Document:

Exhibit 10.2

Exhibit 10.2

DEVELOPMENT/MASTER AGREEMENT

This Development/Master Agreement is made this 21st day of September, 2009 by and between
Receptors LLC, a Minnesota limited liability company (“Receptors”), and VeriChip
Corporation, a corporation organized and existing under the laws of Delaware (“VeriChip”).
Receptors and VeriChip shall be referred to individually as a “Party” and collectively as the
“Parties.”

WHEREAS, VeriChip desires to obtain the services (the “Development Services”) of
Receptors to, on a commercially reasonable best efforts basis, develop certain products for the
detection and identification of the influenza virus as described in Exhibit A attached
hereto (the “Products”), and Receptors desires to provide such Development Services to
VeriChip and to provide an option to license the use of the Products on the terms and subject to
the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and other
good and valuable consideration the sufficiency of which is hereby acknowledged, the Parties agree
as follows:

1. Development Services.  Receptors agrees to provide the Development Services and use
its commercially reasonable best efforts to develop the Products subject to the specifications
provided in the Program Plan attached hereto as Exhibit B, which may be modified by the
Parties in writing from time to time.

2. License Certain Rights. So long as VeriChip is current on the Development Fee
Payments described in Section 4 below, Receptors grants VeriChip the license as described in the
License Agreement attached hereto as Exhibit C (the “License Agreement”).

3. Ownership of Products.  VeriChip acknowledges and agrees that the Products contain
proprietary and patent protected material and contain trade secrets and other intellectual property
rights exclusively owned by Receptors. VeriChip agrees to maintain the secrecy of the contents of
the Products and implement adequate safeguards to prevent and protect the contents of the Products
from unauthorized use or disclosure. Subject to the rights VeriChip may attain from the License
Agreement, VeriChip agrees that Receptors is and shall remain the sole and exclusive owner of all
rights, title, and interest in and to the Products including any enhancements, updates,
modifications and any patents, copyrights, trade secrets, and any other intellectual property
rights related thereto. VeriChip shall not take any action inconsistent with such ownership.
Except as set forth in Section 2 above, this Agreement does not grant VeriChip any rights to any
patents, copyrights, trade secrets, tradenames, trademarks (whether registered or unregistered), or
any other rights or licenses with respect to the Products. This Section shall survive the
termination of this Agreement.

4. Development Fees. In exchange for the Development Services, VeriChip shall pay
Receptors the amounts specified in Exhibit D. In the event of any change in the outstanding shares
of VeriChip stock by reason of any recapitalization, reorganization, merger, consolidation,
split-up, combination or exchange of shares or other similar change affecting the stock of
VeriChip, VeriChip and Receptors shall make an adjustment to the VeriChip stock to which Receptors
is entitled under this Section 4 as shall be equitable and appropriate.

 

 

 

5. Term.  This Agreement shall remain in force until the Products are delivered and
accepted pursuant to the schedule in Exhibit B, unless sooner terminated under the provisions of
Section 6 below.

6.
Termination.

	 	a.	 	Receptors may, in its sole discretion, immediately terminate
this Agreement if (i) VeriChip materially breaches any provision of this
Agreement and such breach is not cured within thirty (30) days following
written notice from Receptors or (ii) if VeriChip becomes insolvent, makes a
general assignment for the benefit of creditors, files a voluntary petition of
bankruptcy, suffers or permits the appointment of a receiver for its business
or assets, or becomes subject to any proceeding under any bankruptcy or
insolvency law, whether domestic or foreign, or has wound up or liquidated,
voluntarily or otherwise. In addition, VeriChip at anytime may discontinue the
Development Fee Payments described in Section 4 above in which case this
Agreement shall immediately terminate, VeriChip shall lose its License, and
Receptors shall have no further obligations under Section 1 above.

	 
	 	b.	 	VeriChip may, in its sole discretion, immediately terminate
this Agreement if (i) Receptors materially breaches any provision of this
Agreement and such breach is not cured within thirty (30) days following
written notice from VeriChip or (ii) if Receptors becomes insolvent, makes a
general assignment for the benefit of creditors, files a voluntary petition of
bankruptcy, suffers or permits the appointment of a receiver for its business
or assets, or becomes subject to any proceeding under any bankruptcy or
insolvency law, whether domestic or foreign, or has wound up or liquidated,
voluntarily or otherwise.

7. Equitable Remedies And Enforcement. The Parties acknowledge and agree that breach
of any of the obligations under this Agreement shall cause irreparable injury and shall entitle the
non-breaching Party to equitable relief or remedy. The pursuit or securing of any such equitable
relief shall not prohibit or limit a Party to seek or obtain any other remedy provided under this
Agreement or by law. The covenants, agreements and remedies provided herein are in addition to,
and are not to be construed as a replacement for or limited by, the rights and remedies otherwise
available to a Party including, but not limited to, those rights and remedies contained in the
Uniform Trade Secrets Act, or its state counterparts.

