Document:

ex10-29.htm

EXHIBIT 10.29

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

APPLIED DNA SCIENCES, INC.

 

PURCHASE WARRANT

 

Warrant No. __ Issue Date: July 15, 2011

 

THIS PURCHASE WARRANT certifies that, for value received, __________ (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the Issue Date and on or prior to the close of business on July 15, 2018 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Applied DNA Sciences, Inc., a Delaware corporation (the “Company”), at the Exercise Price (as defined below) an aggregate of __________ fully paid, validly issued and nonassessable shares of common stock, $0.001 par value per share (the “Common Stock”), of the Company.  As used herein “Underlying Securities” means, the shares of Common Stock, issuable upon exercise of this Warrant.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the Company and the Warrant Holder hereby agree as follows:

 

Section 1.  Exercise of Warrant.

 

 

 

 

 

  (a)     Process.  Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Issue Date and on or before the Termination Date by delivery to the Company (the date of such delivery, the “Exercise Date”) of a duly executed facsimile copy of the Notice of Exercise attached hereto as Exhibit A (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company).  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased the entire Underlying Securities available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days (as defined below) of the date the final Notice of Exercise is delivered to the Company.  Partial exercises of this Warrant resulting in purchases of a portion of the Underlying Securities available hereunder shall have the effect of lowering the Underlying Securities purchasable hereunder by the Underlying Securities purchased.  The Holder and the Company shall maintain records showing the Underlying Securities purchased and the date of such purchases.  The Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such notice.  In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.  The Holder may provide this Warrant, or an affidavit of lost security, to the Company within a reasonable period after the delivery of any Notice of Exercise related to any partial exercise of this Warrant, and the Company, at its expense, will promptly and, in any event within three (3) Trading Days thereafter, issue and deliver to the Holder a new Warrant of like tenor, registered in the name of the Holder and exercisable, in the aggregate, for the remaining Underlying Securities available for purchase under this Warrant.  The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Underlying Securities hereunder, the Underlying Securities available for purchase hereunder at any given time may be less than the amount stated on the face hereof.  As used herein (i) “Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York Time), and (ii) “Principal Market” means the OTC Bulletin Board.

 

  (b)     Exercise Price.  For purposes of this Warrant, “Exercise Price” means $0.0475 per share;

 

  (c)     Cash Exercise.  This Warrant may be exercised in whole or in part at any time prior to the Termination Date, by delivery of the following to the Company:

 

(i)      A duly completed and executed Notice of Exercise in the form attached hereto as Exhibit B; and

 

(ii)     The aggregate purchase price for the Underlying Securities with respect to which this Warrant is being exercised, in lawful money of the United States, in one, or a combination, of the following methods: (1) cash, (2) certified check or bank draft payable to the order of the Company, or (3) by wire transfer of immediately available funds.

 

  (d)     Cashless Exercise.  This Warrant may be exercised in whole or in part at any time prior to the Termination Date, by means of a “cashless exercise” in which event the Company shall issue to the Holder the number of Underlying Securities determined as follows:

 

 

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X = Y [(A-B)/A]

	
where:

	  
	  	
X = the number of Underlying Securities to be issued to the Holder.

	  	  
	  	
Y = the number of Underlying Securities with respect to which this Warrant is being exercised.

	  	  
	  	
A = the volume weighted average closing price of the Common Stock for the five (5) consecutive Trading Day period ending on the Trading Day immediately preceding the date of such election.

	  	  
	  	
B = the Exercise Price.

	  	  

  (e)     Delivery of Underlying Securities; etc.

 

(i)      Upon exercise of this Warrant, the Company shall promptly (but in no event later than five (5) Trading Days after the Exercise Date) (the “Delivery Date”) issue and deliver (or cause to be issued and delivered) to the Holder the Underlying Securities issuable upon such exercise. The Holder, or any person permissibly designated by the Holder to receive the Underlying Securities, shall be deemed to have become the holder of record of such Underlying Securities as of the Exercise Date.

 

(ii)     To the extent permitted by law, the Company’s obligations to issue and deliver the Underlying Securities in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Underlying Securities. Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver the Underlying Securities issuable upon exercise of this Warrant as required pursuant to the terms hereof.

 

(iii)     If the Company fails to transmit to the Holder Underlying Securities pursuant to this Section 1(e) by the fifth Trading Day immediately following the Delivery Date, then the Holder will have the right to rescind such exercise.

 

(iv)     Issuance of Underlying Securities shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Underlying Securities, all of which taxes and expenses shall be paid by the Company, and such Underlying Securities shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event Underlying Securities are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Exhibit C duly executed by the Holder.

 

 

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  (f)      Notice to Allow Exercise by the Holder.  If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register (as defined below) of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  Subject to applicable law, the Holder is entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice.  Notwithstanding the foregoing, the delivery of the notice described in this Section 1(f) is not intended to and shall not bestow upon the Holder any voting rights whatsoever with respect to the Warrant.

 

Section 2.      Transfer of Warrant.

 

  (a)     Transferability.  Subject to compliance with any applicable federal or state securities laws, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto as Exhibit B duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant in the name of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  A Warrant, if properly assigned, may be exercised by a new holder for the purchase of Underlying Securities without having a new Warrant issued.

 

 

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  (b)     New Warrant.  This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 2(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this Warrant except as to the Underlying Securities issuable pursuant thereto.

