property, sale, use, withholding, excise or other taxes assessable on the sale
or delivery of the Authorized Products by DNA to a Customer, which taxes shall
be borne by DNA or the Customer as appropriate.



     6.5 Reports. Within thirty (30) days after the end of each month, DNA
will provide VISTA with a report of the number of Authorized Products sold,
distributed or transferred by DNA to Customers



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during the preceding month. Upon request by VISTA, DNA shall provide VISTA an
accounting of all Customers (i.e., full name, address, telephone number, e-mail
address, date of the delivery of the Authorized Product(s), and the number and
type of Authorized Products delivered to each Customer). All information
regarding Customers shall be the Confidential Information of VISTA and owned by
VISTA and shall not be used by DNA for any other purpose than fulfilling its
obligations hereunder.




     6.6 Records and Audit. During the Term and for three (3) years following
the termination or expiration of this Distribution Agreement, (a) DNA shall
maintain complete and accurate records at its principal place of business
relating to the performance of its obligations hereunder and all of DNA’s
sales, distribution and sales activity relating to the Authorized Products, and
(b) VISTA or its designated representative shall have the right, upon five (5)
days written notice and during normal business hours, to inspect such records
to insure compliance with DNA’s obligations under this Distribution Agreement.
In the event such audit reveals a discrepancy between the Fees paid to, or to
be paid to, VISTA and the Fees actually received by VISTA, then the amount of
such discrepancy shall be paid within thirty (30) days of such audit. In the
event that any audit performed under this Section reveals underpayments in
excess of five percent (5%), DNA shall bear the full cost of such audit and pay
all interest due under Section 6.3.



Article 7

Term and Termination




     7.1 Term. The initial term of this Distribution Agreement shall commence
on the Effective Date and shall continue for the period of five (5) thereafter,
unless sooner terminated as provided herein (the “Initial Term”), and shall
continue for three (3) additional successive renewal periods each for a term of
one (1) (each a “Renewal Term” and together with the Initial Term, the “Term”)
until terminated in accordance with the terms hereof. Either party may
terminate this Distribution Agreement by providing the other party with written
notice of termination at least sixty (60) days prior to the expiration of such
Initial Term or any Renewal Term.



     7.2 Termination.



          (a) Mutual. Either party may terminate this Distribution Agreement upon
prior written notice to the other party if:



               (i) the other party is in material breach of this Distribution Agreement
and, if such breach is curable, does not cure such breach within thirty (30)
days (or ten (10) days in the case of nonpayment of any Charges hereunder)
after the non-breaching party provides the breaching party with written notice
and a reasonable description of such breach; or



               (ii) the other party files a petition in bankruptcy, is adjudicated a
bankrupt or files a petition or otherwise seeks relief under or pursuant to any
bankruptcy, insolvency or reorganization statute or proceeding, or if a
petition in bankruptcy is filed against it or it becomes insolvent or makes an
assignment for the benefit of its creditors or a custodian, receiver or trustee
is appointed for all or a substantial portion of its business or assets,
provided such circumstance are not cured within thirty (30) days of the
commencement of the above-stated event. Nothing contained herein will be
deemed to preclude or impair any rights that VISTA may have as a creditor in
any bankruptcy proceeding.



          (b) By VISTA. VISTA may immediately terminate this Distribution
Agreement, in whole or part, by written notice to DNA, and may regard DNA as in
default of this Distribution Agreement, if DNA is in default of its obligations
under the Transfer Agreement.



          (c) Consultation. Each party hereto agrees to consult in advance with the
other party hereto and to bring to the attention of the other party any
problems, differences of opinion, disagreement or any other matters which may
lead such party to terminate or seek to terminate this Distribution Agreement.
The purpose and intent of the parties in including this provision is to ensure
that both parties to this Distribution Agreement are made aware of any problems
arising out of or relating to this



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Distribution Agreement or the relationship of the parties hereunder, so
that the parties hereto may, in good faith, consult with one another concerning
such problems and, where possible, resolve such problems to the parties’ mutual
satisfaction, thereby preserving their contractual relationship and the
goodwill and mutual respect presently existing between the parties to this
Distribution Agreement.




