Document:

Exhibit 10.8

 

BROOKLINE BANK

 

AMENDMENT TO

EMPLOYMENT AGREEMENT

 

WHEREAS,
Brookline Bank (the “Bank”), a Massachusetts chartered stock savings bank, with
its principal administrative office at 160 Washington Street, Brookline,
Massachusetts 02447-0469 and Charles H. Peck 
(the “Executive”) are parties to an employment agreement dated February
25, 1998 and amended on February 25, 2003 (the “Employment Agreement”); and

 

WHEREAS, under
recently enacted Section 409A of the Internal Revenue Code (“Code”), employment
agreements may be considered deferred compensation arrangement subject to the
provisions of Section 409A; and

 

WHEREAS, the
Bank and Executive desire at this time to update and amend the Employment
Agreement to, among other things, address compliance and other issues with
respect to recently enacted Code Section 409A.

 

NOW, THEREFORE,
in consideration of the mutual covenants herein contained, and upon the other
terms and conditions hereinafter provided, the parties hereby agree as follows:

 

1.             Section
4 of the Employment Agreement “PAYMENTS TO EXECUTIVE UPON AN EVENT OF
TERMINATION” is hereby amended in its entirety to read as follows:

 

The provisions of this Section
shall in all respects be subject to the terms and conditions stated in Sections
7 and 14.

 

(a)   The
provisions of this Section shall apply upon the occurrence of an Event of
Termination (as herein defined) during the Executive’s term of employment under
this Agreement. As used in this Agreement, an “Event of Termination” shall mean
and include any one or more of the following:

 

(i)    the
termination by the Bank or the Company of Executive’s full time employment
hereunder for any reason other than (A) Disability or Retirement, as defined in
Section 5 below, or (B) Termination for Cause as defined in Section 6
hereof;  or

 

(ii)   Executive’s
resignation from the Bank’s employ, upon any

 

(A)  failure to elect or reelect or
to appoint or reappoint Executive as Executive Vice President of the Company
and President of the Bank,

 

(B)   material change in Executive’s
function, duties, or responsibilities, which change would cause Executive’s
position to become one of lesser responsibility, importance, or scope from the
position and attributes thereof described in Section 1, above,

 

(C)   a relocation of Executive’s
principal place of employment by more than 30 miles from its location at the
effective date of this Agreement, or a material reduction in the benefits and
perquisites to the Executive from those being provided as of the effective date
of this Agreement,

 

(D)  liquidation or dissolution of
the Bank or Company other than liquidations or dissolutions that are caused by
reorganizations that do not affect the status of Executive, or

 

(E)   breach of this Agreement by the
Bank.

 

(iii)  Upon
the occurrence of any event described in clauses (ii) (A), (B), (C), (D) or
(E), above, Executive shall have the right to elect to terminate his employment
under this Agreement by resignation upon sixty (60) days prior written notice
given within a reasonable period of time not to exceed four calendar months
after the initial event giving rise to said right to elect. Notwithstanding the
preceding sentence, in the event of a continuing breach of this Agreement by
the Bank, the Executive, after giving due notice within the prescribed time
frame of an initial event specified above, shall not waive any of his rights
solely under this Agreement and this Section 4 by virtue of the fact that

 

 

Executive has submitted his resignation but
has remained in the employment of the Bank and is engaged in good faith
discussions to resolve any occurrence of an event described in clauses (A),
(B), (C), (D) and (E) above.

 

(b)   The
provisions of this Section 4(b) and 4(d) shall apply upon the occurrence of a
Change in Control during the term of this Agreement, including extensions
hereof. In the event of a Change in Control of the Company or the Bank,
Executive shall be entitled to the payments set forth in Section 4(d) hereof. For
purposes of this Agreement, a Change in Control of the Company or the Bank
shall mean (i) a change in ownership of the Company or the Bank under paragraph
(1) below, or (ii) a change in effective control of the Company or the Bank
under paragraph (2) below, or (iii) a change in the ownership of a substantial
portion of the assets of the Company or the Bank under paragraph (3) below:

 

(1)   Change
in the ownership of the Company or the Bank. A change in the ownership of the
Company or the Bank shall occur on the date that any one person, or more than
one person acting as a group (as defined in Proposed Treasury Regulation
Section 1.409A-3(g)(5)(v)(B) or subsequent guidance), acquires ownership of
stock of the corporation that, together with stock held by such person or
group, constitutes more than 50 percent of the total fair market value or total
voting power of the stock of such corporation.