8. Notice. Any and all notices called for under this Agreement shall be in writing,
and presented personally or by certified mail, postage prepaid, or recognized overnight delivery
services to Receptors or VeriChip to the following address as the case may be:

	 	 	 	 	 	 	 
	 

	 	If to Receptors:
	 	 	 	Receptors LLC
	 

	 	 	 	 	 	Suite 510B / MD 57
	 

	 	 	 	 	 	1107 Hazeltine Blvd.
	 

	 	 	 	 	 	Chaska, MN 55318
	 

	 	 	 	 	 	ATTN: Robert E. Carlson, Ph.D
	 
	 	 	 	 	 	 
	 

	 	If to VeriChip:
	 	 	 	VeriChip Corporation
	 

	 	 	 	 	 	1690 South Congress Ave.
	 

	 	 	 	 	 	Suite 200
	 

	 	 	 	 	 	Delray Beach, FL 33445
	 

	 	 	 	 	 	ATTN: William J. Caragol

 

2

 

9. Governing Law; Jurisdiction; Venue; Attorney Fees.  This Agreement shall be
construed and enforced in accordance with the laws of the State of New York. Should it be
necessary to institute an action to enforce any of the terms contained in this Agreement, VeriChip
agrees said action shall and must be instituted in the State of New York. The Parties hereby waive
any and all defenses based on lack of personal jurisdiction or forum non conveniens. Should a
Party default under any of the terms of this Agreement, that Party hereby agrees to pay the
reasonable attorney’s fees incurred by the other Party in enforcing the terms of this Agreement.
The attorney’s fees shall be paid by the defaulting Party irrespective of any damages recovered or
any relief afforded to the non-defaulting Party.

10. Entire Agreement.  This Agreement states the Parties’ entire agreement and
understanding of the subject hereof. This Agreement supersedes all prior understanding and
agreements. Any prior agreement or understandings between the Parties is null and void.

11. Modification.  This Agreement may be modified only in a writing signed by the
Parties.

12. Severability.  If any provision or clause of this Agreement as applied to either
Party or to any circumstances, shall be adjudged by a court of competent jurisdiction to be invalid
or unenforceable, said adjudication shall in no way affect any other provision of this Agreement,
the application of such provision in any other circumstances, or the validity or enforceability of
this Agreement.

13. Assignment. Each Party may not assign its rights or delegate its duties under
this Agreement without the other Party’s prior written consent. Any attempted assignment or
delegation by a Party without the required consent will be void. Notwithstanding the foregoing,
either Party may assign this Agreement including, without limitation to an affiliate, subsidiary,
third party, or successor without the other Party’s prior consent.

14. Execution
in Counterparts. This Agreement may be executed in counterparts, and/or
by facsimile, each of which shall be deemed to be an original, and all of which shall constitute
the same Agreement.

IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the day
and year first written above.

	 	 	 	 	 	 	 	 	 	 	 
	Receptors LLC	 	 	 	VeriChip Corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Robert E. Carlson	 	 	 	By:	 	/s/ William J. Caragol	 	 
	 

	 

	 	 	 	 	 

	 	 
	 

	Its: 	President	 	 	 	 	Its: 	President	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

 

3Exhibit 10.4

Exhibit 10.4

LICENSE AGREEMENT

Effective this 6th day of October, 2009 (the “EFFECTIVE DATE”), VeriChip Corporation, a
corporation organized and existing under the laws of Delaware having its principal office at 1690
South Congress Avenue, Suite 200, Delray Beach, FL, 33445, and its AFFILIATES (hereinafter
“LICENSEE”) and RECEPTORS LLC, a corporation organized and existing under the laws of the State of
Minnesota, having its principal office at Suite 510, 1107 Hazeltine Blvd., Chaska, MN 55318,
U.S.A., and its AFFILIATEs, as defined below, (hereinafter, collectively, “RECEPTORS”) agree as
follows:

BACKGROUND

A. RECEPTORS, as a corporation developing, manufacturing and selling products for pharmaceutical
research and development, biopharmaceutical manufacturing, medical devices, diagnostics and sensor
systems holds the intellectual property rights to the CARATM technologies.

B. RECEPTORS is owner of the PATENT RIGHTS (as hereinafter defined).

C. RECEPTORS has the authority to issue licenses under PATENT RIGHTS.

D. LICENSEE wishes to obtain a license under the PATENT RIGHTS that is exclusive and with the right
to sub-license.

1. DEFINITIONS

As used in this Agreement, the following terms shall have the following meanings:

1.1 “AFFILIATE” means: Any corporation, company, partnership, joint venture and/or firm which
controls, is controlled by or is under common control with LICENSEE. As used in this Paragraph
1.1, “control” means (a) in the case of corporate entities, direct or indirect ownership of at
least fifty percent (50%) of the stock or shares having the right to vote for the election of
directors, and (b) in the case of non-corporate entities, direct or indirect ownership of at least
fifty percent (50%) of the equity interest with the power to direct the management policies of such
non-corporate entities. Unless otherwise specified, the term LICENSEE includes AFFILIATES.