 

  (c)     Warrant Register.  The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

Section 3.      Registration Rights

 

  (a)     Demand Registration.

 

(i)       If, at any time, the Company shall receive a written request from the Holder that the Company effect the registration under the Securities Act of 1933, as amended (the “Securities Act”), of shares of Common Stock issuable upon exercise hereof (the “Registrable Securities”), then the Company will use its reasonable efforts to effect, as expeditiously as possible, the registration under the Securities Act of the Registrable Securities that the Company has been so requested to register by the Holder to the extent necessary to permit the disposition (in accordance with the intended methods thereof) of the Registrable Securities so to be registered; provided, that the Company shall not be obligated to effect more than one (1) Demand Registration pursuant to this Section 3(a).

 

(ii)      The Company will be liable for and pay all expenses in connection with any Demand Registration.

 

  (b)     Piggyback Registration.

 

(i)  If the Company proposes to register any Common Stock under the Securities Act (other than a registration on Form S-8 or S-4, or any successor or similar forms, relating to Common Stock issuable upon exercise of employee stock options or in connection with any employee benefit or similar plan of the Company or in connection with a direct or indirect acquisition by the Company of another person), whether or not for sale for its own account, it will each such time give written notice at least ten (10) Trading Days prior to the anticipated filing date of the registration statement relating to such registration to the Holder, which notice shall set forth the Holder’s rights under this Section 3(b) and shall offer the Holder the opportunity to include in such registration statement the number of Registrable Securities as the Holder may request.  Upon the written request of the Holder made within ten (10) days after the receipt of notice from the Company (which request shall specify the number of Registrable Securities intended to be disposed of by the Holder), the Company will use its reasonable efforts to effect the registration under the Securities Act of all Registrable Securities that the Company has been so requested to register by the Holder; provided that if, at any time after giving written notice of its intention to register any securities pursuant to this Section 3(b) and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register such securities, the Company shall give written notice to the Holder and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration.  No registration effected under this Section 3(b) shall relieve the Company of its obligations to effect a Demand Registration to the extent required by Section 3(a).

 

 

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(ii)      The Company will be liable for and pay all expenses in connection with each registration of Registrable Securities pursuant to this Section 3(b).

 

  (c)     Registration Procedures.

 

(i)  Whenever the Holder requests that any Registrable Securities be registered pursuant to Sections 3(a) or (b) hereof, the Company will as expeditiously as possible prepare and file with the Securities and Exchange Commission (the “SEC”) a registration statement on any form reasonably acceptable to the Holder for which the Company then qualifies or that counsel for the Company shall deem appropriate and which form shall be available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its reasonable efforts to cause such filed registration statement to become and remain effective until the earlier of (A) the date as of which the Holder may sell all of the Registrable Securities covered by such registration statement without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1) (or any successor thereto) promulgated under the Securities Act or (B) the date on which the Holder shall have sold all of the Registrable Securities covered by such registration statement (the “Registration Period”).  The Company shall ensure that each registration statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading. The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a registration statement and the prospectus used in connection with such registration statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep such registration statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement.

 

 

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(ii)  The Company shall permit the Holder to review (A) a registration statement at least three (3) Trading Days prior to its filing with the SEC and (B) all amendments and supplements to all registration statements (except for Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q or any similar or successor reports) within a reasonable number of days prior to their filing with the SEC.  The Company shall furnish to the Holder whose Registrable Securities are included in a registration statement, without charge, (1) copies of any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to any registration statement, (2) promptly after the same is prepared and filed with the SEC, one copy of any registration statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by the Holder, and all exhibits and (3) upon the effectiveness of any registration statement, such number of copies of the prospectus included in such registration statement and all amendments and supplements thereto as the Holder may reasonably request.

 

(iii)  The Company shall use its reasonable efforts to (A) register and qualify, unless an exemption from registration and qualification applies, the resale by the Holder under such other securities or “blue sky” laws of all applicable jurisdictions in the United States, (B) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (C) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (D) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (1) make any change to its certificate of incorporation or bylaws, (2) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (3) subject itself to general taxation in any such jurisdiction, or (4) file a general consent to service of process in any such jurisdiction.  The Company shall promptly notify the Holder of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of notice of the initiation or threatening of any proceeding for such purpose.

 

(iv)  The Company shall notify the Holder in writing of the happening of any event, as promptly as reasonably practicable after becoming aware of such event, as a result of which the prospectus included in a registration statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), promptly prepare a supplement or amendment to such registration statement to correct such untrue statement or omission, and deliver such number of copies of such supplement or amendment to the Holder as the Holder may reasonably request.  The Company shall also promptly notify the Holder in writing (A) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a registration statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to each the Holder by facsimile or e-mail on the same day of such effectiveness and by overnight mail), (B) of any request by the SEC for amendments or supplements to a registration statement or related prospectus or related information, and (C) of the Company’s reasonable determination that a post-effective amendment to a registration statement would be appropriate.

 

 

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(v)  If the Holder is required under applicable securities laws to be described in the registration statement as an underwriter, at the reasonable request of the Holder, the Company shall furnish to the Holder, on the date of the effectiveness of the registration statement and thereafter from time to time on such dates as the Holder may reasonably request (A) a letter, dated as of such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Holder, and (B) an opinion, dated as of such date, of counsel representing the Company for purposes of such registration statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Holder.

