EXHIBIT 10.1
 
DISTRIBUTION AGREEMENT
 
This DISTRIBUTION AGREEMENT (the “Agreement”), dated April 24, 2014 is entered
into by and between Dais Analytic Corporation, a New York corporation (“Dais”),
with an address of 11552 Prosperous Drive, Odessa, FL USA, and SoEX (Hong Kong)
Industry & Investment Co., Ltd., a Hong Kong corporation with its registered
address at Room 11-2-1103 11/F Kowloon Bldg 555, Nathan Rd Mongkok KL, Hong Kong
(“Distributor”). Dais and Distributor are hereinafter sometimes individually
referred to as a “Party” and collectively referred to as the “Parties.”
 
RECITALS
 
WHEREAS, Dais manufactures nanotechnology-based Energy Recovery Ventilator
air-to-air exchanger cores containing MTM (“Cores”) and certain MTM products for
use in certain water treatment facilities as agreed upon between the parties
(the “Products”);
 
WHEREAS, Dais holds the rights to certain intellectual property pertaining to
certain MTM and the use thereof in energy recovery ventilators and water
treatment applications, consisting of Intellectual Property Rights, Know-How,
Trade Secrets, and Patents; and
 
WHEREAS, Distributor desires to obtain the right to distribute and market Dais’s
Products for incorporation in energy recovery ventilators sold and installed in
commercial, industrial and residential buildings, transportation facilities and
vehicles, and MTM for incorporation in applicable water treatment facilities
(“Field”) in mainland China, Hong Kong, Macao and Taiwan (the “Territory”) and
Dais is willing to grant such right under the terms and conditions hereof;
 
WHEREAS, Distributor desires to obtain an exclusive license in the Territory to
utilize the Intellectual Property, and certain improvements thereto in the
manufacture and sale of Products in the Field and Territory and to purchase its
requirements of MTM from Dais, subject to terms and conditions of this
Agreement;
 
WHEREAS, Distributor may use agents, (the “Buyer(s)”), for the installation,
maintenance, sale and use of the Products in the Field and Territory; and
 
NOW THEREFORE, in consideration of the premises and mutual and dependent
promises set forth herein, the parties hereto agree as follows:
 

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1. APPOINTMENT OF DISTRIBUTOR.
 
(a) Subject to the terms of this Agreement, Dais hereby appoints Distributor,
and Distributor accepts appointment, as the exclusive distributor of the
Products in the Field and Territory. In consideration for such an appointment,
Distributor agrees to pay Dais a one-time upfront nonrefundable fee of Two
Hundred and Fifty Thousand Dollars (US$250,000), of which (i) 10% (US$ 25,000)
shall be paid to Dais within five (5) Business Days of the execution of this
Agreement, and (ii) the remaining 90% (US$225,000) shall be paid to Dais on or
before the earlier of (i) one hundred and eighty (180) days of the execution of
this Agreement and (ii) the date that SoEX (Beijing) Environmental Protection
Technology Company Limited is registered and can legally transfer the US$225,000
to Dais. Nothing in this Agreement is intended to limit or prevent Dais or its
Affiliates from, distributing or selling MTM to the Distributor from the
Territory. Distributor shall have a right of first refusal to integrate newer
applications and uses of Dais’s technology in the Territory during the term of
this Agreement. For each new product Dais wants to sell in the Territory, Dais
shall provide written notice to the Distributor and Distributor shall have
thirty (30) calendar days to acknowledge its intent and terms to sell such
product. Upon such an acknowledgment by the Distributor, the Parties will update
this Agreement to include the new product, so that the terms and conditions of
this Agreement will govern the sales, distribution and licensing of such
product, as though such product fell within the definition of Products under
this Agreement in the first place. To the extent there are issues regarding the
new Products that are not covered by this Agreement, the Parties may enter into
an amendment to this Agreement to address such issues.
 
Dais shall not distribute, sell, lease or otherwise transfer the Products to
anyone other than the Distributor for use in the Field and Territory. Dais shall
refer all inquiries from potential customers in the Field and Territory to the
Distributor. All existing agreements (including Purchase Orders) with existing
Buyers and end users in the Territory shall be provided to the Distributor
within 5 Business Days of the execution of this Agreement.
 
Dais agrees to coordinate with Distributor on any new product releases and
relevant initiatives in the Field and Territory. Dais agrees not to disclose any
information regarding any new products or new applications of the MTM and/or
Aqualyte technology in the Field and Territory without first consulting
Distributor, and Distributor agrees to do the same with Dais.
 
Distributor may not sell, lease, distribute, use, install, promote, dispose of
or otherwise transfer the Products outside of the Field and Territory without
the express prior written consent of Dais. Distributor shall not sell, lease,
distribute, use, install, promote, dispose of or otherwise transfer the Products
to any person or entity including, but not limited to Buyers, that Distributor
has reason to believe has or will sell, lease, use, install, distribute,
promote, dispose of or otherwise transfer the Products outside of the Field and
Territory. For purposes of this Agreement, an “Affiliate” shall mean any person
or entity which controls, is controlled by or is under common control with a
party to this Agreement. For the purpose of this Agreement "control" shall mean
the ownership of at least 50% of the entity (or such lesser percentage which is
the maximum allowed to be owned by a foreign corporation in a particular
jurisdiction) having the power to vote on or direct the affairs of the entity
and any person, firm, partnership, corporation or other entity actually
controlled by, controlling or under common control with a party to this
Agreement.
 
(b) Distributor shall have the right to use qualified Buyers for the
installation, engineering, maintenance, sale, lease, and use of the Products in
the Field and Territory subject to the terms and conditions of this Agreement.
Notwithstanding the foregoing, (1) any Buyers appointed by Distributor shall be
subject to the terms and conditions of this Agreement as it applies to
Distributor and (2) Distributor shall use commercially reasonable efforts to
ensure such Buyers are in compliance with this Agreement. Upon the reasonable
request of Dais, Distributor shall terminate any Buyer who is determined to be
in non-compliance with the terms and conditions of this Agreement by either Dais
or the Distributor. Distributor shall be responsible for any breaches by a Buyer
of the Distributor’s obligations hereunder.
 

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(c) Dais, in its sole discretion, may from time to time during the term of this
Agreement modify the Products with respect to their design, function, appearance
or in any other respect, without incurring any liability to Distributor. Upon
sixty (60) calendar days’ prior written notice, which may be waived by the
Parties, Dais shall have the right, at any time, to make changes to or
discontinue the manufacture or sale of any of the Products without incurring any
liability to Distributor; provided, however, the requirement for sixty (60)
calendar days’ prior written notice shall be waived in any circumstance where
the change or discontinuation is due to discontinuation or changes in Dais’s
materials used in its Products or changes in any of the Products for safety
reasons or engineering reasons.
 
(d) Without written consent from Dais, Distributor may not alter, modify,
reverse engineer, decompile or change any Product, components thereof, its
package, and package contents, labeling, manufacturer’s directions or trademark
for any reason. Distributor will make commercially reasonable efforts to prevent
its Buyers and customers from engaging in any such acts. If Distributor, or
Buyer(s), modifies, reverse engineers, decompiles or changes any Product or
Product component, package or package contents, labeling, Dais’s directions or
trademark, or sells, leases or otherwise transfer any Product to a third party
when it has reason to believe such third party has or will undertake any such
act the offending party(s) will; (i) cease being able to sell, lease,
distribute, use, promote, dispose of or otherwise transfer such Products, (ii)
immediately agree to cease or cause to cease such damaging activities, and (iii)
the offending parties will pay Dais (A) all gross revenues the Dais has lost,
regardless of the passage of time, by such improper activities (B) reimburse
Dais for any of its costs, including consequential damages and (C) pay a 250,000
US Dollar penalty within ten (10) calendar days of notification of such event by
Dais. Distributor shall promptly notify Dais of any such infraction.
 
(e) Distributor shall comply with all applicable laws, rules and regulations
related to the sale, lease, distribution, promotion, marketing, use,
installation, disposal, handling, storage and shipment of the Products and shall
use its commercially reasonable efforts to assure its customer comply with all
such laws, rules and regulations.
 
(f) This Agreement is designed to further the interests of both parties in
developing and maintaining the maximum sales volume for the Products in the
Field and Territory. Distributor shall use its commercially reasonable efforts
to actively promote and sell Dais’s Products within the Field and Territory.
 
(g) In the event that Distributor’s payments to Dais or its Affiliates for
Products ordered pursuant to this Agreement do not equal or exceed Two Hundred
Fifty Thousand Dollars ($250,000) in 2014, Three Million U.S. Dollars
($3,000,000) in 2015, and Fifteen Million U.S. Dollars ($15,000,000) in any
calendar year of this Agreement thereafter, Dais may terminate this Agreement
pursuant to the provisions of Section 14.
 
2. PRICING OF PRODUCTS, PAYMENTS AND TERMS.
 
(a) The initial prices for the Products will be as set forth in an agreement
between the Parties. Distributor is entitled to a downward price adjustment when
the volume order exceeds the volume set forth such schedule. Dais and its
Affiliates may change the prices of any or all of the Products in accordance
with Section 5. Distributor may determine the prices at which it sells the
Products. Distributor shall have sole responsibility for remitting to Dais or
its Affiliates full payment for each Product it purchases from Dais or its
Affiliates pursuant to the terms and conditions of this Agreement and related
order and acceptance documents.
 

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(b) The price shown on the schedule to be agreed upon by the Parties shall
include taxes (such as Florida sales tax), but does not include taxes, shipping
expense after the Products are delivered to the shipping point specified in
Section 4 and duties and levies applicable to Distributor in the Territory
(“Distributor Expense”). It is the responsibility of the Distributor to
accurately report and pay the Distributor Expense in full and on a timely basis.
In the event Dais or its Affiliates are required by any law or regulation to
collect or pay any such Distributor Expense, said Distributor Expense will be
billed to Distributor and payable in accordance with the terms of this
Agreement. Florida sales taxes will not be billed to Distributor if Distributor
delivers to Dais a valid and applicable sales tax exemption certificate or
otherwise proves that it is exempt from Florida sales taxes. Distributor must
provide to Dais evidence that any such sales tax exemption is in effect on an
annual basis or when reasonably requested by Dais. Dais will provide support to
Distributor in obtaining such an exemption.
 
