How to prepare legal forms (click here)

Quotaholder Agreement

Note: The following commentary, forms and documents are prepared by the above under the laws and practice prevailing as of 31 January1995. Seldom is a model form or document directly suitable to a transaction without adaption to the particularities and circumstances of the matter.

QUOTAHOLDER AGREEMENT

By this private instrument, entered into by and between,

HIGHTECH CORPORATION, a company organized and existing under the laws of the State of __________, United States, with head offices at ________________________, herein represented by _____________, lawyer, at ______________, and DISTRIBUTION BRAZIL LTDA, a company organized and exiting at ____________, _____________ with its Articles of Association duly registered with the ____________________Board of Trade under _________________, on [Date] duly enrolled with the managing-directors Messrs. _______________, and as Consenting Party:

HT DISTRIBUTION BRAZIL LTDA, a company organized and offices at _____________ hereafter referred to simply as the "COMPANY".

1.0 FORMATION

1.1 The COMPANY was organized for the purposes of consolidating the distribution and service of HIGHTECH products in Brazil.

1.2 The capital of the COMPANY on this date is Cr$ 1,340-million (one-billion, three hundred and forty-million cruzeiros), divided into 1,340,000 (one-million, three hundred and forty thousand) quotas, with the par value of Cr$ 1,000 (One thousand cruzeiros) each, distributed in the following manner:

QUOTAHOLDER NO CRUZEIROS per cent

HIGHTECH 536,000 536-million 40 DBL 804,000 804-million 60

TOTAL 1,340,000 1,340-million 100

1.3 HIGHTECH and DBL wish to be quotaholders in a limited liability company for the purpose of distributing product.

1.4 HIGHTECH and DBL wish to establish supplementary terms and conditions to govern their participation in the COMPANY, in addition to the rules contained in the attached Articles of Association of the COMPANY and in any other agreements executed by the parties relating to this Joint Venture.

1.5 In consideration of the undertakings and covenants herein contained and pursuant to the provisions of Article 118 of Law Number 6.404, of December 15, 1976 (the Corporation Law), the parties mutually agree to enter into this Quotaholders Agreement, which shall govern HIGHTECH's and DBL's relationship regarding their participation in the COMPANY

1.6 Dividend Payments. The COMPANY shall, unless otherwise resolved at a quotaholders' meeting, pay dividends annually to its quotaholders according to their interests in the maximum amount allowed by law out of the after-tax profits of the COMPANY for each fiscal year, calculated on an annual, non-cumulative basis.

1.7 Unanimous Quotaholder Approval. The following matters shall require the unanimous approval of the quotaholders:

1.7.1 Any amendment to the company's Articles of Association;

1.7.2 The acquisition, sale, transfer or disposal of a substantial amount of the assets of the Company;

1.7.3 Any combination, merger or reorganization of the Company with another Company;

1.7.4 Any acts or decisions which may impair, materially affect or dilute HIGHTECH's or DBL's financial and/or equity interest in the Company, or result in a substantial reduction of profits payable to either of the quotaholders including without limitation, the execution of any agreements, deeds, contracts and documents, the granting of rights to third parties, managers or quotaholders, the creation of reserves and provisions, capital expenditures, borrowings, the granting of guarantees and the acquisition, transfer, sale or encumbrance of any assets and intellectual property rights. This provision is not meant to restrict the day-to-day operations of Company, and shall not apply to agreements, contracts or documents executed in the normal ordinary course of Company's business in the licensing, distribution and servicing of HIGHTECH's products in Brazil;

1.7.5 Any decision regarding bankruptcy, creditors agreement ("concordate"), dissolution and liquidation of the Company, as well as the appointment of the liquidator.

1.8 HIGHTECH and DBL their successors and any new subscribers to this Agreement undertake to exercise their voting rights always having in view the best interests of the Company, and the obligations undertaken in the present Agreement shall not be invoked in order to release any of the quotaholders from legal responsibility in the exercise of voting rights, in accordance with the Corporation Law.

2.0 BOARD OF DIRECTORS OF THE COMPANY

2.1 Purpose of this Agreement. The parties shall vote their quotas of the Company and use their best efforts to cause their representatives on the Board and the officers and employees of the Company to act to achieve the purposes set forth in this Agreement, including without limitation the provisions of this Article 2.

