EXHIBIT 10.3
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION"). THE OMISSIONS HAVE BEEN INDICATED BY ASTERISKS ("*****"), AND
THE OMITTED TEXT HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
Letter Agreement
Between
Emcore and World Water & Power (WWAT)
November 29, 2006
Emcore and WorldWater & Power Corp. desire to collaborate on the development and
commercialization of concentrator photovoltaic (CPV) power systems using
Emcore's proprietary multi-junction solar cells (MJ). This letter agreement
("Letter Agreement") defines the scope and key terms of the strategic
relationship to be embodied in a written strategic agreement (the "Strategic
Agreement") and separately sets forth certain binding purchase and supply
obligations of the parties. The term of the Strategic Agreement will be five
years. This Letter Agreement shall be legally binding upon and enforceable
against each of the parties and their respective successors and assigns.
1. The parties will collaborate on the design and development of CPV systems
using Emcore MJ:
a. WorldWater & Power Corp. to provide requirements definition of CPV in
terrestrial power generation in grid-connected, distributed power, and non-grid
applications worldwide.
To this end, Emcore and WorldWater & Power Corp. will establish a joint team to
review the current technology status of MJ systems. This team is to prepare a
report, and within three months, present this report to the management of both
Emcore and WorldWater & Power Corp.
This report will identify a common technology and commercialization platform.
This will include development, product verification, pilot demonstration, and
manufacturing plan with identifiable, achievable and commercial targets, such
as:
i. Performance
ii. Reliability
iii. Design-to-cost (DTC) targets
iv. Schedule and quantity of prototype and production units
b. Emcore to design systems and develop production infrastructure to meet or
exceed WorldWater & Power Corp. requirements, consistent with common commercial
objectives.
This effort will include:
i. Structural configuration
ii. Tracking systems
iii. Control elements
iv. Focusing lens assembly
v. Receiver modules including MJ solar cells
c. WorldWater & Power Corp. to participate in Emcore design reviews and
provide guidance on the design, product verification, pilot projects and other
efforts related to transition-to-production planning, implementation, and
installation.
d. WorldWater & Power Corp. to provide design and testing support and
general consulting on topics such as:
i. System monitoring
ii. Performance testing of prototype systems
iii. Demonstration of application of Emcore CPV systems to core applications
such as driving large motors, pumps, and compressors.
iv. General PV terrestrial systems concepts such as installation, wiring of
modules, and inverters.
e. WorldWater & Power Corp. agrees that Emcore will be its exclusive partner
in the development of CPV systems using MJ technology. Exclusivity will
continue for so long as Emcore meets the milestones and deliverables agreed upon
in the statement of work. In the event that WorldWater & Power Corp.
consummates its transaction with Entech, the parties will agree to continued
collaboration on design and development of a CPV system using Emcore's MJ
technology with the goal of accelerating time to market.
2. Incorporate Emcore cells, concentrators and systems as mutually agreed
to, as to their performance, price, delivery and schedules, in WorldWater &
Power Corp. proposals and other marketing activities.
a. WorldWater & Power Corp. to provide bi-monthly updates to Emcore on the
status of marketing efforts for Emcore CPV systems. Emcore will be invited to
attend all internal marketing meetings and quarterly reviews with WorldWater &
Power Corp.'s management.
b. Emcore to support WorldWater & Power Corp. marketing effort as requested,
including:
i. Preparation of bid packages.
ii. Joint presentations to prospective customers.
iii. Preparation of marketing collateral.
3. During the term of this Letter Agreement and the Strategic Agreement,
WorldWater & Power shall use its best efforts to market and sell to its
customers Emcore CPV systems or CPV systems incorporating Emcore MJ or cell
assemblies. WorldWater & Power, or third parties introduced by WorldWater &
Power that are reasonably acceptable to Emcore, shall provide Emcore supply
agreements leading to specific purchase orders for CPV systems, cells and cell
assemblies, under which Emcore will supply MJ cells, cell assemblies and
systems, with an estimated commercial value of $100 million to be supplied per
the delivery schedule below. Emcore will supply MJ CPV systems that meet
customer performance requirements at a market price competitive with other solar
energy systems (e.g., MJ CPV, silicon flat plate or silicon CPV); provided that
Emcore shall not be required to be the lowest cost supplier of systems.