3. ORDERING AND INVENTORY.
 
(a) All purchase orders submitted by Distributor shall be in the form set forth
in Schedule A and be subject to acceptance by written notice of acceptance
within five (5) Business Days of the date of the purchase order. If Dais and its
Affiliates are not able to accept a purchase order according to the terms of the
purchase order, Dais shall contact Distributor promptly and review the terms
with Distributor. Each purchase order submitted by Distributor shall be binding
upon Distributor when such a purchase order is duly accepted by Dais and shall
set forth the type of Products ordered, quantities to be supplied and delivery
dates. No term or condition set forth in any purchase order submitted by
Distributor will have any effect other than the identification of Product type,
quantity and delivery dates unless agreed to in writing by Dais. All other terms
and conditions contained in Distributor’s purchase orders or Dais’s sales
acknowledgement shall be deemed null and void. Unless agreed to in writing by
the Parties at the time of order and acknowledgement. The terms set forth in
this Agreement shall apply to all purchase orders placed by Distributor and
accepted by Dais or its Affiliates.
 
(b) Invoices will be issued by Dais or its Affiliates promptly upon acceptance
of the purchase order. Invoices will include the Products’ price which includes
taxes, levies, duties and fees applicable to the sale of the Products by Dais or
its Affiliates to Distributor. Payment for twenty percent (20%) of the invoice
amount is due within three (3) Business Days from the date of the invoice with
the remainder of the invoice amount due within thirty (30) days from the date of
ocean shipment or upon receipt of the original Bills of Lading by Distributor or
Distributor’s bank whichever is sooner. Payment can be made by either telegraph
transfer or Letter of Credit, issued by a reputable bank in the Territory with a
letter of credit under the same terms as the sample Letter of Credit in Schedule
E. All payments are to be made in U.S. Dollars.
 
(c) A late payment fee of the greater of 1.5% per month (18% per year) or the
maximum rate permitted by applicable law will be applied to all payments due
under this Agreement, invoices for Products and services and Payments
(calculated and paid pursuant to Section 8) not paid within forty-five (45)
calendar days of the due date, with interest accruing from the date payment was
due through the date that payment in full of the overdue invoice plus the
interest accrued thereon is received by Dais or its Affiliates. Any and all
expenses incurred by Dais and its Affiliates in the collection of any unpaid
invoice including, but not limited to, reasonable attorney’s fees, shall be
added to the amount due from Distributor under said invoice.
 
(d) If, at any time, it becomes necessary for Dais or its Affiliates to allocate
shipments, Dais and its Affiliates will take whatever action in its judgment is
fair and appropriate.
 

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4. SHIPPING OF PRODUCTS. All Products will be sold, at Dais’s sole discretion,
either FOB Odessa, Florida, or Ex Works, Dais’s Factory in Florida, with
transportation charges to be paid by Distributor. Risk of loss of the Products
will pass to the Distributor upon such delivery by Dais or its Affiliates. The
Distributor’s carrier and Distributor shall be responsible for any damage in
shipment. Requests for adjustments on shipping errors (including concealed
shortages/overages) must be reported within ten (10) Business Days after receipt
of the shipment. Distributor will provide suitable storage facilities and follow
all reasonable storage and handling precautions including, but not limited to,
any instructions provided by Dais or its Affiliates, at all times while the
Products are in Distributor’s possession or in transit from Distributor to its
customers and shall instruct its customers as to such storage and handling
precautions.
 
5. AGREEMENT TO SUPPLY.
 
(a) During the Term, except as provided herein at Section 5(c), Distributor
agrees to purchase, exclusively from Dais, Distributor’s (and any Buyer’s)
requirement of Products for use in the Field and Territory. Distributor shall
pay Dais the price for each Product purchased as agreed between Dais and
Distributor (“Purchase Price”), set forth in a schedule to be agreed upon by the
parties, as such Purchase Price may be adjusted, supplemented or amended from
time to time in accordance with this Agreement. The Purchase Price shall be
subject to adjustment by Dais for any actual cost increase Dais incurs in
producing the Product plus twenty five (25%) percent of said increase. Such
price increases shall be in response to actual changes in Dais’s costs and shall
not be effective for forty five (45) calendar days after prior written notice to
Distributor. Evidence of cost changes shall accompany such a notice. Distributor
shall have the right to request reasonable documentation of any such increase
and shall have the right to terminate the Agreement in the event Dais incurs
cost increases in a given year of the Agreement which exceed fifteen (15%)
percent of the average purchase price paid by Distributor for the Product in the
previous year of the Agreement. Any such termination by Distributor shall be
made within thirty (30) calendar days of receiving notice of a cost increase
from Dais or said right is waived. For the purpose of this Agreement “Contract
Quarters” shall be defined as January 1 to March 31, April 1 to June 30, July 1
to September 30 and October 1 to December 31 for each year of the term, unless
otherwise agreed in writing by the Parties
 
(b) Starting with the calendar quarter beginning April 1, 2015, the Distributor
shall provide, not less than thirty (30) calendar days prior to the commencement
of each Contract Quarter, a forecast for the Products it will purchase from Dais
under this Agreement during the next two Contract Quarters, including quantities
for each Product and requested delivery schedules for each Product and for each
Contract Quarter (each a “Rolling Quarterly Forecast”). Each Rolling Quarterly
Forecast shall evidence a binding obligation of Dais to supply the Product and
for Distributor to purchase the Product set forth on such Rolling Quarterly
Forecast. Subject to the foregoing, each time the Quarterly Rolling Forecast is
updated, Distributor may increase the quantities forecast for the Contract
Quarter immediately preceding the current Contract Quarter by up to twenty
percent (20%) and may decrease the quantities forecasted for that same Contract
Quarter by no more than ten percent (10%). Further adjustments to said Contract
Quarter purchases may be made upon the written agreement of the Parties
provided, Dais shall not deny a request by Distributor for an increase in the
quantity of Products forecasted for said Contract Quarter if, after taking into
account any other orders or commitments Dais may have for its products in that
period, it possesses sufficient Products and labor to supply the Distributor’s
request for additional Products pursuant to the delivery schedule proposed. For
a Contract Quarter that has not been previously forecast, Distributor may set
the forecast, at any level mutually acceptable by the Parties. The Parties shall
work cooperatively in good faith making reasonable efforts to insure that market
demand for the Products are met as requested. The Products shall be purchased
and paid for by Distributor pursuant to the terms and conditions of this
Agreement. No term or condition set forth in any purchase order or sales
acknowledgment will have any effect other than the identification of Products
ordered, quantity of each Product and delivery dates (subject to the provisions
herein), unless mutually agreed to by the Parties in writing. All other terms
and conditions contained in any such purchase orders or sales acknowledgments
shall be deemed null and void, unless mutually agreed to by the Parties in
writing. The terms set forth in this Agreement shall apply to all purchase
orders placed by Distributor and accepted by Dais, unless mutually agreed
otherwise by the Parties.
 

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(c) Dais and Distributor agree that Distributor shall have the right to
assemble, build, manufacture and integrate the Products (excluding MTM) in the
Field and Territory as of the date of this Agreement after payment to Dais of
the $500,000 provided for in Section 1(a) and Section 8(b) in this Agreement.
Dais or its affiliates shall have the right to manufacture certain Products in
the Territory if, after consulting the Distributor and giving the Distributor
thirty (30) days from the date of a written notice from Dais to Distributor for
Distributor to consider the option of manufacturing such Products, Distributor
responds to Dais in writing that it does not wish to manufacture such products.
 
Distributor shall be permitted to employ the license granted under Section 6 to
manufacture the Products (excluding MTM) pursuant to the terms of this Section 5
and Agreement. In addition Distributor may sublicense the right to manufacture
said Products subject to the terms and conditions of this Agreement, as
necessary to a contract manufacturer designated by Distributor and approved by
Dais, with said approval not to be unreasonably withheld, conditioned or
delayed. Prior to granting any such sublicense, Distributor will secure from
said contract manufacturer a confidentiality agreement containing terms and
conditions reasonably acceptable to Dais but in no event less restrictive than
the terms contained herein. Notwithstanding any provision of this Agreement to
the contrary, Distributor will, at its expense, adhere to and enforce said
confidentiality agreement and shall indemnify and hold harmless Dais from and
against any and all claims, losses, expenses, including without limitation
reasonable attorneys’ fees, damage, causes of action and liabilities of every
kind and nature asserted by any party or incurred by Dais which result from or
arise out of any license granted or used pursuant to the terms of this Section
5. Any sub-license granted under this Section 5 shall be revocable and
specifically limited to producing Product for Distributor pursuant to the terms
and conditions of this Agreement. Any sublicense permitted hereunder shall not
be sub-licensable or assignable. Distributor shall not be required to pay Dais
the Purchase Price for any Product produced by Distributor or its contract
manufacturer pursuant to this Section 5, but shall pay Dais the Royalty Payment
set forth in Section 8 for the Distributor’s Net Sales Price of Products or
products, components or systems that include Products Distributor.
Notwithstanding anything to the contrary contained in this Agreement,
Distributor agrees it shall not at any time manufacture, or have manufactured
for its use, produce, purchase or procure MTM other than from Dais.
 