 

(vi)  Upon the written request of the Holder in connection with the Holder’s due diligence requirements, if any, the Company shall make available for inspection by the Holder or agents retained by the Holder (collectively, the “Inspectors”), all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector, and cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably request; provided, however, that each Inspector shall agree to hold in strict confidence and shall not make any disclosure (except to the Holder) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (A) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any registration statement or is otherwise required under the Securities Act, (B) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (C) the information in such Records has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement.  The Holder agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential.  Nothing herein shall be deemed to limit the Holder’s ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

 

(vii)  The Company shall hold in confidence and not make any disclosure of information concerning the Holder provided to the Company unless (A) disclosure of such information is necessary to comply with federal or state securities laws, (B) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any registration statement, (C) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (D) such information has been made generally available to the public other than by disclosure in violation of this Warrant.  The Company agrees that it shall, upon learning that disclosure of such information concerning the Holder is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Holder and allow the Holder, at the Holder’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

 

 

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(viii)  The Company shall use its reasonable efforts either to cause all of the Registrable Securities covered by a registration statement to be listed or quoted on each securities exchange, bulletin board or quotation system on which securities of the same class or series issued by the Company are then listed or quoted.

 

(ix)         The Company shall cooperate with the Holder and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a registration statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Holder may reasonably request and registered in such names as the Holder may request.

 

(x)          If requested by the Holder, the Company shall (A) as soon as reasonably practicable incorporate in a prospectus supplement or post-effective amendment such information as the Holder reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (B) as soon as reasonably practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (C) as soon as reasonably practicable, supplement or make amendments to any registration statement if reasonably requested by the Holder.

 

(xi)         The Company shall use its reasonable efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.

 

(xii)        The Company shall otherwise use its reasonable efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.

 

(xiii)       Within two (2) Trading Days after a registration statement which covers Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Holder) confirmation that such registration statement has been declared effective by the SEC.

 

Section 4.      Miscellaneous.

 

  (a)     Loss, Theft, Destruction or Mutilation of Warrant.  The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and upon surrender and cancellation of such Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor and dated as of such cancellation, in lieu of such Warrant.

 

  (b)     Saturdays, Sundays, Holidays, etc.  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 Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.

 

 

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  (c)     Company Covenants.

 

(i)  The Company covenants that during the period the Warrant is outstanding and exercisable, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the exercise in full of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing Underlying Securities to execute and issue the necessary Underlying Securities upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Underlying Securities may be issued as provided herein without violation of any applicable law or regulation.  The Company covenants that all Underlying Securities which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

(ii)  The Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder as set forth in this Warrant against impairment.

 

  (d)     Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.  The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  In the event that any provision of this Warrant is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Warrant.  THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

 

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  (e)     Restrictions.  The Holder acknowledges that the Underlying Securities acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws and shall bear a restrictive legend in substantially the following form:

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

  (f)      Notices.  Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Warrant must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) Trading Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same.  The addresses and facsimile numbers for such communications shall be:

 

	 	If to the Company:
	 	 
	 	Applied DNA Sciences, Inc.
	 	25 Health Sciences Drive, Suite 113
	 	Stony Brook, New York 11790
	 	Telephone:	(631) 444-6370
	 	Facsimile:	(631) 444-8848
	 	Attention:	Chief Financial Officer
	 	 
	 	If to the Holder:
	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	Telephone: 	 	 
	 	Facsimile:	 	 
	 	Attention:

 

 

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  (g)     Limitation of Liability.  No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Underlying Securities, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the Exercise Price of any Underlying Security of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

  (h)    Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

  (i)      Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of the Holder.  The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by any such Holder or holder of Underlying Securities.

 

  (j)      Amendment; Waiver.  No provision of this Warrant may be waived or amended other than by written instrument signed by the Company and the Holder and their successors and assigns.

 

  (k)     Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

  (l)      Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

 

 

12

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	 	APPLIED DNA SCIENCES, INC.
	 	 	 
	 	 	 
	 	By: 	 	 
	 	 	Name: Kurt H. Jensen
	 	 	Title:  Chief Financial Officer

 

 

 

 

 

EXHIBIT A

NOTICE OF EXERCISE

 

TO:          Applied DNA Sciences, Inc.

 

1.           [  ] (Check if applicable)  The undersigned hereby elects to purchase [___________] shares of Common Stock, $0.001 par value per share, of the Company pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise price related to such principal amount in full in lawful money of the United States.

 

Or

 

1.           [  ] (Check if applicable)  The undersigned hereby elects to purchase shares of Common Stock, $0.001 par value per share, of the Company as a cashless exercise of $[_________] of the total Exercise Price of this Warrant.

 

2.           Please issue Common Stock in the name of the undersigned or in such other name as is specified below:

 

	 	 

 

The Common Stock shall be delivered by physical delivery to:

 

	
 

	 
	 	 
	 	 
	 	 
	 	 

 

3.           Accredited Investor.  The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

 

	[SIGNATURE OF HOLDER]	 	 
	 	 	 	 
	Name of Investing Entity:	 	 
	 	 	 	 
	
Signature of Authorized Signatory of Investing Entity:

	 
	 	 	 	 
	Name of Authorized Signatory:	 
	 	 	 	 
	Title of Authorized Signatory: 	 
	 	 	 	 
	Date: 	 

 

 

 

 

 

EXHIBIT C

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

FOR VALUE RECEIVED, [____] all of or [_______] of the Common Stock issuable upon exercise of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	 	whose address is	 
	 	 	 	 
	 	 
	 	 	 	 
	 	 
	 	 	 	 
	Dated: 	 	, 	 	 	 	 	 
	 	 	 	 
	 	 	Holder’s Signature:	 	 
	 	 	 	 
	 	 	Holder’s Address:  	 	 
	 	 	 	 
	 	 	 	 	 

 

 

.

