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TECHNOLOGY DEVELOPMENT AND
LICENSE AGREEMENT
THIS TECHNOLOGY DEVELOPMENT AND LICENSE AGREEMENT ("Agreement") is
made
effective as of this 1st day of January, 2007 ("Effective Date") by
and between
XsunX, Inc., a Colorado Corporation ("XsunX"), and Sencera, LLC, a
North
Carolina Limited Liability Company ("Sencera"). XsunX and Sencera
are herein
referred to individually as a "Party" and collectively as the
"Parties."
R E C I T A L S
A. WHEREAS, Sencera has developed and continues to develop
technologies
and processes pertaining to a unique plasma deposition source for
the coating of
large-area substrates with highly engineered thin film coatings.
Sencera
believes that its high-density plasma source is capable of
depositing certain
coatings, including silicon, at superior rates, low temperatures
and high
quality levels, making it attractive for use in solar cells.
Sencera has
developed its own intellectual property and also has rights to
certain other
intellectual property related to this technology;
B. WHEREAS, XsunX has developed and continues to develop
technologies and
processes for semi-transparent and opaque solar cells and
photovoltaic
technologies, solar cell panels, and methods of manufacture
relating to the
same. XsunX has intellectual property rights under U.S. Patent Nos.
6,180,871;
6,320,117; 6,509,204; 6,488,777; 6,258,408; 6,472,622; and U.S.
Provisional
Application No. 60/536,151;
C. WHEREAS, Sencera desires to grant, and XsunX desires to receive,
a
license under its technology to XsunX for use in certain
commercialization
efforts by XsunX;
D. WHEREAS, Sencera wishes to borrow from XsunX, and XsunX desires
to loan
to Sencera the sum of $1,500,000 to be applied to the costs of the
development
effort the parties intend to undertake herein, in accordance with
the terms of a
Secured Loan Agreement to be executed contemporaneously with the
execution of
this Agreement; and
E. WHEREAS, XsunX is interested in exploring the viability of
Sencera's
technology for its future thin film silicon solar cell products.
Sencera is
likewise interested in developing its technology for application in
solar cells.
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
Unless otherwise provided herein, capitalized terms used but
not
otherwise specifically defined herein shall have the meanings
ascribed to them
in this Agreement, "days" shall mean calendar days, "including"
shall mean
"including without limitation," and the following terms shall have
the meanings
stated below:
<PAGE>
1.1 "Agreement" shall mean this Technology Development and
License
Agreement, including the exhibits attached hereto, which are
incorporated by
reference herein.
1.2 "Confidential Information" shall mean any and all information:
(a) that
is conveyed or presented in oral or written or other tangible form,
(b) that in
the case of written or other tangible form is marked with a legend
such as or
similar to "CONFIDENTIAL INFORMATION" or "PROPRIETARY INFORMATION,"
including
the owner's name or, in the case of oral information, is so denoted
at the time
of disclosure and (c) that (i) relates to a Party's business plans,
production
processes, inventions, discoveries or any other aspect of a Party's
business,
and/or (ii) belongs to third parties and was obtained by a Party
under
restrictions on disclosure and/or use in which case such
information may be
marked as being confidential or proprietary to such third parties.
Such
information may include, by way of example, know-how, algorithms,
software
programs, schematics, processes, source documents, materials,
contracts,
customer information, financial information, personnel information,
product
development, engineering, strategic and tactical plans, sales and
marketing
plans, and business plans.
1.3 "Field of Use A" shall mean the field of deposited solar
cells.
1.4 "Field of Use B" shall mean the field: (a) as claimed in U.S.
Patent
Nos. 6,180,871; 6,320,117; 6,509,204; 6,488,777; 6,258,408;
6,472,622; and (b)
as claimed in U.S. Provisional Application No. 60/536,151; and (c)
for use in
semi-transparent photovoltaic devices, multi-terminal photovoltaic
devices, and
cassette-based roll-to-roll manufacturing equipment.
1.5 "Improvement" shall mean (a) with respect to Sencera
Technology, any
new or modified product or process that performs the same function
as the
Licensed Products or Licensed Process or Licensed Intellectual
Property in a
better or more economical way ("Sencera Improvement"); and (b) with
respect to
XsunX Technology, any new or modified product or process that
enables the XsunX
Technology to perform in a better or more economical way ("XsunX
Improvements").
1.6 "Licensed Intellectual Property" shall mean Sencera
Technology including, but not limited to, all patents and patent
applications
(including the Licensed Patents), trademarks, trademark
applications, designs,
copyrights, copyright applications, inventions, know-how, trade
secrets, mask
works, technical information, drawings, data, computer programs,
testing
specifications and procedures and the like; and all Sencera
Improvements.
1.7 "Licensed Patents" shall mean the patents and patent
applications
described in Exhibit A attached hereto, as well as (i) all pending
and issued
divisions, continuations, continuations-in-part, reissues,
reexaminations,
substitutes and extensions thereof; (ii) all foreign patents and
patent
applications relying for priority on any of the foregoing including
all pending
and issued divisions, continuations, continuations-in-part,
reissues,
reexaminations, substitutes and extensions thereof; and (iii) and
all pending
and issued divisions, continuations, continuations-in-part,
reissues,
reexaminations, substitutes and extensions thereof relating to
Improvements.
<PAGE>
1.8 "Licensed Products" shall mean any and all products
manufactured
utilizing methodologies or processes that utilize any aspect of the
Licensed
Intellectual Property.