1.2 “FIELD” means the field of methods and products for glucose sensing for use in the human body
employing RECEPTORS proprietary artificial receptor technology or methods, synthetic competitor
agent technology or methods, or sensing system technology or methods.

 

 

 

1.3 “LICENSED METHOD” means: (i) any method that is claimed in the PATENT RIGHTS and/or the use of
which would constitute, but for the grant of a license under the PATENT RIGHTS within the FIELD, an
infringement of VALID CLAIM in the country in which such method is used or in the country in which
the resulting products are sold; and (ii) any method that includes or results from RECEPTORS’
TECHNOLOGY.

1.4 “LICENSED PRODUCT” means: (i) any composition of matter or tangible article (for example, a
reagent, kit, or instrument) that is covered by any pending or issued claim within the PATENT
RIGHTS and/or the use, production or sale of which would constitute, but for the grant of a license
under the PATENT RIGHTS within the FIELD, an infringement of any VALID CLAIM in the country in
which such product is used, produced or sold, (ii) any composition of matter or tangible article
(for example, a reagent, kit, or instrument) that is produced according to or through the use of a
LICENSED METHOD, (iii) any composition of matter or tangible article (for example, a reagent, kit,
or instrument) sold for use predominantly in the performance of a LICENSED METHOD, and (iv) any
composition of matter or tangible article (for example, a reagent, kit, or instrument) that
includes or results from RECEPTORS’ TECHNOLOGY.

1.5 “MARKETS” means Diagnostics — an Implantable Glucose Sensing Device for use in the human body
markets and applicational areas in the FIELD.

1.6 “NET SALES” means: The amount billed, invoiced, or received (whichever occurs first) for
sales, leases, or other transfers of LICENSED PRODUCTS, less:

(a) customary trade, quantity or cash discounts and non-affiliated brokers’ or agents’
commissions actually allowed and taken;

(b) amounts repaid or credited by reason of rejection or return;

(c) to the extent separately stated on purchase orders, invoices, or other documents of
sale, taxes levied on and/or other governmental charges made as to production, sale,
transportation, delivery or use and paid by or on behalf of LICENSEE or SUBLICENSEE(s); and

(d) reasonable charges for delivery or transportation provided by third parties, if
separately stated; and

(e) LICENSED PRODUCTS used internally for research and development or quality control by
LICENSEE

NET SALES also includes the fair market value of any non-cash consideration received by LICENSEE
for the sale, lease or transfer of LICENSED PRODUCTS. Fair market value will be calculated as of
the time of transfer of such non-cash consideration to LICENSEE. Transfer of a LICENSED PRODUCT
between LICENSEE and AFFILIATES or SUBLICENSEEs for sale by the transferee shall not be considered
a sale for purposes of ascertaining royalty charges. In such circumstances, the gross sales
price and resulting NET SALES price shall be based upon the sale of the LICENSED PRODUCT by the
transferee.

 

 

 

1.7 “PATENT RIGHTS” means: (i) The patents and patent applications listed in Appendix C and
any patent that issues or grants from any patent application listed in Appendix C, and (ii) any
patent or patent application that is a divisional, continuation, national or regional patent or
application, reissue, renewal, reexamination, substitution or extension of the patents and
applications identified in (i), and (iii) any claim of a continuation-in-part application or
patent, directed to the subject matter specifically described in the patents or patent applications
identified in (i).

1.8 “RECEPTORS’ TECHNOLOGY” means: the research and development knowledge, experience, technical
data, methods, applications and the like concerning artificial receptor technology or methods,
synthetic competitor agent technology or methods, sensing system technology or methods which
RECEPTORS had in its possession or acquired on or before the date of this Agreement and which
RECEPTORS creates during the effective term of this Agreement, including methods of making any
LICENSED PRODUCT or part thereof and any compositions, articles, methods or artificial receptor
technology or methods, synthetic competitor technology or methods, sensing system technology or
methods disclosed but not claimed in any patent or patent application owned and controlled by
RECEPTORS. The term RECEPTORS’ TECHNOLOGY does not include any information which has been acquired
or is acquired by RECEPTORS in confidence from a third party.

1.9 “SERVICE” means: Use of a COMPOSITION PRODUCT or performance of a LICENSED METHOD by LICENSEE
on a “for-fee” basis for any third party.

1.10 “TERRITORY” means: Worldwide.