 

 

                                          ,ex10-30.htm

EXHIBIT 10.30

 

Confidential Treatment Requested

Certain portions of this exhibit, as indicated by ***, have been omitted, pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. The omitted materials have been separately filed with the Securities and Exchange Commission.

 

JOINT DEVELOPMENT AGREEMENT

 

This Joint Development Agreement (the "Agreement") is entered into between C.F. Martin & Co., Inc., a Pennsylvania Corporation having a business address of 510 Sycamore Street, Nazareth, PA 18064 ("Martin"), and Applied DNA Sciences, a Delaware Corporation having a business address of 25 Health Sciences Drive, Suite 215, Stony Brook, NY 11790 ("ADNAS")(Martin and ADNAS are collectively referred to as the "Parties"), on June 30, 2011 (the "Effective Date").

 

RECITALS

 

Martin designs and manufactures musical instruments such as acoustic guitars, strings for acoustic guitars, and related guitar components and accessories. Martin is the largest producer of acoustic guitars in the United States and is highly regarded around the world for creating some of the finest instruments and introducing innovations that have become industry standards in the music products industry. Established in 1833, Martin is one of the oldest surviving makers of guitars in the world.

 

Martin recognizes that counterfeit acoustic guitars and guitar strings bearing the Martin name and trademarks are manufactured and sold around the world, and that sophisticated counterfeiters produce guitars with a high degree of likeness to an authentic Martin guitar. Sales of counterfeit guitars diminish sales of authentic Martin guitars and counterfeit guitars diminish the goodwill associated with the Martin name. Martin desires to combat counterfeiting of its musical instruments, strings, and related components and accessories with advanced authentication technology.

 

ADNAS is an innovator in anti-counterfeit technology. ADNAS develops and implements novel vehicles and protocols for labeling and authenticating a wide array of articles with plant and plant-derived DNA. ADNAS has developed plant and plant-derived DNA markers and methods for labeling and authenticating products, including musical instruments, and authenticating the originality of products labeled with its DNA markers. The platform formulations, techniques, and know-how are proprietary to ADNAS.

 

ADNAS desires to expand its customer base to include manufacturers of musical instruments and musical instrument components, including manufacturers of guitars and guitar strings. As part of its marketing and publicity efforts, ADNAS desires that Martin identify ADNAS as a supplier of anti-counterfeit technology used to label Martin guitars, guitar strings, components, and accessories.

 

 

Martin and ADNAS desire to enter into an agreement to develop new techniques and know-how for labeling guitars and guitar strings with DNA markers, such that the new techniques and know-how are compatible with the unique attributes of Martin's guitars and guitar strings, and do not negatively affect the sound quality produced by these guitars and guitar strings. Martin and ADNAS desire to utilize and promote the use of the new techniques and know-how for labeling and authenticating guitars and guitar strings using DNA markers.

 

 

 

 

Confidential Treatment Requested

 

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NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual promises, covenants, and agreements contained in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows.

 

ARTICLE 1

DEVELOPMENT PROGRAM

 

1.1         The Parties recognize and acknowledge that prior to the Effective Date of this Agreement, the Parties jointly developed and created techniques and know-how for labeling guitars and guitar strings with DNA markers. The Parties agree that such jointly developed techniques, and know-how are within the scope of this Agreement, and that all Articles of this Agreement shall apply retroactively to all efforts undertaken to jointly develop techniques and know-how for labeling guitars and guitar strings with DNA markers, as well as to all techniques and know-how jointly developed by the Parties prior to the Effective Date of this Agreement. As used in this Agreement, the term "guitars" includes guitar components and guitar accessories.

 

A.           Martin acknowledges that the platform technology for creating and developing DNA markers, and formulating them in vehicles for anti-counterfeiting and authentication applications is proprietary to ADNAS.

 

B.            Martin acknowledges that DNA markers created by ADNAS specifically for Martin's guitars and guitar strings are stored and archived by ADNAS.

 

1.2          Immediately following execution of this Agreement, the Parties shall commence activity to continue to jointly develop, create, and apply techniques and know-how for labeling guitars and guitar strings with DNA markers. "DNA markers" include compositions of plant and/or plant-derived polynucleotides having any length or sequence, having any number of strands, and with or without a detectable label.

 

1.3          Martin may, from time to time, request ADNAS to research and produce new DNA markers, buffers, materials, and reagents for labeling guitars or guitar strings with DNA markers. The Parties agree to confer about the cost, scope, and feasibility of any such request, and thereafter, ADNAS may decline the request in its discretion.

 

1.4          Martin may use DNA markers provided by ADNAS in research relating to, among other things, the compatibility of the markers with acoustic guitars and guitar strings, suitable locations on acoustic guitars and guitar strings for labeling with DNA markers, the effect of labeling on the sound quality produced by a labeled acoustic guitar or guitar string, the ideal stage of manufacture of an acoustic guitar or guitar strings for labeling, the impact of environmental conditions on the DNA makers over time, the relative ease of identifying the locations of the label on the guitar or the guitar strings, and the relative ease of reverse engineering the label.