(d) Dais (directly or through its subcontractor, if any) shall test each Product
it manufactures under this Agreement and provide a report confirming that it
meets the specification (“Specifications”) as disclosed in Schedule B, as may be
updated and supplemented from time to time in accordance with this Agreement
(“Specifications Disclosure”). Distributor reserves the right to test Product
from each such production run, employing the procedure outlined in the
Specifications Disclosure (Product Acceptance Test Criteria), within fifteen
(15) Business Days of receipt of each Product order. Product not meeting the
Specification, if not damaged in shipping or by improper handling, may be
rejected by Distributor as non-conforming upon notice made to Dais within the
aforementioned period. Failure to provide said notice in accordance with this
provision shall bar any claims by Distributor with respect to the Products
delivered. Dais will use commercially reasonable efforts to supply Distributor
replacement Products within thirty (30) Business days following receipt of a
notice of rejection.
 
(e) Distributor shall, with said notice, provide Dais with any Products believed
to be non-conforming and all reasonable information Dais may request with regard
to such Products. If the Parties agree the Products do not meet Specifications,
the Products Dais provides as a replacement hereunder shall be provided without
charge. Dais shall have the right to request the Products be returned to it for
inspection. If Dais disagrees with Distributor’s determination or determines
that the Products were damaged in shipping or handling and the Parties are
unable to resolve the issue then such Products shall be submitted to a mutually
acceptable third party test facility. Said test facility shall determine whether
the Products in question meet the Specifications and, if so, if the failure was
due to damage inflicted in shipping or handling. The Parties agree that such
test facility’s determination shall be final and determinative. If such test
facility determines that the Product in question did meet Specifications,
Distributor shall accept the Product and shall pay for each Product as well as
any replacement Products shipped by Dais as a result of a rejection notice. The
foregoing shall be Distributor’s sole remedy for non-conforming Product.
Distributor shall not return any Products, at any time unless (i) such Products
are non-conforming, as determined by the provisions of this Section 5 and (ii)
upon prior written approval of Dais.
 
(f) Notwithstanding any provision of this Agreement to the contrary, any
liability of Dais , regardless of nature, with respect to the Products, shall
not exceed the invoice price of the Products to which the claim relates.
 

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6. LICENSING OF INTELLECTUAL PROPERTY.
 
(a) Dais hereby grants to Distributor, subject to the terms and conditions of
this Agreement, to the extent that it lawfully may, the license and right for
the term of this Agreement, to manufacture, sell, lease and distribute Products
(excluding manufacture of MTM), and to use the Intellectual Property in
connection therewith, in the Field and Territory subject to the terms and
conditions of this Agreement (the “License”). The foregoing right and license
shall terminate upon termination of this Agreement, regardless of reason. Other
than as specifically provided in this Agreement, Distributor may not sublicense
any rights granted herein without the prior written authorization of Dais (which
such authorization will not be unreasonably withheld, conditioned or delayed)
and provided any such sub-licensee accepts in writing all of the terms and
conditions of this Agreement; provided, however, the Distributor shall not
sublicense the agreement to a competitor of Dais or a person or entity that has
a non-compete agreement with Dais. Notwithstanding the foregoing, no provision
in this Agreement shall be deemed to constitute an assignment to the Distributor
of the Intellectual Property and all right, title and interest to the
Intellectual Property shall remain vested in Dais.
 
(b) Upon the termination of this Agreement, regardless of reason, any and all
sub-licenses granted hereunder shall terminate. In the event Distributor fails
to enforce the terms and conditions of any sublicense, Dais or its Affiliates
may opt, upon fifteen (15) calendar days prior written notice to the
Distributor, to institute and prosecute an action in its name or in the name of
the Distributor as may be desirable to protect Dais’s rights and interests. The
Distributor shall join as a party to any such action if required by law or
procedure. In the event the Distributor brings any action to enforce the terms
and conditions of any sublicense, upon the Distributor’s request and at
Distributor’s expense, Dais shall cooperate with such enforcement action.
 
7. PARTIES INTELLECTUAL PROPERTY RIGHTS.
 
(a) The parties agree that any Improvements to the Intellectual Property made or
carried out by: (i) Distributor, or its employees, officers, Affiliates or
agents; or (ii) Dais, or its employees, officers, Affiliates or agents, shall be
promptly disclosed to the other Party, in confidence and in such detail as is
reasonably required to permit the Party to use such Improvement. Dais shall own
and hold all right, title and interest to all such Improvements, except that the
Distributor shall have the right of use of such Improvements during the term of
this Agreement pursuant to the license granted in Section 6.
 
(b) During the term of this Agreement, the Distributor agrees to identify and
mark all products produced by the Distributor with such indications of the
Patents and/or Trademarks as Dais or its Affiliates may reasonably direct or
approve in writing to protect the Intellectual Property.
 
(c) Notwithstanding any provision of this Agreement to the contrary, Dais shall
own any intellectual property of any nature including but not limited to all
Know-How and any amendments, modifications or Improvements thereto, regardless
of nature, created or developed, during the term of this Agreement, by or for
Dais, by or for the Distributor or by or for Distributor in concert with any
other party, including Dais, which is related directly or indirectly to MTM and
its uses (including but not limited to any intellectual property and /or
know-how of any nature relating to the synthesis, resins, or fabrication of MTM)
(“Rights”). The Distributor shall promptly inform Dais in writing of any such
Rights and shall provide reasonable guidance with respect to instructing Dais as
to use thereof.
 
(d) The Distributor shall assign ownership of any such Rights or Improvements to
Dais and shall take all reasonable actions to assist Dais, at Dais’s expense
with respect to the Rights, in securing and enforcing any patents the Dais may
seek relating thereto.
 
(e) The Distributor shall pay all Maintenance Fees within thirty (30) calendar
days of receipt of an invoice from Dais. Said invoice shall include reasonable
support of the charges.
 

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(f) Each Party shall promptly inform the other of any suspected infringement of
any claims of the Patents, or any misuse, misappropriation, theft or breach of
confidence of the Intellectual Property in the Field and Territory by a third
party, and with respect to such activities as are suspected, Dais shall have the
right but not the obligation, to institute an action for infringement, misuse,
misappropriation, theft or breach of confidence of the Intellectual Property
against such third party. If Dais fails to bring such an action or proceeding
within a period of sixty (60) calendar days after receiving notice thereof, then
the Distributor shall have the right to prosecute at its own expense any such
claim. Should either Dais or the Distributor commence suit under the provisions
of this Section 7 and thereafter elect to abandon the same, it shall give timely
notice to the other Party who may, if it so desires, continue the prosecution of
such action or proceeding at its own expenses. Any damages recovered from such
action will be divided between the Parties in proportion to the percentage of
such costs which they have paid. Neither Dais nor Distributor shall settle any
action covered by this Section 7 without first obtaining the consent of the
other Party, which consent shall not be unreasonably withheld, conditioned or
delayed.
 
(g) In the event the parties create any Jointly Developed Intellectual Property,
Dais shall own said property and Distributor shall be granted a royalty free
license to use said intellectual property in the Territory subject to similar
terms as those provided in the license granted in Section 6 and the terms of
Section 7 (a) – (f).
 
(h) Distributor Intellectual Property shall be owned solely by Distributor. Upon
request of Dais, Distributor shall grant Dais a license to use said Intellectual
Property. The license shall be similar in scope to the license provided herein,
including but not limited to one-time license fee and royalty payments.
 
8. OBLIGATIONS RELATED TO INTELLECTUAL PROPERTY.
 
(a) At the request of the Distributor, Dais shall provide reasonable support,
via telephone or electronic means, regarding the Products in the Field and
Territory. If Dais employees need to travel to the Territory in the 2014
calendar year to provide technical support, the Distributor shall pay all
travel, lodging and other local expenses of such Dais employee or employees.
After the 2014 calendar year, if Dais employees need to travel to the Territory
to provide support the Distributor shall pay the travel expenses of such Dais
employee or employees plus $60- $105 per working hour (hourly amount varies due
to the skill level of the Dais employee requested, travel and transit time
excluded), as evidenced by time sheets submitted by such Dais employee(s) and
acknowledged by Distributor, which acknowledgement shall not be unreasonably
withheld, unless otherwise negotiated. Any additional support shall be upon
terms and conditions to be agreed by the Parties.
 
(b) In addition to other payments specified in this Agreement, the Distributor
shall pay Dais with respect to the license granted under Section 6, (i) a
one-time upfront non-refundable license fee of Two Hundred and Fifty Thousand
Dollars (US$250,000), of which (A) 10% (US$ 25,000) shall be paid to Dais within
five (5) Business Days of the execution of this Agreement, and (B) the remaining
90% (US$225,000) shall be paid to Dais on or before the earlier of (1) one
hundred and eighty (180) days of the execution of this Agreement and (2) the
date that SoEX (Beijing) Environmental Protection Technology Company Limited is
registered and can legally transfer the US$225,000 to Dais and (ii) a royalty on
the Distributors’ Net Sales Price of the Distributor’s sales of Products or
products, components or systems that include Products which are leased,
transferred or disposed of by or for the Distributor pursuant to and during the
Term of this Agreement (“Royalty Payment”). The Royalty Payment shall be
calculated according to the amount agreed upon by the Parties and made at the
end of each calendar quarter (i.e. March 31, June 30, September 30 and December
31). Dais may verify the accuracy of the Royalty Payment by requesting a copy of
the Distributor’s audited annual financial report signed and stamped by the
Distributor’s auditors. Distributor shall provide a letter stating there has
been no fee-bearing activity to Dais for any royalty period in which no royalty
bearing activity has occurred. The terms of this Section 8(d) shall survive any
termination or expiration of the Agreement for a period of three (3) years. The
Parties agree that the failure to file or pay a Royalty Payment in full as
required hereunder shall be considered a material default. (c) The Distributor
agrees to keep true and accurate records, files and books of accounting relating
to the Products sold, leased, transferred or otherwise disposed of and in
sufficient detail so as to confirm the accuracy of all Royalty Payments due
hereunder.
 

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(d) The Distributor shall build Cores to standards set by the Air Conditioning,
Heating, and Refrigeration Institute (AHRI)’s Standard 1062, and Dais. The
Distributor or its qualified agent shall test each enthalpy Core using Dais
approved test equipment to test for core air-stream leakage in a ‘dead-headed’
configuration as well as for total enthalpy. The Distributor must maintain a
record of each test.
 