2.2 The Board of Directors.

2.2.1 The Board of Directors of the Company (the "Board") will consist of four (4) directors, of whom two (2) will be nominees of HIGHTECH and two (2) of DBL; provided, however that on the mutual consent of HIGHTECH and DBL, and in accordance with Brazilian law, the number of the directors of the Company may be six (6) or ten (10), and in each case HIGHTECH and DBL shall each nominate half of such number of directors.

2.2.2 The Chairman of the Board and the Vice-Chairman of the Board shall each serve a term of three years. DBL shall designate one of their directors as Chairman of the Board, and HIGHTECH shall designate one of its directors as Vice-Chairman of the Board. Each designation made under this subparagraph shall require the approval of HIGHTECH or DBL, as the case may be, which approval may not be unreasonably withheld.

2.2.3 The parties agree to case their votes as quotaholders of the Company so as to elect as directors the persons nominated respectively by HIGHTECH and DBL hereunder as directors. Written notice of HIGHTECH's or DBL's desire to nominate a new individual as its nominated director or remove or substitute any director appointed shall be given to HIGHTECH or DBL, as applicable, and filed with the principal office of the Company.

2.3 Vacancies. If the position of a director of the Company becomes vacant for any reason, the parties shall cause their quotas to be voted to elect as director a person nominated by whichever of HIGHTECH and DBL nominated the director whose office is vacant.

2.4 Consultations. HIGHTECH and DBL shall each, when requiring the appointment or removal of a director under this Article, consult with the other party before giving notice.

2.5. Board Meetings. Meetings of the Board shall be held at such times as the Board or the Chairman or any two directors shall determine provided that unless otherwise agreed to by the directors a meeting of the Board shall be held at least twice a year. No business will be transacted at any meeting of the Board unless there is present a majority of the directors in office. All resolutions of the board must be adopted by a majority of the votes of all the members in office. In the absence of the Chairman, the Vice Chairman will chair the meeting of the Board with full power and authority of the Chairman in every respect.

2.6 Nominations

2.6.1 The directors nominated as Chairman and Vice-Chairman under Section 2.2.2 hereof shall also be nominated as President and Executive-Vice President, respectively of the Company.

2.6.2 The Parties shall cause their directors to vote so that the persons nominated pursuant to this paragraph are elected.

2.7 Agenda. The agenda of a Board Meeting shall be sent to all directors at least fourteen (14) days in advance and in the case of directors residing outside the Republic of Brazil. Such agenda shall be sent by telex, facsimile or the quickest means and confirmed by airmail letter. Such notice requirement may be modified or eliminated by prior agreement of all directors.

3.0 AUDITOR, ACCOUNTANT, AND FISCAL YEAR

3.1 Auditor. The Company will have one (1) internal auditor who shall be appointed by the quotaholders.

3.2 Accountant. The external auditor of the Company will be the Accountant.

3.3 Fiscal Year. The Company shall unless the quotaholders otherwise agree close its accounts as of 31 December of each year.

4.0 MANAGEMENT

4.1 Management by the Board. The Company will be managed by the Board. The principal functions of the Board will be the establishment of overall policies for the Company and the consideration of extraordinary transactions which are not a part of the day-to-day business.

4.2 Functions of the Board.

4.2.1 The Board shall delegate its managing powers to an executive committee of the Board which shall be comprised of one director nominated by HIGHTECH, the Director Superintendent, and the other nominated by DBL, the Marketing Director, (the "Executive Committee"), which structure may be modified from time to time as deemed appropriate by the Board. The Executive Committee shall have authority to decide the following matters:

(a) Long-term and annual operating and investment budgets.

(b) Long-term and annual programs relative to changes in the Company's activities, finance, or marketing.

(d) Establishment of basic policies for the operation of the Company regarding investments, loans, personnel, travel, funding, foreign exchange, the establishment of branches and representative offices, and, except for members of the Executive Committee, compensation.

(e) Delegation of Executive Committee authority.

(f) Any other matter in addition to the above deemed appropriate by the Executive Committee if such matter is within the authority granted to the Executive Committee by the Board; otherwise such matter shall be referred to the Board.

4.2.2 Notwithstanding anything in this Agreement to the contrary, if the Executive committee decides it is inconvenient or inexpeditious for Executive Committee approval to be obtained in any instance (s), any or all of the foregoing matters may be undertaken by the board. In the event the Executive Committee is unable to reach a decision on any such matter, it shall be referred to the Board.

