EXHIBIT 10.1
TECHNOLOGY SHARING AND LICENSE AGREEMENT
EXHIBIT 10.1
THE INTEREST IN THE SECURITIES CONTEMPLATED IN THIS AGREEMENT WILL BE ACQUIRED,
IF AT ALL, FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
TECHNOLOGY SHARING AND LICENSE AGREEMENT
THIS AGREEMENT ("Agreement") is made effective as of this 17th day of
September, 2004 by and between XsunX, Inc., a Colorado Corporation ("XsunX"),
and MVSystems, Inc., a Colorado Corporation ("MVS") and Xxxx Xxxxx, an
individual ("Xx. Xxxxx"). XsunX, MVS, and Xx. Xxxxx are sometimes herein
referred to individually as a "party" and collectively as the "parties."
R E C I T A L S
A. WHEREAS, MVS and Xx. Xxxxx have developed technology pertaining to solar
cells, thin film resistors, imaging, spatial light modulators, memory devices,
and other technology related to amorphous silicon and related alloys and have
been either granted patents or have applied for or intends to apply for patents
related to the above technology;
B. WHEREAS, XsunX has developed, and continues to develop, technologies and
processes for applications on transparent and semi-transparent substrates for
use in the architectural, industrial and residential building industries, and,
in the transportation and manufacturing industries for use in such areas as
automotive and building materials integrated photovoltaics; and
C. WHEREAS, MVS and Xx. Xxxxx desire to license the above technology,
know-how, and patents to XsunX for use pertaining to transparent and
photovoltaic glazings for applications on transparent and semi-transparent
substrates and the production of solar electric glass technology;
D. WHEREAS, XsunX desires to license, subject to the terms and conditions
set forth herein, the technology, know-how, and patents of MVS and Xx. Xxxxx as
set forth herein; and
E. WHEREAS, While MVS is desirous of licensing, sharing, quitclaiming and
providing all its technology to XsunX it is with the understanding that the
expense of the technology sharing and development shall be incurred by XsunX.
Further, MVS and Xx. Xxxxx are only licensing whatever rights they have and take
no financial responsibility for their technology infringing the right of others.
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F. WHEREAS, the parties desire to enter into a technology sharing and
license agreement for the development and commercialization of cooperative uses
of core technologies as supplemental enhancements to the commercial applications
of their respective technologies and areas of business focus; and
G. WHEREAS, pursuant to the technology sharing and license agreement, MVS
and Xx. Xxxxx will provide research, development, consultation, materials, and
facility services for the benefit of XsunX at cost for the development of
processes for the manufacture of semitransparent solar cell designs on
transparent and semitransparent thin film substrates in exchange for the
consideration set forth herein; and
H. WHEREAS, XsunX, subject to the terms and conditions of this agreement,
desires to obtain the technology, know-how, patents, and facility resources of
MVS and Xx. Xxxxx as set forth herein;
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereto agree as follows:
1. DEFINITIONS
1.1. "Act" means the Securities Act of 1933 promulgated by the United States
Securities and Exchange Commission.
1.2. "Agreement" means this Technology Sharing and License Agreement, including
the schedules and exhibits attached hereto, which are incorporated by reference
herein.
1.3. "Commercial" and "Commercialize" means the development of any technology or
combination of technologies into process related thereto to the point of
obtaining a marketable product, technology, or process and the actual
realization thereupon of $200,000 dollars cumulative revenue by five (5) years
from the effective date of this Agreement in a bona fide arms-length commercial
setting or relationship, Or the execution of a bona fide binding contract for
over $200,000 with a company with assets over $1,000,000 within that time
period.
1.4. "Confidential Information" has the meaning set forth in Section 7.1 of this
Agreement.
1.5. "Cost" means the actual amount of money expended by a party hereunder in
payment to third parties or to or for the benefit of its employees without the
addition of any xxxx-up for profit, or other similar adjustments, by the party
making the expenditure. Costs shall be determined by the lesser of, a) in
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accordance with the provisions set forth in Exhibit "A" attached hereto and
incorporated herein by this reference, or b) by extension of most favored
nations protection providing no worse than the best rate(s) given other parties.
1.6. "Derivative Works" mean works of the parties, including products or
processes, associated with any subsequent research by any party, development, or
combination of technologies of the parties after the Commencement Date, which
are useful or specific to XsunX Field of Use or the business of XsunX or which
may otherwise become subject to the terms of the provisions set forth in this
Agreement.
1.7. "Commencement Date" means March 7, 2004 the time in which technology
sharing and services between the parties began under a proposal for the
development of working samples.
1.8. "Consultancy and Advisory Warrant" means that certain stock warrant for the
purchase of shares contemplated at Section 4 of this Agreement.
1.9. "Consultancy and Advisory Warrant Shares" mean those shares of XsunX
obtained upon the exercise of the Consultancy and Advisory Warrant, as set forth
at Section 4 of this Agreement.
1.10. "Joint License" means the reciprocal license granted by the parties hereto
pertaining to inventions developed hereunder intended to provide MVS with use of
such technology in applications not competitive with or adverse to those of
XsunX as set forth herein.
1.11. "License" means that certain license set forth in Section 2.1 of this
Agreement.
1.12. "Licensed Patents and Technology" means the patents and patent
applications described in exhibit "B" attached hereto and all MVS technology,
know how, resources, related thereto that are now or may become applicable or
beneficial to the furtherance of the Business of XsunX within the XsunX Field of
Use, and specifically includes all patents, reissues, divisionals,
continuations, re-examinations and extensions thereof, and subject matter in the
XsunX Field of Use in any continuations-in-part on which claims issuing obtain
the benefit of a priority date of any of the foregoing, together with all
corresponding foreign patents, extensions, supplemental protections,
certificates, applications, and related intellectual property rights
corresponding thereto now issued or issued during the term of this Agreement and
which directly relate to the patents or applications described in exhibit "B"
and the XsunX Field of Use.
1.13. "License Stock Warrant" means that certain stock warrant contemplated at
Section 4 of this Agreement.