     7.3 Rights Upon Expiration or Termination. In addition to those
obligations upon expiration or termination of this Distribution Agreement
contained elsewhere herein or provided by law, the following shall apply in the
event of termination for any reason:



          (a) Each party shall promptly, but no later than thirty (30) days
following the effective date of termination, pay to the other party all amounts
due and owing hereunder.



          (b) DNA shall provide VISTA with a written report certified by an officer
of DNA listing the nature and quantity of all Authorized Products and all other
items, including all associated packaging, labels, advertising, Promotional
Materials, and displays, Documentation and any other items bearing the VISTA
Marks or related to the Authorized Products in DNA’s or its Affiliates’
possession, custody or control on the date of termination.



          (c) Except as otherwise expressly provided herein, all rights granted to
the parties hereunder shall immediately cease, and each party shall, as
directed by the other party, either deliver to other party or permanently and
irretrievably destroy (and certify such destruction in writing) all physical
and electronic evidence of the other party’s Confidential Information.



          (d) VISTA shall deliver all Orders previously accepted by DNA but yet
undelivered as of the date of termination provided that such Orders are in
accordance with the terms and conditions accepted by VISTA and further provided
that the payment provisions of Section 6 above are met prior to delivery by
VISTA. Except where this Distribution Agreement is terminated by VISTA
pursuant to Section 7.2(a)(i), 7.2(a)(ii) or 7.2(b), DNA shall be entitled to
continue marketing and distributing its inventory of the Authorized Products
that is on hand at the time of such expiration or termination for a period of
one hundred eighty (180) days, after which DNA shall immediately ship and
deliver to VISTA, without charge to VISTA, all existing inventory of Authorized
Products, all packaging, labels, advertising, Promotional Materials, displays,
Documentation and any other items bearing the VISTA Marks or related to the
Authorized Products.



          (e) Termination of the License Agreement shall automatically terminate
this Distribution Agreement.



     7.4 Survival; Non-Exclusive Remedies. Notwithstanding anything in this
Distribution Agreement to the contrary, the following provisions of this
Distribution Agreement will survive its expiration or termination: Sections
2.2, 3.3 (only during the 180-day period set forth in Section 7.3(d) above),
3.6, 3.7 (only during the 180-day period set forth in Section 7.3(d) above),
4.1, 5.3, 6.1 (to the extent set forth in Section 7.3(a) above), 6.2, 6.3 (to
the extent set forth in Section 7.3(a) above), 6.4, 6.5 and 6.6, and Articles
1, 7, 8, 9 and 10. Any such termination shall be in addition to any other
rights or remedies available at law or in equity to the terminating party and
shall not affect any rights or obligations that have accrued prior to the date
of termination. VISTA is under no obligation to terminate this Distribution
Agreement on the occurrence of any or all of the events set forth in Section
7.2.



Article 8

Representation, Warranties and Covenants




     8.1 Mutual. Each party represents, warrants and covenants to the other as
follows:



          (a) It has the right, power and authority to enter into and perform its
obligations under this Distribution Agreement, and this Distribution Agreement
constitutes a legal, valid and binding obligation on its part, enforceable
against it in accordance with its terms.



9









 





          (b) The execution, delivery and performance of this Distribution Agreement
by such party will not result in the breach of any terms of, or constitute a
default under, or conflict with, or cause any acceleration of any obligation of
such party, or violate any applicable law, rule or regulation, and each party
will at all times comply with all applicable federal, state and local laws,
rules and regulations in the performance of its obligations hereunder and
obtain and possess all licenses, consents, permits and other required or
prudent authorizations to perform its obligations hereunder.



