Confidential Treatment

TECHNOLOGY RESELLER AGREEMENT

 

This Technology Reseller Agreement (“Agreement”) effective as of this 01 day of
May, 2007 (“Effective Date”), is made and entered into by and between

 

Applied DNA Sciences, Inc. a Nevada corporation with an address of 25 Health
Sciences Drive, Suite 113, Stony brook, New York 11790 (ADNAS”)

 

and

 

Printcolor Screen Ltd. a Swiss company with an address of Welschloh 299, CH-8965
Berikon, Switzerland (“Printcolor”)

 

WHEREAS, ADNAS has developed and has rights in certain technology used for
botanical DNA encryption, embedment and authentication solutions wherein a
marker may be embedded in items to, among other things, authenticate and
identify counterfeit versions of such items; and

 

WHEREAS, Printcolor desires the right to include ADNAS SigNature DNA Markers in
it is products for distribution to its customers, and ADNAS is willing to grant
such rights, in accordance with the terms and conditions herein.

 

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

 

1.

DEFINITIONS

For the purpose of this Agreement, the following terms shall have the stated
meanings:

 

1.1

“Affiliate” with respect to a party, means any entity controlling, controlled by
or under common control with such party.

 

1.2

“Intellectual Property” means all current and future worldwide patents and other
patent rights, trademarks, trade names, service marks, copyrights, applications
for any of the foregoing, technology, know-how, trade secrets, mask work rights
and all other intellectual property rights.

 

1.3

“Printcolor Products” means those products sold by Printcolor that are
identified on Schedule A.

 

1.4

Profit” “means the actual amount received by Printcolor for the sale of DNA
enhanced Printcolor Products less the following deductions to the extent that
such amounts are actually accrued or incurred as to such sales: (a) cost of
goods sold (b) freight, packaging and insurance costs incurred in transporting
the Product to customers (c) quantity, cash and other trade discounts or rebates
allowed and actually taken; (d) customs duties, surcharges, taxes and other
governmental charges incurred with the importation or exportation of Products;
and (e) amounts repaid or credited by reason of rejections, recalls or
retroactive price reductions.

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1.5

“SigNature DNA Markers” means the DNA-inscribed markers comprising ADNAS’
technology.

 

2.

PRINTCOLOR RIGHTS AND OBLIGATIONS

 

2.1

Rights Granted . Subject to and in accordance with the terms of this Agreement,
ADNAS hereby:

 

(i)

appoints Printcolor as an authorized Reseller of SigNature DNA Markers for the
Term;

 

(ii)

grants to Printcolor a non-exclusive, non-transferable, limited right and
license during the Term to affix the Signature DNA Markers only on Printcolor
Products for distribution to Printcolor’s customers;

 

(iii)

agrees that once Printcolor has identified a customer to ADNAS in writing, ADNAS
will not offer its products to this customer, except through Printcolor, for as
long as customer remains a customer of Printcolor; and

 

(iv)

agrees that any inquiries received by ADNAS from customers in markets as
described in Schedule A shall be forwarded to Printcolor.

 

2.1.1

Printcolor hereby:

 

(i)

agrees to exclusively use SigNature DNA during the Term of this Agreement.

 

(ii)

agrees to produce sample prints to include in its security solutions hand book
and to develop sample kits for marketing purposes, and to provide such handbooks
to ADNAS in reasonable quantity.

 

2.2

Specific Restrictions. Without in any way expanding the rights granted above,
Printcolor’s use of the SigNature DNA Markers shall be restricted in accordance
with the following specific restrictions.

 

2.3

No Unauthorized Use. Printcolor shall not use the SigNature DNA Markers except
as expressly permitted under the terms of this Agreement.

 

2.4

No Altering. Printcolor shall not alter, translate, adapt or vary the SigNature
DNA Markers.

 

2.5

No Reverse Engineering. Printcolor shall not decompile or disassemble the
SigNature DNA Markers or reverse engineer the SigNature DNA Markers (or attempt,
authorize or permit the same).