1.14. "License Stock Warrant Shares" mean those shares of XsunX obtained upon
the exercise of the License Stock Warrant, as set forth at Section 4 of this
Agreement.
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1.15. "MVS Phase 2 Development Agreement" means that certain written agreement
between XsunX and MVS effective May 27, 2004, pertaining to the development of a
semi-transparent thin film solar cell module, and other technology, as set forth
therein, a copy of which is attached hereto as Exhibit "C" and incorporated
herein.
1.16. "New Patents" means any patents filed or claimed hereunder after the
Commencement Date with regard to the Derivative Works.
1.17. "Phase 2" means and refers to the development of a semi-transparent thin
film silicon solar cell module, and other technology, as set forth in the MVS
Phase 2 Development Agreement.
1.18. "Services" mean the goods and services of MVS in providing research,
development, consultation, materials, and facilities for the benefit of XsunX as
set forth herein.
1.19. "Technology Sharing Warrant Shares" mean those shares of XsunX obtained
upon the exercise of the Technology Sharing Warrant, as set forth at Section 4
of this Agreement.
1.20. "Technology Sharing Warrant" means that certain stock warrant contemplated
at Section 4 of this Agreement.
1.21. "XsunX Field of Use" means the business of developing, commercializing and
licensing processes for the manufacture of semi-transparent (greater than 5%
transparency) solar cells or photovoltaic glazing technologies as set forth at
Section 2.5 of this Agreement.
1.22. "Approval by MVS and Xx. Xxxxx" means that the approval by either MVS or
Xx. Xxxxx of any proposal contemplated or obligation contained herein shall
constitute the approval by the other.
2. LICENSE PROVISIONS
2.1. Grant of License. Subject to the terms and conditions of this Agreement,
and in exchange for the warrant set forth herein, MVS and Xx. Xxxxx, jointly and
severally, hereby grant to XsunX for the term of this Agreement, and XsunX
accepts, an exclusive, royalty-free license of and to the Licensed Patents and
Technology, with the right to sublicense, to import, make, have made, use, sell,
offer for sale, have sold, and otherwise commercially exploit the Licensed
subject matter of the Licensed Patents and Technology within the XsunX Field of
Use, provided however that Xx. Xxxxx and MVS retain the right to use the
Licensed Patents and Technology themselves and to lend or transfer them to a
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university or non-profit research organization so long as such use or transfer
does not defeat or diminish the economic benefit and commercial ability of such
Licensed Patents and Technology that may be derived by XsunX within the XsunX
Field of Use and the Business of XsunX.
2.2. Expiration of License. The License granted herein shall, subject to
expiration as set forth herein, be perpetual and self-renewing. Notwithstanding
the foregoing, in the event that XsunX fails to Commercialize within the later
of either five (5) years from the effective date of this Agreement or ten (10)
years from the date placed into use under a Commercially qualifying sub license
any technology licensed from MVS and Xx. Xxxxx herein, the License granted above
shall expire for that technology or part thereof that was not Commercialized.
2.3. Intent and Scope of License. The License granted herein is intended to be
utilized by XsunX within the XsunX Field of Use and the development of the
Business of XsunX in its pursuit to establish a commercially viable process for
the manufacture of semi-transparent solar cells and solar electric glazing
processes and, accordingly, shall include all MVS technology, know how, and
resources which are part of or related to the Licensed Patents and Technology
that is now or may become applicable or beneficial to the furtherance of the
business objectives of XsunX within the XsunX Field of Use and the development
of the Business of XsunX. The License shall be exclusive as to technology
pertaining to XsunX Field of Use and the Business of XsunX as defined herein.
2.4. Derivative Works. All Derivative Works of the parties resulting from
research or work funded by, or Confidential Information provided by, XsunX
associated with any subsequent research by any party, development, or
combination of technologies of the parties after the Commencement Date, which
are useful or specific to the XsunX Field of Use or the Business of XsunX, shall
become the property of XsunX, subject to the terms of separate joint licensing
agreements between the parties intended to provide MVS use of such technology in
applications not in direct or indirect competition with or adverse to XsunX in
light of XsunX Field of Use.
2.5. XsunX Field of Use. The XsunX Field of Use pertains to the business of
developing, commercializing and licensing processes for the manufacture of
semi-transparent (greater than 5% transparency) solar cells or photovoltaic
glazing technologies. XsunX intends that its current and future processes for
the manufacture of semi-transparent solar cells and photovoltaic glazing
technologies will have marketable opportunities for applications on transparent
and semi-transparent substrates for use in the architectural, industrial and
residential building industries, and, in the transportation and manufacturing
industries for use in such areas as automotive and building materials integrated
photovoltaics.
2.6. Protection Costs. XsunX shall bear all costs associated with the efforts to
protect such Derivative Works through patent or other means of protection. MVS
shall use its best efforts to cooperate and provide all information pertinent
to, and authorizations or releases necessary for, the preparation of any
documents associated with the protection of Derivative Works for the benefit of
XsunX.
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3. TECHNOLOGY SHARING
3.1. Business of MVS and Xx. Xxxxx. The main or primary line of business of MVS
and Xx. Xxxxx has historically been to design, build and deliver state of the
art, ultra high vacuum multi-chamber PECVD/sputtering/Hot Wire CVD systems,
arranged in a cluster tool configuration and specifically designed for the thin
film semiconductor market and I-V solar simulator testing stations. MVS has
historically provided thin film semiconductors such as amorphous silicon,
dielectrics such as Silicon Nitride for solar cells, thin film transistor (for
displays) and image sensors. MVS has also provided research and development
contract services and consultancy for thin film materials and devices.
3.2. Business of XsunX. XsunX is in the business of developing, commercializing
and licensing processes for the manufacture of semi-transparent photovoltaic
glazing technologies. XsunX intends that its current and future processes for
the manufacture of semi-transparent solar cells and photovoltaic glazing
technologies will have marketable opportunities for applications on transparent
and semi-transparent substrates for use in the architectural, industrial and
residential building industries, and, in the transportation and manufacturing
industries for use in such areas as automotive and building materials integrated
photovoltaics.
