OUTSOURCE TECHNOLOGY DEVELOPMENT AGREEMENT
Exhibit
10.10
OUTSOURCE
TECHNOLOGY DEVELOPMENT AGREEMENT
This
Outsource Technology Development Agreement (this
“Agreement”)
is entered into and effective as of this 1st day of March, 2018
(the “Effective
Date”) by and between Document Security Systems, Inc.,
a corporation organized and existing under the laws of the State of
New York (“DSS”), and HotApp International Ltd., a corporation organized
and existing under the laws of Hong Kong
(“Developer”).
RECITALS:
WHEREAS, DSS is
engaged in the business of, among other things, developing and
licensing anti-counterfeiting technology, processes and products
providing protection against a wide range of threats, including
product diversion and counterfeiting, brand infringement, forgery,
and unauthorized copying, scanning and photo imaging;
WHEREAS, Developer
is engaged in the business of, among other things, software
development; and
WHEREAS, DSS
desires to retain Developer for the purpose of assisting DSS in
developing an Android software application to be included as part
of DSS’s AuthentiGuard® Technology suite, and DSS is
willing to grant Developer a non-exclusive, limited and
non-transferable license for purposes of such development
activities.
NOW,
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
Capitalized terms
contained herein shall have the meanings ascribed to them herein,
or in Schedule 1
which is annexed hereto and made a part of this
Agreement.
1. Development License
and Fees.
1.1. Development
License. Subject to the terms
and conditions set forth herein, DSS hereby grants to Developer,
and Developer accepts from DSS, for the Term, a non-exclusive,
limited, and non-transferable license to install and use the
Technology for the sole purpose of developing the Improvements (as
defined hereunder) thereto for the benefit of DSS (the
“Technology Development
Services License”).
1.2. Development
Fees.
As payment for Developer’s
satisfactory performance of the services set forth in
Schedule
1 hereto (the
“Technology Development
Services”), DSS shall pay
Developer the sum of US $23,000 per month, for the duration of the
Term hereof, with payments to commence on March 1,
2018.
2.1. Term.
The initial term of this Agreement shall commence on the Effective
Date, and shall continue thereafter for a period of twelve (12)
months (the “Initial
Term”). The Initial Term
shall automatically renew for one-month periods thereafter unless
either party provides 30-days advance notice of termination, unless
earlier terminated pursuant to Section 2.2 hereof. For purposes
hereof, the Initial Term, together with any extension or renewal
terms, shall hereinafter be collectively referred to as the
“Term”.
2.2. Early
Termination.
2.2.1. Either
party may terminate this Agreement prior to expiration of the Term:
(i) upon thirty (30) days prior written notice, or (ii) immediately
upon written notice to the other party if: (a) the other party
declares or a petition is filed in any court for insolvency or
bankruptcy and such petition is not dismissed in thirty (30) days;
(b) the other party reorganizes under the relevant bankruptcy act
or any similar statute in such party’s jurisdiction of
incorporation; (c) the other party consents to the appointment of a
trustee in bankruptcy or a receiver or similar entity; or (d) the
Developer breaches DSS’s Technology or Intellectual Property
rights contained herein.
2.2.2. Upon
the expiration or termination of this Agreement, (i) the Technology
Development Services License granted to Developer hereunder shall
immediately cease, and (ii) Developer shall immediately cease use
of all proprietary technology files heretofore delivered by DSS and
shall deliver to DSS all such proprietary files along with any and
all Improvements completed to date by Developer.
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3. Proprietary
Rights.
3.1. Subject to
Developer’s expressly granted rights under this Agreement,
Developer acknowledges and agrees that DSS shall own all right,
title, and interest in and to the Technology, the Improvements, its
Intellectual Property, and all future derivative works derived
therefrom or developed hereunder. Developer agrees that it will not
at any time (i) do or cause to be done any act or thing contesting
or in any way impairing any part of such right, title and interest
or (ii) represent, expressly or by implication that it has any
right, title or interest in or to any of the foregoing other than
as expressly set forth herein.