     8.2 By VISTA. VISTA’s sole warranty for the Authorized Products is set
forth in VISTA’s Standard Resale Terms, and such product warranties set forth
the exclusive remedy of DNA (except as set forth in Section 5.8 above or in the
License Agreement) and the exclusive remedy of the Customers against VISTA
arising from the Authorized Products.



     8.3 Disclaimer and Limitation. EXCEPT AS SPECIFICALLY AND EXPRESSLY
REPRESENTED AND WARRANTED HEREIN, VISTA DISCLAIMS AND EXCLUDES ALL WARRANTIES,
EXPRESS, IMPLIED OR OTHERWISE, INCLUDING WITHOUT LIMITATION ALL IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, FREEDOM FROM
INFRINGEMENT OF ANY INTELLECTUAL PROPERTY OR OTHER PROPRIETARY RIGHTS, AND
WARRANTIES BASED ON A COURSE OF DEALING BETWEEN THE PARTIES OR USAGE OF TRADE.
NEITHER PARTY, NOR ITS EMPLOYEES, REPRESENTATIVES OR AGENTS WILL BE LIABLE FOR
ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT
LIMITATION, ECONOMIC LOSSES AND LOST PROFITS, EVEN IF SUCH PARTY HAS BEEN
NEGLIGENT OR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT
SHALL VISTA BE LIABLE FOR DAMAGES IN EXCESS OF THE AMOUNT ACTUALLY PAID BY DNA
OR CUSTOMERS TO VISTA FOR THE AUTHORIZED PRODUCTS WHICH RELATE TO THE CLAIM
BEING MADE.



     8.4 By DNA. DNA represents, warrants and covenants to VISTA as follows:



          (a) All services and efforts to be performed and taken by DNA hereunder
will be performed in a professional, workmanlike manner, in accordance with
industry standards and by reasonably skilled persons who are sufficiently
trained to accomplish their assigned tasks.



          (b) All obligations owed to third parties with respect to the activities
contemplated to be undertaken by DNA pursuant to this Distribution Agreement
are or will be fully satisfied by DNA so that VISTA will not have any
obligations with respect thereto (other than with respect to the fulfillment of
VISTA’s standard product warranties pursuant to Section 8.2 above).



Article 9

Indemnity and Insurance




     9.1 Indemnification by DNA. DNA will defend, indemnify and hold harmless
the VISTA Indemnitees from and against any and all liabilities, damages,
losses, claims, demands, assessments, actions, causes of action, costs
(including attorneys’ fees and associated expenses) and any of them, arising
out of or resulting from third party claims with respect to any (a) acts or
omissions of any of the DNA Indemnitees, whether or not constituting, but
including, any breach by DNA of any representation, warranty or covenant of DNA
contained in this Distribution Agreements, (b) claims by a Customer or
potential Customers or suppliers of DNA (except as are the result of VISTA’s
performance of or failure to perform its obligations hereunder or under the
License Agreement with respect to such Customers), and (c) the Licensed
Technology, including, without limitation, the portions of the Authorized
Products comprised of or embodying the Licensed Technology and DNA’s promotion,
advertising, marketing, demonstration, offer for sale, sale, distribution,
transfer, use or misuse of the Authorized Products (except as otherwise set
forth in Section 9.2(b) below with respect to the VISTA Technology), including,
without limitation, any claim for injury, death or property damage or for
violation of any patent, copyright, trademark or other intellectual property or
proprietary right of any third party and any product liability claims relating
thereto.



10









 





     9.2 Indemnification by VISTA. VISTA will defend, indemnify and hold
harmless the DNA Indemnitees from and against any and all liabilities, damages,
losses, claims, demands, assessments, actions, causes of action, costs
(including attorneys’ fees and expenses) and any of them, arising out of or
resulting from third party claims with respect any (a) acts or omissions of any
of the VISTA Indemnitees, whether or not constituting, but including, any
breach by VISTA of any representation, warranty or covenant of VISTA contained
in this Distribution Agreement, and (b) violation of any valid United States
patent, copyright, trademark or other intellectual property or proprietary
right of any third party based solely upon the Authorized Products but only to
the extent based on the VISTA Technology including, without limitation, the
portions of the Authorized Products comprising or embodying the VISTA
Technology.



