Exhibit 10.1
Confidential
TECHNOLOGY RESELLER AGREEMENT
This Technology Reseller Agreement ("Agreement"), effective as of this 19 day of
March, 2007 ("Effective Date"), is made and entered into by and between
Applied DNA Sciences, Inc., a Nevada corporation with an address of 25 Health
Sciences Drive, Suite 113, Stony Brook, New York 11790 ("Applied DNA"),
and
HPT International LLC., a _____________ limited liability company with an
address of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇ ▇., ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Reseller").
WHEREAS, Applied DNA has developed and has rights in certain technology used for
botanical DNA encryption, embedment and authentication solutions wherein a
marker may be embed in items to, among other things, authenticate and identify
counterfeit versions of such items; and
WHEREAS, Reseller desires the right to include Applied DNA's SigNature DNA
Markers in its products for distribution to its customers, and Applied DNA is
willing to grant such rights, in accordance with the terms and conditions
herein.
NOW THEREFORE, in consideration of the mutual covenants and understandings
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. DEFINITIONS
For the purpose of this Agreement, the following terms shall have the stated
meanings:
1.1 "Affiliate" with respect to a party, means any entity controlling,
controlled by or under common control with such party.
1.2 "Intellectual Property" means all current and future worldwide patents
and other patent rights, trademarks, trade names, service marks,
copyrights, applications for any of the foregoing, technology, know-how,
trade secrets, mask work rights and all other intellectual property
rights.
1.3 "Reseller Products" means those products sold by Reseller that are
identified on SCHEDULE A.
1.4 "SigNature DNA Markers" means the DNA-inscribed markers comprising
Applied DNA's technology.
2. RESELLER RIGHTS AND OBLIGATIONS
2.1 RIGHTS GRANTED. Subject to and in accordance with the terms of this
Agreement, Applied DNA hereby:
TECHNOLOGY RESELLER AGREEMENT
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(i) appoints Reseller as an authorized reseller of SigNature DNA
Markers during the Term; and
(ii) grants to Reseller a non-exclusive, non-transferable, limited
right and license during the Term to affix the SigNature DNA
Markers only on Reseller Products for distribution to Reseller's
customers.
(iii) grants to Reseller a exclusive, non-transferable, limited right
and license during the Term to affix the SigNature DNA Markers
only on Resellers Products for distribution to Reseller's
customers in the US in the poultry and/or Kosher Food markets
provided that the Reseller buy's and pay's for $[*] worth of
SigNature DNA Markers during the first 12 months of this
agreement. If this milestone is met, the Reseller can extend the
exclusivity for a second Term, provided Reseller agrees to buy
and pay for $[*] worth of SigNature DNA Markers during the
second Term.
(iv) If after 2 years, the milestones have been met or exceded, HPT
shall retain the right to exclusivity based on a milestone which
shall be negotiated before the expiration of the 2nd year
(v) In the event HPT does not reach a milestone, HPT shal retain the
right to sell to HPT customers already using the Signature DNA
Markers until such time as this agreement expires
2.2 SPECIFIC RESTRICTIONS. Without in any way expanding the rights granted
above, Reseller's use of the SigNature DNA Markers shall be restricted
in accordance with the following specific restrictions.
2.2.1 NO UNAUTHORIZED USE. Reseller shall not use the SigNature DNA Markers
except as expressly permitted under the terms of this Agreement.
2.2.2 NO ALTERING. Reseller shall not alter, translate, adapt or vary the
SigNature DNA Markers.
2.2.3 NO REVERSE ENGINEERING. Reseller shall not decompile or disassemble the
SigNature DNA Markers or reverse engineer the SigNature DNA Markers (or
attempt, authorize or permit the same).
2.2.4 NO COPYING. Reseller may not make nor attempt to make copies of the
SigNature DNA Markers.
3. ORDERS; FEES
3.1 PURCHASE ORDERS. Reseller shall submit purchase orders for Applied DNA
to embed SigNature DNA Markers in a requested media which Reseller shall
then affix to Reseller Products. Each such purchase order shall be in
the amounts required for a minimum of one (1) million Reseller Product
units. All such purchase orders shall be subject to the terms of this
Agreement. No terms in any purchase order shall be binding upon Applied
DNA, and under no circumstances shall any such terms alter or vary any
term of this Agreement.