5.0 RESTRICTIONS ON TRANSFER

5.1 No Transfer. Except as otherwise provided herein, no party may sell, assign or otherwise transfer or encumber its quota in the COMPANY, or purchase or otherwise acquire control of any quotas, except that any party may freely transfer its quotas to an affiliate ("Affiliate" which is any company in which a party owns or controls more than fifty per cent (50 per cent) of the voting stock or shares of such company) the voting quotas of which it owns more than fifty per cent (50 per cent). No party may transfer less than all of its quotas without each other party's prior written consent, except to such an Affiliate. Any transfer under this Section shall require the prior approval of HIGHTECH or DBL, as applicable, which approval shall not be unreasonably withheld.

5.2 Restriction in Articles of Association. The parties agree that the Articles of Association will contain a provision to the effect that any transfer of quotas of the COMPANY must be in accordance with the procedure provided in Section 5.3, and a legend to that effect shall be placed on all quota certificates, if any, of the COMPANY

5.3 Right of First Refusal.

5.3.1 Each party hereto hereby extends to the other parties, and will extend to any subsequent quotaholder, the right of first refusal with respect to the acquisition of the quotas of the COMPANY held by it. Accordingly, if at any time any party hereto desires to transfer its quotas of the COMPANY other than to an Affiliate, such party shall first offer in writing to sell its quotas to the other quotaholders or any nominee of any of them, at the higher of (1) book value, the determination of which shall include, the value of reserves in loan loss provision and real property whose book value is below fair market value, or (2) fair market value, both as determined by an authorized securities company mutually acceptable to and selected by HIGHTECH and DBL, or, if HIGHTECH and DBL fail to select such company, selected by the Accountant on written request of HIGHTECH or DBL made more than thirty days after the date of the relevant offer to sell. Notwithstanding the foregoing, such quota price may be otherwise agreed on by HIGHTECH and DBL Such amount shall be payable in United States dollars if HIGHTECH is selling its shares and in the national currency of Brazil if DBL is selling its shares. Any value calculated in Brazilian currency and payable in United States dollars shall be indexed as of the calculation date up until the effective payment date in accordance with the variation of the General Price Index of the Fundaco Getulio Vargas ("IGP-FGV").

5.3.2 The quotaholders receiving such first offer will have one hundred and twenty (120) days therefrom to respond. If such offer is accepted, the sale shall be consummated no earlier than the sixtieth (60th) day, or later than the ninetieth (90th) day, after the date such acceptance is received. The buying quotaholders will be each entitled to purchase the portion of the offered quotas proportionate to its then existing percentage interests in the Company's remaining quotas, as well as a like portion of any quotas not purchased by a quotaholder entitled to buy.

5.3.3 To the extent such first offer to sell is declined or not answered by the receiving quotaholders within the initial one hundred and twenty (120) day period described above, the quotaholder making the offer shall have the right to offer and sell, within ninety (90) days after the elapse of the initial one hundred and twenty (120) days as aforesaid, all such quotas of the COMPANY not being purchased by a quotaholder to any other person, natural or juridical, at a price equal to or greater than such book or market value established under Section 5.3.1.

5.3.4 If the sale to an outside party is not carried out within such ninety (90) day period, the right of first refusal is automatically reinstated, any previous sales to quotaholders in respect of the relevant offering are automatically rescinded, and the quotaholders will revert to their ownership positions prior to the relevant first offer made under Section 5.3.1.

5.4 Assumption of Obligations. No transfer of the quotas of the COMPANY in accordance with this Article 5 is valid unless the transferee first agrees in writing prior to such transfer to be bound by and fulfill all of the obligations and duties of the transferor hereunder.

5.5 Government Approval. Transfer of quotas hereunder shall be subject to any required approval or validation of the Brazilian government and shall not become effective until such approval or validation has been obtained.

5.6 Calculations. For purposes of this Section the local books maintained in accordance with Brazilian generally accepted accounting principles shall be used to calculate book values.

6.0 BUY-OUT

6.1 In the event of a Deadlock Notice ("Deadlock Notice" means a statement in writing, signed by all the directors nominated by either HIGHTECH or DBL that negotiations have failed to result in an agreement on the applicable matter thirty (30) days' prior written notice of intent to issue such a statement must be given by HIGHTECH or DBL, as applicable) by the quotaholders or the Board for a period of at least the previous three (3) months, the parties shall negotiate for the purchase of HIGHTECH's quotas by DBL, or vice versa.

6.2 If such negotiations do not result in a mutually acceptable agreement within 120 days of the date of the Deadlock Notice, the parties agree to cause the liquidation of the COMPANY as quickly as possible. Any purchase, sale or liquidation shall be made subject to any relevant governmental requirements.