     9.3 Indemnification Procedures.



          (a) Notice. If any third party makes a claim covered by Section 9.1 or 9.2
against an indemnitee with respect to which such indemnitee intends to seek
indemnification under this Section, such indemnitee will give prompt notice of
such claim to the indemnifying party, including a brief description of the
amount and basis therefor, if known; provided, however, that the failure to
give such notice promptly will not relieve the indemnifying party of its
obligations hereunder except to the extent prejudiced thereby.



          (b) Control of Defense. Upon the giving of such notice, the indemnifying
party will be obligated to defend such indemnitee against such claim, and will
be entitled to assume control of the defense of the claim with counsel chosen
by the indemnifying party; provided, however, that if DNA is the indemnifying
party, VISTA shall be entitled, upon notice to DNA at any time, to undertake
and assume sole control of the defense thereof with counsel of its own
selection if VISTA reasonable determines that DNA is unable, due to financial
reasons or otherwise, to continue actively and diligently defending against
such claim. The non-defending party will, to a commercially reasonable extent,
cooperate fully with, and assist, the defending party in its defense against
such claim in all reasonable respects, at the defending party’s request and
expense. The defending party will take commercially reasonable steps to keep
the non-defending party fully apprised at all times as to the status of the
defense. Notwithstanding the foregoing, the non-defending party will have the
right, at its expense, to employ separate counsel in any such action, but the
role of such counsel will only be supportive of the defending party’s counsel.
Neither party will be liable for any settlement of action or claim effected
without its consent, which will not be unreasonably withheld. Notwithstanding
the foregoing, the indemnitee will retain, assume, or reassume sole control
over all expenses relating to every aspect of the defense that it believes is
not the subject of the indemnification provided for in this Section. Following
indemnification as provided in this Article 9, the indemnifying party will be
subrogated to all rights of the indemnitee with respect to the matters for
which indemnification has been made.



          (c) Satisfaction of Defense Costs. During the pendency of a suit,
proceeding, claim or demand against which DNA is required to indemnify any of
the VISTA Indemnitees pursuant to Section 9.1 above, VISTA may withhold
payments due to DNA under the Agreements or under any other business
arrangement between the parties to the extent reasonably necessary to conduct
the defense thereof and to satisfy any liability therein provided.



     9.4 Infringement Remedy.



          (a) By DNA. If any portion of the Authorized Products, or any part
thereof, becomes, or in either party’s opinion is likely to become, the subject
of any claim or action covered by Section 9.1(c), then DNA shall comply with
its obligations set forth in Section 9.4 of the License Agreement on the terms
and conditions set forth therein.



          (b) By VISTA. If any portion of the Authorized Products, or any part
thereof, becomes, or in either party’s opinion is likely to become, the subject
of any claim or action covered by Section 9.2(b), then, VISTA shall, at its
expense, in its sole discretion and within thirty (30) days following such
notice or determination, either: (a) procure the right to continue using same
as contemplated hereunder; (b) modify same to render same non-infringing; or
(c) replace same with an equally suitable,



11









 




functionally equivalent, compatible, non-infringing Authorized Products.
If none of the foregoing is commercially practicable, the infringing Authorized
Products in DNA’s possession shall be returned to VISTA and VISTA’s sole
liability (other than satisfaction of its indemnification obligations
hereunder) shall be to refund amounts paid therefor by DNA for the period
following the effective date of termination and for the period during which the
Licensed Technology was affected thereby.




