JOINT DEVELOPMENT AND MARKERTING AGREEMENT

”DNA Technologies” mean the proprietary technologies and know how owned exclusively by ADNAS involving the extraction, recombination, encapsulation, and preservation of botanical DNA and the embedding, implanting or attaching of botanical DNA into various products;

“IIMAK Materials” mean thermal transfer ribbons including any hardware and software required to print using the thermal ribbons

“Product” means thermal transfer ribbons, which utilize and integrate the DNA Technologies.

“Profit” means the actual amount received by IIMAK for the sale of DNA enhanced thermal transfer ribbons 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 actually allowed and 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.

“Territory” means the world.

ADNAS and IIMAK agree to work jointly together to develop thermal transfer ribbons which incorporate ADNAS’s DNA Technologies taggants for the prevention of counterfeiting and diversion.

The initial joint development period will be six (6) months (“Initial Joint Development”), which can be extended by mutual written agreement. The Initial Joint Development period will begin on the Effective Date of this Agreement. A specific plan detailing each Party’s responsibilities along with a timeline for fulfilling these responsibilities is attached as Appendix A.

Each Party will be responsible for its own costs and expenses during the Initial Joint Development period and any extensions to the Initial Joint Development period thereafter, unless otherwise agreed to in writing by both parties.

For purposes of Product development and/or improvement and Quality Control, ADNAS may request that IIMAK provide samples of IIMAK’s current products or materials involving the DNA Technologies. IIMAK, at its cost, agrees to provide IIMAK products or materials as reasonably requested by ADNAS and as necessary to the evaluation, testing, development, manufacturing, marketing and distribution of the Product. ADNAS agrees that the IIMAK products and materials shall be used only for the purpose of evaluating and developing Products and shall be used for no other purpose without the prior written consent of IIMAK, and any such use shall be under terms that shall equitably accommodate the financial interests of IIMAK. ADNAS agrees to comply with all reasonable security and chain of custody requirements imposed in writing by IIMAK governing the proper protection, security and control of the IIMAK materials.

To the extent either party does not have formal security or chain of custody requirements, the parties agree to develop mutually acceptable protocols for the secure storage and custody of any ADNAS Materials and/or IIMAK Materials transferred in accordance with this Agreement.

Unless otherwise agreed, ADNAS and IIMAK will each provide the Materials required to develop and/or test the Products as samples at no cost to each other.

During the term of this Agreement, IIMAK shall furnish to ADNAS quarterly written reports detailing the sales and costs for the previous quarter along with the payments owed to ADNAS for that fiscal quarter. Quarterly reports will be due within thirty (30) days after the end of each quarter. Payments due for that quarter will accompany the quarterly reports. Conversion from foreign currency, if any, shall be based upon the conversion rate published in the Wall Street Journal on the last day of the particular quarterly accounting period for which payments are due.

ADNAS shall have the right, upon prior written notice to IIMAK, not more than once in IIMAK’s fiscal year, to engage an independent nationally-certified auditing firm selected by ADNAS and acceptable to IIMAK, which acceptance shall not be unreasonably withheld or delayed, to have access during normal business hours of IIMAK as may be reasonably necessary to verify the accuracy of the reports required to be furnished pursuant to this Section 5.0 B of this Agreement. If such audit shows any underpayment of royalties, then within thirty (30) days after Party’s receipt of such report, IIMAK shall remit to ADNAS:

The records required under this Section 5.0 shall be maintained and available for inspection for a period of five (5) years following the calendar quarter to which they pertain. This Section 5.0D shall survive termination of this Agreement.

Payments due under this Agreement that are more than sixty (60) days late shall be subject to a twenty percent (20%) per annum interest charge.

DNA Material Supply. The parties agree to jointly and continuously determine DNA material stockpile requirements sufficient to meet the production requirements of IIMAK. ADNAS shall stockpile in the US at a facility(s) selected by ADNAS and approved by IIMAK, sufficient DNA Materials to ensure at all times the adequate and on-time supply of DNA Material in quantities sufficient to fully meet the production requirements of IIMAK in a timely manner.

Delivery. ADNAS will use commercially reasonable efforts to deliver the ADNAS Materials at the times specified in its written acknowledgment of a requisition for ADNAS Materials. ADNAS will not be liable to IIMAK or to any other party for any delay in the delivery of the ADNAS Materials not directly attributable to ADNAS.

Shipment. ADNAS will package and ship the ADNAS Materials in accordance with standard commercial practices. The ADNAS Materials will be shipped prepaid to the location specified on IIMAK’s requisition, by a mode of shipment selected by ADNAS. Title, except to the extent the ADNAS Materials contain or consist of software or firmware, will pass to IIMAK upon ADNAS’ delivery of the ADNAS Materials to the facility site of IIMAK.

Ordering. All requisitions for ADNAS Materials submitted by IIMAK will be sent to ADNAS at the address set forth below, email address(es) or via facsimile. All requisitions will specify the type and quantity of the ADNAS Materials requested and the delivery date requested, and will be sent to the attention of Dr. Benjamin Liang with copies to MeiLin Wan and Kurt Jensen . All of IIMAK’s requisitions will be governed exclusively by the terms and conditions of this Agreement.

Acceptance. A requisition will be confirmed or declined by ADNAS in writing, by email, or facsimile within five (5) business days of its receipt.