3.3. Purpose of Technology Sharing. The purpose of the technology sharing set
forth herein is to allow XsunX to develop commercially viable semi-transparent
solar cells and photovoltaic glazing products or processes for licensesure to
third parties for use in applications and products within the XsunX Field of Use
and the development of the Business of XsunX.
3.4. Obligations of MVS. MVS and Xx. Xxxxx shall, subject to the specific
provisions of any development proposal then approved by XsunX, MVS and Xx.
Xxxxx, and subject to the confidentiality provisions set forth herein, share the
technology referenced herein with XsunX and provide research, development,
consultation, materials, tools, instruments, and facility services ("Services")
for the benefit of XsunX at cost ("Cost") for the development of processes for
the manufacture of semi-transparent solar cell designs on transparent and
semi-transparent thin film substrates and for performance under this Agreement.
Approval of any development proposal shall not be unreasonably withheld by MVS
and Xx. Xxxxx.
3.5. Materials to be Provided by MVS. MVS and Xx. Xxxxx shall, subject to the
specifics of any mutually approved development proposal by the parties, provide
XsunX with such reasonable materials, including raw materials, chemicals,
minerals, metals, glass, doping compounds, and related materials, reasonably
necessary to carry out the intent and purpose of this Agreement. XsunX shall
reimburse MVS and Xx. Xxxxx for such expenses in accordance with the provisions
of this Agreement. Approval of any development proposal shall not be
unreasonably withheld by MVS and Xx. Xxxxx.
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3.6. Tools, Instruments and Facilities of MVS. Subject to the confidentiality
provisions set forth herein, MVS and Xx. Xxxxx shall provide research,
development, consultation and facility services ("Services") for the benefit of
XsunX with reasonable access to and use of such Services for purposes of the
matters set forth in this Agreement subject to the specifics of any mutually
approved development proposal by the parties.
3.7. Obligations of XsunX. XsunX shall share its technology with MVS and
co-market certain MVS products and technologies where appropriate, subject to
agreement by the parties.
3.8. Access to Information. Each party hereto shall, subject to the
confidentiality provisions of this Agreement, reasonably furnish to the other
any and all written and oral information concerning the Licensed Patents and
Technology, the technology and processes related thereto, the current and
projected sublicense fees and operational data pertaining to the License and the
subject matter of this Agreement, and shall at all times hereunder allow the
other parties reasonable access to such information. In furtherance of the above
obligation, each party hereto shall make truthful and accurate representations
to the best of their current actual knowledge concerning any and all such
projected data, so as to allow a full and complete disclosure of all pertinent
material information concerning the technology sharing contemplated herein. Such
information may be furnished in the form of reports, interpretations, forecasts,
records, and personal interviews
3.9. Technology Sharing Term. Unless otherwise agreed to by the parties or
unless otherwise specifically provided in this Agreement the term of the
technology sharing set forth herein shall be five (5) years, which shall be
automatically renewed for additional two year periods unless written notice is
given by either of the parties to the other at least sixty (60) days before the
expiration of the original or renewed term, or, as may be specified further
within any master license, joint sharing agreement, or development agreement
entered into between the parties.
3.10. Nature of Relationship. While the parties intend to operate cooperatively
under an agreement, concurrent with the implementation of their existing
business operations, they do not intend to create a joint venture or partnership
and shall make no representations to the contrary. The parties shall be deemed
to have an independent contractor relationship with regard to the technology
sharing and Services and other non-license subject matter of this Agreement in
accordance with Sections 2750.5 and 3353 of the California Labor Code and any
similar provisions under Colorado law. The parties shall not be deemed to be
joint venturers or partners with regard to the subject matter of this Agreement
or otherwise.
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4. WARRANT FOR PURCHASE OF SHARES
4.1. License Stock Warrant. As consideration for the grant of the License, XsunX
shall, grant MVS a warrant ("License Stock Warrant") for the purchase of up to
Five Million (5,000,000) shares of common stock of XsunX (the "License Stock
Warrant Shares"), the warrant to expire five (5) years after the date of the
grant. The License Stock Warrant shall be in the form of that Warrant To
Purchase Common Stock of XsunX, Inc. instrument attached hereto as Exhibit "D"
and incorporated herein by this reference.
4.2. Technology Sharing Warrant. As consideration for access to MVS know how and
Service at Cost pursuant to the technology sharing set forth above, XsunX shall
grant to MVS a warrant to purchase up to one million shares (1,000,000) of
common stock of XsunX ("Technology Sharing Warrant Shares"). The Technology
Sharing Warrant shall be in the form of that Warrant to Purchase Common Stock of
XsunX, Inc. instrument attached hereto as Exhibit "E" and incorporated herein by
this reference. The Technology Sharing Warrant shall be for a five (5) year term
and subject to conditional vesting in accordance with the following provisions:
4.2.1. The Technology Sharing Warrant shall become exercisable in the
amount of 250,000 shares upon the satisfactory completion of Phase 2 under the
MVS Phase 2 Development Agreement.
4.2.2. The Technology Sharing Warrant shall become exercisable in the
amount of 250,000 shares upon the satisfactory completion, as reasonably
determined by the XsunX Board of Directors, of any subsequent phase of
development as may be defined under the an MVS future development proposal.
4.2.3. The Technology Sharing Warrant shall become exercisable in the
amount of 500,000 shares upon the Commercialization of an XsunX process.
4.3. Consultancy and Advisory Warrant. Pursuant to the offer of consultancy and
advisory services for the position of Chairman of the XsunX Scientific Advisory
Board as set forth herein, XsunX shall, as compensation for Xx. Xxxxx'x advice
and consultation efforts in the furtherance of XsunX business initiatives, offer
to Xx. Xxxxx the grant of a warrant ("Consultancy and Advisory Warrant") to
purchase up to one million (1,000,000) shares of common stock of XsunX
("Consultancy and Advisory Stock Warrant Shares") in the form attached hereto as
Exhibit "G" and incorporated herein by this reference.. This Warrant shall be
for a five (5) year term and shall be subject to conditional vesting in
accordance with the following provisions:
4.3.1. The Consultancy and Advisory Warrant shall become exercisable at the
rate of 25,000 Shares per month during and up to the first twenty-four months
(24) of services.