     9.5 Limitations. VISTA shall have no obligations under Section 9.2
unless: (a) DNA takes no action that, in VISTA’s reasonable judgment, impairs
VISTA’s defense of the claim; (b) DNA immediately stops all distribution,
transfer and use of the Authorized Products upon the request of VISTA; and (c)
DNA has paid VISTA all amounts due at the time DNA becomes aware of the claim.
The indemnity in Section 9.2 and the infringement remedy under Section 9.4
shall not apply thief the infringement claim results from, in whole or part:
(i) a modification or other change to the Authorized Products not provided by
VISTA; (ii) the combination of the Authorized Products with hardware, software
or other goods, items or materials not provided by VISTA; (iii) the operation
or use of the Authorized Products in a manner not described in the
Documentation; (iv) any failure of DNA, or others acting under DNA’s authority
or control, to comply with this Agreement; or (v) any use, sale, distribution
or transfer or other exploitation of the Authorized Products outside the scope
of this Agreement.



     9.6 Insurance. During the Term of this Agreement, each party agrees that
it shall, at its sole cost and expense, obtain and maintain the insurance
coverages pursuant to Section 9.6 of the License Agreement on the terms and
conditions set forth therein.



Article 10

Miscellaneous




     10.1 Incorporation by Reference. The parties agree that the terms and
conditions set forth in Article 5 (Ownership; Patent Rights and Litigation) and
Article 6 (Confidentiality and Non-Competition) of the License Agreement are
incorporated by reference herein and shall apply to, and each party agrees to
comply with and be bound by such terms and conditions as applicable to, this
Distribution Agreement, the Authorized Products and the parties’ respective
obligations hereunder.



     10.2 Independent Contractor Status. The parties to this Distribution
Agreement are independent contractors and this Distribution Agreement shall not
be construed to create any partnership, franchise or employment relationship.
In addition, nothing in this Distribution Agreement shall be deemed to appoint
or authorize one party to act as an agent or other representative of the other
party or to assume or incur any liability or obligation in the name of or on
behalf of the other party, but this Section shall not be construed to diminish
any licenses or rights granted to VISTA under this Distribution Agreement. All
sales to Customers by DNA shall be DNA’s sales and any account receivable from
such Customers shall be the entire responsibility of DNA. Notwithstanding
anything to the contrary in this Distribution Agreement, DNA shall refrain from
holding itself out or representing itself as an employee, authorized agent or
legal representative of VISTA, and DNA shall make no representation on behalf
of VISTA nor take any action, except as expressly authorized in this
Distribution Agreement, that binds VISTA to any arrangement, contract,
obligation or commitment with any third party.



     10.3 Force Majeure. Any failure or delay in the performance by VISTA or
DNA of their respective obligations hereunder, other than a failure to pay
undisputed amounts hereunder, shall not be a breach of this Distribution
Agreement if such failure or delay arises out of or results primarily from an
Event of Force Majeure. In the event that an Event of Force Majeure materially
affects a party’s obligations hereunder, then upon notice to the other party,
the party affected thereby shall be relieved of its obligations hereunder for
so long as such Event of Force Majeure continues to have such affect. Both
VISTA and DNA shall use their commercially reasonable efforts to avoid the
occurrence and remove the causes of an Event of Force Majeure and to continue
performance of their respective obligations hereunder promptly following the
removal of such causes.



12









 





     10.4 Assignments. This Distribution Agreement is binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns. Affiliates of VISTA are intended third party beneficiaries of this
Distribution Agreement to the extent expressly provided herein. DNA shall not
assign or transfer any of its rights under this Distribution Agreement (whether
by merger, operation of law or otherwise) or delegate any of its obligations or
duties hereunder without the prior written consent of VISTA, which may be
withheld in VISTA’s sole discretion. VISTA shall be entitled to assign,
transfer or delegate this Distribution Agreement or any rights or duties under
this Distribution Agreement upon prior written notice to DNA. Any assignment
of this Distribution Agreement by either party shall not relieve or release
such party from any of its duties or obligations under this Distribution
Agreement.



     10.5 Subcontracting. DNA shall not subcontract the performance of any of
its obligations under this Agreement without the prior written consent of
VISTA. Any such subcontracting approved by VISTA as set forth herein shall not
relieve or discharge DNA from any of its obligations under this Distribution
Agreement and DNA shall remain liable for all acts and omissions of any such
subcontractor.