6.3 If a Deadlock Notice is withdrawn prior to expiration of such 120 day period, the obligations of the parties to negotiate a quota purchase shall cease and, if no other Deadlock Notice has been issued and not withdrawn, a subsequent Deadlock Notice will be required to invoke the procedure of this Section.

7.0 CONFIDENTIALITY

7.1 Obligation of Confidentiality. The parties hereto agree to keep confidential and not to disclose to any third party, excluding Affiliates, except to the extent that disclosures may be required by this Agreement or applicable law or regulation, any and all technical, economic, financial or marketing information acquired from another party hereto (including information acquired during the period of negotiations preceding the execution hereof) or from the COMPANY unless disclosure of such information is expressly permitted by this Agreement, the Board, or the Executive Committee. No disclosure shall be made in violation of any legal restriction or established business practice.

7.2 Obligation not to Use. The parties hereto agree that they shall not use any information described in Section 7.1 obtained from another party hereto or from the COMPANY for any purpose whatsoever except in a manner expressly provided for in this Agreement.

7.3 Exceptions to Obligation of Secrecy. The obligations undertaken by the parties hereto pursuant to Sections 7.1 and 7.2 shall not apply to any such information which,

7.3.1 at the time of acquisition or thereafter is in the public domain by publication or otherwise through no fault of the acquiring party; or

7.3.2 was in possession of the acquiring party prior to the time of acquisition; or

7.3.3 was acquired from a third party imposing no obligation of confidentiality.

7.4 Survival of Obligations. The obligations of the parties under Sections 7.1 and 7.2 (but subject to Section 7.3) shall be valid for five (5) years from the time of acquisition of each item of information, and shall survive the termination of this Agreement.

8.0 TERM OF VALIDITY

8.1 The present Quotaholders Agreement shall be in force for a period of five (5) years from the date of execution by the parties to this Agreement, and may be extended for additional periods of one (1) year, by decision of the parties taken at least three (3) months prior to the final closing of each term.

9.0 PROPER BUSINESS PRACTICES

9.1 No signatory hereto will pay, promise, offer or authorize payment of anything of value in any form to any person or organization, either directly or indirectly, through an agent, representative, subcontractor or other third party, to obtain or retain business, where such payment, promise, offer or authorization is contrary to applicable laws, including without limitation the United States Foreign Corrupt Practices Act and/or United States Export Administration Law.

10.0 GENERAL PROVISIONS

10.1 For the purposes of Article 118 of Law Number 6.404/76, a copy of this Instrument shall be filed at the head-office of COMPANY

10.2 All notifications shall be given in writing, accompanied by a notice of receipt, to the addressees indicated in the preamble of this Agreement. However, any of the parties may, by giving written notification to the other party, accompanied by a notice of receipt, alter the address assigned for delivery of notifications.

10.3 This Agreement is executed in an irrevocable and irretractable manner and all obligations and rights herein provided are binding on the parties, their legal representatives, transferees, successors and assignees under any circumstance, on participation by a collateral creditor, usufructuaries with a voting right and any third parties, purchasers or subscribers of quotas of the COMPANY, which must necessarily subscribe this Agreement.

10.4 Each party undertakes to compensate the other party for any actual losses, damages, costs and expenses resulting from its failure to comply with any of the obligations under this Agreement.

10.5 In the event any of the obligations herein contained are not fulfilled by either of the parties, the party wishing to remedy the breach may specifically enforce this Agreement under the provisions of Article 118, third paragraph, of Law Number 6.404/76.

10.6 If any provision of this Agreement is deemed to be invalid or unenforceable in accordance with its terms, all other provisions shall be and continue to be valid and enforceable in accordance with their terms.

10.7 If the IGP-FGV is extinguished or is no longer calculated or no longer accurately reflects the devaluation of the Brazilian currency, such index shall be replaced by another index maintained by a reputable institution or by government authorities chosen by the parties in good faith, which index accurately reflects devaluation.

10.8 This Agreement shall be governed and interpreted in accordance with the laws of the Federal Republic of Brazil. The parties hereby agree to the sole exclusive jurisdiction of the courts of the City of Sao Paulo.

IN WITNESS WHEREOF, the parties have executed this Agreement in three (3) counterparts, in the presence of the two (2) undersigned witnesses.