 

2.6

No Copying. Printcolor may not make or attempt to make copies of the SigNature
DNA Markers.

 

3.

ORDERS/FEES

 

3.1 Purchase Orders. Printcolor shall submit purchase orders to ADNAS for one of

 

the following:

 

3.1.1

“Printcolor” DNA for general applications requiring lower security;

 

3.1.2

Ten “mix and Match” DNA for individualized applications requiring higher
security;or

 

3.1.3

Joint development projects for large customers requiring highest security.

 

3.2

Fees. ADNAS shall be entitled to the fees associated with Printcolor’s
distribution of Printcolor Products which have SigNature DNA Markers, in
accordance with the fee schedule set out in Schedule B.

 

3.3

Shipment. All orders will be shipped by ADNAS F.O.B. place of origin within 30
days of receipt of a formal purchase order. Orders needing a degree of custom
development may require some prepayement to initiate development.

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3.4

Taxes. All amounts payable under this Agreement are exclusive of all sales, use,
value-added, withholding, and other taxes and duties. Each party will pay the
taxes and duties assessed against it in connection with this Agreement and its
performance by any authority within or outside of the U.S., except for taxes
payable on the other party’s net income or any other taxes due and payable by
the other in the ordinary course.

 

3.5

Records. During the Term, Printcolor will maintain accurate records necessary to
determine the fees payable pursuant to Section 3.2.

 

3.6

Audit. Not more than once during each six (6) month period, and upon ten (10)
days prior written notice to Printcolor, ADNAS may inspect Printcolor’s records
identified in Section 3.5 to verify compliance with Printcolor’s obligations to
pay feed under this Agreement (“Audit”). If the Audit reveals an underpayment,
Printcolor will pay to ADNAS the full amount of such underpayment within fifteen
(15) days of Printcolor’s receipt of the results of the Audit. The cost of any
Audit shall be born by ADNAS; provided that if the Audit reveals an underpayment
of more than five percent (5%) of the fees due for the period audited, then
Printcolor will bear the reasonable costs of the Audit. Any such Audit shall be
conducted at a time and a place reasonably acceptable to Printcolor, and in such
a manner so as not to interfere with or disrupt Printcolor’s business and
operations.

 

4

TERM AND TERMINATION

 

4.1

Term. This Agreement shall commence on the Effective Date and continue for a
period of three (3) years. Thereafter, this Agreement shall automatically renew
for successive one year terms (each a “Renewal Term”) unless earlier terminated
as permitted below. The Initial Term and all Renewal Terms are referred to
collectively as the “Term”.

 

4.2

Termination.

 

4.2.1.

Breach. Either party may terminate this Agreement for a material breach by the
other party if such breach is not cured within thirty (30) days after receipt of
written notice thereof.

 

4.2.2

Termination. In the event of the expiration or termination of this Agreement all
of the rights granted to Printcolor pursuant to this Agreement shall terminate;
provided that Printcolor may continue to resell any SigNature DNA Markers that
it has inventory of as of the effective date of such termination so long as
Printcolor in not in default of its obligations under Section 2 or 3.

 

 

5.

LIMITED WARRANTIES

 

5.1

Warranties. Each party represents and warrants that (a) it is authorized and has
the right to enter into this Agreement; and (b) it has rights to its products
sufficient to complete this transactions contemplated by this Agreement.

 

5.2

DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 5, THE SIGNATURE DNA
MARKERS AND ANY OTHER MATERIALS PROVIDED BY ADNAS ARE PROVIDED “AS IS” WITHOUT
ANY WARRANTIES OF ANY KIND, AND ADNAS SPECIFICALLY DISCLAIMS ALL
WARRANTIES,WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED
WARRANTIES OF MERCHANTIBILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT.

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6

PROPRIETARY RIGHTS

 

6.1

Each party maintains all rights, title and interest, including all Intellectual
Property Rights, in and to its own proprietary material and all of the
technology relating thereto, except for the license rights expressly granted in
Section 2.