3.2. Developer hereby
acknowledges DSS’s claim of sole ownership of the Technology,
the Improvements, and all associated goodwill. Nothing in this
Agreement or in the performance thereof, or that might otherwise be
implied by law, shall operate to grant Developer any right, title,
or interest in or to the Technology or the Improvements. Developer
hereby assigns and shall assign in the future to DSS all rights it
may acquire by operation of law or otherwise in the Technology or
Improvements, along with the goodwill associated therewith. DSS
shall have the sole right to, and in its sole discretion may,
commence, prosecute or defend, and control any legal action
concerning the Technology and Improvements. Developer may not
contest the validity of, by act or omission jeopardize, or take any
action inconsistent with, DSS’s ownership rights or goodwill
in the Technology or Improvements, including any attempted
registration of the Technology or Improvements in Hong Kong or in
any other legal jurisdiction, or any attempts to license the same
to any unauthorized third Person.
4. Definitions.
For purposes of this Agreement, the following capitalized terms
shall have the meanings set forth below.
“Improvements” shall mean
technical improvements, modifications
or enhancements relating to the Technology that are developed by
the Developer pursuant to this Agreement.
“Intellectual
Property” shall
mean, but shall not be limited to, all of DSS’s (i) issued
and pending patents, trademarks, trade names, service marks,
designs, logos, and copyrights, and all pending applications for
registration thereof; (ii) know-how, inventions, improvements,
methods, operation manuals and procedures, trade secrets, technical
information, formulas; (iii) computer software and programs, and
related documentation, updates, and data, whether in object or
source code form, and (vi) other similar proprietary and
intellectual rights, whether or not registered.
“Person”
shall mean any individual, corporation, partnership, limited
liability company, association, trust or any other entity or
organization of any kind or character, including a governmental
authority or agency.
“Technology”
shall collectively mean (i) DSS’s proprietary
AuthentiGuard® technology (including DSS’s related
patents and patent applications, inventions, software, trademarks,
trade names, service marks, technology marks, designs, logos,
copyrights, know-how, trade secrets and any other DSS owned
intellectual property relating thereto), consisting of a unique
application of the AuthentiGuard® patent coupled with next
generation technology and software which enables and end-to-end
brand protection solution for product authentication, counterfeit
deterrence and data tracking via embedded customized technology
marks with hidden codes placed in products which can be read an
authenticated via an application loaded on various devices along
with necessary hardware and DSS’s portal, (ii) DSS’s
Prism Viewer technology comprised of a custom covert Prism image
imbedded in a customer’s products that is viewed and
authenticated through the use of DSS’s propriety smart phone
application, and (iii) DSS’s AuthentiSite technology suite
comprised of an embedded digital Prism image coupled with a
cloud-based security server and a smart phone verification
application for website authentication.
5. Confidentiality;
Non-Disclosure. The parties
acknowledge that they have entered into that certain Mutual
Non-Disclosure Agreement dated as of January 18, 2018 (the
“NDA”), a copy of which is attached hereto
as Exhibit
A. The terms of the NDA shall
be deemed to be incorporated by reference into this
Agreement, mutatis mutandis.
During the Term of this Agreement and
thereafter for a period of five (5) years, the parties shall be
bound by all of the protective terms and conditions of the
NDA.
6. Developer
Liability.
6.1. Developer Liability
for Damages. Developer shall be fully liable, without
limitation, for money damages resulting from its improper or unauthorized use, modification,
alteration, licensing or transfer of the Technology or
Improvements, or resulting from its failure to provide functional
and merchantable Improvements hereunder, which failure shall be
deemed a material breach of this Agreement by
Developer.
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7. DSS’s
Representations and Warranties.
7.1. Power and
Authority. DSS represents and
warrants that it has the right, power and authority to enter into
this Agreement and that the signatory on behalf of such party to
this Agreement has full authority to enter into and bind the party
to the obligations set forth in this Agreement.
7.2. Right to
Technology. DSS represents and
warrants to Developer (i) that the Technology is the sole and
exclusive property of DSS (ii) that DSS possesses all legal right,
title and interest in and to the Technology necessary to grant
Developer the rights provided herein, and (iii) that nothing
contained in this Agreement conflicts with any other obligation or
agreement of DSS.