9. DISTRIBUTORS OBLIGATIONS.
 
(a) Distributor at its own cost agrees, to (i) use its commercially reasonable
efforts to sell the Products and increase demand for the Products, including but
not limited to development and implementation of a business plan and strategy;
(ii) maintain an adequate number of full-time, personnel trained in marketing,
sales, and operations of the Products; (iii) have Distributor’s or Buyer’s sales
representatives, as the case may be, participate in any Dais’s sales and
technical training programs and such trade shows and sales meetings as Dais may
reasonably designate from time to time; (iv) provide demonstration assistance to
promote the Products; (v) allow Dais, at Dais’s option, to participate during
Distributor’s or Buyer’s sales meetings at no charge to Dais; (vi) generate and
qualify sales leads; (vii) support the sales process with cost proposals,
demonstrations, customer agreements, etc.; (viii) assist current and new
customers in ordering appropriate Products for their needs; (ix) promptly
deliver Products to its customers upon order; (x) maintain adequate sales and
warehouse facilities and sufficient inventory to fulfill the requirements of its
customers; (xi) maintain adequate records with respect to the Product (to
include, without limitation, serial and model numbers, installation date and
location and customer’s name); (xii) not issue free goods of or credits on
Products without the prior written consent of Dais; (xiii) send Dais, upon
request, a quarterly listing of itemized Product volumes purchased by individual
customers, material inventory status, and general market conditions (including
customer trends, competition and economic and regulatory conditions that effect
sales); (xiv) maintain a list of the locations of its customers to which
Products have been delivered and are installed; (xv) purchase from Dais at least
one Distributor Demo Unit for the Distributor and each Buyer(s) within six (6)
weeks of the execution of this Agreement at a price to be mutually agreed by the
Parties; (xvi) sell to any additional Buyer(s) a minimum of (1) Distributor Demo
Unit’ purchased from either Dais or the Distributor. The “Distributor Demo Unit”
is a portable ConsERV system of the type designated as a ConsERV H75i unit with
integrated humidification capability and on-board sensors for temperature and
humidity able to demonstrate a functioning ConsERV unit.
 
(b) Distributor shall perform activities related to Product support. Functions
to be performed by Distributor may include, but are not limited to (i)
documenting and responding to any complaints from customers; (ii) taking actions
requested in writing by Dais to respond to any customer complaints within the
Territory; (iii) notifying Dais within five (5) Business Days after becoming
aware of any and all adverse reactions reported to Distributor or Buyer, as the
case may be, alleged to have been caused by any Product. If requested by Dais,
Distributor will use their respective commercially reasonable efforts in the
event of a recall to notify their respective customers of the recall and to
facilitate retrieval of Products recalled.
 
(c) Distributor will allow Dais the right to conduct semi-annual remote and/or
on-site inspections of Distributor’s facilities to determine if Distributor has
adequate systems in place to fulfill its obligations under this Agreement.
Distributor acknowledges that the granting of such rights to Dais shall in no
way relieve Distributor of any of its obligations under this Agreement, nor
shall such provisions require Dais to conduct any such inspections.
 
(d) Distributor shall assist and support Buyer with respect to the Products as
set forth in Schedule C.
 
(e) Nothing herein shall be deemed to constitute a party an agent of another
party, and no party shall make any statements or representations to the contrary
by advertising, signs, letterheads, or otherwise. No contracts, commitments,
statements, or representations made by or on behalf of a party shall be binding
in any respect on another party.
 

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(f) Nothing contained in this Agreement shall be construed to grant to
Distributor or Buyer any rights or license whatsoever in any patent, patent
application, trademark, trade name, trade dress, service mark or original
packaging of Dais or any of its Affiliates (collectively, the “Marks”), except
rights expressly granted herein to sell or lease Products on which the Marks
appear and to advertise the Products. Distributor disclaims any interest in and
right to any of the Marks or the goodwill pertaining thereto, whether arising
out of this Agreement or arising in some other manner. All sales of Products to
Distributor (and subsequently to Buyer) are made with the understanding that any
such patents, patent applications, trademarks, trade names, trade dress, service
marks or original packaging will not be altered or misused by Distributor, Buyer
or any of their respective officers, directors, employees, agents or their
customers. Distributor will promptly notify Dais in writing of any infringement
or threatened infringement of any of the Marks of which Distributor or Buyer, as
the case may be, becomes aware, and will, at Dais’s request and expense, assist
Dais in preventing or eliminating such infringement. Distributor agrees to
identify and mark all Products with such indications of the Marks as Dais or its
Affiliates may reasonably direct or approve in writing. Distributor and Buyer
may attach an identification label, at their own expense, to the Products
stating that the Products are being distributed or sold by Distributor or Buyer,
so long as such identification label does not prevent the plain view of the
Marks and other information and designs appearing on the Products and packaging.
 
(g) Distributor agrees that in the performance of this Agreement, Distributor
will not make any illegal payments of any kind or give other such consideration
to any person or entity at any time or under any circumstance including, but not
limited to, any local, state or federal government official.
 
(h) This Agreement is made subject to any and all restrictions concerning the
export of Products or technical information from the United States of America to
other countries as may be in effect from time to time. Distributor agrees it
will not import or export, directly or indirectly, any Products or technical
information to a location or in a manner that at the time of the import or
export requires an import or export license or other governmental approval,
without first obtaining said license and all written consents required from all
appropriate agencies or other governmental entities.
 
10. CONFIDENTIALITY.
 
(a) Distributor acknowledges that it may be given access to confidential and
proprietary information regarding Dais and the Products (the “Confidential
Information”). For the purposes of this Agreement, Confidential Information
includes, but is not limited to, drawings and specifications, know-how,
Intellectual Property, Joint Intellectual Property, innovations, improvements,
Product development data, oral or written observations, customer lists,
marketing information, competitive strategies, and trade secrets. In addition,
the Parties agree that Confidential Information shall include any communication
or data exchanged by the Parties prior to the date of this Agreement.
Distributor shall not, either during the term of this Agreement or thereafter,
disclose any Confidential Information to any person or entity, other than those
of its employees and agents to whom disclosure is reasonably necessary in order
for Distributor to fulfill its obligations hereunder (each of such persons to be
advised by Distributor of the confidential nature of the information and to be
subject to contractual obligations of confidentiality to Distributor
substantially equivalent to Distributor’s undertakings in this paragraph), and
will not use the Confidential Information for any purpose other than in the
performance of its obligations hereunder. This restriction on use and disclosure
shall not apply to Dais’s information that is (i) in the public domain at the
time of disclosure to Distributor or which subsequently becomes part of the
public domain through no fault of Distributor or their Buyer’s, employees or
agents, as the case may be; (ii) disclosed to Distributor by a third party
without any obligation of confidentiality; (iii) in Distributors’ possession,
prior to disclosure by Dais, as evidenced by reasonable written evidence; or
(iv) independently developed by employees or agents of Distributor that did not
have access to Dais’s information, as evidenced by reasonable written evidence.
Distributor has the burden to establish that any of the foregoing exceptions is
applicable. Distributor shall not be deemed to have violated its obligations
under this Section 10(a) if it is compelled by law to disclose any Confidential
Information, so long as it provides prompt written notice of such compelled
disclosure to Dais and permits Dais to intercede in the matter, at its own
expense, for the purpose of obtaining a protective order. Upon termination of
this Agreement, Distributor shall return to Dais all tangible copies of
Confidential Information, destroy all notes, memoranda, work papers, extracts
and the like containing Confidential Information, and provide Dais with a
certificate of a senior executive officer of Distributor confirming
Distributors’ fulfillment of their respective obligations under this paragraph.
 

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(b) Distributor understands that the Confidential Information constitute unique
and valuable trade secrets of Dais and acknowledges that the breach of the
provisions of Section 10(a) of this Agreement may result in irreparable harm to
Dais for which monetary damages may be inadequate. Accordingly, Distributor
agrees that in the event of any breach or threatened breach by Distributor or
its Buyers, employees or agents of Section 10(a), Dais may seek to obtain
temporary or permanent injunctive relief or other equitable relief (without the
necessity of posting bond) from any court of competent jurisdiction, in addition
to any other remedies available to it, and Distributor will not claim as a
defense to such petition for injunctive relief that Dais has an adequate remedy
at law.
 
(c) Distributor acknowledges and agrees that all Confidential Information shall
remain the property of Dais and that any and all Confidential Information and
all amendments, modifications or improvements thereto, regardless of nature,
created or developed, during the term of this Agreement, by or for Dais, by or
for Distributor or by or for Distributor in concert with any other party,
including, but not limited to, Dais, which is related directly or indirectly to
Product, its components or the use thereof is the sole property of Dais.
Distributor shall promptly inform Dais in writing of any such Rights and shall
provide reasonable guidance with respect to instructing Dais as to use thereof.
In addition, Distributor shall assign ownership of any such Rights to Dais and
shall take all reasonable actions to assist Dais, at Dais’s expense, in securing
and enforcing any patents Dais may seek relating thereto.
 
11. ACCEPTANCE; NO WARRANTY.
 
(a) Distributor shall immediately inspect the Product upon delivery for
non-conformities. In the event Distributor fails to notify Dais of any Product
non-conformity within thirty (30) calendar days after delivery of the Products
in question, then the delivered Products shall be deemed to have been accepted
by Distributor.
 
(b) Dais represents and warrants to Distributor that the Products manufactured
and sold by Dais to Distributor under this Agreement conforms to the
Specifications contained in Schedule B as of the date of delivery. Further, Dais
represents and warrants to Distributor that the Products and the use of Products
in the Field and Territory does not, to its knowledge, infringe the personal,
contractual, proprietary, or intellectual property rights of any third party.
 