1.11 “VALID CLAIM” means either (i) a claim of an issued and unexpired patent included within the
PATENT RIGHTS that has not been held permanently revoked, unenforceable, or invalid by a decision
of an agency or a court of competent jurisdiction, that is unappealable or unappealed within the
time allowed for appeal, and which has not been admitted to be invalid or unenforceable through
surrender, disclaimer or otherwise; or (ii) a claim of a pending patent application included within
the PATENT RIGHTS that was filed with a good faith belief in its patentability and that has not
been abandoned or finally rejected without the possibility of appeal or refiling.

1.12 The terms “sale(s)”, “sold” and “sell” include, without limitation, leases and other transfers
and similar transactions.

 

 

 

2. GRANT

2.1. RECEPTORS hereby grants to LICENSEE, and LICENSEE hereby accepts,

(a) an exclusive, worldwide license under the PATENT RIGHTS, with the right to grant
SUBLICENSEs (subject to Section 3), to make, have made, sell, have
sold, offer to sell, import and export tangible LICENSED PRODUCTS for the MARKETS in the
FIELD in the TERRITORY.

(b) an exclusive license to sell SERVICE, and to use the PATENT RIGHTS and RECEPTORS’
TECHNOLOGY for internal research, internal development and internal quality control
purposes for the MARKETS in the FIELD in the TERRITORY, with no right to grant SUBLICENSEs
except that LICENSEE shall have the right to grant any SUBLICENSEE(s) under subparagraph
(a) of this Paragraph a SUBLICENSE to use the PATENT RIGHTS and RECEPTORS’ TECHNOLOGY
solely for internal research, internal development and internal quality control purposes.

Any LICENSED PRODUCT(s), except for SERVICE, sold by LICENSEE or any SUBLICENSEE(s) shall
transfer to the purchaser a limited license, as set forth in Appendix A of this Agreement, to use
such LICENSED PRODUCT(s).

2.2 The granting and exercise of this license is subject to the condition that LICENSEE not enter
into any agreement under which LICENSEE grants to- or otherwise creates in any third party a
security interest in this Agreement or any of the rights granted to LICENSEE herein.

2.3 In the event that any patent(s) and/or patent application(s) is/are: outside the PATENT RIGHTS;
necessary for freedom to operate in the FIELD and MARKETS of the PATENT RIGHTS is/are owned and
controlled by RECEPTORS, and such patent(s) and/or patent application(s) is/are available for
license at such time as LICENSEE requests a license thereunder, RECEPTORS will offer to negotiate
in good faith with LICENSEE toward the issuance of an exclusive license on reasonable terms
standard to licensing practice and common in the industry to which the subject technology pertains.

3. SUBLICENSE

3.1 SUBLICENSEs are subject to RECEPTORS’ prior approval, which approval shall not be unreasonably
withheld.

3.2 To the extent applicable, SUBLICENSEs must include all of the rights of and obligations due to
RECEPTORS under this Agreement.

3.3 No third party to whom LICENSEE grants a SUBLICENSE may grant further SUBLICENSES.

3.4 LICENSEE shall promptly provide RECEPTORS with a copy of each SUBLICENSE issued; collect and
guarantee payment of all payments due RECEPTORS from SUBLICENSEEs; and summarize and deliver all
reports due RECEPTORS from SUBLICENSEEs.

 

 

 

3.5 Upon termination of this Agreement for any reason, RECEPTORS, at its sole discretion, shall
determine whether LICENSEE shall cancel or assign to RECEPTORS any and all SUBLICENSEs.

3.6 The right of LICENSEE to grant SUBLICENSEs shall not survive termination of this Agreement.

4. NOT USED

5. NOT USED

6. ROYALTIES

6.1 LICENSEE shall pay to RECEPTORS royalties on NET SALES of the LICENSED PRODUCTS of forty-five
percent 45.0%) of NET SALES from all sales of LICENSED PRODUCTS in the MARKETS in the TERRITORY.

6.2 LICENSEE shall pay to RECEPTORS forty-five percent (45%) of any and all revenue received for
the sale of the Licensed Products, other than for the sales described in Section 6.1 above. For
example, if VeriChip sold its rights under this Agreement, then Receptors shall be entitled to
forty-five percent (45%) of the proceeds from such sale. VeriChip acknowledges and agrees that it
may not assign or transfer any of its rights under this Agreement without the prior written consent
of Receptors. In the event that the License is terminated pursuant to Section 17 of the Master
Development Agreement, Receptors will pay to VeriChip a ten percent (10%) royalty, defined and
governed (except reversing the licensor and licensee) in the same manner as described in Section 6
through Section 8 in this License Agreement.

6.3 The Parties agree that they will examine, prior to starting Phase III of the Development
Agreement, the possibility of assigning the License to a joint venture owned by each of RECEPTORS
and VeriChip (as an example, with each Party owning fifty-percent (50%) of the voting rights of
such joint venture but with Verichip and Receptors having fifty-five (55%) and forty-five (45%),
respectively, of the economic rights in such joint venture).