8. Developer’s Representations,
Warranties and Covenants.
8.1
Power and
Authority. Developer represents and warrants that it has the
right, power and authority to enter into this Agreement and that
the signatory on behalf of such party to this Agreement has full
authority to enter into and bind the party to the obligations set
forth in this Agreement.
8.2
Reverse
Engineering. Developer covenants that it shall not attempt,
directly or indirectly, during the term of this Agreement or at any
time thereafter, (i) to reverse engineer, by any means whatsoever,
the Technology or other Intellectual Property provided to Developer
hereunder, for any unauthorized purpose, and further acknowledges
that such Technology and Intellectual Property has been provided
hereunder by DSS solely for the purpose of enabling Developer to
fully perform its legal duties and obligations hereunder, (ii) to
forensically, graphically or otherwise physically analyze the
Technology or Intellectual Property provided to Developer hereunder
for any unauthorized purpose, or (iii) to compile/assemble,
decrypt, or create any derivative works based upon the Technology
or Intellectual Property of DSS, for any unauthorized purpose. Any
violation of this clause shall be deemed a material breach of this
Agreement by the Developer.
9. Miscellaneous.
9.1. Assignment. Developer may not
assign or transfer this Agreement, nor its rights and obligations
hereunder, by operation of law or otherwise, to any third party
without the prior express written approval of DSS. Any purported
assignment without the consent of DSS shall be void. The provisions
of this Agreement shall be binding upon, and shall inure to, the
benefit of the parties, their legal representatives, permitted
successors and permitted assigns. The rights of Developer under
this Agreement shall immediately cease and be terminated upon the
sale or transfer of all or substantially all of the assets of
Developer unless an assignment of such rights pursuant to such sale
or transfer has been previously approved in writing by DSS. The
rights of Developer under this Agreement shall immediately cease
and be terminated upon the sale or transfer of no less than a
majority of, or a controlling interest in or over, the voting
capital or ownership capital of Developer unless an assignment of
such rights pursuant to such sale or transfer has been previously
approved in writing by DSS.
9.2. Remedies Cumulative; Waiver.
The rights and remedies provided in this Agreement, and all other
rights and remedies available to either party at law or in equity
are, to the extent permitted by law, cumulative and not exclusive
of any other right or remedy now or hereafter available at law or
in equity. A party’s failure to assert any right or remedy
shall not constitute a waiver of that right or remedy. No waiver by
either party of any default shall be deemed as a waiver of prior or
subsequent default of the same or other provisions of this
Agreement.
9.3. Severability. In the event that
a court of competent jurisdiction finds any provision of this
Agreement to be illegal, invalid or unenforceable, it is the
intention of the parties that such court shall modify such
provision as necessary so that it shall be legal, valid and
enforceable. The illegality, invalidity or unenforceability of any
provision of this Agreement shall not affect the legality, validity
or enforceability of any other provision of this
Agreement.
9.4. Relationship of the Parties.
Nothing in this Agreement shall be construed as creating a
partnership, joint venture or agency relationship between the
parties, or as authorizing either party to act as agent for the
other.
9.5. Amendments. No modifications or
amendments may be made to this Agreement except as expressed in
writing and signed by both parties.
9.6. Irreparable Damage. The parties
acknowledge and agree that any material breach of this Agreement
may subject the other to irreparable injury for which monetary
damages may not be an adequate remedy. Therefore, in addition to
any remedies otherwise available, the non-breaching party may be
entitled to injunctive relief and specific performance to enforce
the terms of this Agreement. The breaching party shall pay all
reasonable attorney’s fees and court costs, arbitration
costs, and/or appeal costs incurred by the non-breaching party
should it be necessary for the non-breaching party to enforce the
terms of this Agreement.
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9.7. No Construction against the Drafter;
Headings. The parties acknowledge that they have reviewed
this Agreement, have either been represented by counsel or had the
opportunity to be represented by counsel, and have negotiated its
terms. Accordingly, this Agreement shall be construed without
regard to the party or parties responsible for its preparation, and
shall be deemed to have been prepared jointly by the parties.