(c) DAIS DOES NOT ASSUME ANY LIABILITY, EITHER TECHNICAL OR ECONOMICAL OR
OTHERWISE, FOR THE PERFORMANCE, SAFETY, QUALITY OR ANY OTHER ASPECT OF ANY
PRODUCT MANUFACTURED BY IT OR ITS CONTRACTORS AND, EXCEPT AS EXPRESSLY SET FORTH
IN THIS SECTION 11, DAIS SPECIFICALLY DISCLAIMS AND EXCLUDES ALL WARRANTIES
REPRESENTATION AND/OR GUARANTEES (EXPRESS, IMPLIED OR STATUTORY) REGARDLESS OF
NATURE, ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING BUT NOT LIMITED TO
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
DISTRIBUTOR ACKNOWLEDGES THAT DAIS HAS MADE NO UNDERSTANDINGS, AGREEMENTS OR
REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBJECT MATTER OF THIS
TRANSACTION OTHER THAN AS EXPRESSLY SET FORTH IN THESE TERMS AND CONDITIONS. NO
PERSON IS AUTHORIZED TO EXPAND OR IN ANY MANNER MODIFY DAIS’S EXPRESS WARRANTY
DESCRIBED ABOVE.
 

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(d) Notwithstanding anything to the contrary set forth herein, the liability of
Dais with respect to a claim of any kind, whether as to quality or amount of
Products delivered or for non-delivery of Products, shall not exceed the invoice
price of the quantities of Products as to which the claim is made.
 
(e) IN NO EVENT SHALL DAIS BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT,
PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING IN TORT, CONTRACT, STRICT LIABILITY OR
ANY OTHER LEGAL THEORY (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFIT OR
REVENUE, DOWNTIME COSTS, LOSS OF USE OF THE PRODUCTS, COST OF ANY SUBSTITUTE
PRODUCT, FACILITY OR SERVICE, AND ANY CLAIMS OF DISTRIBUTOR, DISTRIBUTOR’S
CUSTOMERS, BUYER OR OTHER THIRD PARTIES FOR ANY SUCH DAMAGES).
 
(f) The delivering carrier, and not Dais, is responsible for damage in shipment.
Packing material should not be discarded when damage is found. The delivering
carrier should be notified to inspect any damages. Damaged items cannot be
returned to Dais or its Affiliates without authorization. Distributor should
contact Dais for complete instructions.
 
(g) Distributor shall be responsible for the installation, engineering,
maintenance, sale and its manufacture of the Products for its customer’s use. In
addition to the foregoing, upon the reasonable request of Distributor, Dais may
agree to review Distributor’s design and marketing for Products and provide
advice with respect to such Products; provided, however, Dais shall not be
responsible in any manner for such design or marketing of Products or any
statement, representation or warranty made therein.
 
(h) Distributor and its customers assume all responsibility and liability for
injury or damages resulting from their handling, possession, installation,
manufacture, engineering, marketing, use, lease or sale of Products including,
but not limited to any injury or damage resulting from the use of Products by
customers in their business operations or in combination with other substances
or Products, and agree to defend and indemnify Dais, its Affiliates and their
respective directors, officers, employees and agents from and against all
claims, losses, liabilities and expenses (including attorneys’ fees and other
litigation or settlement costs) arising out of such handling, possession,
marketing, use, lease or sale, except for those directly caused by defects in
the design, workmanship or quality of any Products manufactured and sold to
Distributor by Dais.
 
(i) Distributor shall provide the pre-sale, post-sale, technical support and
other services set forth in Schedule C.
 
(j) Distributor shall, and take all actions to make sure its Buyers shall,
comply with all laws, rules and regulations and secure all approvals, license
and permits related to the Products pre-sale, import, post-sale, technical
support and other services provided hereunder and the import, distribution,
handling, possession, installation, engineering, maintenance, shipment and sale
of the Products.
 
 (k) Distributor represents and warrants to Dais that Distributor’s manufacture
and sale of its products and Systems does not and will not, to the best of its
knowledge, infringe the personal, contractual, proprietary, or intellectual
property rights of any third party and the products and Systems, when
manufactured by or for Distributor pursuant to the terms and conditions hereof,
are free of material defects in design, products and workmanship.
 

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12. RETURN POLICY AND CREDITS. Distributor shall not have the right to return
any Products, either during the term of this Agreement or upon termination
hereof, unless (i) such Product is in non-conformity, as determined by Dais in
its reasonable determination, and Distributor has notified Dais pursuant to
Section 11(d), and (ii) such Product does not comply with the Specifications
contained in Schedule B. Returns of non-conforming Products require prior
written authorization from Dais and shipping in accordance with instructions
provided by Dais. When contacting Dais for return authorization, Distributor
must provide the invoice number, serial number and date of shipment. Authorized
returns must be in clean factory packaging sufficient to protect Product from
damage during shipment. All returns must be made by prepaid transportation
unless otherwise specified by Dais. Shipping charges on all returns will be at
Distributor’s expense unless Dais confirms that the Product is non-conforming,
in which case Dais will refund reasonable shipping charges.
 
13. INDEMNIFICATION.
 
(a) Distributor shall indemnify, defend and hold Dais, its Affiliates and their
respective directors, officers, employees, agents and advisors harmless from and
against any and all claims, demands, actions, causes of action, judgments,
losses, liabilities, costs and expenses of any kind, nature and description,
including but not limited to reasonable attorneys’ fees and other litigation
expenses (collectively, “Losses”), arising from or related to (i) any bodily
injury, wrongful death or damage suffered by third parties arising out of the
import, sale, lease, maintenance, installation, use, handling, engineering or
storage of the Products, to the extent said Losses do not directly and solely
arise from the (i) failure of a Product provided by or on behalf of Dais to
Distributor under this Agreement to meet Specifications upon delivery, or (ii)
Dais’s breach of any of its covenants or representations contained herein.
During the term of this Agreement, Distributor agrees to maintain Commercial
General Liability Insurance in such an amounts as is reasonably acceptable to
Dais.
 
(b) With respect to the indemnity and hold harmless provisions of Section 13(a),
Distributor agrees to jointly and severally defend Dais or its Affiliates (at
Dais’s request and option, with attorneys mutually agreed upon) in any suit or
action brought or threatened against Dais or its Affiliates based on the
foregoing provision including but not limited to any suit or action based on any
such injury, damage or alleged injury or damage and to pay all reasonable costs,
expenses and reasonable attorney fees. The Parties shall negotiate in good faith
concerning the direction of the defense and any compromise or settlement of any
action or claims against Dais or its Affiliates.
 
(c) Dais shall indemnify Distributor from and against any and all Losses, up to
the amount of the purchase price of the Products on which such Losses are based,
arising from or related to any bodily injury, damage or wrongful death suffered
by third parties arising out of the use of the Products, to the extent said
Losses arise directly and solely from the (i) failure of the Product provided by
or on behalf of Dais to Distributor under this Agreement to meet Specifications
at delivery, or (ii) Dais’s or breach of any of its covenants or representations
contained herein, subject to the limitations set forth in Section 11 hereof.
 
(d) With respect to the indemnity and hold harmless provision of Section 13(c),
Dais agrees to defend Distributor (at Distributor’s request and, at
Distributor’s option, with attorneys mutually agreed upon) any suit or action
brought or threatened against Distributor based on said provisions including but
not limited to any suit or action based on any such injury, damage or alleged
injury or damage, and to pay all reasonable costs, expenses and reasonable
attorney fees, subject to the limitations set forth in Section 11 hereof. The
Parties shall negotiate in good faith concerning the direction of the defense
and any compromise or settlement of any action or claims against Distributor.
 

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14. TERM AND TERMINATION.
 
(a) The initial term of this Agreement shall commence on the date hereof and
continue for a period of 15 years, unless earlier terminated as provided in this
Section 14 or Section 1(g). Unless notice of termination is delivered to the
other parties ninety (90) calendar days prior to the initial term or any renewal
term, this Agreement will automatically renew for consecutive additional periods
of 1 year each.
 
(b) Dais may terminate this Agreement (i) immediately upon ninety (90) Business
Days written notice of the Distributor’s failure to complete purchases that meet
the minimum amounts in accordance with Section 1(g), (ii) upon sixty (60)
calendar days written notice to Distributor for failure by Distributor to make
payment for Products, Royalties or any amount due under this Agreement when due,
unless such failure is cured within the sixty (60) calendar day cure period with
the provision that Dais may stop all shipments to Distributor during the cure
period (iii) upon sixty (60) calendar days written notice to Distributor if the
Distributor is in breach of its material obligations hereunder and such breach
continues uncured for a period of sixty (60) calendar days after written notice
from Dais. Distributor may terminate this Agreement upon sixty (60) calendar
days written notice to Dais if Dais is in breach of its material obligations
hereunder and such breach continues uncured for a period of sixty (60) calendar
days after written notice from Distributor. Any party may immediately terminate
this Agreement, with or without notice to the applicable other party, if such
other party files a petition for relief from its creditors under applicable
bankruptcy laws, becomes insolvent, has a receiver appointed for its assets, or
is subject to an involuntary bankruptcy petition which is not discharged within
thirty (30) calendar days after it is filed. Neither Dais nor Distributor shall,
by reason of the termination of this Agreement be liable to any other for
compensation, reimbursement or damages due to loss of profits on sales or
anticipated sales or losses due to expenditures, investments or commitments made
hereto or in connection with the establishment, development or maintenance of
the business or good will of Dais or Distributor or on account of any cause
whatsoever.
 
(c) At the discretion of Dais, to be exercised by the delivery of written notice
to Distributor, this Agreement shall be deemed to be canceled immediately upon
the transfer, directly or indirectly, of fifty percent (50%) or more of either
the assets or the voting stock or other indicia of ownership of Distributor to
any third party other than those owning or holding such assets or equity on the
date herein above set forth. Distributor shall provide Dais with thirty (30)
calendar days written notice prior to any such transfer.
 