6.4 Payment of royalties specified in Section 6 shall be made by LICENSEE to RECEPTORS within sixty
(60) days after March 31, June 30, September 30 and December 31 each year during the term of this
Agreement. If no royalties are due, LICENSEE shall so report. The last such payment shall be made
within sixty (60) days after termination of this Agreement.

 

 

 

7. REPORTING

7.1 (a) LICENSEE shall submit to RECEPTORS within sixty (60) days after each calendar quarter year
ending March 31, June 30, September 30 and December 31, a Royalty Report setting forth for such
quarter year at least the following information:

(i) the number of LICENSED PRODUCTs sold by LICENSEE and/or its SUBLICENSEEs;

(ii) total billings for such LICENSED PRODUCTs;

(iii) an accounting of all LICENSED METHODs used;

(iv) deductions applicable to determine the NET SALES thereof;

(v) the amount of revenue received by LICENSEE pursuant to the sales described in
Section 6.2; and

(vi) the amount of payment due thereon, or, if no payment is due to RECEPTORS for
any reporting period, the statement that no payment is due.

Such report shall be certified as correct by an officer of LICENSEE and shall include a detailed
listing of all deductions from royalties. Such officer shall have a reasonable knowledge of, and
access to, information on which such report is based.

(b) All payments due hereunder shall be deemed received when funds are credited to
RECEPTORS’ bank account and shall be payable by check or wire transfer in United States
dollars. If made by wire transfer, such payments shall be marked so as to refer to this
Agreement. Conversion of foreign currency to U.S. dollars shall be made at the conversion
rate existing in the United States (as reported in the Wall Street Journal or, if not so
reported, then as reported in the New York Times) on the last working day of each royalty
period. No transfer, exchange, collection or other charges shall be deducted from such
payments.

(c) All such reports shall be maintained in confidence by RECEPTORS except as required by
law; however, RECEPTORS may include in its usual reports annual amounts of royalties paid.

(d) In the event that any payment due under this Agreement is not made when due, such
payment shall be subject to a charge of interest at one and one half percent (1 1/2%) per
month, or $250, whichever is greater. Interest shall accrue beginning on the first day
following the due date as herein specified and shall be compounded quarterly. RECEPTORS
shall not be precluded from exercising any other rights it may have as a consequence of the
lateness of any payment.

 

 

 

8. RECORD KEEPING

8.1 LICENSEE shall keep, and shall require each SUBLICENSEE to keep, accurate records (together
with supporting documentation) of efforts to meet the diligence milestones set forth on Appendix B
attached hereto and of LICENSED PRODUCTs made, used or sold under this Agreement, appropriate to
determine the amount of payments due to RECEPTORS hereunder and compliance with the terms of this
Agreement. Such records shall be retained for at least five (5) years following the end of the
reporting period to which they relate. They shall be available during normal business hours for
examination by an auditor selected by RECEPTORS, for the sole purpose of verifying reports,
payments due or made hereunder and compliance with the terms of this Agreement. In conducting
examinations pursuant to this paragraph, RECEPTORS’ auditor shall have access to all records which
RECEPTORS reasonably believes to be relevant to the accuracy of reports, calculation of payments
due under Article 6 and compliance with the terms of this Agreement.

8.2 RECEPTORS’ auditor shall not disclose to RECEPTORS any information other than information
relating to the accuracy of reports and payments made hereunder and compliance with the terms of
this Agreement.

8.3 Such examination by RECEPTORS’ auditor shall be at RECEPTORS’ expense, except that if such
examination shows an underreporting or underpayment in excess of five percent (5%) for any twelve
(12) month period, then LICENSEE shall pay the cost of such examination as well as any additional
sum that would have been payable to RECEPTORS had the LICENSEE reported correctly, plus interest on
said sum at the rate of one and one half per cent (1 1/2%) per month pursuant to the terms of
subparagraph 7.1(d) of this Agreement.

8.4 In the event of a dispute asserted by RECEPTORS pursuant to this section 8, VeriChip will have
the right to have the results of RECEPTORS’ audit reviewed by VeriChip’s auditor. To the extent of
a disagreement between the two auditors’ findings, the Parties agree to resolve the dispute through
a mutually agreed arbitration process.

9. PATENT PROSECUTION 

9.1 RECEPTORS shall control the preparation, filing, prosecution and maintenance (including without
limitation conducting or participating in interferences or oppositions), at its own expense, of any
and all RECEPTORS Patents and any Patents claiming or covering any RECEPTORS Inventions.

