[CONFIDENTIAL]
REDACTED COPY
EXHIBIT 10.1
[Note: A “[*]” indicates
that material has been omitted pursuant to a request for
confidential treatment and that the material has been filed
separately.]
LICENSE AGREEMENT
This License Agreement
(“Agreement”) is made this 21st day of November, 2006,
between the UD Technology Corporation, a non-profit corporation
located at 15 Innovation Way, Suite 103, Newark, Delaware, 19711
(hereinafter referred to as “Licensor”) and Ascent
Solar Technologies, Inc., a Delaware corporation with its principal
place of business in Littleton, Colorado (hereinafter referred to
as “Licensee”).
WITNESSETH THAT:
WHEREAS, Licensor is the owner of
certain intellectual property related to a means of manufacturing
solar cells, modules and arrays based on CuInGaSe2 and related
materials encompassing 1) a multi-source physical vapor deposition
process to form the CuInGaSe2 on a continuously moving substrate,
2) a method to coat a substrate with a metal that eliminates
cracking and poor adhesion of the CuInGaSe2 layer, and 3) a process
to deposit a CdS layer, all useful for production of photovoltaic
conversion cells, modules, and arrays.
WHEREAS, Licensee desires to obtain
a non-exclusive license to practice the intellectual property to
make, use, and sell products comprising solar cells, modules,
and/or arrays which can be prepared using the intellectual
property; and
WHEREAS, Licensor is willing to
grant such a license on the terms and subject to the conditions set
forth below, and Licensee desires to receive and operate
commercially under such a license.
NOW THEREFORE, in consideration of
the premises and mutual agreements
hereinafter set forth, Licensor and
Licensee agree as follows:
ARTICLE
1.
DEFINITIONS
For the purpose of this License
Agreement, unless the context clearly or necessarily indicates
otherwise, the following words and phrases shall have the meanings
set forth below:
1.1
“Licensed Patents” means all (i) patent(s) and patent
application(s) listed in Exhibit A attached hereto; (ii) any
international counterparts thereof; (iii) any divisionals,
continuations, continuations-in-part, and extensions of any of the
foregoing patents and patent application(s); (iv) all
substitutions, reissues, renewals, reexaminations, patents of
addition, and inventors’ certificates thereof, patent term
extensions, supplementary protection certificates, and data package
exclusivity extensions of the foregoing patents; and (v) all
patent(s) issuing from any of the foregoing.
1.2
“Licensed Products” shall mean any solar cell, module,
and/or array constituting an apparatus or article for the
generation of electricity, characterized by a power rating in watts
determined under standard conditions, which but for the grant of
rights in Paragraph 2.1 would infringe the Licensed
Patents.
1.3
“Sale” or “Sales” shall mean any bona fide
transaction for which consideration is received or expected for the
sale, use, lease, transfer, or other disposition of the Licensed
Product(s). A Sale of Licensed Product(s) shall be deemed
completed at the time that Licensee receives payment for such
Licensed Products. In determining the amount of Sales,
Licensee may first deduct applicable returns and allowances, as
well as charges for freight, handling, transportation, in-transit
insurance, sales taxes, use taxes and other applicable
taxes
2
paid by Licensee with respect to the
sale, use, lease, transfer or other disposition of Licensed
Products (“Net Sales”).
1.4
“License Year” means the one year period starting on
January 1, of one year and ending on December 31, of the same
year. The first License Year shall begin on the Effective
Date and end on December 31, 2006.
1.5
“Effective Date” means the date when this Agreement is
fully executed by the parties.
1.6
“Affiliate” of a party means any corporation or other
legal entity directly or indirectly controlling, controlled by or
under common control of such party. For purposes, hereof, the
term “controlled” (including the terms
“controlled by” and “under common control
with”), as used with respect to any entity, shall mean the
direct and indirect ability or power to direct or cause the
direction of management policies of such entity or otherwise direct
the affairs of such entity, whether through ownership of equity
participation, voting securities, beneficial interest, by contract
or otherwise.
ARTICLE
2.
LICENSE GRANT
2.1
Licensor hereby grants to Licensee for the term of this Agreement a
non-exclusive, non-transferable license, without the right to
sublicense except to Affiliates, under the Licensed Patents, to
make, have made, use, and sell Licensed Products throughout the
world.
2.2
The right to sublicense to Affiliates granted to Licensee hereunder
is subject to the following conditions.
a.
In each sublicense, the sublicensee shall be subject to the terms
and conditions of the license granted to Licensee
hereunder.
3
b.