4.3.2. The Consultancy and Advisory Warrant shall become exercisable in the
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amount of 150,000 shares upon the satisfactory completion of Phase 2 under the
MVS Phase 2 Development Agreement.
4.3.3. The Consultancy and Advisory Warrant shall become exercisable in the
amount of 250,000 shares upon the Commercialization of an XsunX process.
5. Consultancy and Advisory Services
5.1. Engagement of Xx. Xxxxx. As of the effective date of this Agreement, XsunX
shall offer Xx. Xxxxx the position of Chairman on the XsunX Scientific Advisory
Board. Pursuant to such engagement, Xx. Xxxxx will provide XsunX with his best
efforts and technical expertise in the furtherance of XsunX process and product
development efforts. The exclusive compensation of Xx Xxxxx shall be solely
pursuant to the terms of such engagement as set forth in that certain
Consultancy and Advisory Agreement the form of which is attached hereto as
Exhibit "F" and incorporated herein by this reference.
6. INTELLECTUAL PROPERTY
6.1. Ownership of Intellectual Property. Notwithstanding the License set forth
herein, the intellectual property of each party shall be deemed to be owned by
and constitute the proprietary intellectual property of the party who owns the
same. No party shall take any acts inconsistent with the foregoing.
6.2. Ownership of Licensed Patents. MVS and Xx. Xxxxx represent to XsunX that
they, jointly or severally, own the Licensed Patents and Technology free and
clear of any claim, charge, or lien, possess the right to grant the License
hereunder, and have received no notice that the Licensed Patents and Technology
are not valid or infringe in any way on the intellectual property rights of any
party.
6.3. Remedies. XsunX shall have the following remedies, and the following rights
and obligations shall apply, in the case of a claim of infringement against any
of the Licensed Patents and Technology or any works based thereon or derived
therefrom:
6.3.1. XsunX shall notify MVS of the assertion of any claim that the
Licensed Patents and Technology or the use thereof under this Agreement violates
the trade secret, trademark, copyright, patent, or other proprietary right of
any other party, and shall cooperate with MVS in the investigation and
resolution of any such claim.
6.3.2. If the Licensed Patents and Technology become, or in the opinion of
either party are likely to become, the subject of a claim of infringement, MVS
shall not have the obligation to defend or procure the right for XsunX or its
sub licensees, representatives, successors or assigns to continue using the
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Licensed Patents and Technology but, shall have the obligation to cooperate with
XsunX in the investigation and resolution efforts on the part of XsunX to
defend, or procure such rights. Xx. Xxxxx or MVS may decide to take separate
action at their expense to resolve such disputes, claims, lawsuits, Etc, to the
extent they think appropriate to protect their interests in the Licensed Patents
and Technology.
6.4. Placement of Marks. The parties each agree not to remove, deface, or
destroy any copyright, patent notice, trademark, service xxxx, other proprietary
markings, or confidential or protective legends placed on, within or associated
with the Licensed Patents and Technology or any patent, copyright, trademark, or
service xxxx pertaining to any of their intellectual property of the parties.
The parties shall xxxx, and shall require any sublicensee to xxxx, any and all
material forms of any products incorporating the Licensed Patents and Technology
or any Derivative Works, and all packaging pertaining thereto, made and sold in
the United States, or imported into the United States, with an appropriate
patent marking identifying the pendency of any U.S. patent application or any
issued U.S. or foreign patent forming any part of Licensed Patents and
Technology, to the extent applicable. All products incorporating the Licensed
Patents and Technology or any Derivative Works shipped to or sold in, or
imported into, other countries shall be marked in such a manner as to provide
notice to potential infringers pursuant to the patent laws and practice of the
country of manufacture or sale, or importation.
6.5. Use of Names. Each party agrees that it will not use the name, trademark or
other identifier of any other party for any advertising, promotion, or other
commercially related purpose without the express prior written consent of the
other party. Nothing contained in this Agreement shall be construed as
conferring any right to use in advertising, publicity or other promotional
activities any name, trade name, trademark or other designation of a party
hereto including any contraction, abbreviation or simulation of any of the
foregoing, unless the express written permission of the other party has been
obtained, provided that XsunX may state the existence of this Agreement and the
fact that all of the parties entered into it. For the purposes of XsunX public,
investor and business relations MVS and Xx. Xxxxx agree not to unreasonably
withhold such approval.
6.6. Maintenance of Licensed Patents. Except for Derivative Works, MVS shall
have sole responsibility for filing, prosecution and maintenance of any and all
patent applications, whether pending or not yet filed as of the Commencement
Date, in the Licensed Patents and Technology, and of the maintenance and other
management of any and all issued patents in the Licensed Patents and Technology.
6.7. Prosecution of New Patents. XsunX shall have the sole right and obligation
to file any New Patents after the Commencement Date pertaining to the Derivative
Works, and shall be solely responsible for filing, prosecution and maintenance
of any and all patent applications, whether pending or not yet filed as of the
Commencement Date, in the Derivative Works, and of the maintenance and other
management of any and all issued patents in the Derivative Works. Xx. Xxxxx and
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MVS shall have the obligation to timely consult with XsunX as to the status and
patentability of Derivative Works. All Expense for patent searches and legal
analysis of such shall be at the expense of XsunX.
6.8. Licensed Patents and Technology Patent Status. MVS and Xx. Xxxxx shall keep
XsunX informed of the status of any and all patents and patent applications
comprising Licensed Patents and Technology and shall provide to XsunX timely
copies of all correspondence with the United States Patent and Trademark Office
(as well as any foreign equivalent bodies), and shall provide XsunX with the
opportunity from time to time to advise MVS and Xx. Xxxxx on courses of action
respecting the management of patents in the Licensed Patents and Technology,
provided MVS shall have sole authority and obligation to prosecute and maintain
the Licensed Patents and Technology. If MVS determines that it will not be able
to properly prosecute or maintain any of the Licensed Patents and Technology,
MVS will provide timely notice to XsunX and shall provide to XsunX reasonable
opportunity to prosecute or maintain such Licensed Patents and Technology. XsunX
will likewise inform Xx. Xxxxx and MVS of the patent status of Derivative Works.