3.2 FEES. Applied DNA shall be entitled to the fees associated with
Reseller's distribution of Reseller Products having embed on them the
SigNature DNA Markers, in accordance with the fee schedule set out in
SCHEDULE B.
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3.3 SHIPMENT. All orders will be shipped by Applied DNA F.O.B. place of
origin within 30 days of receipt of a formal purchase order.
3.4 TAXES. All amounts payable under this Agreement are exclusive of all
sales, use, value-added, withholding, and other taxes and duties. Each
party will pay the taxes and duties assessed against it in connection
with this Agreement and its performance by any authority within or
outside of the U.S., except for taxes payable on the other party's net
income or any other taxes due and payable by the other party in the
ordinary course.
3.5 RECORDS. During the Term, Reseller will maintain accurate records
necessary to determine the fees payable pursuant to ss.3.2.
3.6 AUDIT. Not more than once during each six (6) month period, and upon ten
(10) days prior written notice to Reseller, Applied DNA may inspect
Licensee's records identified in ss.3.5 to verify compliance with
Reseller's obligations to pay fees under this Agreement ("Audit"). If
the Audit reveals an underpayment, Reseller will pay to Applied DNA the
full amount of such underpayment within fifteen (15) days of Reseller's
receipt of the results of the Audit. The cost of any Audit shall be born
by Applied DNA; provided, that if the Audit reveals an underpayment of
more than the greater of five percent (5%) of the fees due for the
period audited, then Reseller will bear the reasonable costs of the
Audit. Any such Audit shall be conducted at a time and place reasonably
acceptable to Reseller, and in such a manner so as not to interfere with
or disrupt Reseller's business and operations.
4. TERM AND TERMINATION
4.1 TERM. This Agreement shall commence on the Effective Date and continue
for a period of one (1) year (the "Initial Term") unless earlier
terminated as permitted below. Thereafter, this Agreement shall
automatically renew for successive one (1) year terms (each a "Renewal
Term") unless earlier terminated as permitted below. The Initial Term
and all Renewal Terms are referred to collectively as the "Term."
4.2 TERMINATION.
4.3 BREACH. Either party may terminate this Agreement for a material breach
by the other party if such breach is not cured within thirty (30) days
after receipt of written notice thereof.
4.4 CANCELLATION OF RENEWAL. Either party may elect not to renew this
Agreement by providing written notice to the other party not less than
ninety (90) days before the end of the Initial Term or the then-current
Renewal Term, as the case may be.
4.5 TERMINATION. In the event of the expiration or termination of this
Agreement all of the rights granted to Reseller pursuant to this
Agreement shall terminate; provided that Reseller may continue to resell
any SigNature DNA Markers that it has in inventory as of the effective
date of such termination so long as Reseller is not in default of its
obligations under ss.ss.2 or 3.
5. LIMITED WARRANTIES
5.1 WARRANTIES. Each party represents and warrants that (a) it is authorized
and has the right to enter into this Agreement; and (b) it has rights to
its products sufficient to complete the transactions contemplated by
this Agreement.
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5.2 DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS SS.5, THE SIGNATURE DNA
MARKERS AND ANY OTHER MATERIALS PROVIDED BY APPLIED DNA ARE PROVIDED "AS
IS" WITHOUT ANY WARRANTIES OF ANY KIND, AND APPLIED DNA SPECIFICALLY
DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NON-INFRINGEMENT.
6. PROPRIETARY RIGHTS
As between the parties, Applied DNA maintains all rights, title and
interest, including all Intellectual Property Rights, in and to the
SigNature DNA Markers and all of the technology relating thereto, and
except for the license rights expressly granted in ss.2 Reseller shalL
have no rights in or to the SigNature DNA Markers.
7. INDEMNITY
7.1.1 INDEMNITY. Reseller shall defend, indemnify and hold harmless Applied
DNA, its Affiliates, and their respective officers, directors, employees
and agents (each an "Indemnified Party") from and against any and all
claims, suits, losses, liabilities, damages, judgments, settlements,
costs and expenses (including but not limited to investigation costs and
attorneys' fees and expenses), that any Indemnified Party may suffer or
incur as a result of any claim by any third-party relating to the
Reseller Products.
