TECHNOLOGY SHARING AND LICENSE AGREEMENT

EXHIBIT 10.1

TECHNOLOGY SHARING AND LICENSE AGREEMENT

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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 Arun Madan, an

individual ("Dr. Madan"). XsunX, MVS, and Dr. Madan 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 Dr. Madan 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 Dr. Madan 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 Dr. Madan 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 Dr. Madan 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 Dr. Madan 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 Dr. Madan 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 mark-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 Dr. Madan" means that the approval by either MVS or

Dr. Madan 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 Dr. Madan, 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 Dr. Madan 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 Dr. Madan 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 Dr. Madan. The main or primary line of business of MVS

and Dr. Madan 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 Dr. Madan shall, subject to the specific

provisions of any development proposal then approved by XsunX, MVS and Dr.

Madan, 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 Dr. Madan.

3.5. Materials to be Provided by MVS. MVS and Dr. Madan 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 Dr. Madan for such expenses in accordance with the provisions

of this Agreement. Approval of any development proposal shall not be

unreasonably withheld by MVS and Dr. Madan.

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3.6. Tools, Instruments and Facilities of MVS. Subject to the confidentiality

provisions set forth herein, MVS and Dr. Madan 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 Dr. Madan's advice

and consultation efforts in the furtherance of XsunX business initiatives, offer

to Dr. Madan 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 Dr. Madan. As of the effective date of this Agreement, XsunX

shall offer Dr. Madan the position of Chairman on the XsunX Scientific Advisory

Board. Pursuant to such engagement, Dr. Madan will provide XsunX with his best

efforts and technical expertise in the furtherance of XsunX process and product

development efforts. The exclusive compensation of Dr Madan 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 Patent