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[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
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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.
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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
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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:
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.
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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,
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against Licensor, its licensees, or the customers of each.
ARTICLE
7.
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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 to use the Licensed Patents necessary for
the processing, manufacture, use, or sale of the Licensed
Products.
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