 

(2)   Change
in the effective control of the Company or the Bank. A change in the effective
control of the Company or the Bank shall occur on the date that either (i) any
one person, or more than one person acting as a group (as defined in Proposed
Treasury Regulation Section 1.409A-3(g)(5)(v)(B) or subsequent guidance),
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) ownership of stock of the
corporation possessing 35 percent or more of the total voting power of the
stock of such corporation; or (ii) a majority of members of the corporation’s
board of Directors is replaced during any 12-month period by Directors whose
appointment or election is not endorsed by a majority of the members of the
corporation’s board of Directors prior to the date of the appointment or
election, provided that this sub-section (ii) is inapplicable where a majority
shareholder of the Company or the Bank is another corporation.

 

(3)   Change
in the ownership of a substantial portion of the Company’s or the Bank’s assets.
A change in the ownership of a substantial portion of the Company or the Bank’s
assets shall occur on the date that any one person, or more than one person
acting as a group (as defined in Proposed Treasury Regulation Section
1.409A-3(g)(5)(v)(B) or subsequent guidance), acquires (or has acquired during
the 12-month period ending on the date of the most recent acquisition by such
person or persons) assets from the corporation that have a total gross fair
market value equal to or more than 40 percent of the total gross fair market
value of (i) all of the assets of the Company or the Bank, or (ii) the value of
the assets being disposed of, either of which is determined without regard to
any liabilities associated with such assets.

 

(4)   For
all purposes hereunder, the definition of Change in Control shall be construed
to be consistent with the requirements of Proposed Treasury Regulation Section
1.409A-3(g) or subsequent guidance.

 

(c)   Upon
the occurrence of an Event of Termination, on the Date of Termination, as
defined in Section 7, the Bank shall pay Executive, or, in the event of his
subsequent death, his beneficiary or beneficiaries, or his estate, as the case
may be, as severance pay or liquidated damages, or both, a sum equal to three
(3) times the sum of (i) Base Salary and (ii) the highest rate of bonus awarded
to the Executive during the prior three years. Payments of the amounts set
forth in this paragraph shall be made no earlier than the first day of the
seventh month following Executive’s Separation from Service if Executive is a
Specified Employee and such delay is required by Code Section 409A. For these
purposes, the terms “Specified Employee” and “Separation from Service” shall
have the meaning required by Code Section 409A. At the election of the
Executive, which election is to be made on an annual basis by December 31 of
the year immediately preceding the year in which an Event of Termination
occurs, and which election is irrevocable for the year in which made and upon
the occurrence of an Event of Termination, any payments shall be made in a lump
sum or paid monthly during the remaining term of this Agreement following the
Executive’s termination. In the event that no election is made, payment to the
Executive will be made in a lump sum on the Date of Termination or on the first
day of the seventh month following Executive’s Separation of Service, if, as
provided above, required by Code Section 409A. Such payments shall not be
reduced in the event the Executive obtains other employment following
termination of employment.

 

(d)   Upon
the occurrence of a Change in Control, as defined in Section 4(b), the Bank
shall pay to Executive, or, in the event of his death during the term of this
Agreement but subsequent to a Change in Control, to his beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay or
liquidated damages, or both, a sum equal to three (3) times the sum of (i) Base
Salary and (ii) the highest annual bonus awarded to Executive during the prior
three years. Payment of the amount required hereunder shall be made in a lump
sum on the effective date of the Change in Control.

 

 

(e)   Upon
the occurrence of an Event of Termination, or a Change in Control as defined in
Section 4(b), the Bank will cause to be continued life, medical, dental and
disability coverage substantially identical to the coverage maintained by the
Bank for Executive prior to his termination. Such coverage shall continue for
36 months from the Date of Termination or the Change in Control.

 

(f)    Notwithstanding
the preceding paragraphs of this Section 4, in the event that:

 

(i)    the
aggregate payments or benefits to be made or afforded to Executive under said
paragraphs (the “Termination Benefits”) would be deemed to include an “excess
parachute payment” under Section 280G of the Code or any successor thereto, and

 

(ii)   if
such Termination Benefits were reduced to an amount (the “Non Triggering Amount”),
the value of which is one dollar ($1.00) less than an amount equal to the total
amount of payments permissible under Section 280G of the Code or any successor
thereto,

 

then the Termination Benefits to be paid to
Executive shall be so reduced so as to be a Non Triggering Amount.