6.9. Infringement by Third Party. Each party shall promptly inform the other
party of any alleged infringement of, Licensed Patents and Technology or any New
Patents, by a third party of which that party is aware and provide any available
evidence thereof. Each party will promptly inform the others of any actions or
possible actions by third parties which may affect the ownership or validity of
the Licensed Patents and Technology.
6.10. Settlement of Infringement by Third Party. During the term of exclusivity
of the License granted hereunder, XsunX shall have the first right to settle any
alleged infringement of Licensed Patents and Technology by securing cessation of
the infringement, instituting suit against the infringer, or entering into a
sublicensing agreement in and to relevant patents in the Licensed Patents and
Technology. So long as Xx. Xxxxx and MVS do not seek compensation as a
requirement for settlement the right of settlement by XsunX is subject to the
approval of MVS, which approval shall not be unreasonably withheld.
6.11. Participation. In the event that XsunX institutes suit against an alleged
infringer during the term of exclusivity as provided in this Agreement, MVS
shall, at its own expense, fully and promptly cooperate with XsunX in connection
with any such suit.
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7. CONFIDENTIAL INFORMATION
7.1. Confidential Information. For purposes of this Agreement, and subject to
the following provisions of this Agreement, "Confidential Information" shall
mean all non-public information pertaining to (i) the Licensed Patents and
Technology, (ii) the Derivative Works, (iii) the intellectual property of MVS
and Xx. Xxxxx, and (iv) the intellectual property of XsunX, whether in written,
graphic, oral or other tangible form, including without limitation all data,
algorithms, formulae, techniques, improvements, technical drawings, computer
software and materials.
7.2. Exceptions. Notwithstanding any other provisions of this Agreement, a party
shall be free from any obligations of confidentiality hereunder regarding any
information which is or becomes:
7.2.1. already known to such party, other than under an obligation of
confidentiality, at the time of disclosure;
7.2.2. generally available to the public or otherwise part of the public
domain at the time of disclosure to such party;
7.2.3. generally available to the public or otherwise part of the public
domain after its disclosure other than through any act or omission of such party
in breach of this Agreement or other agreement or legal obligation;
7.2.4. subsequently lawfully disclosed to such party by a third party under
no obligation of confidentiality to the other party;
7.2.5. independently developed by such party as documented by written
evidence;
7.2.6. approved for release by written authorization of the other party;
7.2.7. furnished to a third party by any other party without a similar
restriction on the third party's rights; or
7.2.8. disclosed pursuant to the requirement of a governmental agency.
7.3. Protection of Confidential Information. MVS, Xx. Xxxxx, and XsunX agree not
to engage in unauthorized disclosure or use of Confidential Information and to
take reasonable measures to prevent unauthorized disclosure and use of
Confidential Information, including without limitation taking reasonable
measures to prevent creating a premature bar to a United States or foreign
patent application. Each party shall limit access to Confidential Information
received from the other party to those persons having a need to know in
connection with the Agreement and License, the technology sharing anticipated
hereunder, the MVS Phase 2 Agreement, or in the operation of the businesses of
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MVS and/or XsunX and shall use reasonable efforts to ensure that any such person
receiving Confidential Information understands its confidential nature and
agrees not to make unauthorized disclosure or use thereof. Each party further
agrees to employ no less than the same measures to protect Confidential
Information that it uses to protect its own valuable information.
7.4. Identification of Confidential Information. The parties shall take
reasonable measures to xxxx and identify all Confidential Information as
confidential. Confidential Information disclosed in oral form shall be
identified as such by the disclosing party to the other party in writing within
fourteen (14) days of any such disclosure. Information that is not marked or not
identified in writing as confidential within such period shall not be
Confidential Information. Upon termination of this Agreement and to the extent
otherwise consistent with this Agreement, any Confidential Information of the
disclosing party shall be promptly returned or destroyed upon written request of
the disclosing party.
7.5. Independent Development. In no event shall the obligations of
confidentiality set forth in this Agreement be construed to limit any party's
right to independently develop products or conduct research without the use of
any other party's Confidential Information, except as may be expressly limited
by this Agreement or any other applicable agreements between the parties.
7.6. Use in Products. Notwithstanding anything contained herein to the contrary,
XsunX may incorporate technology and principles derived from or related to the
Licensed Patents and Technology in its commercial and other products, within the
XsunX Field of Use and the development of the Business of XsunX and the same
shall not be deemed a violation of this Agreement or the confidentiality
provisions contained herein.
7.7. Term. The Parties agree that, unless otherwise mutually agreed to in
writing, the obligations regarding nondisclosure, protection and nonuse of
Confidential Information set forth in this Agreement shall, in any event, end
ten (10) years after termination of this Agreement.
7.8. Press Releases. Any press release, XsunX disclosures and advertisement made
by XsunX relating to MVS or Xx. Xxxxx shall be subject to the approval of MVS or
Xx. Xxxxx prior to public release. MVS and Xx. Xxxxx will not unreasonably
withhold such approval and agree to respond to such requests for approval within
two (2) business days.
8. REPRESENTATIONS AND WARRANTIES
8.1. Representations and Warranties of XsunX. XsunX represents and warrants to
MVS, as of the date of the effective date of this Agreement, as follows:
8.1.1. XsunX is duly organized, authorized and in good standing under the
laws of the State of Colorado.
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8.1.2. XsunX has the full power and authority to execute, deliver and
perform this Agreement. XsunX has the right, power, legal capacity, and
authority to enter into and perform its obligations under this Agreement, and no
approvals or consents of any persons other than XsunX are necessary in
connection with it.
8.1.3. The execution and delivery of this Agreement by XsunX has been duly
authorized by all necessary corporate action on the part of XsunX.