1.9 "Licensed Process" shall mean any methodologies or processes
that
utilize any aspect of the Licensed Intellectual Property.
1.10 "Licensed Territory" shall mean worldwide.
1.11 "Phase" shall mean an individual task or set of tasks to be
completed
by a Target Date as set forth herein.
1.12 "Royalty" shall mean the payment by a Party of a certain
amount of
revenues earned from the exploitation of any or all of the Licensed
Intellectual
Property as set forth herein.
1.13 "Sencera Technology" shall mean all existing technology of
Sencera in
existence as of the Effective Date of this Agreement, and any and
all technology
and intellectual property, including any Licensed Products or
Licensed Process,
conceived or developed during the Term.
1.14 "Target Date" shall mean the date by which a Phase is intended
to be
completed.
1.15 "XsunX Technology" shall mean all existing technology of XsunX
in
existence as of the Effective Date of this Agreement including U.S.
Patent Nos.
6,180,871; 6,320,117; 6,509,204; 6,488,777; 6,258,408; 6,472,622;
and U.S.
Provisional Application No. 60/536,151.
2. DEVELOPMENT - PHASE II
2.1 Development. In accordance with the terms of this Section 2,
Sencera
shall, at its cost (funded with proceeds of the loan from XsunX or
otherwise),
lead a joint development program with XsunX to develop a Licensed
Process that
will produce silicon material at deposition rates expected to
produce cells at a
cost of less than $1 USD per Watt in Phase III below; specifically
rates of >90
Angstrom-meters per minute (> 15 Angstroms per second equivalent
static rate)
for the manufacture of thin film solar cells and other technology
in accordance
with the Sencera Development Plan, a copy of which is attached
hereto as Exhibit
B and incorporated herein by reference, said development phase
referred to
herein as ("Phase II"). Sencera will, in addition to the reporting
requirements
in the Development Program, provide XsunX with periodic reports on
the status of
efforts undertaken in connection with this Phase II, at least as
frequently as
once each month, and with access to key technical personnel and
records
reflecting such activity upon reasonable request, and provide
sample material
for independent XsunX use in conjunction with reports or when
available.
2.2 Target Date. The Target Date to complete Phase II is August 31,
2007.
<PAGE>
3. DEMONSTRATION - PHASE III
3.1 Demonstration. Sencera and XsunX shall, pursuant to terms as
shall be
mutually agreed, jointly design and build a production
demonstration tool to
demonstrate rate and cost scaling for use in joint marketing
production hardware
and processes; target cost is less than $1 (USD) per peak watt,
said
demonstration phase referred to herein as ("Phase III"). Sencera
will, in
addition to the reporting requirements in the Development Program,
provide XsunX
with periodic reports on the status of efforts undertaken in
connection with
this Phase III, at least as frequently as once each month, and with
access to
key technical personnel and records reflecting such activity upon
reasonable
request.
3.2 Costs. During this Phase III, XsunX and Sencera will share
equally all
Non-Refundable Engineering (NRE) and build costs for equipment
related to the
scale-up and implementation of Sencera Technology for the
production of
high-rate Plasma Enhanced Chemical Vapor Deposition (PECVD) silicon
solar cells.
3.3 Target Date. The Target Date to complete Phase III is August
31, 2008.
4. JOINT MARKETING - PHASE IV
4.1 Joint Marketing. XsunX and Sencera shall, subject to
successful
completion of the Development Phases, jointly and, pursuant to
terms as shall be
mutually agreed, determine and implement a plan to market and sell
equipment and
processes for high-rate deposited silicon solar cells, said joint
marketing
phase referred to herein as ("Phase IV"). Each of XsunX and Sencera
shall have
the right to independently market or sell such equipment and
processes, as well.
4.2 XsunX shall, subject to its reasonable discretion enter into
a
sublicense agreement with any third party wanting to obtain the
right to use the
Licensed Process. The sublicense agreement shall require that each
sublicensee
pay a Royalty to use the Licensed Process. The Royalty shall be
based on an
energy production basis. The Royalty shall be paid directly to
XsunX but XsunX
agrees to share the Royalty with Sencera in accordance with the
following terms
and conditions: If cell manufacturing costs are less than $1 per
peak watt,
Sencera's portion of the Royalties shall be one half (50%) of the
Royalties
actually received and collected from a licensee by XsunX for the
production of
solar cells that employ the Licensed Process; provided, however,
that in no case
shall the minimum be less than $ 0.15 per peak watt of manufactured
cell
capacity.
4.3 The Royalty rate or basis may be revised if: (a) Sencera
licenses the
Licensed Process to another licensee under more favorable terms
than the terms
of the present Agreement, in which case XsunX shall be entitled to
the same or
better terms; (b) an objective industry pricing index (such as
www.solarbuzz.com) indicates that the present structure is not
supported by the
market which shall be indicated by the average retail price of a
solar PV module
falling below $3.00 per peak watt; or (c) both Parties agree to a
modification.
<PAGE>
4.4 XsunX shall sublicense for and pay to Sencera a Royalty: (a) at
the end
of the first twelve month period commencing six months after the
end of Phase
II, a minimum annual payment equivalent to the Royalty that would
be due from
the licensing of 25 MW annual solar cell manufacturing capacity
using the
Licensed Process; and (b) commencing one year after the
commencement of the
period defined in Sectio
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