 

2.             Terms not defined
herein shall have the meaning ascribed to them in the Employment Agreement.

 

3.             Except as set forth
above, all other terms and provisions of the Employment Agreement shall remain in
full force and effect.

 

IN WITNESS WHEREOF,
the Bank and the Company have caused this Amendment to be executed by their
duly authorized officers, and Executives have signed this Agreement, as of
December 15, 2005.

 

 

	
   

  	
   

  	
  BROOKLINE
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Franklyn Wyman, Jr.

  	
   

  
	
   

  	
   

  	
  Franklyn Wyman, Jr.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  BROOKLINE
  BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Franklyn Wyman, Jr.

  	
   

  
	
   

  	
   

  	
  Franklyn Wyman, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Charles
  H. Peck

  	
   

  
	
   

  	
   

  	
  Charles H.
  PeckExhibit 10.1

 

SUPPLY
AGREEMENT

 

Dated:  April 26, 2006

 

BETWEEN:

 

(1)           Digital
Angel Corporation 490 Villaume Avenue, South St. Paul, MN 55075-2443 USA
(hereinafter called DAC)

(2)           Raytheon Microelectronics Espana, S.A.
Parque Tecnologico de Andalucia, Avda. Juan Lopez de Penalver, 12 Malaga.
(hereinafter called RME)

 

	
  WHEREAS:

  	
  RME and DAC are parties to a Supply
  Agreement dated June 19, 2003 which expires on June 30, 2006 (the
  “2003 Agreement”), and the parties want to negotiate a new agreement that
  reflects the changes to the business since the execution of the 2003
  Agreement; and

  
	
   

  	
   

  
	
  WHEREAS:

  	
  The parties desire to assure that the sale
  of the Products pursuant to this Agreement includes the right for DAC and the
  subsequent purchasers and users of the Products to use for the intended
  purpose(s) Intellectual Property that may be owned by RME or its Affiliates
  that relates exclusively to the design, manufacture or distribution of the
  Products.

  

 

IT IS AGREED:

 

1.             Definitions

 

1.1        “Affiliate”
means any person, partnership, joint venture, corporation or other form of
enterprise, domestic or foreign, including but not limited to subsidiaries,
that directly or indirectly, control, are controlled by, or are under common
control with a party.

 

1.2        “Confidential
Information” means nonpublic information that RME or DAC (“Disclosing Party”)
designates as being confidential at the time of disclosure, by suitable legend to
the party that receives such information (“Receiving Party”) that has or could
have commercial value in the business or prospective business of Disclosing
Party, or which, under the circumstances surrounding disclosure ought to be
treated as confidential by the Receiving Party. 
“Confidential Information” includes, without limitation, information in
tangible or intangible form relating to and/or including released or unreleased
Disclosing Party technology, software or hardware products, the marketing or
promotion of any Disclosing Party product, Disclosing Party’s business
policies, financial information, contracts, records, or practices, and
information received from others that Disclosing Party is obligated to treat as
confidential.  Except as otherwise
indicated in this Agreement, the term “Disclosing Party” also includes all Affiliates
of the Disclosing Party and, except as otherwise indicated, the term “Receiving
Party” also includes all Affiliates of the Receiving Party.  An “Affiliate” means any person, partnership,
joint venture, corporation or other form of enterprise, domestic or foreign,
including but not limited to subsidiaries, that directly or indirectly,
control, are controlled by, or are under common control with a party.    Confidential Information shall not include
any information, however designated, that: 
(i) is or subsequently becomes publicly available without Receiving
Party’s breach of any obligation owed Disclosing Party; (ii) became known
to Receiving Party prior to Disclosing Party’s disclosure of such information
to Receiving Party pursuant to the terms of this Agreement; (iii) became
known to

 

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Receiving Party from a source other than
Disclosing Party other than by the breach of an obligation of confidentiality
owed to Disclosing Party; or (iv) is independently developed by Receiving Party.