 

 

 

10. INFRINGEMENT

10.1 Infringement of RECEPTORS Patents by Third Parties.

(a) LICENSEE agrees to inform RECEPTORS promptly in writing of any suspected
infringement of the RECEPTORS Patents by a Third Party in the Field of Use.

(b) RECEPTORS shall have the sole right and authority to institute suit against any
Third Party suspected of infringing any RECEPTORS Patent. If RECEPTORS does not notify
LICENSEE of its intent to pursue legal action within one hundred and twenty (120) days
after giving notice of any infringement of the RECEPTORS Patents, LICENSEE may institute
suit; provided that RECEPTORS shall have the right, in its sole discretion, to join any
such suit as a plaintiff and be represented by separate counsel of its own selection. In
any event, RECEPTORS and LICENSEE shall each bear their own fees and expenses related to
such litigation. Any recovery or settlement in excess of litigation costs and reasonable
attorney fees shall be shared equally between RECEPTORS and LICENSEE.

10.2 Infringement of Third Party Rights.

Each Party shall promptly notify the other in writing of any allegation by a Third Party that the
activity of either of RECEPTORS or LICENSEE pursuant to this Agreement infringes or may infringe
the intellectual property rights of such Third Party. Subject to the following sentence, RECEPTORS
shall have the sole right to control any defense of any such claim involving alleged infringement
of Third Party rights by RECEPTORS’ activities at its own expense and by counsel of its own choice.
If any Third Party claim alleges that the manufacture, use or sale of a LICENSED PRODUCT infringes
such Third Party’s patent rights, then LICENSEE shall have the first right to control any defense
of any such claim at its expense and by counsel of its own choice, and RECEPTORS shall have the
right, at its own expense, to be represented in any such action by counsel of their own choice;
provided that if LICENSEE does not defend against any such Third Party claim, then RECEPTORS may
assume such defense at its expense and using counsel of its own choice, in which case RECEPTORS
shall keep LICENSEE fully informed with regard to the defense of such Third Party claim. RECEPTORS
shall have the sole right to control any defense of any such claim involving alleged infringement
of Third Party rights by RECEPTORS’ activities at its own expense and by counsel of its own choice.
Neither RECEPTORS nor LICENSEE shall have the right to settle any patent infringement litigation
under this §12.09 in a manner that diminishes the rights or interests of the other Party without
first consulting the other Party.

10.3 If a declaratory judgment action is brought naming LICENSEE as a defendant and alleging
invalidity of any of the PATENT RIGHTS, RECEPTORS may elect to take over the sole defense of the
action at its own expense. RECEPTORS shall consult with LICENSEE in such action, and LICENSEE
shall have an opportunity to provide comment; however, final decision-making authority shall vest
in RECEPTORS. LICENSEE shall cooperate fully with RECEPTORS in connection with any such action.

11. TERMINATION OF AGREEMENT

11.1 This Agreement, unless terminated as provided herein, shall remain in effect until the last
patent or patent application in PATENT RIGHTS has expired or been abandoned.

 

 

 

11.2 RECEPTORS may terminate this Agreement as follows:

(a) If LICENSEE does not make a payment due hereunder and fails to cure such non-payment
(including the payment of interest in accordance with one or both of Paragraphs 7.1(d) and
8.3 within forty-five (45) days after the date of notice in writing of such non-payment by
RECEPTORS.

(b) Pursuant to the terms of Paragraph 13.6, if LICENSEE defaults in its obligations under
Paragraph 13.4 to procure and maintain insurance or, if LICENSEE has in any event failed to
comply with the notice requirements contained therein, immediately without notice or
additional waiting period.

(c) If LICENSEE shall become insolvent, shall make an assignment for the benefit of
creditors, or shall have a petition in bankruptcy filed for or against it. Such
termination shall be effective immediately upon RECEPTORS giving written notice to
LICENSEE.

(d) If an examination by RECEPTORS’ auditor pursuant to Article 8 shows an underreporting
or underpayment by LICENSEE in excess of 20% for any twelve (12) month period (in the event
the dispute is not settled pursuant to Section 8.4.

(e) If LICENSEE is convicted of a felony relating to the manufacture, use, or sale of
LICENSED PRODUCTS. Such termination shall be effective immediately upon RECEPTORS giving
written notice to LICENSEE.

(f) If LICENSEE enters into an agreement that creates a security interest in violation of
the terms of Section 2.2 of this Agreement, this Agreement shall immediately and
automatically terminate.

(g) Except as provided in subparagraphs (a), (b), (c), (d), (e), and (f) above, if
LICENSEE defaults in the performance of any obligations under this Agreement and the
default has not been remedied within ninety (90) days after the date of notice in writing
of such default by RECEPTORS.

11.3 LICENSEE may terminate this Agreement as follows:

(a) If RECEPTORS shall become insolvent, shall make an assignment for the benefit of
creditors, or shall have a petition in bankruptcy filed for or against it. Such termination shall
be effective immediately upon LICENSEE giving written notice to RECEPTORS.