8.1.4. This Agreement is valid, binding, and enforceable against XsunX in
accordance with its terms and no provision requiring the performance of XsunX is
in conflict with the obligations of XsunX under any charter or any other
agreement (of whatever form or subject) to which XsunX is a party or by which
XsunX is bound.
8.1.5. To the best knowledge of XsunX, XsunX is not aware of any claims and
is not a party to any suit, action or proceeding that would impair, prejudice,
hinder, or prevent the transactions proposed in this Agreement.
8.2. Representations and Warranties of MVS and Xx. Xxxxx. MVS and Xx. Xxxxx
represent and warrant to XsunX, as of the date of execution of this Agreement,
as follows:
8.2.1. MVS is duly organized, authorized and in good standing under the
laws of the state of Colorado.
8.2.2. MVS and Xx. Xxxxx have the full power and authority to execute,
deliver and perform this Agreement. MVS and Xx. Xxxxx have the right, power,
legal capacity, and authority to enter into and perform its obligations under
this Agreement, and no approvals or consents of any persons other than MVS and
Xx. Xxxxx are necessary in connection with it.
8.2.3. The execution and delivery of this Agreement by MVS has been duly
authorized by all necessary corporate action on the part of MVS.
8.2.4. This Agreement is valid, binding, and enforceable against MVS and
Xx. Xxxxx in accordance with its terms and no provision requiring the
performance of MVS or Xx. Xxxxx is in conflict with the obligations of MVS or
Xx. Xxxxx under any charter or any other agreement (of whatever form or subject)
to which MVS or Xx. Xxxxx is a party or by which MVS or Xx. Xxxxx is bound.
8.2.5. To the best knowledge of MVS and Xx. Xxxxx, neither MVS nor Xx.
Xxxxx is a party to any suit, action or proceeding that would impair or
prejudice the Licensed Patents and Technology or impair, prejudice, hinder or
prevent the transactions proposed in this Agreement.
14
8.2.6. MVS and Xx. Xxxxx, jointly or severally, own all of the Licensed
Patents and Technology in its, his, or their own name and are in lawful
possession thereof. Both MVS and Xx. Xxxxx possess the requisite power, right,
and ability to license the Licensed Patents and Technology hereunder to XsunX
free and clear of any liens, encumbrances, pledges, and restrictions, subject
only to liens, encumbrances, pledges, or restrictions heretofore disclosed in
writing by MVS to XSUN, if any.
8.2.7. As of the effective date of this Agreement, MVS and Xx. Xxxxx have
promptly and timely performed all acts reasonably necessary or proper in order
to file, prosecute, perfect, obtain, defend, and maintain the Licensed Patents
and Technology and any and all patent applications pertinent to the XsunX Field
of Use, and shall at all times hereunder continue, to a commercially and legally
reasonable extent, to promptly, timely, and diligently file, prosecute, and
maintain the same at their own cost and expense.
9. INDEMNIFICATION
9.1. Indemnification of the Parties. Unless otherwise provided or limited by
this Agreement, the parties hereto shall each indemnify, defend and hold
harmless the other and each of its or their directors, officers, agents,
employees and controlling persons (within the meaning of the Securities Act of
1993, as amended) against any losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) relating or arising out of this Agreement,
and shall reimburse the other and each other person indemnified hereunder for
all legal and other expenses reasonably incurred in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding in connection with pending or threatened litigation in which any
party or any of its directors, officers, agents, employees and controlling
persons is a party, provided, however, that no party shall be liable in any such
case for losses, claims, damages, liabilities or expenses that a court of
competent jurisdiction shall have found in a final judgment to have arisen
primarily from the willful misconduct or malfeasance or misconduct or gross
negligence of the party claiming a right to indemnification.
9.2. Indemnification Procedure.If any proceeding shall be instituted involving
any person in respect of whom indemnity may be sought, such person (the
"indemnified party") shall promptly notify the other party, and, upon request of
the indemnified party, the other party shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and
shall pay as incurred the reasonable fees and expenses of such counsel related
to such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense, except that the other party
shall pay as incurred the fees and expenses of such counsel if (i) the
indemnified party and the other party shall have mutually agreed to the
retention of such counsel or, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnified party and the
other party and representation of both parties by the same counsel would be
inappropriate, in the reasonable opinion of the indemnified party, due to actual
15
or potential differing interests between them. In no event shall any party be
liable for the fees and expenses of more than one counsel for all indemnified
parties in connection with any one action or separate but similar or related
actions arising out of the same general allegations or circumstances. No party
shall be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment, the parties agree to indemnify the indemnified party to the extent set
forth in this Agreement.
9.3. Contribution. If a claim for Indemnification under this Agreement is
determined to be unenforceable by a final judgment of a court of competent
jurisdiction, then the parties shall contribute to the aggregate legal costs and
expenses, losses, claims, damages or liabilities to which the party suffering
damages, or its officers, directors, agents, employees or controlling persons,
may be subject in such amount as is appropriate to reflect the relative benefits
received by each of the parties hereto in comparison to the relative faults of
each of the parties, as well as any relevant equitable considerations, provided,
however, that no person adjudged guilty of fraudulent misrepresentation (within
the meaning of paragraph 11 (f) of the Securities Act of 1933, as amended) or
willful misconduct or gross negligence in a final judicial determination shall
be entitled to contribution hereunder.
10. SECURTIES COMPLIANCE
10.1. No Offer or Sale. This Agreement is not intended to be an offer for the
sale or issuance of securities, whether pertaining to stock, options, warrants,
or otherwise, unless the same is exempt from registration and qualification
pursuant to an applicable exemption. The issuance of stock and warrants is
expressly subject to compliance with all state and federal securities laws,
rules and regulations by the parties. While XsunX does not consider this
Agreement itself to be a securities or offer of any securities, whether
pertaining to stock, options, warrants or otherwise, in the event that this
letter is construed to be an offer, the parties acknowledge the following
disclosure in accordance with Section 25102(a) of the California Corporations
Code:
The sale of the securities which are the subject of this
agreement has not been qualified with the Commissioner of
Corporation of the State of California and the issuance of
such securities or the payment or receipt of any part of the
consideration therefore prior to such qualification is
unlawful, unless the sale of securities is exempt from the
qualification by Section 25100, 25102, or 25105 of the
California Corporations Code. The rights of all parties to
this agreement are expressly conditions upon such
qualification being obtained unless the sale is so exempt.