 

1.3        “Intellectual
Property” means any and all intellectual property held by a party or any Affiliate
of a party, including but not limited to patents, licenses of patented
technology, trademarks, exclusively copyrights,
trade secrets, and know-how to the extent that such Intellectual Property relates
to the manufacture or distribution of the Products.

 

1.4        “Products”
means glass encapsulated, syringe-implantable transponders, regardless of
operating frequency for use in animals, human beings and inanimate objects
carried on or worn by animals and human beings

 

1.5        “Specifications”
means all documentation related to the operating performance, design,
manufacture or use of the Products, whether developed by RME or DAC.

 

2.             Terms
and Conditions of Supply

 

2.1           DAC
shall purchase products in accordance with the terms set forth in Clause 3
below and RME shall manufacture and supply
the products , in accordance with the Specifications in existence at the time
of the order release RME shall ensure that the materials procured by RME and RME’s
manufacturing of the Products shall remain competitive with regard to price,
quality and other terms.

2.2           This
Agreement shall be effective from April 26, 2006 and except as provided by
clause 17 below, shall continue until June 30th 2010.

2.3           Any
modification to this Agreement shall be made by written agreement between DAC
and RME.

2.4           RME
will be DAC’s preferred supplier of the Products for the duration of this
agreement provided RME’s pricing remains market competitive.  Notwithstanding the foregoing, DAC reserves
the right to purchase components for the Products from any supplier/vendor
including RME’s suppliers/vendors.

2.5           DAC
may review and audit the components used by RME and/or its suppliers for
compliance with the terms and conditions of this Agreement.  In connection with any such audit, DAC shall
be provided with copies of any documents reasonably requested by DAC.

 

3.             Orders
and Forecast

 

3.1           In
the last week of each calendar month, DAC shall send RME a 12 month non-binding
rolling forecast.

3.2           DAC
will place orders covering at least 90 days horizon.

3.3           At
the time of receiving the rolling forecast, RME will also order long lead time
parts needed to cover the quantity indicated in the forecast for the fourth month
forward +/- 25%.

3.4           DAC
is committed to lead times as agreed between the parties and will therefore
bear responsibility for the long lead materials defined in 3.3 above if not
consumed as forecasted

3.5           RME
will do its best to manage requested changes in the 90 days horizon to reflect
DAC’s demand changes.

 

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4.             Suppliers

 

4.1           RME
and DAC will set a formal vendor approval process with the participation of
both parties.

4.2           The
vendor approval process shall endeavor to establish that DAC representatives
will have full access to the facilities of RME/DAC approved suppliers.

 

5.             Production

 

5.1           RME
shall operate a quality system to the requirements of EN ISO 9001 or agreed
equivalent.

5.2           RME
shall operate a first in first out policy on all components used in the
Products manufactured for DAC.

5.3           RME
shall be responsible for implementing the Specification to manufacture the
Products and ensuring the Products comply with the Specification.

5.3.1        RME
will strive to improve the yield of all of the assembly processes involved in
the manufacturing of DAC products.  Any
yield improvement below 4% will be shared equally between RME and DAC.

 

6.             RME
support

 

6.1           RME
will continue supporting DAC prototype build and new product introduction.

6.2           RME
will continue supporting and collaborating with DAC Engineering on a daily
basis to improve product performance and design and process development.

6.3           A
project team including at least a program manager, 2 process engineers, a test
engineer, a quality engineer and a supply chain engineer will be in charge of
the whole program.

6.4           The
program manager assigned to the project will be in charge of the coordination,
monitoring and daily activities for the operations and in dealing with
suppliers.

6.5           RME
will provide DAC with bills of materials and general process flow information
for DAC internal use and to be submitted to DAC Head Office at St Paul MN when
required.  These documents and its
content are covered by the Confidentiality requirements in article 18 as
well as signed off RME-DAC non-disclosure
agreement and cannot be transferred to others.

6.6           RME
will provide a customer advocate in order to communicate DAC’s desires to the
appropriate RME personnel, as required.

 

7.             Engineering
Change Orders “ECOs”

 

7.1           RME
will not make any changes to the Specifications without DAC written
authorization.

7.2           If
DAC issues a written Engineering Change Order (“ECO”) to the Specifications,
RME will apply such ECO to the relevant Products for all subsequent deliveries.

7.3           DAC
will be responsible to RME for the cost of components specific to DAC products
made obsolete as a consequence of an ECO. 
If components affected by ECO are already assembled into product, DAC
will accept those products already manufactured.