(d) Upon termination of this Agreement and upon Dais’s written consent (such
consent not to be unreasonably withheld), Distributor shall have the right to
deplete their respective existing inventory of Products through sales to their
respective then existing customers unless termination was for violation of any
portion of Section 6 or Section 10 then Distributor loses the right to deplete
their respective existing inventory of Products. Dais reserves the right in any
event to repurchase from Distributor all or any part of Distributor’s existing
inventory of Products for the lesser of the prevailing prices being charged to
Distributor, or the price paid by Distributor to Dais for such Products. Other
than the foregoing, Distributor will cease all use of the Marks, cease to
represent itself as authorized Distributor of Dais Products and otherwise desist
from all conduct that might lead any person or entity to believe that
Distributor is so authorized.
 
(e) Notwithstanding any provision of this Agreement to the contrary, any
termination of this Agreement shall be without prejudice as to any right of
either party hereto with respect to any obligation of the other party, which
accrued on or prior to the effective date of such termination.
 

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15. MISCELLANEOUS.
 
(a) This Agreement constitutes the entire agreement and understanding between
the parties with respect to the subject matter hereof and supersedes all
previous undertakings, agreements and representations between the parties,
written or oral, with respect to the subject matter hereof. No modification of,
addition to, or waiver of any provisions of this Agreement shall be binding upon
a party hereto unless the same shall be in writing and duly executed by a duly
authorized representative of the parties hereto. No waiver by a party of any of
its rights hereunder shall be effective unless in writing and signed by the
party to be charged therewith. Waiver by any Party of any breach of or exercise
of any rights under this Agreement shall not be deemed to be a waiver of similar
or other breaches or rights or a future breach of the same duty. If any
provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws in any applicable jurisdiction, such
unenforceability or invalidity shall not affect the other provisions of this
Agreement and the unenforceable or invalid provision shall be construed to be
amended in order to avoid such unenforceability or invalidity while giving
maximum permissible effect to the Parties intentions expressed herein. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
 
(b)
 
(i) This Agreement may not be assigned in whole or in part by Distributor to any
third party and the Distributor may not delegate any performance or obligations
to Dais under this Agreement; provided that the Distributor shall assign this
Agreement to SoEX (Beijing) Environmental Protection Technology Company Limited
(in Chinese：大莱伟业（北京）环保科技有限责任公司) (“SoEX EPT”) upon its legal registration in the
PRC, which shall not be unreasonably delayed with a target date of July 1, 2014,
pursuant to the terms in this Section 15(b).
 
a. SOEX EPT shall be owned by the beneficiary shareholders of Distributor and
Dais with Dais owning 25% of SoEX EPT. Such an ownership structure shall be in
place no later than September 30, 2014 unless agreed to by the Parties in
writing prior to that date;
 
b. For the two (2) years from the date of SoEX EPT’s legal registration until
the second anniversary of SoEX EPT’s legal registration, Dais’s shall not have
to contribute any capital to SoEX EPT and Dais’s ownership percentage shall not
drop below 25% of SoEX EPT. After the second anniversary of SoEX EPT’s legal
registration, Dais shall have a preemptive right of first refusal to purchase
securities offered by SoEX EPT in any offering of equity to enable Dais to
maintain the Dais’s fully diluted equity ownership position in SoEX EPT at 25%.
 
c. Before completing any equity offering, SoEX EPT shall give Dais a notice
containing the relevant terms of the equity offering. If Dais does not exercise
its preemptive right, Dais’s ownership percentage in SoEX EPT shall never be
diluted below a 5% ownership percentage in SoEX EPT. Upon SoEX EPT’s
registration and as long as Dais’s ownership percentage in SoEX EPT does not
drop below 5%, Dais shall have the right to designate a candidate for SoEX EPT’s
Board of Directors.
 
(ii) The assignment to SoEX (Beijing) Environmental Protection Technology
Company Limited shall become effective upon a written notice from Distributor to
Dais, with a copy of the assignee’s business license attached to such a notice
and a government issued certificate. Any attempt to assign, or any actual
assignment of any part of this Agreement by Distributor to any third party other
than SoEX (Beijing) Environmental Protection Technology Company Limited without
Dais’s prior written approval, shall be deemed null and void and shall result in
the immediate termination of this Agreement. This Agreement will be freely
assignable by Dais to its Affiliates or to any successor to its business,
whether acquisition of all or substantially all of its assets, acquisition of
equity, merger, consolidation or otherwise.
 

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(c) No party shall be liable to another party for any delay or failure to
perform hereunder (excluding the failure to pay money due hereunder), which
delay or failure is due to causes beyond the reasonable control of said party,
including, but not limited to, acts of God, acts of the public enemy, natural
disaster (e.g., earthquakes, hurricanes, tornadoes, storms, or floods),
explosions, riots, fires, epidemics, quarantine restrictions, labor strikes,
significant material shortages, freight embargoes or other acts that neither
Party can reasonably anticipate or control.
 
(d) Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given
and effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile or email at the facsimile number or
email address specified in this Agreement prior to 6:00 p.m. (New York City
time) on a Business Day, (b) the next Business Day after the date of
transmission, if such notice or communication is delivered via facsimile or
email at the facsimile number or email address specified in this Agreement on a
day that is not a Business Day or later than 6:00 p.m. (New York City time) on
any Business Day, (c) the Business Day following the date of deposit with a
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The addresses, facsimile
numbers and email addresses for such notices and communications are those set
forth on the signature pages hereof, or such other address or facsimile number
as may be designated in writing hereafter, in the same manner, by any such
Person.
 
(e) This Agreement may be executed by facsimile and in one or more counterparts,
each of which shall be deemed an original, and together shall constitute one and
the same document. This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective successors and permitted assigns.
 
(f) This Agreement shall be governed by and construed in accordance with the
laws of the state of New York without giving effect to the conflicts of laws
principles thereof, except that the interpretation and enforcement of this
arbitration provision shall be governed by the Federal Arbitration Act. Any
controversy or claim arising out of or relating to this Agreement or the
existence, validity, inducement, termination or breach thereof, shall be
referred to and finally resolved by arbitration before a single arbitrator in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”) then pertaining, except where those rules conflict with this
provision, in which case this provision controls. The language of the
arbitration shall be English, and the place of arbitration should be Honolulu,
Hawaii, OR such other place that the parties may mutually agree. Within thirty
(30) calendar days after initiation of arbitration, the parties shall reach
agreement upon and thereafter follow procedures assuring that the arbitration
will be concluded and the award rendered within no more than six months from
selection of the arbitrator. Failing such agreement, the AAA will design and the
parties will follow such procedures. EXCEPT WITH RESPECT TO A BREACH RELATING TO
SECTION 6 OF THIS AGREEMENT, THE ARBITRATOR SHALL NOT AWARD ANY PARTY PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES, AND EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT TO SEEK SUCH DAMAGES. Each party has the right before or during the
arbitration to seek and obtain from the appropriate court provisional remedies
such as attachment, preliminary injunction, replevin, etc., to avoid irreparable
harm, maintain the status quo or preserve the subject matter of the arbitration.
In addition, a party may seek the imposition of temporary or permanent
injunctive relief to prevent or stop the disclosure or misuse of any
Confidential Information that it discloses to any other party. The Parties agree
to negotiate in good faith on the most appropriate and convenient venue to
enforce any arbitration award with such venue being chosen by the arbitrator if
the Parties are unable to agree.
 

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The parties further agree that service of process shall be proper if served
pursuant to Section 14(d). This paragraph shall survive any termination or
expiration of this Agreement.
 
(g) In the event the English translation of this Agreement is inconsistent with
the translation of this Agreement into any other language, the English
translation shall control.
 
(h) Unless otherwise stated herein, no remedy herein is intended to be exclusive
of any other remedy and each and every such remedy shall be cumulative and shall
be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise.
 
(i) Section 6(b), Section 7, Section 8(d), Section 9, Section 10, Section 11,
Section 13 and Section 14(f) shall survive the expiration or termination of this
Agreement (and any extensions thereof) as shall any other provision which
specifically states it shall survive termination or expiration.
 
(j) Nothing in this Agreement shall be deemed to constitute, create, give effect
to or otherwise recognize a joint venture, partnership, or formal business
entity of any kind between the parties and the rights and obligations of the
parties shall be limited to those expressly set forth herein. Nothing contained
in this Agreement shall be construed as providing for the sharing of profits or
losses arising out of the efforts of the parties.
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized respective representatives as of the day and year
written below.
 
[SIGNATURES TO FOLLOW]
 

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DAIS ANALYTIC CORPORATION
       
By:
/s/ Timothy N. Tangredi   Name: Timothy N. Tangredi   Title: President & CEO    
   
Address: 11552 Prosperous Drive, Odessa, FL 33556 USA
Email: tntangredi@daisanalytic.com
            SOEX (Hong Kong) Industry & Investment Co., Ltd.        
By:
/s/ Han Shuang (Sharon Han)   Name: Han Shuang (Sharon Han)   Title: President &
CEO        
Address: Room 11-2-1103 11/F Kowloon Bldg 555, Nathan Rd Mongkok KL, Hong Kong
Email: omnipa@vip.163.com

 

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SCHEDULE A
 
Form of Purchase Order
 
 
 
 
 
 
 
 
 
 

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SCHEDULE A-2
 
Form of Sales Acknowledgment
 
 
 
 
 
 
 
 
 
 

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SCHEDULE B
 
Product Specification
 
[img_ex10101.jpg]
 

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[img_ex10102.jpg]
 

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[img_ex10103.jpg]
 

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[img_ex10104.jpg]
Do not stack said Products in a quantity exceeding five in total. If the
Products are stacked place each so the metal end plate of one meets the metal
end plate of the next. All Products must be adequately wrapped and strapped to
prevent tipping. Employ care when handling. Wear cut resistant gloves and use
proper lifting techniques when handling any Product. All Products must be kept
in a clean, dry place with temperatures not exceeding 120°F. Do not expose to
snow, rain or water. Do not expose to flame, chemicals, glues or a corrosive
environment of any nature.
 