16
10.2. General Securities Compliance. Notwithstanding anything contained in this
Agreement to the contrary, this Agreement, and the stock warrants discussed
herein, shall be, and are, expressly subject to all SEC and securities, laws,
rules, regulations and reporting and disclosure requirements, to the extent
applicable to XsunX as a reporting company, the shares, and\or any party hereto,
including, but not limited to, shareholder voting and proxy solicitation rules.
All issuances, sales, transfers, or other dispositions of shares of XsunX shall
be made in compliance with all applicable securities laws, rules and
regulations, and pursuant to registration of securities under the Securities Act
of 1933 ("Act") (and qualification under General Corporation Law of California)
or pursuant to an exemption from registration under the Act (and qualification
under General Corporation Law of California). Notwithstanding the foregoing,
nothing in this Agreement shall obligate XsunX to seek registration or
qualification of any of its shares, and, to the extent that any obligation
hereunder cannot be performed without registration or qualification of any of
its shares, such obligation shall be excused on the part of XsunX to the extent
that XsunX provides other adequate consideration therefore.
10.3. Rule 144. MVS and Xx. Xxxxx each acknowledge that the shares of XsunX may
be subject to the restrictions on transfer set forth in Rule 144 of the Rules
promulgated under the Act. Any and all offers, sales, transfer or other
dispositions of shares of XsunX shall be made only in compliance with Rule 144.
MVS and Xx. Xxxxx shall each comply with all policies and procedures established
by the APC with regard to Rule 144 matters. MVS and Xx. Xxxxx each acknowledged
that XsunX or its attorneys or transfer agent may require a restrictive legend
on the certificate or certificates representing the shares pursuant to the
restrictions on transfer of the shares imposed by Rule 144.
11. MISCELLANEOUS.
11.1. Parties in Interest. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third party to this Agreement, nor
shall any provision give any third person any right of subrogation or action
over against any party to this Agreement.
11.2. Expenses. Each of the parties hereto shall, subject to the terms and
conditions of this Agreement, be responsible for and pay that party's own
expenses incident to the preparation of this agreement and/or incurred by any
party in the performance and consummation of the transaction contemplated
hereby.
11.3. Survival. All representations and warranties contained herein shall remain
in full force and effect, regardless of any investigation made by a party and
shall survive the completion of an Offering and the expiration of the term of
this Agreement.
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11.4. Entire Agreement. This Agreement, including all exhibits, comprises the
entire agreement between the parties and supersedes all prior or contemporaneous
understandings and agreements between the parties with respect to the subject
matter hereof. This Agreement may not be amended or modified except in a writing
signed by both MVS and XsunX as to matters involving only MVS and XsunX and in a
writing signed by both Xx. Xxxxx and XsunX as to matters involving only Xx.
Xxxxx and XsunX.
11.5. Notices. Any and all notices, demands, requests, or other communications
required or permitted by this Agreement or by law to be served on, given to, or
delivered to any party hereto by any other party to this Agreement shall be in
writing and shall be deemed duly served, given, or delivered when personally
received by the party or to an officer of the party, or in lieu of such personal
delivery, when received by United States mail, first-class postage prepaid
addressed to the parties hereto at such addresses as may be provided by the
parties hereto from time to time for such purposes.
11.6. Authorization. The parties hereto represent and warrant that they are duly
authorized to execute this Agreement on behalf of such party and the persons
executing this Agreement represent and warrant that such persons are duly
authorized by the entity that they are signing on behalf of to execute and
deliver this Agreement on behalf of such party.
11.7. Subject Headings. The subject headings of the paragraphs of this Agreement
are included for purposes of convenience only and shall not affect the
construction or interpretation of any of its provisions.
11.8. Assignment. This Agreement is personal in nature and may not be assigned
by any party without the express prior written consent of all of the parties.
Upon the express prior written consent to assignment by all parties, this
Agreement shall be binding upon and shall inure to the benefit of the parties to
it and their respective heirs, legal representatives, successors, and assigns.
11.9. Attorneys' Fees and Costs. If any legal action or any arbitration or other
proceeding is brought by either party for the enforcement or interpretation of
this Agreement, or because of an alleged dispute, breach, default, or
misrepresentation in connection with any of the provisions of this Agreement, or
because of an alleged dispute, breach, default, or misrepresentation in
connection with any of the provisions of this Agreement, the successful or
prevailing party or parties shall be entitled to recover reasonable attorneys'
fees and other costs incurred in that action or proceeding, in addition to any
other relief to which it or they may be entitled pursuant to such legal action.
11.10. Further Acts. The parties hereto shall cooperate with each other and
acknowledge, execute, deliver, and file such additional documents or instruments
and perform such further acts as may be reasonably necessary to affect the
18
purpose and intent of the Agreement, including, but not limited to, the making
of filings with the United States Patent and Trademark Office.
11.11. Severability. The provisions of this Agreement are severable and, if any
clause or provision shall be held invalid or unenforceable in whole or in part,
in any jurisdiction, then such invalidity or unenforceability shall effect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner effect such clause or provisions in any other jurisdiction, and in
respect of the jurisdictions in which such clause or provision is effected, the
parties agree to substitute therefore a provision which most closely
approximates the relative rights and obligations intended by the parties.
11.12. Counterparts. This Agreement may be signed in counterparts with the same
effect as if the signatories hereto and thereto were upon the same instrument.
11.13. Time of Essence. Time is of the essence of this Agreement.
11.14. Governing Law. This Agreement shall be governed by the laws of the State
of Colorado, without reference to its choice-of-law or conflict of law rules.
THIS AGREEMENT is made effective as of the date set forth above.