7.4           RME
will use its reasonable endeavours to mitigate such cost.  All such costs shall be agreed prior to
implementation of the ECO.

7.5           RME
may request changes to the Specification (“ECR”).  ECRs will be accompanied by an evaluation of
cost impact and all other relevant data. 
ECRs will not be binding on DAC until expressly accepted in writing by
DAC as an ECO.

 

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8.             Materials

 

8.1           DAC
shall have the right, at its discretion, to provide components to RME at cost and
invoice RME for such components; in turn RME will invoice DAC at the same cost
plus 5.5% charge as described in paragraph 11.3 , thereby incorporating the
supplied component costs within the total unit cost charged to DAC. It is
acknowledged and agreed that DAC will bear complete responsibility for the
components that it provides and that RME will be excused and compensated for
any non-conformance, including but not limited to delays in delivery, scrap,
yield or quality issues as a result of any components that are provided by DAC,
or which fail to be provided to RME in a timely manner. This situation only
could happen for new products at prototype or new product introduction stages.
This situation will not apply to the current products.

 

8.2           Except
to the extent that DAC provides components to RME pursuant to Clause 8.1 above,
RME will have full responsibility on the supply of the parts of all the current
transponder Products.

 

9.             DAC
Automated equipment and tooling provided to or by RME

 

9.1           Schedule 9.1
sets forth the automated equipment and tooling, used in the production of the Products,
that are owned by DAC but located in the RME facilities (the “DAC-Owned
Equipment”).  Schedule 9.1 sets
forth the automated equipment and tooling, used in the production of the Products
that are owned by RME (the RME-Owned Equipment”).

9.2           The
DAC-Owned Equipment shall remain the property of DAC at all times and can be
recovered from RME provided ten day’s notice is given and further provided that
such removal will not impact RME’s current production obligations for the
Products

9.3           RME
shall pay DAC the replacement cost of all lost of damaged DAC-Owned Equipment.

9.4           RME
shall keep the DAC-Owned Equipment properly maintained and calibrated at DAC’s
cost (such cost to be the direct cost incurred by RME for parts and supplies
and other mutually agreeable items, but excluding labor costs) provided that
RME provide DAC with a written quotation and obtain DAC’s prior written
approval before calibration is carried out. 
DAC will ensure such calibration is carried out in a timely manner to
ensure production output is not delayed.

9.5           DAC-Owned
Equipment shall not be removed from RME’s premises without DAC’s written
notice.

9.6           DAC-Owned
Equipment shall not be used for manufacturing products or subassemblies for
third parties without DAC’s prior written approval.

9.7           Upon
termination of this Agreement, DAC shall have the right, having given 10 day’s
notice in writing to enter RME premises, to remove any DAC-Owned Equipment not
returned to DAC when requested.

 

10.           Outsourcing
decisions

 

RME may outsource the assembly of all Products
covered by this agreement with the exception of Products incorporating the
Super 12 technology, provided the subcontractors are approved by both RME and
DAC, and provided such subcontractor has signed a non compete and
confidentiality agreement acceptable to RME and DAC prior to the performance of
any work.

 

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11.           Price

 

11.1         RME
material purchasing cost will be reported to DAC at any time that it is
requested.

11.2         RME
will strive to continually get the best competitive pricing from all the
suppliers and to develop the highest quality and competitive suppliers.

11.3         At
the time of taking over responsibility on the supply of all the components of
the bill of material of DAC products including coils and circuits, RME will
include in the price of the finished Product the actual cost to RME of
components for the Products, labor costs incurred by RME plus a fee equal to 5.5%
of the actual cost of the components for the Products purchased by DAC.  This 5.5% percentage includes a current 4.5%
material scrap cost carried by DAC and has been set considering material
freight cost, material duties, material inventory cost, material overhead cost
and financial cost arising from changes in the payment terms.

11.4         The
pricing of each Product shall be set forth in the purchase orders submitted by
DAC based on the prices currently agreed between DAC and RME; provided,
however, that the parties shall from time to time negotiate in good faith any
changes in price for existing Products as a result of agreed changes to the
Products or for future Products, and shall update this Agreement as necessary to
reflect the current price of each Product.