7.1.2 PROCEDURE. Applied DNA or the affected Indemnified Party will (a)
promptly notify Reseller in writing of any such claim, provided,
however, that a delay in notifying Reseller shall not avoid Reseller's
indemnity obligations hereunder unless, and only to the extent that,
Reseller's ability to defend the claim has been materially prejudiced
thereby; and (b) provide to Reseller, at Reseller's expense, all
available information, assistance and authority reasonably necessary to
defend. Reseller shall, at its own expense, assume the defense of any
such claim or suit. In no event, however, shall Reseller settle any such
claim without the written consent of Applied DNA and the affected
Indemnified Party, which consent shall not be unreasonably withheld.
Reseller shall reimburse Applied DNA for any costs and expenses
(including without limitation reasonable attorneys' fees) incurred by
Applied DNA or an Indemnified Party in enforcing the aforesaid
indemnification.
8. LIMITATION OF LIABILITY
8.1 DISCLAIMER. IN NO EVENT SHALL APPLIED DNA OR ITS AFFILIATES OR PROVIDERS
BE LIABLE FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL OR
PUNITIVE DAMAGES (INCLUDING WITHOUT LIMITATION, LOSS OF PRODUCTION, LOSS
OF PROFITS OR OF CONTRACTS, LOSS OF REVENUE, LOSS OF OPERATION TIME,
LOSS OF GOODWILL OR ANTICIPATED SAVINGS, WASTED MANAGEMENT OR STAFF
TIME) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
MATERIALS PROVIDED BY APPLIED DNA PURSUANT HERETO, WHETHER IN AN ACTION
IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR
OTHERWISE, OR ITS TERMINATION, AND IRRESPECTIVE OF WHETHER APPLIED DNA
HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH DAMAGES.
8.2 LIMIT. APPLIED DNA'S MAXIMUM LIABILITY, WHETHER IN CONTRACT, TORT
(INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR BASED ON ANY CLAIM FOR
INDEMNITY OR CONTRIBUTION OR OTHERWISE, IN RESPECT OF EACH AND EVERY
EVENT ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, SHALL NOT
EXCEED THE AMOUNT PAID TO APPLIED DNA BY RESELLER IN THE TWELVE (12)
MONTH PERIOD IMMEDIATELY PRECEDING THE CLAIM GIVING RISE TO SUCH
LIABILITY.
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9. CONFIDENTIALITY
9.1 A party ("Recipient Party") that receives confidential or proprietary
information ("Confidential Information") from the other party
("Disclosing Party") agrees to use the Confidential Information of the
Disclosing Party only for the purposes set forth under this Agreement
and not to use such Confidential Information for any other purpose
whatsoever; ensure that only those of its directors, officers,
employees, consultants, contractors and agents who are concerned with
the carrying out of this Agreement have access to the Confidential
Information of the Disclosing Party on a "need to know" basis and are
informed of the secret and confidential nature of it and are bound by
obligations of confidentiality; and otherwise keep the Confidential
Information of the Disclosing Party secret and confidential and not
directly or indirectly disclose or permit to be disclosed to any
third-party for any reason without the prior written consent of the
Disclosing Party.
9.2 The obligations of confidence of each party referred to in this ss.8
will not extend to any Confidential Information of the other party that:
is or becomes generally available to the public other than by a breach
by a Recipient Party of the provisions of this ss.8; is developed
independently by the Recipient Party as demonstrated by written record
and without access or reference to, or use of, the Confidential
Information of the Disclosing Party; is in the rightful and lawful
possession of the Recipient Party prior to its disclosure by the
Disclosing Party as demonstrated by written record; or is rightfully and
lawfully disclosed to the Recipient Party by a third-party who
rightfully and lawfully obtained the Confidential Information, and
without breach of any obligation of such third-party to maintain the
confidentiality of such Confidential Information.
9.3 The Recipient Party may, on the advice of counsel, disclose Confidential
Information to the extent required by law, provided that, unless
prohibited by law, prompt written notice of the required disclosure is
given to the Disclosing Party so that it may seek appropriate relief to
prevent such disclosure, and that such disclosure will be only to the
extent so required and will be subject, if practicable, to prior
consultation with the Disclosing Party with a view to agreeing to the
timing and content of such disclosure.