XSUNX:
XsunX, Inc., a Colorado corporation
By: /s/ Xxx X. Xxxxxxxxx
-------------------------------
Xxx X. Xxxxxxxxx, President
MVS:
MVSystems, Inc., a Colorado corporation
By: /s/ Xx. Xxxx Xxxxx
---------------------------------
Xx. Xxxx Xxxxx, President
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EXHIBIT A
COSTS
Subject to the terms and conditions of the Agreement it is intended by the
parties that MVS will provide Services to XsunX at cost without xxxx-up for
profit. These services will be specific to phased research and development
efforts for the continued development of XsunX technology. It is intended that
MVS will xxxx XsunX monthly for actual and authorized Services provided in the
previous monthly period. Services may be authorized subject to approved written
proposals in advance. It is understood by the parties that estimates for
Services are subject to cost fluctuation associated with normal unknown research
and development difficulties. MVS will use its best efforts ("Best Efforts") to
provide Services in a professionally managed and expeditious manner to the
benefit of XsunX and the cooperative venture. Any actual or anticipated increase
in proposed costs will be submitted to XsunX prior to provisioning of Services
for approval by XsunX. XsunX may, upon ten days (10) written notice, request to
inspect the books associated with the Services rendered. Service costs will be
managed, in general, under the following guidelines, overhead tables and terms
of the Agreement:
1. All employees are required to provide a time sheet at the end of each pay
period and the costs for a particular project is determined on a continual basis
for all the materials/labor costs/ all applicable rates.
2. The labor fringe benefit covers the items such as, employee benefits (e.g.
medical, dental etc.), vacation/holiday pay, sick personal time, XXX plans,
payroll taxes, and xxxxxxx'x comp insurance. Billed at 34.78% of direct labor
costs
3. The labor overhead rates covers items such as gasses, insurances (property,
liability), maintenance, safety, mail, shipping costs, facility rent, office
supplies, shop supplies, telephone, trash removal, utilities. Billed at 25.02%
of direct labor costs.
4. G and A rate covers items such as bank charges, contributions and conations,
consultants, copier lease, depreciation expense, dues and subs., contract labor,
hiring costs, interest expense, janitorial, indirect wages, legal fees, license
expense, burglar alarm monitoring, employee morale, businesses entertainment,
payroll expense, professional development, registration, mileage reimbursement,
equipment rental, office machines, overhead travel costs. Billed at 17.42% of
total materials and labor costs.
20
EXHIBIT B
LICENSED PATENTS AND TECHNOLOGY
1. MVS has been in the business of selling technology and systems since 1989.
The technology covers opaque and semi-transparent solar cells, thin film
transistors, imaging, spatial light modulators, and memory devices. These
seemingly different applications have a common underlying theme and rely on
amorphous silicon (doped and undoped) and their alloys such as amorphous silicon
carbide, amorphous SiGe and their close variants, dielectric materials such as
SiNx, SiNOx, and metallization using sputtering and evaporation techniques.
(i) MVS, prior to this agreement has designed, built and delivered
systems for the above mentioned applications and are commonly
referred to as cluster tools. The cluster tools incorporate
sophisticated technologies using PECVD, HWCVD (Hot Wire chemical
vapor deposition), laser crystallization, and sputtering. In
addition MVS has also designed and in many cases provided On- and
OFF-axis sputtering systems, MOCVD ( metallo organic chemical
vapor deposition) system, specialized custom built systems for
remote PECVD ( plasma enhanced chemical vapor depositions), RIE (
reactive ion etching ) systems, pulse PECVD, modified pulsed
PECVD, thermal evaporation, in line mass production systems for
SiNx to coat multi-crystalline Si solar cells, I-V testing
stations, bubblers for chemical delivery, CIS systems, CdTe
systems, and gas manifold cabinets
(ii) The cluster tool design, allows for upgrades for up to 8 xxxxxxxx
(Modular Process Zones-MPZ's) stationed around a central circular
evacuated isolation and transfer zone (ITZ); the ITZ houses an
accurate and precise robotic arm which works on a "pick and
place" principle and serves to insert, extract and transfer
substrates from one MPZ to another in any sequence. Hence, this
versatile configuration allows the deposition in any sequence
whatsoever; another major advantage of this approach is that as
each MPZ has gate valves present between it and the ITZ, then any
cross contamination (crucial to obtaining high performance
electronic devices) is thus prevented.
(iii) The systems are also designed in modular fashion, such that
single MPZ systems can, via retrofits, be expanded into a cluster
tool.
(iv) The cluster tools are designed such that they can be co-joined
for increased output.
(v) The cluster tools can be for rigid substrates or for reel-to-reel
cartridges (cassettes).
(vi) The systems have also been used for in line operation, for rigid
as well as flexible substrates.
2. MVS has developed know how in solar cells and has been either granted several
patents or has applied for or intends to apply for patents. The patents are as
follows.
(i) US 6,488,777 B2, US 6,258,408 B1- Semiconductor vacuum deposition
system and method having a reel-to reel substrate cassette.
(ii) Us 6,472,622 B2- Hot Wire deposition method and apparatus using
graphite hot rods.
(iii) US Provisional Patent Application serial number 60/536,151- three
terminal and four terminal solar cells, solar cell panels, and
method of manufacture. (Note: This is a broad patent which covers
the use of various approaches to lead to high efficiency devices,
whether they are semi transparent or opaque.
(iv) MVS may decide to file a restricted patent application on the
Section 1.1 (iii).
(v) MVS intends to file a patent on the modified pulsed PECVD
technique.
(vi) MVS may decide to file other patents as the technology is
developed.
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EXHIBIT C
FORM OF MVS PHASE 2 DEVELOPMENT AGREEMENT
22
EXHIBIT D
FORM OF LICENSE STOCK WARRANT
23
EXHIBIT E
FORM OF TECHNOLOGY SHARING WARRANT
24
EXHIBIT F
FORM OF CONSULTANCY AND ADVISORY AGREEMENT
25
EXHIBIT G
FORM OF CONSULTANCY AND ADVISORY WARRANT
26