 

12.           Payment

 

12.1         RME
shall invoice DAC for Products delivered on or after delivery.

12.2         DAC
shall pay RME within 30 days after the date of Product is delivered to DAC.

12.3         DAC
products shall be priced and paid for in US$ currency.

 

13.           Quality
Tests

 

RME is responsible for testing all Products
and ensuring they perform in accordance with the specification and agree not to
ship any product not meeting specification with DAC prior written consent.

 

14.           Other
products and rest of the transponder value chain

 

14.1         DAC
and RME will work together to develop and evaluate the feasibility of a win-win
proposal in order for RME be in charge of the whole transponder value chain
including custom packaging for different DAC customers.

14.2         DAC
will provide RME with the information needed to quote other electronic
products, including current price and target price to be successful so RME
could get their suppliers involved to develop a win-win proposal.

 

15.           Warranty

 

RME warrants that for 12 months from the
delivery date, Products supplied will conform to the applicable Specifications
and be free from defects in material and workmanship.  DAC will provide a monthly report to RME of
all warranty claims for the Products within the prior month.  Within 30 days of receipt of the above
information, which must include itemized serial numbers, product
identification, description of failure, and cost of warranty, RME shall credit
DAC 100% of the purchase cost of the original product where the serial number
identifies the age of the

 

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product to be equal to or less than 12 months
from delivery date and RME reasonably determines that the Products are
defective, based on product failures identified through standard manufacturing
testes performed by RME, within ten (10) business days after receipt of
the Products.  If no determination is
made within such ten (10) business day period, then the Products shall be
deemed defective and covered by the warranty.

 

16.           Liability

 

16.1         The
liability of either party to the other, if any, and the sole and exclusive
remedy for damages for any claim of any kind whatsoever made by one party
against the other with respect to the supply of products under this Agreement
or default in respect of such supply shall be limited to an amount equal to the
value of purchases made by DAC from RME in the immediately preceding twelve
months.  Under no circumstances will
either party be liable to the other for any indirect, special, incidental, or
consequential damages arising out of any breach of this agreement whether such
damages are labeled in tort, contract, or indemnity, even if the relevant party
has been advised of the possibility of such damage.

 

17.           Termination

 

17.1         Either
party shall be entitled to terminate this agreement immediately if the other:

(i)            commits
any breach of this Agreement which cannot be remedied within 30 days after
notification;

(ii)           commits
a breach which can be remedied but which is not remedied within 30 days of
receipt of written notice requiring the breach to be remedied;

(iii)          ceases
or threatens to cease trading, becomes insolvent or has a receiver,
administrative receiver appointed over the whole or any part of its assets, or
enters into composition with is creditors or has a resolution passed or order
made for it to be wound up (other than for purpose of a solvent amalgamation or
reconstruction);

 

17.2         Termination
shall not affect any rights which have accrued in favour of either party prior
to the date of termination.

 

18.           Confidentiality

 

18.1         Receiving
Party shall:

 

(i)      Refrain
from disclosing any Confidential Information of the Disclosing Party to third
parties for three (three) years following the date that Disclosing Party first
discloses such Confidential Information to Receiving Party, except as expressly
provided in Sections 2(b) and 2(c) of this Agreement;

 

(ii)     Take
reasonable security precautions, at least as great as the precautions it takes
to protect its own Confidential Information, but no less than reasonable care, to keep
confidential the Confidential Information of the Disclosing Party;

 

(iii)    Refrain
from disclosing, reproducing, summarizing and/or distributing Confidential
Information of the Disclosing Party except in pursuance of

 

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Receiving Party’s business relationship with
Disclosing Party, and only as otherwise provided hereunder; and

 

(iv)    Refrain
from reverse engineering, decompiling or disassembling any software code and/or
hardware devices disclosed by Disclosing Party to Receiving Party under the
terms of this Agreement, except as expressly permitted by applicable law.

 

18.2      Receiving Party may disclose
Confidential Information of Disclosing Party in accordance with a judicial or
other governmental order, provided that Receiving Party either (i) gives
the undersigned Disclosing Party reasonable notice prior to such disclosure to
allow Disclosing Party a reasonable opportunity to seek a protective order or
equivalent, or (ii) obtains written assurance from the applicable judicial
or governmental entity that it will afford the Confidential Information the
highest level of protection afforded under applicable law or regulation.  Notwithstanding the foregoing, the Receiving
Party shall not disclose any computer source code that contains Confidential
Information of the Disclosing Party in accordance with a judicial or other
governmental order unless it complies with the requirement set forth in sub-section (i) of
this Section 2(b).