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C500S & C500SY PRODUCT BILL OF MATERIALS
ENDPLATE
Galvanized steel
CORNER BRACKETS
Galvanized steel
RIVETS
Aluminum w/steel mandrel
ENDPLATE SPACER
Expanded polystyrene foam
COATED SCREEN
Coated steel
SPACER/FLOW FIELD
PVC
MEMBRANE
Aqualyte
ADHESIVES & SEALANTS
Silicone sealant, hot-melt adhesives

 
Table 1 – C500S & C500SY Bill of Materials
 
C510 & C510Y PRODUCT BILL OF MATERIALS
ENDPLATE
Galvanized steel
CORNER BRACKETS
Galvanized steel
RIVETS
Aluminum w/steel mandrel
ENDPLATE SPACER
Expanded polystyrene foam
COATED SCREEN
Coated steel
SPACER/FLOW FIELD
High-impact polystyrene
MEMBRANE
Aqualyte
ADHESIVES & SEALANTS
Silicone sealant, hot-melt adhesives

 
Table 2 – C510 & C510Y Bill of Materials
 

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PRODUCT SPECIFICATIONS
DEMO ERV + ENHANCED FILTER PRODUCT
 
[img_ex10105.jpg]
 

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[img_ex10106.jpg]
 
Figure 1 - Pressurized Cross-Flow Test Station

CONFORMANCE TEST PROCEDURE AND INSTRUCTIONS FOR THE C500S, C500SY, C510, AND
C510Y PRODUCTS
 
The following is a sequential set of steps to test Products using the above
pressurized cross-flow test rig:

1)  
Put on safety glasses and gloves.

2)  
Inspect testing station. Look for discontinuities and/or damage to the foam
sealing tape perimeter. Remove excess caulk and debris by hand and/or with a
vacuum cleaner. Remove tools and unnecessary equipment from the general vicinity
of the test rig. Make sure all equipment is in proper working order and is
zeroed correctly.

3)  
Obtain Product to be tested and place Products on test rig with airstream A in
the vertical orientation. Be sure the bottom perimeter of the Product is sealed
by neoprene (foam) tape.

 

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4)  
Place the lid on the top of the Product and align it such that sealing occurs.
Make sure no hoses are crimped or otherwise impaired between the Product and
lid.

5)  
Affix a serial number sticker to top left corner of Product.

6)  
Put the ratcheting tie-down straps in place at either end of the lid (see Figure
1). The straps should run under the base of the tester and above the lid, and
pull the base and lid firmly onto the Product edges, forming a seal. Tension the
tie-down straps to a reasonable level.

7)  
The Product should be ready to undergo testing. Enter all relevant data into the
log file. Appendix C contains the fields to be completed by the Product tester.

8)  
Turn on fixed displacement pump, power supply to differential pressure
transducer, and mass flow meter.

9)  
There are two valves between the mass flow meter and the pump. The one that is
in-line will be referred to as the I Valve and the one that exhausts to
atmosphere will be known as the E Valve. The I Valve, which is downstream of the
E Valve, is to be closed, thus forcing all air to be exhausted thru the E Valve.
Begin by slowly opening the I Valve., The mass flow meter will register a flow
rate, and the differential pressure transducer will measure the extent to which
the C510Y Product has been pressurized. Continue opening the I Valve until the
desired test conditions are achieved. If the I Valve is fully open and the
desired pressure value has not been reached, begin closing the E Valve. Proceed
with closing the E Valve until the desired pressure has been reached, or until
the E Valve is fully closed. At the point the E Valve is fully closed, maximum
pressure and flow are achieved. If the pressure level has previously reached or
is currently at the test objective, record the rate from the mass flow meter;
otherwise, write down the maximum values obtained. The objective of this test is
to quantify the Product at a pressure of 0.50 in-H2O above atmospheric. Record
test rate in the Product log file.

10)  
Put the I Valve in the closed position and the E Valve in the open position.

11)  
Turn off the fixed displacement pump, differential pressure transducer, and mass
flow meter.

12)  
Release the tension in ratcheting tie-down straps. Remove lid.

13)  
Rotate Product 90° so that Airstream B is in the vertical position.

14)  
Repeat relevant steps for Airstream B.

15)  
Release the tension in ratcheting tie-down straps. Remove lid.

16)  
Remove Product from test rig.

C510Y Test - Equipment
Table 3 lists equipment used in the pressurized cross-flow test rig and includes
basic information and specifications.
 
MEASUREMENT DEVICES USED IN THE PRESSURIZED CROSS-FLOW TEST RIG*
DESCRIPTION
 
Brand
 
Model
DIFFERENTIAL PRESSURE TRANSDUCER
 
Setra 0-1.5 in-WG w/front LCD
 
26711R5WD2DG2HD
MASS FLOWMETER
 
TSI
 
40241
FIXED DISPLACEMENT PUMP
 
Gast DDL Linear
 
SPP-200GJH-101

 
Table 3 - Pressurized Cross-Flow Test Apparatus

* Subject to modification by Seller
 

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Test Rate Pass Values
 
If a Product receives a test rate less than or equal to the value listed in
Table 4 at the required static pressure differential, then it passes the
pressurized cross-flow test.

MAXIMUM RATE TABLE
C500S
C500SY
C510
C510Y
Maximum Rate in CFM
@ 0.50 in-H2O (124 Pa)
10
10
10
10
Maximum Rate in L/min
@ 0.50 in-H2O (124 Pa)
283
283
283
283

 
Table 4 - Acceptable Product Test Rates
 
Notes:
 
1)  
Use two ratcheting tie-down straps to secure the lid and Product to the base of
the test rig. Over time, the teeth of the ratcheting straps will fatigue, so
they should be periodically inspected and/or replaced to maintain the tension
levels needed to form the desired seal.

2)  
Said test should be carried out for both of the Product's airstreams. This is
done by sealing and pressurizing the Product to 0.50 in-H2O above ambient
(atmospheric) pressure, and subsequently comparing the test rate to existing
pass/fail values, which are found in Table 4 of the Test Rate Pass/Fail Values
section of this document.

APPENDIX C - Data to Be Provided to Buyer
 
The following data is to be recorded and provided to Buyer with each Product at
delivery:

Product Serial ID Number
Test Date
Test Rate @ 0.50 in-H2O for Airstream A
Test Rate @ 0.50 in-H2O for Airstream B
 
Product acceptance test criteria for MTM Product Vapor Phase Moisture Transfer
Test
 
Purpose:
 
To determine the vapor phase moisture transfer properties of the MTM Product
("MTM") in a quantitative manner. The vapor phase properties determine the
efficacy of the MTM material to transfer latent heat.
 
A sample from each shipment of MTM will be randomly selected and will be tested
three (3) times in accordance with the procedure described below. The results of
the three tests will be recorded and averaged. If the H2O transferred across the
MTM sample averages greater than 0.210 grams per 10 minutes the MTM provided
will be deemed to have met the Specifications.
 

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The Test:
 
Remove a sample of the MTM from the leading edge of a roll from the shipment and
test it using the moisture transfer test procedure and equipment described
below.
 
Required Equipment:
 
1.  
Cylinder of compressed, dry air with regulator and tubing

2.  
Mass-flow controller to regulate the compressed air flow rate at 1.0 L/min ± 0.1
L/min

3.  
Custom aluminum / Plexiglas flow fields (see Figure1)

4.  
Heat blanket and temperature controller capable of maintaining flow fields at 30
°C ± 0.5 °C

5.  
Analytical balance

6.  
6" long ¾’ PVC pipe with end caps, at least one of which is removable (for
holding desiccant)

7.  
Syringe (typically 15 or 25 mL)

8.  
Disposable pipette

9.  
Large binder clips (2)

10.  
10 minute timer

11.  
Latex-free laboratory grade gloves to be used to handle the sample during
testing/analysis.

 
Required Materials:
 
1.  
MTM sample, no less than 3" x 3" square

2.  
Paper towels

3.  
Granular desiccant (e.g. Drierite)

4.  
Distilled water

 

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[img_ex10107.jpg]
 
Figure 1. Flow field used for moisture transfer testing.
 
Procedure:
 
1.  
Completely remove any water in the lower flow field with disposable pipettes and
paper towels.

2.  
Fill the syringe with 10 mL of water. Dispense throughout the lower (aluminum)
flow field. Use the tip of the disposable pipette to move water around to
completely fill the bottom of the flow field. Ensure that there is no water near
the top of the flow field by lightly wiping your hand or a paper towel across
the top and verifying that it is dry.

3.  
Turn on the power supply to the temperature controller and adjust the set-point
so that temperature of the flow field is 30 °C ± 0.5 °C.

4.  
Remove the end of the PVC pipe with tubing attached to it.

5.  
Fill the PVC pipe with desiccant and recover the end.

 

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6.  
Place the MTM sample flat on the Plexiglas flow field*, taking care to not place
it over the two alignment pins. Let the excess fall over the sides. Grasp the
MTM sample and the flow field by the sides with overlapping MTM to hold the MTM
sample flat when inverted and place on the lower flow field. Secure with the two
binder clips, one on each side. Quickly attach the 1 L/min dry air-flow to one
inlet of the flow-field.

7.  
Using the analytical balance, weigh the filled desiccant pipe and record the
mass.

8.  
Attach the desiccant pipe to the outlet of the flow field and let the test run
for 10 minutes.

9.  
Remove the desiccant pipe and weigh again in the analytical balance.

10.  
After the sample has been checked for moisture transfer, carefully remove it
from the apparatus and check to make sure that no liquid water is in contact
with the bottom of the membrane. If water has contacted the bottom of the MTM
sample, all tests done on this MTM sample are to be DISCARDED, and the test must
be run again.

 
* If the MTM is on a support, it can just as easily be placed flat on top of the
lower flow field and then place the upper flow field on the apparatus.
** Unless otherwise specified, if a membrane has one side that is smoother or
more glossy than the other, it is placed smooth side down.
 