 

6.2

All inventions developed jointly during the Agreement will be assigned to ADNAS.
ADNAS will be responsible for all costs associated with filing, prosecuting and
maintaining any patents resulting from joint inventions. Printcolor shall
provide reasonable assistance in a timely manner to ADNAS at ADNAS’ request.

 

6.3

Printcolor will receive an exclusive, fully paid up worldwide license to any
intellectual property jointly developed during the course of this Agreement.
Should this Agreement be terminated, this license will convert to a non-
exclusive license.

 

7

INDEMNITY

 

7.1

Indemnity. Printcolor shall defend, indemnify and hold harmless ADNAS, its
Affiliates, and their respective officers, directors, employees and agents (each
an “Indemnified Party”) from and against any and all claims, suits, losses,
liabilities, damages, judgments, settlements, costs and expenses (including but
not limited to investigation costs and attorneys’ fees and expenses), that any
Indemnified Party may suffer or incur as a result of any claim by any third
party relating to the Printcolor Products.

 

7.2

Procedure ADNAS or the affected Indemnified Party will (a) promptly notify
Printcolor in writing of any such claim, provided, however, that a delay in
notifying Printcolor shall not avoid Printcolor’s indemnity obligations
hereunder unless, and only to the extent that, Printcolor’s ability to defend
the claim has been materially prejudiced thereby; and (b) provide to Printcolor,
at Printcolor’s expense, all available information, assistance and authority
reasonably necessary to defend. Printcolor shall, at its own expense, assume the
defense of any such claim or suit. In no event, however, shall Printcolor settle
any such claim without the written consent of ADNAS and the affected Indemnified
Party, which consent shall not be unreasonably withheld. Printcolor shall
reimburse ADNS for any costs and expenses (including without limitation
reasonable attorney’s fees) incurred by ADNAS or and Indemnified Party in
enforcing the aforesaid indemnification.

 

 

8.

LIMITATION OF LIABILITY

 

8.1

DISCLAIMER. IN NO EVENT SHALL ADNAS OR ITS AFFILIATES OR PROVIDERS BE LIABLE FOR
ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL, OR PUNITIVE DAMAGES (INCLUDING
WITHOUT LIMITATION, LOSS OF PRODUCTION, LOSS OF PROFITS OR OF CONTRACTS, LOSS OF
REVENUE, LOSS OF OPERATION TIME, LOSS OF GOODWILL OR ANTICIPATED SAVINGS, WASTED
MANAGEMENT OR STAFF TIME) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
ANY MATERIALS PROVIDED BY ADNAS PURSUANT HERETO, WHETHER IN AN ACTION IN
CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, OR ITS
TERMINATION, AND IRRESPECTIVE OF WHETHER ADNAS HAS BEEN ADVISED OF THE
POSSIBLITY OF ANY SUCH DAMAGES.

 

8.2

LIMIT. ADNAS MAXIMUM LIABILITY, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE
AND STRICT LIABILITY) OR BASED ON ANY

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CLAIM FOR INDEMNITY OR CONTRIBUTION OR OTHERWISE, IN RESPECT OF EACH AND EVERY
EVENT ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, SHALL NOT EXCEED THE
AMOUNT PAID TO ADNAS BY RESLLER IN THE TWELVE (12) MONTH PERIOD IMMEDIATELY
PRECEDING THE CLAIM GIVING RISE TO SUCH LIABILITY.

 

 

9.