 

 

 

 

 

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1.5          ADNAS shall provide:

 

DNA markers composed of plant and/or plant-derived DNA; Buffers, materials, and reagents and instructions for storing DNA markers; Reagents, materials, and instructions for labeling products with DNA markers; Expertise for manufacturing DNA markers; Expertise for labeling products with DNA markers; Expertise for authenticating products labeled with DNA markers.

 

1.6           Martin shall provide:

 

Guitars, guitar strings, and guitar components and accessories; Expertise for manufacturing guitars and guitar strings; Expertise on sound quality for guitars and guitar strings; Non-proprietary expertise for packaging, promoting, marketing, and distributing guitars and guitar strings, on an as-needed basis and for the limited purpose of fulfilling Martin's duties under this Agreement.

 

1.7          Martin and ADNAS agree that time is of the essence and therefore agree to use their best efforts to complete the development and creation of techniques and know-how for labeling guitars and guitar strings with DNA markers. "Best efforts" are those steps that a commercially reasonable party in the position of Martin or ADNAS would take under the same circumstances.

 

ARTICLE 2

FUNDING

 

2.1           Each party shall bear and be responsible for its own expenses and costs relating to all materials, supplies, reagents, licenses, labor, and work on the development and creation of techniques and know-how for labeling guitars and guitar strings with DNA markers in accordance with this Agreement.

 

ARTICLE 3

EXCLUSIVITY

 

3.1           ADNAS and Martin agree not to sell, offer for sale, enter into any agreement with any third party for the future sale of, advertise, or market, anywhere in the world, subject to paragraph 3.1A below, any jointly developed technique for labeling guitars or guitar strings with DNA markers for a period of six (6) months beginning on the Effective Date of this Agreement (the "Period of Exclusivity").

 

 

 

 

 

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A.            During the Period of Exclusivity, ADNAS may sell, offer for sale, or enter into any agreement for the future sale of any jointly developed technique for labeling guitars or guitar strings with DNA markers to the following companies:***, and other companies agreed upon in writing by the Parties.

 

3.2           Martin shall purchase DNA markers exclusively from ADNAS during the term of this Agreement or during the Period of Exclusivity, whichever is longer.

 

ARTICLE 4

PUBLICITY

 

4.1           Each party agrees to recognize and acknowledge the other party as an innovator of techniques for labeling guitars and guitar strings using DNA markers in all information, publications, data, advertising, marketing, promotional materials, and publicity, if any, relating to jointly developed techniques, guitars or guitar strings labeled using jointly developed techniques, or materials or kits for labeling guitars or guitar strings using jointly developed techniques.

 

4.2           Martin and ADNAS agree that, during the Period of Exclusivity, all information, data, advertising, and publicity, if any, relating to guitars or guitar strings labeled with DNA markers, or labeled using jointly developed techniques for labeling guitars or guitar strings with DNA markers shall be jointly managed by Martin and ADNAS. During the Period of Exclusivity, publication of information, experiments, data, test results, abstracts, posters, and other public presentations by ADNAS pertaining to jointly developed techniques for labeling guitars or guitar strings with DNA markers shall take place only with the express written consent of Martin, which consent shall not be unreasonably withheld.

 

4.3           Martin agrees that ADNAS shall not be required to obligate purchasers from or

 

licensees of ADNAS of DNA markers, materials, kits, reagents, or techniques for labeling guitars or guitar strings with DNA markers, whether or not jointly developed by Martin and ADNAS, to acknowledge or identify Martin on any product labeled with a DNA marker, or on any packaging or case provided with a product labeled with a DNA marker, subject to paragraph 4.4 below.

 

4.4           ADNAS shall use commercially reasonable efforts to require any purchasers from and any licensees of ADNAS of techniques for labeling guitars or guitar strings with DNA markers jointly developed by Martin and ADNAS to acknowledge and identify Martin and ADNAS as joint developers of techniques for labeling guitars or guitar strings with DNA markers on any and all information, brochures, presentations, publications, data, advertisements, advertising materials, marketing materials, promotional materials, press releases, articles, literature, or other materials (the "Promotional Materials") about, relating to, or describing the source, origin, or the development of the jointly developed techniques for labeling guitars or guitar strings with DNA markers, if and when said purchasers or licensees present, exhibit, demonstrate, publish, distribute, or otherwise communicate such Promotional Materials in any form, during, in, or on websites, social media, trade journals, trade shows, trade magazines, newspapers, newsletters, programs, or other forum.

 

 

 

 

 

Confidential Treatment Requested

 

 

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4.5           ADNAS agrees to use commercially reasonable efforts to acknowledge and identify Martin as a joint developer of techniques for labeling guitars or guitar strings with DNA markers in all information, brochures, publications, data, advertisements, advertising materials, marketing materials, promotional materials, press releases, articles, literature, or other materials about or relating to guitars or guitar strings labeled with DNA markers using these techniques, presented, exhibited, demonstrated, published, distributed, or otherwise communicated, in any form, during, in, or on websites, social media, trade journals, trade shows, trade magazines, newspapers, newsletters, programs, or other forum about or relating to the manufacture, labeling, or authentication of musical instruments.