9.4 All Confidential Information disclosed by the Disclosing Party to the
Recipient Party will be considered to be and will remain the property of
the Disclosing Party. In the event that a court or trustee assumes
partial or complete control over the assets of a Recipient Party based
on the insolvency or bankruptcy of that party, the Recipient Party will
to the extent permitted by law, take all steps necessary or desirable to
maintain the confidentiality and security of the Disclosing Party's
Confidential Information and to ensure that the court or trustee
maintains that Confidential Information in confidence in accordance with
this Agreement.
9.5 Nothing in this ss.8 shall be deemed to conflict with or otherwise
restrict the rights granted in ss.2 to use the SigNature DNA Markers in
Reseller Products and to distribute them to Reseller's customers. The
obligations of the parties under this ss.8 will survive the expiration,
rescission, assignment or termination of this Agreement for whatever
reason.
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10. FORCE MAJEURE
Neither party shall be responsible to the other for failure to perform
any of the obligations imposed by this Agreement; provided that such
failure shall be occasioned by fire, flood, explosion, lightning,
windstorm, earthquake, subsidence of soil, failure or destruction, in
whole or in part, of machinery or equipment or failure of supply of
materials, discontinuity in the supply of power, governmental
interference, civil commotion, riot, war, terrorism, strikes, labor
disturbance, transportation difficulties or labor shortage or by any
cause beyond the reasonable control of the party in question; and
provided further that the party seeking to avail itself of the
protections of this ss.10 use reasonable efforts to restore performance
as soon as possible, and regularly inform the other party of its
progress to that end. Should a force majeure event relied upon by a
party materially impact the other party's rights under this Agreement
for a period of more than one hundred eighty (180) days, then the other
party may terminate this Agreement upon ten (10) days written notice to
the non-performing party.
11. MISCELLANEOUS
11.1 GOVERNING LAW. This Agreement shall be governed and interpreted in
accordance with the laws of the State of New York, except to the extent
that New York conflict of laws rules would require the application of
the law of another state or country.
11.2 JURISDICTION. Any action arising out of or related to this Agreement
shall be litigated in, and only in, one of the federal or state courts
located in the City of New York, State of New York.
11.3 SERVICE OF PROCESS. Each party agrees that service of process may be
made upon it at the address set forth in ss.11.6.
11.4 EXPORT RESTRICTIONS. Any know-how, technology or documents to be
transferred hereunder shall not be exported by Reseller except in
compliance with applicable United States governmental regulations.
11.5 RELATIONSHIP OF THE PARTIES. This Agreement does not constitute a
partnership agreement, nor does it create a joint venture or agency
relationship between the parties. Neither party shall hold itself out
contrary to the terms of this ss.11.5. Neither party shall be liable to
any third party for the representations, acts or omissions of the other
party.
11.6 NOTICES. Unless otherwise expressly provided for, all notices, requests,
demands, consents or other communications required or permitted under
this Agreement must be in writing and must be delivered personally or
sent by certified or registered mail (postage prepaid and return receipt
requested) or by a nationally recognized courier using its tracking
system, to the other party at the address set forth below (or to any
other address given by either party to the other party in writing):
if to Applied DNA, addressed to: if to Reseller, addressed to:
Applied DNA Sciences, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile:
Attention: ▇▇▇▇ ▇▇▇▇▇▇ Attention:
TECHNOLOGY RESELLER AGREEMENT
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In the case of mailing, the effective date of delivery of any notice,
demand or consent shall be considered to be ten (10) days after proper
mailing. In the case of courier, the effective date of delivery of any
notice, demand or consent shall be upon actual delivery as confirmed by
the courier's tracking system.
11.7 WAIVER AND AMENDMENT. No waiver, amendment or modification of this
Agreement shall be effective unless it is in writing and signed by the
party against whom the waiver, amendment or modification is sought to be
enforced. No failure or delay by either party in exercising any right,
power or remedy under this Agreement shall operate as a waiver of the
right, power or remedy. No waiver of any term, condition or default of
this Agreement shall be construed as a waiver of any other term,
condition or default.