CONFIDENTIALITY

The parties recognize that each party may disclose to the other information
concerning suppliers, clients, distributors, agents, brokers, buyers, sellers,
technical data, performance data, pricing details, formulas, processes,
commissions, discounts, information relating to competitors and other
information which the parties have acquired through their investment of time,
expense and effort and which may constitute confidential proprietary business
information, intellectual property, and/or trade secrets. The parties
acknowledge and agree that during the term of this Agreement, and in the course
of the discharge of the duties hereunder, the parties shall have access to and
become acquainted with information concerning the operation of the other party,
including, financial, personnel, sales, manufacturing, buying, planning, and
other information owned by and regularly used in the operation of the business
of each party and each party shall also receive information of a proprietary
nature regarding the constitution, formulation, pricing and effectiveness of the
Products and both parties hereto accept that such information as outlined above
constitutes the Confidential Information of the providing party. The parties
hereto agree not to disclose any such Confidential Information, directly or
indirectly, to any other person or party, except as may be necessary for such
person or party to pursue sales as a function of this Agreement and such person
or party shall have executed a Confidentiality Agreement undertaking, binding
that person or party to conditions of confidentiality identical to those
contained in this Agreement. The obligations of confidentiality contained in
this Section shall survive expiration or earlier termination of this Agreement.

 

 

10.

MISCELLANEOUS

 

10.1

Governing Law. This Agreement shall be governed and interpreted in accordance
with the laws of the State of New York, except to the extent that New York
conflict of laws rules would require the application of the law of another state
or country.

 

10.2

Relationship of the Parties. This Agreement does not constitute a partnership
agreement, nor does it create a joint venture or agency relationship between the
parties. Neither party shall hold itself out contrary to the terms of this S.
10.2. Neither party shall be liable to any third party for the representations,
acts, or omissions of the other party.

 

10.3

Notices. Unless otherwise expressly provided for, all notices, requests,
demands, consents or other communications required or permitted under this
Agreement must be in writing and must be delivered personally or sent by
certified mail (postage prepaid and return receipt requested) or by a nationally
recognized courier using its tracking system, to the other party at the address
set forth below (or to any other address given by either party to the other
party in writing):

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If to ADNAS, addressed to:

if to Printcolor, addressed to:

 

Applied DNA Sciences, Inc.

Printcolor Deutschland GmbH

 

25 Health Sciences Drive, Suite 113

Josef-Baumann-Strasse 39

 

Stony Brook, NY 11790

DE-44805 Bochum, Germany

 

Facsimile: 631 444-8848

Facsimile: 0049 234 687 1919

 

Attention: Kurt Jensen

Attention: Peter Paul

 

In the case of mailing, the effective date of delivery of any notice, demand or
consent shall be considered to be ten (10) days after proper mailing. In the
case of courier, the effective date of delivery of any notice, demand, or
consent shall be upon actual delivery as confirmed by the courier’s tracking
system.

 

 

10.4

Assignment. Neither this Agreement nor any right (except as otherwise stated in
Section 2) or obligation under this Agreement may be assigned by either party
without the prior written consent of the other party.

 

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

 

 

Applied DNA Sciences, Inc.

Printcolor:

 

By (sign)

By (sign)

 

 

 

Printed name: Kurt Jensen

Printed name: Dieter Hermann

 

Title: Comptroller

Title: CEO

 

Date: 5/30/2007

Date: 21th May 2007

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Schedule A

 

Printcolor will initially use the SigNature DNA Markers in the following
products for distribution to its customers. Additional products may be added to
this list in the future:

 

Initially Printcolor will focus on the following markets:

•Tickets and tags

•Security plastic label

•Textile label

•DVD replication

•Luxury packaging

•OEM parts (direct decoration)

•Plastic cards

•High security printers (Money, State documents) via specialized partner

 

Ink technology:

Initially, Printcolor will focus on their available ink technology

 

1.

Screen printing inks

 

2.

Flexo printing inks

 

3.

Pad printing inks

 

4.

DOD digital printing inks

However, using offset printing inks from a partner company can be seen as an
option if markets require.

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SCHEDULE B

 

Printcolor shall pay ADNAS the following fees:

 

 

1.

For Printcolor Product 3.1.1 Printcolor shall pay to ADNAS $*** per liter of
Printcolor Product which contains SigNature DNA Markers

 

2.

For Printcolor Product 3.1.2, Printcolor shall pay to ADNAS $*** per liter of
Printcolor Product which contains SigNature DNA Markers.....

 

3.

For Printcolor Products 3.1.3, which require joint development, Printcolor and
ADNAS will share in Profits ***. Companies will be responsible for their own
costs of development.

 

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