(b) Except as provided in subparagraph (a) above, if LICENSEE defaults in the performance of
any obligations under this Agreement and the default has not been remedied within ninety (90) days
after the date of notice in writing of such default by LICENSEE.

 

 

 

11.4 LICENSEE shall provide, in all SUBLICENSEs granted by it under this Agreement, that LICENSEE’s
interest in such SUBLICENSEs shall at RECEPTORS’ option terminate or be assigned to RECEPTORS upon
termination of this Agreement.

11.5 LICENSEE may terminate this Agreement by giving ninety (90) days advance
 written
notice of termination to RECEPTORS. Upon termination, LICENSEE shall submit a final Royalty Report
to RECEPTORS and any payments owed to RECEPTORS pursuant to Articles 5 and 6 of this Agreement and
unreimbursed patent expenses invoiced by RECEPTORS shall become immediately payable.

11.6 In the event that this Agreement is terminated pursuant to Paragraph 11.5 or any of
subparagraphs 11.2(a), (b), (d) or (g), LICENSEE shall be permitted to clear inventory of LICENSED
PRODUCTS existing as of the date of termination for a period of one (1) year commencing on that
date.

11.7 Paragraphs 3.5, 3.6, 6.2, 8.1, 8.2, 8.3, 9.1, 10.1, 10.2, 10.3, 11.6, 11.6, 11.7, 12.2, 13.1,
13.2, 13.3, 13.4, 17.1, 17.2, 17.6, 17.7, 17.8, 17.9 and 17.10, subparagraphs 7.1(b), (c) and (d),
and Articles 4, 6 and 14 of this Agreement shall survive termination.

12. WARRANTY

12.1 RECEPTORS does not warrant the validity of the PATENT RIGHTS licensed hereunder and makes no
representations whatsoever with regard to the scope of the licensed PATENT RIGHTS or that such
PATENT RIGHTS may be exploited by LICENSEE or any SUBLICENSEE without infringing other patents.

12.2 RECEPTORS EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO EXPRESS
OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS
OR INFORMATION SUPPLIED BY RECEPTORS, LICENSED METHODS OR LICENSED PRODUCTS CONTEMPLATED BY THIS
AGREEMENT.

13. INDEMNIFICATION

13.1 LICENSEE shall indemnify, defend and hold harmless RECEPTORS and its current or former
directors, board members, and employees, and their respective successors, heirs and assigns
(collectively, the “INDEMNITEES”) from and against any claim, liability, cost, expense, damage,
deficiency, loss or obligation or any kind or nature (including, without limitation, reasonable
attorney’s fees and other costs and expenses of litigation) (collectively, “Claims”), based upon or
arising out of or otherwise relating to this Agreement, including without limitation any cause of
action relating to product liability concerning any product, process, or service made, used or sold
pursuant to any right or license granted under this Agreement.

13.2 RECEPTORS shall indemnify, defend and hold harmless LICENSEE and its INDEMNITEES from and
against any Claim, based upon or arising out of a breach of the
terms of this Agreement by RECEPTORS. In the event VeriChip is found liable for any damages from a
Claim, each party will share equally in the damages on a pro rata basis, up to their share of the
NET SALES and ROYALTIES earned to date.

 

 

 

13.3 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS OR EXPECTED
SAVINGS OR OTHER ECONOMIC LOSSES, OR FOR INJURY TO PERSONS OR PROPERTY) ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER, REGARDLESS OF WHETHER RECEPTORS KNOWS OR
SHOULD KNOW OF THE POSSIBILITY OF SUCH DAMAGES. RECEPTORS’ AGGREGATE LIABILITY FOR ALL DAMAGES OF
ANY KIND RELATING TO THIS AGREEMENT OR ITS SUBJECT MATTER SHALL NOT EXCEED THE AMOUNT PAID BY
LICENSEE TO RECEPTORS UNDER THIS AGREEMENT. The foregoing exclusions and limitations shall apply
to all claims and actions of any kind, whether based on contract, tort (including but not limited
to negligence), or any other grounds.

13.4 LICENSEE shall, at its own expense, provide attorneys reasonably acceptable to RECEPTORS to
defend against any actions brought or filed against any INDEMNITEE hereunder with respect to the
subject of indemnity contained herein, whether or not such actions are rightfully brought.

14. USE OF NAMES AND PRODUCT LABELING

LICENSEE shall not use RECEPTORS’ name or insignia, or any adaptation of them, or the name of any
of RECEPTORS’ employees in any advertising, promotional or sales literature, including without
limitation press releases, without the prior written consent of RECEPTORS. LICENSEE shall
acknowledge RECEPTORS’ ownership of the PATENT RIGHTS in the manual or datasheet of the related
products as follows:

Products in the FIELD are covered by an international patent family, owned by RECEPTORS LLC.
“This product or the use of this product may be covered by one or more patents of RECEPTORS LLC
including, but not restricted to, the following: United States Patent No. 7,504,364.”