Each sublicense shall expressly provide that Licensor makes no
warranties or representations regarding the Licensed Patents, and
shall provide that Licensor has no liability to sublicensees with
regard to the Licensed Patents.
c.
Licensee shall forward to Licensor, within thirty (30) days of
execution, the name and address of each sublicensee and the
identity of any designated representative of the sublicensee (name,
title, location) to receive communications relative to the
sublicense and copies of each sublicense agreement upon written
request of Licensor.
2.3.
The rights and licenses granted to Licensee herein shall be
effective as of the Effective Date.
2.4
Licensee shall use reasonable commercial efforts to develop for
commercial use and to practice the Licensed Patents as soon as
reasonably possible, consistent with sound and reasonable business
practices.
ARTICLE
3.
CONSIDERATION
3.1
In consideration for the grant of rights provided above in
Paragraph 2.1, Licensee shall pay to Licensor a royalty based upon
the Net Sales of Licensed Products sold or transferred according
the following schedule:
[*]
3.2
Minimum royalties per License Year shall be [*] regardless of Net
Sales, except that the minimum annual royalty for the first
calendar year ending December 31, 2006 shall be prorated from the
Effective Date. Should Licensee fail to meet any License
Year’s annual minimum royalty, Licensor, in its sole
discretion, may terminate this License Agreement.
3.3
The royalty due shall be paid to Licensor in United States
Dollars. For
4
converting royalties into United
States Dollars any royalties that accrue in a foreign currency, the
parties shall use the average of the closing buying rates of the
Morgan Guaranty Trust Company of New York applicable to
transactions under exchange regulations for the particular currency
on the first business day of each month of the License Year for
which royalties are payable.
3.4
The royalty shall be paid annually by Licensee (on behalf of itself
and its sublicensees) no later than thirty (30) days after the end
of each License Year. The royalty relating to any Sales by
Licensee to Affiliates shall be calculated based upon the transfers
of Licensed Product and the royalty schedule provided in Paragraph
3.1, above.
3.5
Licensee’s obligation to pay royalties (for itself and its
Affiliates) shall continue until the earlier of termination of this
License Agreement or the date of the last to expire of the Licensed
Patents. Licensee shall notify Licensor of the date of first
commercial sale of Licensed Product within each country in which
sales are made within (60) days of the date of such first
sale.
3.6
Royalty payments shall be payable to “UD Technology
Corporation” and sent to:
Vice President
UD Technology Corporation
15 Innovation Way, Suite 103
Newark, Delaware 19711
ARTICLE
4.
REPORTING BY LICENSEE
4.1
Licensee shall prepare annual royalty reports setting forth sales
of Licensed Products during the License Year by Licensee and its
sublicensees. These reports shall be delivered to Licensor
with the royalty payments within thirty (30) days following the end
of each calendar year.
5
4.2
If no sales of Licensed Products have been made by Licensee and/or
its Affiliates during any calendar year, a statement to that effect
shall be delivered by Licensee to Licensor with the minimum
royalties described in paragraph 3.2 within thirty (30) business
days following the end of each calendar year.
ARTICLE
5.
BOOKS AND RECORDS
5.1
Licensee shall maintain and cause its Affiliates to maintain full,
true and accurate books of accounts and other records containing
all particulars which may be necessary to ascertain and verify the
royalties payable under this Agreement. Upon Licensor’s
reasonable written request, Licensee and its Affiliates shall
permit independent Certified Public Accountants selected and paid
for by Licensor to examine at reasonable times during regular
business hours such of their records as may be reasonably necessary
to determine the accuracy of any report and/or payment made under
this Agreement, subject to execution by such independent Certified
Public Accountants of appropriate confidentiality and
non-disclosure agreements with Licensee.
5.2
To the extent practical and not inconsistent with any other
provision herein, all reports and other documents provided
hereunder and all calculations shall be made pursuant to generally
accepted accounting principals as practiced by certified public
accountants in the United States.
ARTICLE
6.
IMPROVEMENTS OF LICENSEE
Any improvements, patented or
unpatented, made to the Licensed Patents by Licensee during the
term of this Agreement, shall be the sole property of
Licensee. Licensee hereby agrees not to assert rights in any
such improvements, or in any patents related thereto,
6
against Licensor, its licensees, or
the customers of each.
ARTICLE
7.
[INTENTIONALLY LEFT BLANK]
ARTICLE
8.
INFRINGEMENT LITIGATION
8.1
Licensor agrees to provide such assistance and cooperation at
Licensee’s expense as may be reasonably necessary to assist
Licensee in its defense of any litigation which seeks to prevent
Licensee’s right