Headings contained in this Agreement are not intended to be full
and accurate descriptions of the contents of this Agreement and
shall not affect the meaning or interpretation of this
Agreement.
9.8. Notice.
All notices sent under this Agreement shall be in writing and shall
be deemed effectively given (i) upon personal delivery to
the party to be notified; (ii) when sent by e-mail PDF or confirmed
facsimile, if sent during normal business hours of the recipient,
if not, then on the next business day; (iii) three (3) days after
having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (iv) two (2) days after deposit with
an internationally recognized overnight courier, specifying two (2)
day delivery, with written verification of receipt. Notices shall be sent to the Parties at the
following addresses or fax numbers or such other addresses or fax
numbers as the parties subsequently may provide in accordance with
this Section 9.8:
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If to DSS:
Document Security Systems, Inc.
000
Xxxxx Xxxx Xxxx., Xxxxx 000
Xxxxxxxxx,
Xxx Xxxx 00000
XXX
Attn: Chief Executive Officer
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With e-mail PDF copy to:
Document Security Systems, Inc.
000 Xxxxx Xxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
XXX
Attn:
General Counsel (xxxxxxxx@xxxxxxxxx.xxx)
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If
to Developer:
HotApp
International Ltd.
17B,
Greatmany Centre
109-111
Queen’s Road East
Hong
Kong
Attn: Chief Executive Officer
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With
a copy to:
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9.9. Force Majeure. Notwithstanding
any provision herein, the parties may be discharged from all
liabilities if the failure to perform or improper performance of
this Agreement is the result of Force Majeure, provided that the
party subject to the Force Majeure provides notice of such Force
Majeure, as soon as possible after such party became subject to
such Force Majeure.
9.10. Governing Law; Jurisdiction.
This Agreement shall be governed in accordance with the laws of the
State of New York without regard to conflict of laws principles. It
is hereby irrevocably agreed that legal jurisdiction and venue for
any proceeding arising out of this Agreement shall be in the state
or federal courts located in the County of Monroe, State of New
York, United States.
9.11. Entire Agreement. This
Agreement and the Schedules and Exhibits hereto contain the entire
agreement between the parties with respect to the transactions
described herein, and supersede all prior agreements, written or
oral, with respect thereto, provided, however, that notwithstanding
any provision herein, the NDA shall remain in full force and
effect.
9.12. Counterparts; Facsimile
Signatures. This Agreement may be executed in counterparts,
each of which shall be deemed to be original but all of which
together shall constitute a single instrument. The signatures
required for execution may be transmitted electronically to the
other party via e-mail PDF, and such signatures shall be deemed
original signatures.
[Remainder of Page Intentionally Left Blank – Signature Page
Follows]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective duly authorized officers as of the
date first set forth above.
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DOCUMENT SECURITY SYSTEMS, INC.
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HOTAPP
INTERNATIONAL LTD.
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/s/Xxxxxxx
Xxxxxxx
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/s/
Xxxxxx Xxx
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Name:
Xxxxxxx Xxxxxxx
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Name:
Xxxxxx Xxx
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Title:
Chief Executive Office
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Title:
Chief Executive Officer
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SCHEDULE 1
TECHNOLOGY
DEVELOPMENT SERVICES
(Attached)
6
Technology
Development Services
Deliverables from March
1st to May
31st
1. To conduct thorough testing of
AuthentiGuard App for specificclients provided by DSS for every
releases in Android and iOS as instructed by
DSS.
2. To development Android Mobile
App for core scanning modulewith improvement of scanning
accuracy for major Android Phones (Samsung S7, S8 in
particular)
3. To develop Sales Demo Apps for
AuthentiGuard with guidelines offered by Product Marketing Team
from DSS
4. To establish the standard
testing procedure for all clients AuthentiGuard Mobile App
testing
5. To develop Proof of Concept
for AuthentiSite
Note: Detail Scope of Work to be
agreed during the meeting with HotApp on March 20-24th,
2018.
Deliverable for subsequent 3
months will be mutually agreed by end of May.
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EXHIBIT A
MUTAL
NON-DISCLOSURE AGREEMENT
(Attached)
8