This acknowledgement may, at LICENSEE’s discretion be included as part of the “Limited Use License”
wording.

In addition, LICENSEE must identify LICENSOR on any related products.

15. ASSIGNMENTS

Without the prior written consent of RECEPTORS in each instance, neither this Agreement nor
the rights granted hereunder shall be transferred or assigned in whole or in part by LICENSEE to
any party, whether voluntarily or involuntarily, by operation of
law or otherwise. Any purported transfer or assignment made without such consent shall be void.

 

 

 

16. NOTICES

Any notices to be given hereunder shall be sufficient if signed by the party (or party’s
attorney) giving same and either

(a) delivered in person,

(b) mailed certified mail return receipt requested,

(c) made by overnight delivery, or

(d) faxed to other party if the sender has evidence of successful transmission
and if the sender promptly sends the original by ordinary mail, in any
event to the following addresses:

If to RECEPTORS:

Robert E. Carlson

President

RECEPTORS LLC

Suite 510 / MD23

1107 Hazeltine Blvd.

Chaska, MN 55318 USA

Facsimile: (952) 448-1651

If to LICENSEE:

VeriChip Corporation

1690 South Congress Ave., Suite 200

Delray Beach, FL 33445

ATTN: William J. Caragol, President

Facsimile: (561) 805-8001

By such notice either party may change their address for future notices.

Notices delivered in person shall be deemed given on the date delivered. Notices mailed shall
be deemed given on the date postmarked on the envelope. Notices sent by overnight carrier shall be
deemed given on the date received by such carrier, as indicated on the shipping manifest or
waybill. Notices sent by fax shall be deemed given on the date faxed.

 

 

 

17. MISCELLANEOUS

17.1 The interpretation and application of the provisions of this Agreement shall be governed by
the laws of the State of New York.

17.2 LICENSEE shall comply with all applicable laws and regulations. In particular, it is
understood and acknowledged that the transfer of certain commodities and technical data is subject
to United States laws and regulations controlling the export of such commodities and technical
data, including all Export Administration Regulations of the United States Department of Commerce.
These laws and regulations among other things, prohibit or require a license for the export of
certain types of technical data to certain specified countries. LICENSEE hereby agrees and gives
written assurance that it will comply with all United States laws and regulations controlling the
export of commodities and technical data, that it will be solely responsible for any violation of
such by LICENSEE, and that it will defend and hold RECEPTORS harmless in the event of any legal
action of any nature occasioned by such violation. LICENSEE shall, in each SUBLICENSE, include
terms that provide that SUBLICENSEE shall comply with all such laws and regulations, shall be
solely responsible for any violation of same by SUBLICENSEE, and shall defend and hold RECEPTORS
harmless in the event of any legal action of any nature occasioned by such violation.

17.3 LICENSEE and any SUBLICENSEE(s) shall obtain all regulatory approvals required for the
manufacture and sale of LICENSED PRODUCTS.

17.4 LICENSEE and any SUBLICENSEE(s) shall utilize appropriate patent and/or trademark marking on
LICENSED PRODUCTS.

17.5 LICENSEE shall register or record this Agreement as is required by law or regulation in any
country where the license is in effect.

17.6 Should a court of competent jurisdiction hold any provision of this Agreement to be invalid,
illegal, or unenforceable, and such holding is not reversed on appeal, it shall be considered
severed from this Agreement. All other provisions, rights and obligations shall continue without
regard to the severed provision, provided that the remaining provisions of this Agreement are in
accordance with the intention of the parties.

17.7 This Agreement constitutes the entire understanding between the parties and neither party
shall be obligated by any condition or representation other than those expressly stated herein or
as may be subsequently agreed to by the parties hereto in writing.

17.8 This Agreement shall be binding upon the respective successors, legal representatives and
assignees of RECEPTORS and LICENSEE.

17.9 This Agreement may be executed in multiple counterparts, each of which shall be deemed an
original, but all of which, taken together, shall constitute one and the same instrument.

 

 

 

17.10 This Agreement includes the attached Appendixes A, B and C.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives.

	 	 	 	 	 
	RECEPTORS LLC

	 	 	 	VeriChip Corporation
	 
	 	 	 	 
	/s/ Robert E. Carlson

	 	 	 	/s/ William J. Caragol
	 

	 	 	 	 
	Name Robert E. Carlson

	 	 	 	Name William J. Caragol
	Title   President

	 	 	 	Title   President
	 
	 	 	 	 
	06 Oct 09

	 	 	 	10/6/09
	 

	 	 	 	 
	Date

	 	 	 	Date

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