 

4.6           Martin agrees to use commercially reasonable efforts to acknowledge and

 

identify ADNAS as a joint developer of techniques for labeling guitars or guitar strings with DNA markers in all information, brochures, publications, data, advertisements, advertising materials, marketing materials, promotional materials, press releases, articles, literature, or other materials about or relating to guitars or guitar strings labeled with DNA markers using these techniques, presented, exhibited, demonstrated, published, distributed, or otherwise communicated, in any form, during, in, or on websites, social media, trade journals, trade shows, trade magazines, newspapers, newsletters, programs, or other forum about or relating to the manufacture, labeling, or authentication of musical instruments.

 

4.7           Neither party shall use the other party's trademarks in any way in any marketing, advertising, promotional, or other materials without the prior written consent of the other party.

 

ARTICLE 5

INVENTIONS AND PATENTS

 

5.1           All patents, patent applications, know-how, or other proprietary information existing before this Agreement, and disclosed under this Agreement and the confidentiality provisions described in Article 6 of this Agreement, shall remain the property of the disclosing party.

 

5.2           The Parties shall jointly own all inventions, whether patentable or not, conceived or first reduced to practice, together with all technical information and know-how relating to techniques or know-how for labeling guitars or guitar strings with DNA markers developed jointly in the course of this Agreement.

 

 

 

 

 

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5.3           The Parties agree to confer about all decisions concerning the selection of patent counsel and the filing and prosecuting of patent applications, if any, in the United States and in any international jurisdiction, relating to jointly developed techniques or know-how for labeling guitars or guitar strings with DNA markers.

 

5.4           Each party shall have the right to use jointly developed techniques or know-how for labeling guitars or guitar strings without the permission of the other party. For any jointly owned patents or patent applications, each party shall have the right to make, use, or sell products or processes covered by claims in the patents or patent applications without the permission of the other party.

 

5.5            Neither party may sell, offer for sale, gift, transfer, assign, encumber, pledge, or license jointly owned patents or patent applications to any third party without the prior written consent of the other party.

 

5.6           Each party agrees to supply all information and evidence of which it has knowledge or possession, relating to the making and practice of any inventions relating to jointly developed techniques or know-how for labeling guitars or guitar strings, to testify in any legal proceeding relating thereto, to execute all instruments proper to patent or evidence ownership of the inventions in the United States of America and foreign countries, and to execute all instruments proper to carry out the intent of this Agreement.

 

5.7           Each party shall maintain suitable agreements with their respective employees and agents such that title to any inventions described in this Article can be transferred free of any kind of ownership interest by such employees and agents.

 

5.8           The Parties shall jointly own and equally bear all responsibility, including costs and fees, for filing, prosecuting, and maintaining any patent applications or patents issuing from the applications relating to jointly developed techniques or know-how for labeling guitars or guitar strings with DNA markers in the United States.

 

5.9           The Parties agree to confer about ownership, and responsibility for payment of costs and fees for filing, prosecuting, and maintaining any patent applications or patents issuing from the applications relating to jointly developed techniques or know-how for labeling guitars or guitar strings with DNA markers in any international jurisdiction.

 

 

 

 

 

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ARTICLE 6

CONFIDENTIAL TREATMENT OF INFORMATION

 

6.1           The Parties agree that all information relating to DNA markers and techniques and know-how for labeling guitars and guitar strings with DNA markers developed under this Agreement shall be considered proprietary and confidential to the Parties, and neither party may disclose such information without the prior written consent of the other party, except that Martin or ADNAS may disclose such information in the context of preparing, filing, and prosecuting patent applications as set forth in Article 5 of this Agreement. In addition to the foregoing, both parties have confidential and proprietary technical and business information that they are willing to disclose to each other for furthering the purpose of this Agreement, all of which shall be disclosed or used under the following terms and conditions:

 

A.            Martin and ADNAS are willing to obtain or disclose to each other confidential and proprietary technical business information of the type and for the purpose mentioned above with the understanding that the party receiving the information (the "Receiving Party") agrees to receive all information in confidence and to use such information solely for the purpose stated above. For the term of this Agreement, each party grants to the other party the limited right to use any Confidential Information disclosed by the party, for the limited purposes of jointly developing techniques and know-how for labeling guitars and guitar strings with DNA markers. The Parties shall not use the Confidential Information for any purposes other than fulfilling their respective duties under this Agreement.

 

(i).   "Confidential Information" means all nonpublic information, whether in oral, written, recorded, electronic, or other form, that the party disclosing the information (the "Disclosing Party") designates as being confidential, or which, under the circumstances surrounding disclosure, the Receiving Party knows or has reason to know should be treated as confidential. Confidential Information includes, but is not limited to the products, services, research, formulas, compilations, programs, devices, concepts, designs, configurations, methods, techniques, strategies, processes, data, knowledge, intellectual property, know-how, and unique combinations of separate items that individually may or may not be confidential, which information is not generally known to the public and either derives economic value, actual or potential, from not being generally known or has a character such that the Disclosing Party has a legitimate interest in maintaining secrecy. Notwithstanding the foregoing, Confidential Information does not include information that, as evidenced by written records (a) was possessed by the Receiving Party before receipt; (b) is or becomes generally available to the public through no fault of the Receiving Party; (c) is rightfully received from a third party owing no duty of confidentiality; or (d) is independently developed by personnel of the Receiving Party.