     10.6 Notices. Any notice contemplated by or required or permitted to be
given under this Distribution Agreement shall be given in the manner set forth
in the License Agreement; provided, however that all notices to VISTA shall be
directed to the attention of the person named and the address or facsimile
number below (or, in each case, to such other person or address or facsimile
number as may be specified in writing to DNA):



	 	 	 
	

	 	VISTA:
	 
	 	 
	

	 	VISTA Controls, Inc.
	

	 	28965 Avenue Penn
	

	 	Santa Clarita, CA 91355
	

	 	Attn: Sales Manager
	

	 	Fax:
	 
	 	 
	

	 	        With a copy to:
	 
	 	 
	

	 	        Curtiss-Wright Controls, Inc.
	

	 	        3120 Northwest Boulevard
	

	 	        Gastonia, NC 28052
	

	 	        Attn:
Robert H. Shaw, General Counsel 

        Fax:







     10.7 Expenses. Each party hereto shall pay all of its own administrative
expenses (including without limitation the fees and expenses of its agents,
representatives and counsel) incident to the preparation and implementation of
this Distribution Agreement.



     10.8 Waiver. No waiver by either party hereto of any breach or default of
any of the covenants or agreements herein set forth shall be deemed a waiver as
to any subsequent and/or similar breach or default. The failure of any party
hereto to enforce at any time any of the provisions of this Distribution
Agreement shall in no way be construed to constitute a waiver of any such
provision nor in any way to affect the validity of this Distribution Agreement
or any part hereof, including the right of any party thereafter to enforce each
and every provision. The waiver by any party to this Distribution Agreement of
any breach or violation of any provision of this Distribution Agreement by the
other party hereto shall not operate or be construed to be a waiver of any
subsequent breach or violation thereof.



     10.9 Governing Laws, Venue, Jurisdiction, Disputes. This Distribution
Agreement shall be interpreted and construed in accordance with the laws of the
State of North Carolina and the United States of America. Any disputes,
controversies or differences arising out of or in connection with this
Distribution Agreement or the making thereof, Including claims of fraud in the
inducement, which cannot be settled by mutual agreement shall be resolved by
the state or federal courts located in Mecklenburg County, North Carolina. All
parties hereby submit to the jurisdiction of said courts. The provisions of
Article 10 (Dispute



13









 




Resolution) of the License Agreement shall apply to this Transfer
Agreement.




     10.10 Export Restrictions. The Authorized Products and related
information covered by this Distribution Agreement are subject to export
regulations of the U.S. Government, including the U.S. Department of State
(International Traffic in Arms Regulations, 22 CFR 120 et seq.) and the U.S.
Department of Commerce (U.S. Export Administration Regulations 15 CFR 730 et
seq.) DNA will not export, re-export, resell, transfer or disclose, directly or
indirectly, any Authorized Product, technical data or software obtained
hereunder without (a) complying with applicable U.S. export control laws, (b)
notifying and obtaining written permission of VISTA, and (c) providing such
written assurances as VISTA may request. VISTA shall not be liable to DNA for
any failure to provide Authorized Products, services or technical data as a
result of U.S. Government’s: (i) refusal to grant export or re-export license;
(ii) cancellation of export or re-export license; or (iii) interpretation of
U.S. export laws and regulations, after the date of an Order, adversely to the
interests of VISTA or DNA, or having a material affect on the cost of VISTA’s
performance.



     10.11 Drafting. All parties hereto have been represented by counsel, and
each voluntarily enters into and agrees to be bound by this Distribution
Agreement as written on the day it is signed. Authorship of this Distribution
Agreement shall be deemed to be joint, and shall not be attributed to one party
or another for the purpose of construing its terms or provisions. The recitals
to this Distribution Agreement are for reference purposes only and shall not be
binding upon any party or otherwise used by a party to contradict or challenge
the terms of this Distribution Agreement.