WorldWater & Power will make every effort to incorporate MJ CPV in their bids
and will treat Emcore as the exclusive supplier for MJ cells, cell assemblies
and systems up to the $100 million estimated commercial value. Subject to Emcore
meeting the conditions set forth in the third sentence of this paragraph,
WorldWater & Power, or third parties introduced by WorldWater & Power that are
reasonably acceptable to Emcore, shall place CPV system orders with Emcore
according to the following schedule:
a. 1.5 MW to be delivered by Emcore to WorldWater & Power Corp. by 12/31/07;
provided, however, that if such a Purchase Order is not issued to Emcore by
WorldWater & Power Corp., or by third parties introduced by WorldWater & Power
that are reasonably acceptable to Emcore, so that Emcore can reasonably have
time to deliver by 12/31/07 on such a Purchase Order, WorldWater & Power Corp.
will either (i) place a purchase order (within the specified lead times) for,
take delivery of and pay Emcore by 1/31/08 for 40,200 MJ608584, T1000 MJ Cell.
The parties may agree to a different cell size. Price per cell to WorldWater &
Power Corp. for any other solar cell product will be adjusted accordingly so
that Emcore realizes its normal fully yielded and burdened profit margin. at
$***** per cell or (ii) pay Emcore $***** by 1/31/08 in respect of its purchase
requirements for calendar 2007.
b. 10 MW to be delivered by Emcore to WorldWater & Power Corp. by 12/31/08;
provided, however, that if such a Purchase Order is not issued to Emcore by
WorldWater & Power Corp., or by third parties introduced by WorldWater & Power
that are reasonably acceptable to Emcore, so that Emcore can reasonably have
time to deliver by 12/31/08 on such a Purchase Order, WorldWater & Power Corp.
will place a purchase order (within the specified lead times) for, take delivery
of and pay Emcore by 1/31/09 for 365,600 MJ at $***** per cell; provided,
however, that the parties will negotiate in good faith an adjustment to such
cell pricing to ensure that the overall CPV system from a price and performance
perspective is competitive with other solar energy systems (e.g., MJ CPV,
silicon flat plate or silicon CPV). For the sake of clarity, such adjustment
may either result in an increase or decrease to the reference price.
c. 15 MW to be delivered by Emcore to WorldWater & Power Corp. by 12/31/09;
provided, however, that if such a Purchase Order is not issued to Emcore by
WorldWater & Power Corp., or by third parties introduced by WorldWater & Power
that are reasonably acceptable to Emcore, so that Emcore can reasonably have
time to deliver by 12/31/09 on such a Purchase Order, WorldWater & Power Corp.
will place a purchase order (within the specified lead times) for, take delivery
of and pay Emcore by 1/31/10 for 502,700 MJ at $***** per cell; provided,
however, that the parties will negotiate in good faith an adjustment to such
cell pricing to ensure that the overall CPV system from a price and performance
perspective is competitive with other solar energy systems (e.g., MJ CPV,
silicon flat plate or silicon CPV). For the sake of clarity, such adjustment
may either result in an increase or decrease to the reference price.
4. Without limiting the MJ purchase obligations set forth in paragraph 3
above, WorldWater & Power Corp. and its subsidiaries and affiliates will
purchase MJ exclusively from Emcore, provided Emcore is able to meet mutually
agreed price, performance and delivery requirements; provided further that
Emcore shall not be required to be the lowest cost provider of the MJ cells to
maintain exclusivity.
5. The MJ purchase obligations set forth in paragraph 3 above are
irrevocable, non-cancelable and non-reschedulable on a take or pay basis.
6. This Letter Agreement and the Strategic Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York, applicable
to agreements made and to be performed within such State without regard to its
conflicts of laws provisions which may direct the dispute to be resolved in
accordance with the laws of another jurisdiction. Each Party consents to the
jurisdiction of the Federal District Court for the Southern District of New
York, and agrees to waive any objections to as to venue or personal
jurisdiction.
7. Each Party hereto hereby acknowledges that all Parties hereto
participated equally in the negotiation and drafting of this Letter Agreement
and that, accordingly, no court construing this Letter Agreement shall construe
it more stringently against one Party than against the other.
8. This Letter Agreement is subject to the confidentiality agreement
between the parties entered into on October 9, 2006 (the "Nondisclosure
Agreement").
9. Neither party may assign this Letter Agreement without the prior written
consent of the other party, except that Emcore may assign its rights under this
Letter Agreement in connection with the sale of all or substantially all of the
business to which this Letter Agreement relates.
10. This Letter Agreement may be executed in any number of counterparts
(including by facsimile) and by different parties hereto in separate
counterparts, with the same effect as if all parties had signed the same
document. All such counterparts shall be deemed an original, shall be construed
together and shall constitute one and the same instrument. This Letter
Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
[Execution Page Follows]
IN WITNESS WHEREOF, this Letter Agreement has been duly executed by each of the
parties hereto as of the date first written above.
EMCORE Corporation
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Legal Officer, Executive Vice-President and Secretary
WorldWater & Power Corp.
By: /s/ Xxxxxxx X. Xxxxx
---------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