 

18.3      The undersigned Receiving
Party may disclose Confidential Information only to Receiving Party’s employees
and consultants on a need-to-know basis. 
The undersigned Receiving Party will have executed or shall execute
appropriate written agreements with third parties sufficient to enable
Receiving Party to enforce all the provisions of this Agreement.

 

18.4      Receiving Party shall notify
the undersigned Disclosing Party immediately upon discovery of any unauthorized
use or disclosure of Confidential Information or any other breach of this
Agreement by Receiving Party and its employees and consultants, and will
cooperate with Disclosing Party in every reasonable way to help Disclosing
Party regain possession of the Confidential Information and prevent its further
unauthorized use or disclosure.

 

18.5      Receiving Party shall, at
Disclosing Party’s request, return all originals, copies, reproductions and
summaries of Confidential Information and all other tangible materials and
devices provided to the Receiving Party as Confidential Information, or at
Disclosing Party’s option, certify destruction of the same. 

 

18.6.     Remedies.  The parties acknowledge that monetary
damages may not be a sufficient remedy for unauthorized disclosure of
Confidential Information and that Disclosing Party shall be entitled, without
waiving any other rights or remedies, to such injunctive or equitable relief as
may be deemed proper by a court of competent jurisdiction. 

 

18.7.     Miscellaneous

 

(a)           All Confidential
Information is and shall remain the property of Disclosing Party.  By disclosing Confidential Information to
Receiving Party, Disclosing Party does not grant any express or implied right
to Receiving Party to or under any patents, copyrights, trademarks, or trade secret
information except as otherwise provided herein.  Disclosing Party reserves without prejudice
the ability to protect its rights under any such patents, copyrights,
trademarks, or trade secrets except as otherwise provided herein.

 

7

 

(b)           The terms of
confidentiality under this Agreement shall not be construed to limit either the
Disclosing Party or the Receiving Party’s right to independently develop or
acquire products without use of the other party’s Confidential
Information.  However, this sub-paragraph
shall not be deemed to grant to the Receiving Party a license under the
Disclosing Party’s copyrights or patents. 

 

19.           Waiver

 

The failure of either party at any time or
times to enforce any provisions within this Agreement shall not affect its
right to enforce such provision at a later date.

 

20.           Law

 

This Agreement shall be governed by the laws
of the state of Minnesota, USA.

 

21.           Assignment
or Transfer.  RME will not, without
prior consent in writing, assign, transfer or sub-contract, or in any way make
over its obligations of this agreement without DAC’s consent.

 

22.           Amendments,
Assignment, and Entire Agreement. 
This Agreement may not be modified, amended, or supplemented except by
an agreement in writing signed by both parties. 
This Agreement and the rights and obligations hereunder shall not be
assignable without the express written consent of the nonassigning party.  Subject to the restrictions against transfer
or assignment as herein set forth, the provisions of this Agreement shall inure
to the benefit of, and shall be binding on, the permitted successors and
assigns of each of the parties hereto. 
This Agreement shall constitute the entire agreement between the parties
hereto with respect to the transactions contemplated hereby and shall supersede
all prior or contemporaneous discussions, negotiations, understandings and
agreements.  There are no
representations, agreements, arrangements, or understandings, oral or written,
between or among the parties hereto relating to the subject matter of this
Agreement that are not fully expressed herein.

 

23.           Counterparts.  This Agreement may be executed in various
counterparts or copies, all of which, when taken together, shall constitute the
entire agreement.

 

24.           Waiver.  The failure of any party to insist, in any
one or more instances, upon performance of any of the terms, covenants, or
conditions of this Agreement shall not be construed as a waiver or a
relinquishment of any right or claim granted or arising hereunder or of the
future performance of any such term, covenant, or condition, and such failure
shall in no way affect the validity of this Agreement or the rights and
obligations of the parties hereto.  No
waiver of any provision or condition of this Agreement shall be valid unless
executed in writing and signed by the party to be bound thereby, and then only
to the extent specified in such waiver. 
No waiver of any provision or condition of this Agreement shall be
construed as a waiver of any other provision or condition of this Agreement,
and no present waiver of any provision or condition of this Agreement shall be
construed as a future waiver of such provision or condition.