Calculations:
 
Moisture transfer = (end mass of the desiccant) — (start mass of the desiccant)
Recall that three (3) test are done per sample and the results are then averaged
to determine the grams of H2O transferred.
 
Notes:
 
1. The desiccant can be used for two (2) consecutive tests (approximately 20
minutes of active test time), after which the desiccant should be removed and
placed in a container marked "used Drierite". The desiccant can be recharged by
placing a shallow layer in a pan in an oven at 220 °C for 1.5 hours.
 

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SCHEDULE C
 
Pre-sale, Post-sale, Technical Support and Other Services
 

 
Product Education
Distributor
Distributor shall participate in any product education sessions held by Dais or
its Affiliates. Distributor shall be responsible to provide education to Buyer
on an initial and on-going basis during the course of this Agreement.
Distributor’s education shall consist of class-room style instructor lead
sessions, conducted by a person knowledgeable in the industry and Products and
shall include hand-out Products to assist Distributor in maximizing Product
sales. These sessions and Products will address all aspects of the sales cycle
including, but not be limited to, Product function, configuration, application,
pricing, installation, handling, storage and service.
Dais
Dais or its Affiliates will provide Distributor initial Product education
training and additional ongoing education at its Odessa. Florida facility, as
Dais deems necessary. The education may consist of class-room style instructor
leading sessions given by members of Dais’s organization. These sessions will
address all aspects of the sales cycle including, but not be limited to, Product
function, configuration, application, pricing, installation, handling, storage
and service.
The initial training period shall end 6 months after execution of this
Agreement.
 
Product Support
Distributor
During the Distributor’s initial training period, Distributor may request and
shall facilitate timely communications, if needed, between Distributor and Dais
pursuant to which Dais shall provide reasonable amounts of input with respect to
the Product, its configuration, and related engineering, installation and
service issues . Dais shall not be responsible in any manner for the assistance
it provides.
Dais
Upon request of Distributor and during the Distributor’s training period, Dais
shall provide reasonable and relevant information about the Products to
Distributor to assist in the sale, design, installation, or servicing process.
Distributor shall be solely responsible for the use of such information.
 
Information about Customers
Distributor
Distributor shall maintain reasonable and sufficient information about all sales
to Buyers and installations of Products including, but not limited to
information necessary to reasonably determine existence of any non-conformity of
the Products as well as to confirm the sale and installation of the Products
being within the Field and Territory. Upon request by Dais, Distributor may be
asked to provide any reasonable data about the Buyers.
Dais
Dais shall have the right to request all reasonable data about Buyers in
Distributor’s territory to facilitate a variety of business issues.
 
Dais Requests for Assistance
Distributor
Dais may request and Distributor shall facilitate timely communications between
Distributor and Dais regarding any issue related to the Products.

 

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SCHEDULE D
 
Definitions
 
“Business Day” means any day except Saturday, Sunday, any day which is a federal
legal holiday in the United States or any day on which banking institutions in
the State of Florida are authorized or required by law or other governmental
action to close. If the last or appointed day for the taking of any action or
the expiration of any right required or granted herein shall not be a Business
Day, then such action may be taken or such right may be exercised on the next
succeeding Business Day.
 
“Cores” means nanotechnology-based Energy Recovery Ventilator air to air
exchanger cores containing MTM.
 
“Distributor Intellectual Property” shall mean all protectable intellectual
property or proprietary rights, in whatever median, whether registered or
unregistered, foreign or domestic, all know-how, trade secrets, patents and
trademarks developed solely by the Distributor without reference to or use of
any Dais Intellectual Property, Improvements or any intellectual property of any
nature developed, in whole or in part, or secured by Dais during the term of
this Agreement, including, but not limited to (i) rights which are provided by a
United States or foreign patent, trademark/service mark, copyright or a similar
government-granted right, including reissues, reexaminations or extensions
thereof, (ii) applications for the foregoing, including any divisions,
continuations and continuations-in-part thereof, (iii) potentially patentable
inventions, (iv) all those patents, and (v) all common law rights pertaining to
the items listed in (i)-(iv) hereof
 
“Energy Recovery Ventilator” shall mean a type of mechanical equipment, of which
an energy recovery ventilator air to air exchanger core is a component, that
assists in the recovery of energy (sensible and latent) from the exhaust air
expelled by an HVAC system for the purpose of pre-conditioning the incoming
outdoor air's latent and sensible components prior to supplying the conditioned
air to a residential, industrial or commercial building, either directly or as
part of an air-conditioning system.
 
“Improvements” shall mean all inventions and developments relating to Products
and Product within the Field, whether patentable or not, the rights to which
either Party creates, secures, controls, or acquires by assignment, license or
otherwise, during the term of this Agreement which are based upon, relate to or
derived from Intellectual Property.
 
“Intellectual Property” shall mean those Intellectual Property Rights, Know-How,
Trade Secrets, Patents and Trademarks useful in the manufacture and sale of
Product within the Field and owned or controlled by Dais at the commencement of
this Agreement.
 

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“Intellectual Property Rights” shall mean all protectable intellectual property
or proprietary rights, in whatever median, whether registered or unregistered,
foreign or domestic, existing as of the date of this Agreement and relating to
the Product in the Field, including, but not limited to (i) rights relating to
the Product in the Field which are provided by a United States or foreign
patent, trademark/service mark, copyright or a similar government-granted right,
including reissues, reexaminations or extensions thereof, (ii) applications for
the foregoing, including any divisions, continuations and continuations-in-part
thereof, (iii) potentially patentable inventions with respect to the Product in
the Field, (iv) all those Patents, and (v) all common law rights pertaining to
the items listed in (i)-(iv) hereof.
 
“Joint Intellectual Property” shall mean all protectable intellectual property
or proprietary rights, in whatever median, whether registered or unregistered,
foreign or domestic, know-how, trade secrets, patents and trademarks jointly
developed by the parties during the term of this Agreement without reference to
or based upon Dais Intellectual Property or any Dais intellectual property
developed or secured during the course of this agreement, including, but not
limited to (i) rights which are provided by a United States or foreign patent,
trademark/service mark, copyright or a similar government-granted right,
including reissues, reexaminations or extensions thereof, (ii) applications for
the foregoing, including any divisions, continuations and continuations-in-part
thereof, (iii) potentially patentable inventions, (iv) all those patents, and
(v) all common law rights pertaining to the items listed in (i)-(iv) hereof.
 
“Know-How” shall mean, with respect to the Product in the Field, any and all:
(i) design drawings, (ii) specifications and performance criteria, (iii)
operating instructions and maintenance manuals, (iv) technology, technical and
manufacturing information, including production documentation and methods
layouts, (v) computer software and related documentation, (vi) prototypes,
models, or samples, (vii) computer-aided design or computer aided manufacturing
data, and (viii) other tangible Products necessary for the manufacture, sale, or
testing of the Product in the Field and owned or controlled by Dais at the
commencement of this Agreement or developed after the commencement of this
Agreement.
 
“Maintenance Fees” shall mean the Distributor’s pro rata portion (relative to
the other entities holding licenses on the Intellectual Property) of the costs
and expenses incurred or paid (including the reasonable legal fees of Dais) in
connection with: (i) applying for, initiating, maintaining, obtaining and
modifying any patents and patent applications, Trademarks and Trademark
applications, copyrights and copyright applications including the filing of any
application or any continuation in part, whether in the U.S. or internationally,
or such other intellectual property protections deemed to be reasonably
necessary or advisable by Dais in connection with the Intellectual Property;
(ii) prosecuting any claims related to the Intellectual Property and (iii)
defending the Intellectual Property or other intellectual property against any
claim or the exercise of any purported right with respect to the Product ,
including any claim of infringement by a third party.
 
“Moisture Transfer Material” herein referred to as “MTM” means a thin film
polymer membrane which is capable of reversibly adsorbing and desorbing water
molecules and is composed in part or in whole of an organic layer of hydrocarbon
ionomeric material, possibly bonded to a reinforcing substrate, and chemically
stabilized for standard industrial thin film or precision lamination
manufacturing.
 

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“Net Sales Price” means the gross sales or lease price, as the case may be, of
the Products or products, components or systems that include Products: sold or
leased or transferred by Dais to Distributor, less the following items:
 
a.  
consumption tax, sales, excise and value added taxes;

 
b.  
custom duties;

 
c.  
cost of transportation and freight insurance without mark-up or added fees;

 
d.  
reasonable and customary trade, cash and quantity discounts;

 
e.  
amounts repaid or credited by reason of timely rejections or returns of goods

 
provided, however, that if Product is transferred by Distributor to a third
party or transferred, disposed of, sold or leased to any party of whom 25% or
more of its shares are owned by Distributor then the Net Sales Price for the
purpose of computing royalties hereunder shall be the higher of the sales price
or lease amount received with regard to the transaction in question and the
average Net Sales Price of such Product or products, components or systems that
include Products as then sold or leased by Distributor to unrelated customers in
similar quantities and under similar terms.
 
“Patent” shall mean a patent mark, as defined by applicable law that is: (i)
owned, controlled or used by Dais; and (ii) the subject of a registration or a
pending application for registration claiming inventions relating to Product in
the Field.
 
“ERV System” shall mean either an Energy Recovery Ventilator or an HVAC system
of which an Energy Recovery Ventilator is a part provided in each instance a MTM
based Product is a component .
 
“Trademark” shall mean a trademark, tradename or service mark, as defined by
applicable law, that is: (i) owned, controlled or used by Dais; and (ii) the
subject of a registration or a pending application for registration or (iii)
unregistered and is sufficiently identifiable by words or drawings together with
a description of the goods or services with which it is used such that common
law trademark rights may attach to it.
 
“Trade Secrets” shall mean all Know-How, data and other information developed or
acquired without restriction by the Dais as of the date of this Agreement that
is useful in the manufacture, use, or sale of Products in the Field.
 

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SCHEDULE E
 
Sample Letter of Credit
 
 
 
 
 
 
 
 
 
 

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