By_________________________ By_________________________

WITNESSES

___________________________

For the purposes of Article 118 of Law Number 6.404/76 a copy of this Agreement was filed at the head-office of COMPANY, on the date of its execution.

Date:____________

By_________________________

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

Production Rights Agreement

Introduction

This production rights agreement was designed to authorize a joint venture partner to make copies of a United States manufacturer's software for distribution in Brazil. It is one of a number of agreements and relies heavily on references to a distribution agreement which included additional protections for the intellectual property, including use of the trademarks and tradename. It is the result of negotiation and does not include all the clauses which one side or the other might want in an ideal situation. The agreement was entered into between joint venture partners for reasons peculiar to the transaction, but in most cases this agreement would be entered into between the software manufacturer and the joint venture itself. The agreement contemplates that, on formation of a joint venture entity, the Brazilian partner would assign its rights under the agreement to the joint venture.

The most important consideration in these agreements is protection of the manufacturer's rights in the software. This was particularly true in Brazil which, at one time, required submittal of source code as part of the registration process. Brazilian law still required registration at which time the software would be compared against local Brazilian software to make sure that the market was not already served by a similar product. The manufacturer's concern in this case was that the right to copy and distribute be pursuant to an enforceable license agreement. The production rights agreement does not grant any distribution right but rather a right to copy only. Distribution rights for these copies is granted pursuant to the referenced distribution agreement. As is typical of most license agreements this is a non-exclusive non-transferable license, allowing the manufacturer to grant other companies the same rights and preventing the distributor from transferring these rights to another party.

The production rights agreement was one piece of the transaction which also entailed a shareholder agreement between the manufacturer and local distributor governing their rights in a joint venture established for the purposes of distributing the manufacturer's products. A distribution agreement between the manufacturer and the joint venture provided the manufacturer with revenue from software sales and a management agreement between the Brazilian distributor and the joint venture provided the Brazilian partner with revenue for the support services it provided. The production rights agreement not only gave the Brazilian partner (and subsequently the joint venture) rights to copy but also served as another source of revenue for the United States manufacturer.

Operations

In consideration of the right to make copies the Brazilian distributor is required to make payment net of tax. The tax clause is a typical gross-up clause which provides for an increase in the payment in the event withholding applies. The software manufacturer requires a tax receipt for the payment because it will need to report the gross number as income, not the net, and will be able to deduct local taxes paid from its foreign earned income.

The local distributor needed the right not only to copy the software but the accompanying documentation as well. This would include operating manuals and marketing literature which, under this agreement, could be translated into local language. Although translation of the material and copying of the software is authorized, the software manufacturer does not warrant the copies or the translations. Sections 8 and 9 provide that the software manufacturer warrants only the original copies it provides under the agreement and the distributor indemnifies the manufacturer for any liability incurred by the manufacturer as a result of the distributor's performance under the agreement.

Finally, the agreement provides for termination in case the distribution agreement has been terminated or has expired or if the rights under the agreement were not assigned to the joint venture. Any person wishing to structure a similar transaction must pay careful attention to the intellectual property laws in the local jurisdiction and determine whether reference to separate agreements which include more IP protection would be enforceable or whether it would be preferable to restate these protections.

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

Note: The following commentary, forms and documents are prepared by the above under the laws and practice prevailing as of 1995. Seldom is a model form or document directly suitable to a transaction without adaption to the particularities and circumstances of the matter. Readers are invited to contact the contributors regarding any questions concerning the application of the forms and documents.

Int. Business Transactions ( ....1995) Chapter 25 B - 5

PRODUCTION RIGHTS AGREEMENT

AGREEMENT made as of the ___ day of _____________ 20 __ HIGHTECH CORPORATION, with its principal office at 15 Software Drive ("HIGHTECH") and DISTRIBUTION BRAZIL LTDA, with its principal office at Avenue Cidade Jardim, Sao Paulo, Brazil ("DBL").

1. Purpose. HIGHTECH agrees to grant to DBL a limited license for production rights to HIGHTECH's proprietary "Multisense" software products and Multisense documentation (collectively the "Multisense Products") under the terms and conditions of this Agreement.