 

8

 

25.           Invalidity

 

If any provision of this agreement is held by
any court or other competent authority to be void or unenforceable in whole or
in part, the other provisions of this agreement and the remainder of the
affected provisions shall continue to be valid.

 

26.           Intellectual
Property.

 

26.1         License
grants from DAC to RME.  During the
term of this Agreement, DAC hereby grants to RME a non-exclusive, royalty free
license to use DAC’s Intellectual Property in connection with the manufacture
of the Products, which license specifically excludes any right to distribute
the Products to third parties or to create any derivative works from the
Products.  Except as provided in Clause
10 herein, RME shall have no right to grant sublicenses to any of DAC’s
Intellectual Property to third parties.

 

26.2         License
grant from RME to DAC.  In
consideration of the sale of the Products to DAC, whether such Products are
manufactured by RME or by a third party pursuant to the provisions of Clause 10
herein, DAC and any person acquiring title to any Product through DAC shall be
deemed to have been granted a non-exclusive, royalty free license to any and
all Intellectual Property held by RME or its Affiliates related to the
manufacture, distribution or use of the Products; provided, however, that such
license shall be considered as part of each Product and shall not be licensed,
sublicensed or conveyed separately from the Product to which such license
relates.  RME represents and warrants
that prior to the effective date of this Agreement, neither RME nor its Affiliates
(i) have used the Intellectual Property to commercialize
syringe-implantable transponders for use in humans or animals other than
through DAC or (ii) assigned or otherwise granted any rights in the Intellectual
Property to any third parties.

 

26.3         Exclusivity.  So long as DAC purchases not less than the
aggregate quantity of Products purchased by DAC in calendar year 2005 from RME
(the “Annual Minimum Purchase Amount”), RME shall not, without the prior
written consent of DAC in each instance, (i) manufacture or sell any
Products (or Products competitive with the Products) to third parties or (ii) knowingly
license any Intellectual Property of RME or its Affiliates to any third party
for use in manufacture or distribution of the Products or products competitive
to the Products.  In the event that RME
is unable or unwilling to manufacture the quantities of any Product requested
by DAC and does not acquire such Products from third parties pursuant to Clause
10 herein, DAC shall have the right to purchase Products from third parties,
and (i) such purchases shall be treated as having been purchased from RME
for the purpose of calculating the Annual Minimum Purchase Amount, and (ii) the
license of Intellectual Property of RME and its Affiliates referred to in
subparagraph (c) above shall be deemed to extend to all such Products
manufactured by third parties.  RME shall
have the right, on not less than 90 days prior notice, to advise DAC of its
willingness to again produce the quantities of Product requested by DAC, and
upon delivery of such Products, DAC shall not have the right to treat purchases
from third parties against the Annual Minimum Purchase Amount.

 

26.4         No
other interest in Intellectual Property. 
Except as expressly provided herein, the parties acknowledge that
neither party has, nor shall such party acquire, any interest in the other
party’s Intellectual Property.

 

9

 

27            Force
Majeure.  Any delay or failure of RME
to perform its obligations hereunder shall be excused to the extent that it is
caused by an event or occurrence beyond its reasonable control such as, by the
way of example and not by way of limitation, acts of god, actions by any
governmental authority (whether valid or invalid), fires, floods, windstorms,
explosions, riots, natural disasters, wars, sabotage, labor problems (including
lockouts, strikes, and slowdowns) at RME’s facility, its source plant or
suppliers, inability to obtain power, material, labor, equipment, or transportation,
or court injunction or order.

 

 

The parties or their duly authorized representatives have executed this
Agreement on the date shown at its head.’

 

	
  Signed for and on behalf of

  	
  Signed for and on behalf of

  
	
  Digital Angel Corporation

  	
  Raytheon Microelectronics Espana, S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ James P. Santelli

  	
   

  	
  /s/ Ignacio Galnares

  	
   

  
	
   

  	
   

  
	
  Sr. Vice President James Santelli

  	
  Managing Director Ignacio Galnares

  
	
   

  	
   

  
	
  Dated:

  	
  April 26, 2006

  	
   

  	
  Dated:

  	
  April 28, 2006

  	
   

  
						

 

10

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