 

(ii).   It is further agreed and understood, even if the obligations of confidentiality are governed by the exceptions recited above, the Receiving Party shall still retain in confidence the fact that any information or data supplied under this Agreement was obtained from the Disclosing Party as well as any correlation, identity, similarity, or relation between (a) the information and data acquired from the Receiving Party and (b) information which may become part of the public domain or which may be received from a third party.

 

 

 

 

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B.            The Parties agree that all Confidential Information received under this Agreement shall be maintained in confidence for a period of five (5) years from the receipt of such Confidential Information. The Receiving Party (i) shall use the same standard of care to protect the confidentiality of the Confidential Information as it uses to protect its own Confidential Information, and in any event no less than a reasonable degree of care, (ii) shall limit the disclosure of Confidential Information to those personnel who have an actual need to know in order to carry out the Receiving Party's obligations under this Agreement and have a written obligation to protect the confidentiality of the Confidential Information, and (iii) shall not reproduce, or disclose the Confidential Information to any third party, in any form without the prior written consent of the other party.

 

C.   The Parties agree that all Confidential Information received or used by the Receiving Party in connection with this Agreement shall remain the sole and exclusive property of the Disclosing Party.

 

D.   Each party agrees to return all materials, including but not limited to written, recorded, or electronic materials, in their possession or control containing, reflecting, or derived from any Confidential Information belonging to the other party upon the request of that party or upon the expiration or termination of this Agreement.

 

 

ARTICLE 7

ASSIGNMENT

 

7.1           Neither Party shall have the right to transfer or assign any right or obligation under this Agreement by assignment, merger, acquisition, or consolidation without the prior written consent of the other party.

 

 

ARTICLE 8

RELATIONSHIP BETWEEN THE PARTIES

 

8.1           The relationship between the Parties shall be limited to activity relating to the development of techniques or know-how for labeling guitars and guitar strings with DNA markers. Nothing in this Agreement shall be construed to make Martin and ADNAS a partner of one another, nor shall this Agreement be construed to create a general partnership or joint venture between the Parties, nor to authorize either party to act as general agent for the other, nor to permit either party to undertake any contract or obligations for the other party, nor to pledge the credit of the other party.

 

8.2           Martin agrees not to compete, directly or indirectly, with ADNAS in the manufacture or sale of DNA markers or techniques for labeling or authenticating articles, for any purpose, anywhere in the world.

 

 

 

 

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ARTICLE 9

TERM AND TERMINATION

 

9.1           This Agreement shall continue until the Parties agree that the development and creation of techniques or know-how for labeling guitars or guitar strings with DNA markers is complete, unless this Agreement is terminated earlier by ether party as provided in this Article.

 

9.2           Either Martin or ADNAS may terminate this Agreement by giving at least sixty (60) days written notice of termination to the other party.

 

9.3           In the event of a material breach by either Martin or ADNAS, the non-breaching party shall provide the breaching party with written notice of the breach and an opportunity for up to thirty (30) days after the receipt of such notice to cure the breach. If the breach is not cured to the satisfaction of the non-breaching party, then the non-breaching party may immediately terminate this Agreement by providing the breaching party with a written notice. of termination. Termination of this Agreement shall not relieve the breaching party of obligations or liability resulting from the breach.

 

9.4           In the event either party shall make a general assignment for the benefit of creditors, or fail to discharge within sixty (60) days any proceedings for the institution of bankruptcy, or receivership, reorganization for the benefit of creditors, or liquidation, the other party may terminate this Agreement upon thirty (30) days written notice.

 

9.5           In the event of termination or expiration of this Agreement, each party shall retain whatever rights it had in any developments, inventions, know-how, and patents owned as of the effective date of termination and shall be free to exploit such rights for its own accounts without obligation to the other party.

 

9.6           The rights and obligations of the Parties with respect to Confidential Information shall continue beyond the expiration or termination of this Agreement for the period of time specified in Article 6 above.

 

ARTICLE 10

NOTICES

 

All notices required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if enclosed in a sealed envelope and deposited in the United States mails, postage prepaid, for delivery by first-class mail, certified, or registered and returned receipt requested, addressed as follows:

 

 

 

 

 

Confidential Treatment Requested

 

 

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	To:	C.F. Martin & Co., Inc.
	 	
510 Sycamore Street

	 	Nazareth, PA 18064 
	 	Attention:	 	 
	 	 
	 	Applied
	 	DNA Sciences 25 Health 
	 	Sciences Drive Stony 
	 	Brook, NY 11790 
	 	Attention: CFO

 

The date of properly given notice shall be the earlier of five (5) days after the notice is mailed or upon actual receipt thereof.

 

ARTICLE 11

INDEMNIFICATION

 

11.1         ADNAS shall indemnify, defend and hold harmless Martin from and against any claim, demand, suit, liability, damages, loss, or expense, including reasonable attorneys' fees and costs arising out of or related to any claim of infringement of any third party's intellectual property right in the DNA markers, reagents, or materials provided to Martin from ADNAS as part of the development work underlying this Agreement. For purposes of this Agreement, intellectual property rights include patents, trade secrets, and proprietary information.

 

 

ARTICLE 12

DISPUTE RESOLUTION

 

12.1         The Parties agree to cooperate to effectuate the letter and spirit of this Agreement. The Parties shall attempt in good faith to resolve any questions, issues, or disputes arising out of or relating to this Agreement or to the breach, termination, or validity of this Agreement (collectively any "Dispute"), which may occur in the future, promptly by negotiations between representatives who have authority to settle the Dispute. Such Disputes may arise during the implementation of this Agreement or later.