11.8 SEVERABILITY. If any provision of this Agreement is finally held by a
court of competent jurisdiction to be unlawful, the remaining provisions
of this Agreement shall remain in full force and effect, unless as a
result of such unlawful provision there is a material failure of
consideration as to a party and such party is unwilling to waive such
failure.
11.9 ASSIGNMENT. Neither this Agreement nor any right (except as otherwise
stated in Section 2) or obligation under this Agreement may be assigned
by either party without the prior written consent of the other party.
11.10 HEADINGS. The section and paragraph headings of this Agreement are
intended as a convenience only, and shall not affect the interpretation
of its provisions.
11.11 SECTION REFERENCES. Unless the context otherwise requires, all
references to a particular section will be a reference to that section,
in or to this Agreement, as it may be amended from time to time pursuant
to this Agreement.
11.12 CONSTRUCTION. Both parties have participated in the drafting of this
Agreement, which Agreement is the result of negotiations between the
parties. The rule of "construction against the draftsman" shall have no
applicability to the interpretation or construction of the provisions of
this Agreement and no provision of this Agreement shall be construed
against either party as the drafter.
11.13 SINGULAR AND PLURAL TERMS. Where the context of this Agreement requires,
singular terms shall be considered plural, and plural terms shall be
considered singular.
11.14 CURRENCY. All references in this Agreement to dollars are U.S.
denominated currency.
11.15 ENTIRE AGREEMENT. This Agreement constitutes the complete and final
agreement and understanding between the parties, and supersedes and
replaces all prior negotiations and agreements between the parties
concerning its subject matter. The interpretation of this Agreement may
not be explained or supplemented by any course of dealing or
performance, or by usage of trade.
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11.16 EXECUTION REQUIRED. This Agreement shall not be binding against either
party until it is executed by both parties.
11.17 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which when so executed will be an original, and both of which will
constitute one and the same instrument. Complete sets of counterparts
will be distributed to each party.
11.18 COSTS. Each party will bear its own costs, fees and other expenses
(including legal fees, costs and expenses) incurred in the preparation
and execution of this Agreement. Each party to this Agreement shall, at
its own expense except as otherwise expressly provided herein, furnish,
execute and deliver all documents and take all actions as may reasonably
be required to effect the terms and purposes of this Agreement.
11.19 REMEDIES CUMULATIVE. Unless stated otherwise in this Agreement, the
rights and remedies of the parties under this Agreement are cumulative
and not exclusive of any rights or remedies provided herein or by law.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
APPLIED DNA SCIENCES, INC. RESELLER:HPT International LLC
By (sign) By (sign):
/s/ ▇▇▇▇ ▇▇▇▇▇▇ /s/ Israel Sar-El
----------------------------- -----------------------------
Printed name: ▇▇▇▇ ▇▇▇▇▇▇ Printed name: Israel Sar-El
Title: Comptroller Title: C.E.O.
Date: 3/16/07 Date: 3/19/07
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SCHEDULE A
RESELLER PRODUCTS
Reseller may use the SigNature DNA Markers in the following of its products for
distribution to its customers:
Holograms, Nylon 6 tags, other plastic or metal food tags and any other
identification material mutually agreed upon by the parties.
TECHNOLOGY RESELLER AGREEMENT
SCHEDULE A
Confidential
SCHEDULE B
FEE SCHEDULE
Reseller shall pay Applied DNA the following fees:
1. AMOUNT. In respect of all Reseller Products having the SigNature DNA Markers
fixed to them that are distributed to third parties, Reseller shall pay Applied
DNA $[*] per Reseller Product incorporating SigNature DNA Marker(s) that is
distributed to a third party.
2. Second level forensic authentication (Real Time PCR) will be provided at our
Stony Brook Lab at a cost to Reseller of $[*] per test. Third level forensic
authentication test (CE Sequencing) will be provided at our Stony Brook Lab at a
cost to Reseller of $[*] per test.
3. PAYMENT TERMS. Reseller shall calculate the fees due to Applied DNA at the
end of each calendar month, and shall pay to Applied DNA all such fees within
ten (10) days following the last day of such calendar month, providing with that
payment an accounting report itemizing all products distributed and to whom they
were distributed.
TECHNOLOGY RESELLER AGREEMENT
SCHEDULE B