Upon successful completion of the Joint Development, IIMAK agrees to develop a Manufacturing, Sales & Marketing Plan to undertake manufacturing, sales and marketing efforts to promote the Products into the target markets and to target clients. The Manufacturing, Sales & Marketing Plan shall identify and prioritize clients, define product categories and applications, program marketing activities, news releases, trade show participation, web seminars and direct electronic mailing campaigns. IIMAK shall create industry-specific and customer-specific marketing and presentation Materials and shall mount comprehensive trade publicity programs for the Products as they are developed.

Within the guidelines of the Manufacturing, Sales & Marketing Plan, each of the parties shall provide Technical Sales support to the other party and each shall make appropriate staff or Consultants available to participate in sales calls and meetings with target clients. Technical Sales support shall be provided by each party at its own cost, unless circumstances impose an undue burden upon one party, in which case the parties shall arrange cost-sharing as may be appropriate and such cost sharing shall be set forth in writing, and signed by both parties

ADNAS, at its expense, shall defend any suit brought against IIMAK on the grounds that use of the ADNAS Materials or DNA Technologies for the intended purpose or purposes, as furnished by ADNAS, infringes any United States patent and shall pay the amount of any judgment that may be awarded against IIMAK in any such suit provided and upon condition that IIMAK shall (a) promptly deliver to ADNAS all infringement notices and other papers received by or served upon IIMAK, (b) permit ADNAS to take charge of the defense of such suit and compromise the same, if deemed advisable by ADNAS, and (c) assist in every reasonable way in the conduct of such defense.

IIMAK, at its expense, shall defend any suit brought against ADNAS on the grounds that use of the Products for the intended purpose or purposes, infringes any United States patent and shall pay the amount of any judgment that may be awarded against ADNAS in any such suit provided and upon condition that ADNAS shall (a) promptly deliver to IIMAK all infringement notices and other papers received by or served upon ADNAS, (b) permit IIMAK to take charge of the defense of such suit and compromise the same, if deemed advisable by IIMAK, and (c) assist in every reasonable way in the conduct of such defense.

In the event that IIMAK shall be enjoined by a court of competent jurisdiction from which no appeal can be taken, from selling or using the Products for the intended purpose or purposes on the ground that such sale or use of the Product infringes any such United States or other patent, or it is established to ADNAS satisfaction, upon due investigation, that sale or use of the Product infringes any such United States or other patent, ADNAS at its option may either (i) procure for IIMAK a license to sell and/or use the Products, (ii) modify the Products so as to make it non-infringing without seriously impairing its performance, (iii) replace the Products with a product that is substantially equal but non-infringing, or (iv) accept the return of the Product from IIMAK.

ADNAS shall be responsible for assuring and insuring the integrity of any patent or trademark application process regarding the ADNAS Materials and for safeguarding by reasonable measures the confidentiality of all proprietary or trade secret information related to the ADNAS Materials to be used as components in the Products.

ADNAS shall supply to IIMAK technical specifications for the ADNAS Materials including, but not limited to, MSDS data, suitability for commercial use, stability in environmental and application conditions, safety for use in products exposed to the skin or general human occupational and end-use product exposure, technologies, methods and materials for successful analysis of the DNA component of the products, and specifications for use in marketing materials that describe the characteristics of the ADNAS Materials.

IIMAK shall be responsible for assuring and insuring the integrity of any patent or trademark application process regarding the IIMAK materials and for safeguarding by reasonable measures the confidentiality of all proprietary or trade secret information related to the IIMAK Materials to be used as components in the Products.

ADNAS shall secure Insurance for the Loss of Goods in Transit together with coverage against damages that may arise there from, for the ADNAS materials.

IIMAK shall secure Insurance for the Loss of Goods in Transit to end users(s) together with coverage against damages that may arise therefrom, for the IIMAK materials and the Products.

Each party shall be responsible for acquiring and/or maintaining Product Liability Insurance and shall provide documentation of such insurance or other financial responsibility, upon demand of the other party.

ADNAS and IIMAK shall jointly determine Warranty and shelf-life limitations.

The Parties recognize that each party shall 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.

As used herein, “Confidential Information” of a party means all trade secret, proprietary and confidential information and materials, in any form whatever, relating to such party’s technologies, compounds, research programs, operations or financial or business condition (including, without limitation, know-how, data, drawings, designs, specifications, formulations, processes, methods, equipment, software and pricing information) that is (i) disclosed in writing and marked as “Confidential”, “Proprietary” or with similar words, or (ii) orally or visually disclosed and identified as confidential or proprietary at the time of disclosure and confirmed as such in writing within thirty (30) days thereafter.

Notwithstanding Section 9A or 9B above, “Confidential Information” of a party shall not include any information or materials that:

are approved for release by that party in writing without restriction;

are demonstrated by written records of the receiving party as being previously known to it other than through a prior disclosure by the disclosing party or by any third party with an obligation of confidentiality to the disclosing party;

are publicly known as of the date of this Agreement, or become public knowledge subsequent thereto, through no act or omission of the party receiving the information or any third party with an obligation of confidentiality to such party;

are obtained by the receiving party in good faith from a third party without the violation of any obligation of confidentiality to such party by either the receiving party or such third party; or

are independently developed by or on behalf of the receiving party without the benefit of such party’s Confidential Information, as shown by competent written records.

In Consideration of this Agreement each party agrees not to attempt in any manner to commercially exploit, either directly or indirectly, the proprietary business concepts and Technologies or any of the Confidential Information without the other party’s prior written consent. The parties specifically understand and agree that this prohibition is specifically intended to include any direct or indirect solicitation of the other’s customer/client contacts by either party’s then current Providers, Suppliers, Agents, Employees and/or Representatives.