 

12.2         If the Parties are unable to resolve any Dispute on their own, the Parties shall submit the Dispute to a sole mediator selected by the Parties or, at any time at the option of a party, to mediation by the American Arbitration Association ("AAA"). If not thus resolved, the Dispute shall be referred to a sole arbitrator selected by the Parties within thirty (30) days of the mediation or, in the absence of such selection, to final and binding arbitration by a sole arbitrator under the AAA Commercial Arbitration Rules in effect on the date of this Agreement. The mediation and arbitration shall be conducted in Nazareth, Pennsylvania.

 

 

 

 

 

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12.3         Any arbitration award made (i) shall be a bare award limited to a holding for or against a party and affording such remedy as is deemed equitable, just, and within the scope of the Agreement; (ii) may in appropriate circumstances include injunctive relief; (iii) shall be made within four (4) months of the appointment of the arbitrator; and (iv) may be entered in any court. The arbitrator shall determine issues of arbitrability but may not limit, expand, or otherwise modify the terms of the Agreement. The arbitrator shall not have authority to award punitive or other damages in excess of compensatory damages and each party irrevocably waives any claim to such excess damages.

 

12.4         The Parties, their representatives, other participants, and the mediator and arbitrator shall hold the existence, content, and result of mediation and arbitration in confidence. A request by a party to a court for interim measures shall not be deemed a waiver of the obligation to mediate and arbitrate. The requirement for mediation and arbitration shall not be deemed a waiver of any right of termination under this Agreement and the arbitrator is not empowered to act or make any award other than based solely on the rights and obligations of the Parties prior to any such termination. Each party shall bear its own expenses but those related to the compensation and expenses of the mediator and arbitrator shall be borne equally.

 

ARTICLE 13

GENERAL PROVISIONS

 

13.1         This Agreement shall be binding on and inure to the benefit of the Parties, including all parents, subsidiaries, or affiliates, along with all persons under the control of any of the foregoing, including without limitation all agents, attorneys, independent contractors, partners, employees, principals, owners, shareholders, officers, directors, executors, and administrators.

 

13.2         Each party represents and warrants that: (i) it has the full power and authority to enter into this Agreement and perform each of its obligations hereunder; and (ii) no litigation or pending or threatened claims of litigation exist that may adversely affect its ability to perform its obligations hereunder or its rights granted hereunder.

 

13.3         Neither party shall be responsible or liable to the other party for delays or failures to perform under this Agreement due to force majeure, labor disputes, or other similar or dissimilar causes beyond its control.

 

13.4         No assignment of this Agreement shall relieve the assignor of any of its liabilities under this Agreement.

 

13.5         This Agreement constitutes the entire understanding and agreement of the Parties and supersedes any prior understandings, agreements, representations, warranties, statements, and promises, whether written or oral, regarding the subject matter of this Agreement. Neither of the Parties shall be bound by or charged with any oral or written agreement, representation, warranty, statement, promise, or understanding with respect to the subject matter of this Agreement that is not specifically set forth or referred to in this Agreement.

 

 

 

 

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13.6         This Agreement may not be amended, altered, or modified except by an instrument in writing signed by the duly authorized representatives of the Parties.

 

13.7         No delay or failure on the part of either party to this Agreement in exercising any right, power, or privilege under this Agreement shall impair any such right, power, or privilege or be construed as a waiver or acquiescence thereto; nor shall any single or partial exercise of any right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. No waiver shall be valid against either party, unless made in writing and signed by the party against whom enforcement of such waiver is sought, and then only to the extent expressly specified therein.

 

13.8         The use of headings in this Agreement is merely for convenience and shall have no legal effect, and such headings shall not be referred to in construing any provisions of this Agreement.

 

13.9         This Agreement may be executed in multiple counterparts each of which shall constitute an original and all of which shall constitute a single agreement.

 

13.10       This Agreement shall be interpreted and construed, and all legal relations created in this Agreement shall be determined in accordance with the laws of the Commonwealth of Pennsylvania, exclusive of its conflict of laws provisions. Any litigation relating to this Agreement shall be commenced in courts having jurisdiction over Northampton County, Pennsylvania, and each party consents to the jurisdiction of such courts solely for this purpose.

 

13.11       The Parties agree that if any provision of this Agreement or the application thereof is held to be void or voidable, illegal, unenforceable, or invalid, the remaining provisions or applications of this Agreement shall remain in full force and unaffected. If any provision is held to be void or voidable, illegal, unenforceable, or invalid, by any court, administrative agency, arbitrator, or mediator, the parties agree to negotiate in good faith to amend such provision to conform as nearly as possible, in accordance with applicable law, to the intended purpose and intent of the original provision.

 

In witness whereof the parties have caused this Agreement to be executed by their duly authorized representatives, effective the date first set forth above.

 

 

 

	
C.F. MARTIN & CO., INC.

	
Applied DNA Sciences

	 	 	 	 
	
/s/ Gregory Paul

	 	
/s/ Kurt H. Jensen

	 
	
By: Gregory Paul

	 	
By: Kurt H. Jensen

	 
	
Title: Vice President, Corporate Operations

	
Title: CFO

	 
	
Date: 7/12/11

	 	
Date: 7/18/11

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