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 Patents.