     10.12 Severability. If any provision of this Distribution Agreement is
declared or found to be illegal, unenforceable or void, then both parties shall
be relieved of all obligations arising under such provision, but only to the
extent that such provision is illegal, unenforceable or void. Further, this
Distribution Agreement shall be deemed amended by modifying such provision to
the extent necessary to make it legal and enforceable while preserving its
intent or, if that is not possible, by substituting therefore another provision
that is legal and enforceable and achieves the same intended objective. If the
remainder of this Distribution Agreement shall not be affected by such illegal,
unenforceable or void provision and is capable of substantial performance, then
each provision not so affected shall be enforced to the extent permitted by
law.



     10.13 Counterparts. This Distribution Agreement and any amendments,
waivers, consents or supplements hereto may be executed in any number of
counterparts, and by different parties in separate counterparts, each of which
when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same agreement. Each
such agreement, document or instrument shall become effective upon the
execution of a counterpart hereof or thereof by each of the parties hereto.



     10.14 Media Releases. All media releases, public announcements and public
disclosures by DNA or VISTA, or their respective Affiliates, representatives,
employees or agents, relating to this Distribution Agreement or its subject
matter, but not including any announcement intended solely for internal
distribution by a party or any disclosure required by legal, accounting or
regulatory requirements beyond the reasonable control of a party, shall be
coordinated with and approved in writing by the other party prior to the
release thereof.



     10.15 Third Party Beneficiaries. This Distribution Agreement is entered
into solely between, and may be enforced only by, DNA and VISTA, and this
Distribution Agreement will not be deemed to create any rights in third
parties, including, without limitation, suppliers, distributors, Customers or
subcontractors of a party, or to create any obligations of a party to any such
third parties.



     10.16 Further Acts. Each party shall do, or cause to be done, all such
further acts, and shall execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, any and all such further documentation as
the other party reasonably requires to carry out the purposes of this
Distribution Agreement.



14









 





     10.17 Entire Agreement; Amendments. This Distribution Agreement and its
Exhibits (and to the extent applicable, the License Agreement and the Transfer
Agreement) constitute the entire agreement between the parties with respect to
the subject matter hereof, and all prior agreements respecting the subject
matter hereof, either written or oral, expressed or implied, shall be
abrogated, canceled, and are null and void and of no effect. All amendments to
this Distribution Agreement must be in writing and signed by the parties. Each
party represents and warrants to the other party that in entering into this
Distribution Agreement it has not relied on any representations, promises or
assurances from the other party or any employee, officer, director,
representative, attorney or Affiliate of the other party not expressly
contained in this Distribution Agreement. Any other terms or conditions shall
not be incorporated herein or be binding upon either party unless expressly
agreed to in writing by both parties.



Signatures Appear on Following Page




15









 








     In Witness Whereof, the parties have executed and delivered this
Distribution Agreement, in duplicate originals, by their respective persons or
officers hereunto duly authorized, to be effective as of the day and year first
above written.



	 	 	 	 	 
	 	 	VISTA Controls, Inc.
	 
	 	 	 	 
	

	 	By:
	 	/s/ DAVID DIETZ
	

	 	 	 	
 
	 	 	Name: David Dietz
	 	 	Title: Vice President and GM
	 
	 	 	 	 
	 	 	DNA Computing Solutions, Inc.
	 
	 	 	 	 
	

	 	By:
	 	/s/ R. EUGENE HELMS
	

	 	 	 	
 
	 	 	Name: R. Eugene Helms
	 	 	Title: Chief Executive Officer







16









 






Exhibit A




Authorized Products



The following Products (as defined in the License Agreement) are “Authorized
Products” for purposes of this Distribution Agreement:





	•	 	Ruggedized version of DNA’s VQG4 Digital Signal Processor cards
developed by VISTA pursuant to the License Agreement






	•	 	Ruggedized version of DNA’s Eagle I Digital Signal Processor cards
developed by VISTA pursuant to the License Agreement




17









 











Exhibit B




Standard Resale Terms




18