2. Grant of License/Production Rights. Subject to payment by DBL to HIGHTECH of the amount set forth in Section 3 below, HIGHTECH grants to DBL a non-exclusive, non-transferable license to make copies of the Multisense Products up to the cumulative value of ______________Dollars (US $___________) (as determined by HIGHTECH's then current standard Distributor List Price) for the sole purpose of assigning such limited production rights to the subsidiary which DBL will be forming under the Joint Venture agreement between the parties. Such subsidiary will be distributing certain mutually agreed to HIGHTECH products in accordance with HIGHTECH's standard International Distribution Agreement ("International Distribution Agreement"). DBL further agrees to require, as a condition of such assignment, such subsidiary to be bound by all of DBL's obligations set forth in this Production Rights Agreement. DBL shall not use the Multisense Products for any other purpose or in any other manner.

It is an express condition of this Agreement that title to, ownership of, and all rights in patents, copyrights and trade secrets in the Multisense Products and any copy or part of such Multisense Products shall not transfer to DBL and shall remain in HIGHTECH and/or HIGHTECH's vendors.

3. Payment. In consideration of such license for limited production rights, DBL agrees to pay HIGHTECH the amount of Two Hundred Thousand Dollars (US $200,000). In the event HIGHTECH does not receive such payment, this Agreement shall automatically be terminated.

Payments to HIGHTECH shall be made without deduction for taxes, imposts, customs, levies or other withholding ("Tax") or shall be grossed-up to provide HIGHTECH the same amount after such Tax as it would have received without the imposition of such Tax, together with tax receipts or similar evidence of payment by DBL DBL shall also be responsible, at its own expense, for obtaining all necessary export and import permits and certificates.

4. Term. The term of this Agreement shall commence as of the date set forth above and shall end on the earlier of (i) failure of DBL to assign such limited production rights to the subsidiary by ______________, (ii) termination as set forth in Section 7 of this Agreement, or (iii) expiration or termination of the International Distribution Agreement to be entered into between DBL's new subsidiary and HIGHTECH

5. Copies/Translations. HIGHTECH will provide DBL with one (1) master copy for each Multisense Product. DBL shall ensure that all copies of the Multisense Products (i) are serialized, (ii) properly contain HIGHTECH and HIGHTECH's vendor's copyright and proprietary notices and (iii) are equal in quality and appearance to the Multisense Product distributed by HIGHTECH DBL agrees to maintain complete records (as required by Section 13.2 of the International Distribution Agreement) of all copies of the Multisense Products and to make these records available to HIGHTECH on request. DBL may, at its own expense, translate the Multisense documentation into Portuguese provided such translation does not materially alter the Multisense documentation.

6. International Distribution Agreement. For the purposes of defining certain rights and obligations in regards to the limited production rights granted hereunder, the terms and conditions of the International Distribution Agreement referenced in Section 2 above shall apply to this Agreement. Such incorporation shall not in any way be construed as creating a distributor relationship between DBL and HIGHTECH

7. Termination. This Agreement shall terminate automatically if DBL assigns or attempts to assign its rights under this Agreement to any third party except as expressly agreed to in writing by HIGHTECH DBL may terminate this Agreement on thirty (30) days prior written notice to HIGHTECH, however, DBL shall not be entitled to a refund or credit for any amounts paid if HIGHTECH has not receive payment as set forth in Section 3 above or if DBL otherwise breaches this Agreement.

On termination of this Agreement, DBL shall, at HIGHTECH's direction, either immediately return or destroy the Multisense Products master copies and all portions and copies, and if requested by HIGHTECH, certify in writing that all copies have been so returned or destroyed.

8. Limited Warranty and Remedy. HIGHTECH agrees to warrant the Multisense Products master copies in accordance with the warranty provisions set forth in Section 8 of the International Distribution Agreement. Copies of the Multisense Products made by DBL shall be excluded from such warranties.

9. Limitation of Liability/Indemnity. The limitation of liability provisions set forth in Section 9 of the International Distribution Agreement shall apply to this Agreement. In addition, COMPANY AGREES TO HOLD HIGHTECH AND HIGHTECH'S VENDORS HARMLESS FROM ALL CLAIMS OR LIABILITY (WHETHER IN CONTRACT, WARRANTY, NEGLIGENCE, TORT OR OTHERWISE) ARISING DIRECTLY OR INDIRECTLY FROM COMPANY'S ACTIVITIES UNDER THIS AGREEMENT

10. Export Administration/Compliance With Laws. DBL expressly agrees to comply with Section 13 of the International Distribution Agreement relating to compliance with United States export administration regulations and other applicable laws and regulations.

IN WITNESS WHEREOF, DBL and HIGHTECH hereby duly execute this Agreement on the date first written above.

New Company USA Software Corporation

By:___________________ By:___________________ Title:__________________

Title:__________________