Letter Agreement Between Emcore and World Water & Power (WWAT) November 29, 2006
EXHIBIT
10.3
PORTIONS
OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION").
THE OMISSIONS HAVE BEEN INDICATED BY ASTERISKS (“*****”), AND THE OMITTED TEXT
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
Between
Emcore
and World Water & Power (WWAT)
November
29, 2006
Emcore
and WorldWater & Power Corp. desire to collaborate on the development and
commercialization of concentrator photovoltaic (CPV) power systems using
Emcore’s proprietary multi-junction solar cells (MJ). This letter agreement
(“Letter Agreement”) defines the scope and key terms of the strategic
relationship to be embodied in a written strategic agreement (the “Strategic
Agreement”) and separately sets forth certain binding purchase and supply
obligations of the parties. The term of the Strategic Agreement will be five
years. This Letter Agreement shall be legally binding upon and enforceable
against each of the parties and their respective successors and
assigns.
| 1. |
The
parties will collaborate on the design and development of CPV systems
using Emcore MJ:
|
| a. |
WorldWater
& Power Corp. to provide requirements definition of CPV in terrestrial
power generation in grid-connected, distributed power, and non-grid
applications worldwide.
|
To
this
end, Emcore and WorldWater & Power Corp. will establish a joint team to
review the current technology status of MJ systems. This team is to prepare
a
report, and within three months, present this report to the management of both
Emcore and WorldWater & Power Corp.
This
report will identify a common technology and commercialization platform. This
will include development, product verification, pilot demonstration, and
manufacturing plan with identifiable, achievable and commercial targets, such
as:
| i. |
Performance
|
| ii. |
Reliability
|
| iii. |
Design-to-cost
(DTC) targets
|
| iv. |
Schedule
and quantity of prototype and production
units
|
| b. |
Emcore
to design systems and develop production infrastructure to meet or
exceed
WorldWater & Power Corp. requirements, consistent with common
commercial objectives.
|
This
effort will include:
| i. |
Structural
configuration
|
| ii. |
Tracking
systems
|
| iii. |
Control
elements
|
| iv. |
Focusing
lens assembly
|
| v. |
Receiver
modules including MJ solar cells
|
| c. |
WorldWater
& Power Corp. to participate in Emcore design reviews and provide
guidance on the design, product verification, pilot projects and
other
efforts related to transition-to-production planning, implementation,
and
installation.
|
| d. |
WorldWater
& Power Corp. to provide design and testing support and general
consulting on topics such as:
|
| i. |
System
monitoring
|
| ii. |
Performance
testing of prototype systems
|
| iii. |
Demonstration
of application of Emcore CPV systems to core applications such as
driving
large motors, pumps, and
compressors.
|
| iv. |
General
PV terrestrial systems concepts such as installation, wiring of modules,
and inverters.
|
| e. |
WorldWater
& Power Corp. agrees that Emcore will be its exclusive partner in the
development of CPV systems using MJ technology. Exclusivity will
continue
for so long as Emcore meets the milestones and deliverables agreed
upon in
the statement of work. In the event that WorldWater & Power Corp.
consummates its transaction with Entech, the parties will agree to
continued collaboration on design and development of a CPV system
using
Emcore’s MJ technology with the goal of accelerating time to market.
|
| 2. |
Incorporate
Emcore cells, concentrators and systems as mutually agreed to, as
to their
performance, price, delivery and schedules, in WorldWater & Power
Corp. proposals and other marketing
activities.
|
| a. |
WorldWater
& Power Corp. to provide bi-monthly updates to Emcore on the status
of
marketing efforts for Emcore CPV systems. Emcore will be invited
to attend
all internal marketing meetings and quarterly reviews with WorldWater
& Power Corp.’s management.
|
| b. |
Emcore
to support WorldWater & Power Corp. marketing effort as requested,
including:
|
| i. |
Preparation
of bid packages.
|
| ii. |
Joint
presentations to prospective
customers.
|
| iii. |
Preparation
of marketing collateral.
|
| 3. |
During
the term of this Letter Agreement and the Strategic Agreement, WorldWater
& Power shall use its best efforts to market and sell to its customers
Emcore CPV systems or CPV systems incorporating Emcore MJ or cell
assemblies. WorldWater & Power, or third parties introduced by
WorldWater & Power that are reasonably acceptable to Emcore, shall
provide Emcore supply agreements leading to specific purchase orders
for
CPV systems, cells and cell assemblies, under which Emcore will supply
MJ
cells, cell assemblies and systems, with an estimated commercial
value of
$100 million to be supplied per the delivery schedule below. Emcore
will
supply MJ CPV systems that meet customer performance requirements
at a
market price competitive with other solar energy systems (e.g., MJ
CPV,
silicon flat plate or silicon CPV); provided that Emcore shall not
be
required to be the lowest cost supplier of systems. WorldWater & Power
will make every effort to incorporate MJ CPV in their bids and will
treat
Emcore as the exclusive supplier for MJ cells, cell assemblies and
systems
up to the $100 million estimated commercial value. Subject to Emcore
meeting the conditions set forth in the third sentence of this paragraph,
WorldWater & Power, or third parties introduced by WorldWater &
Power that are reasonably acceptable to Emcore, shall place CPV system
orders with Emcore according to the following
schedule:
|
| a. |
1.5
MW to be delivered by Emcore to WorldWater & Power Corp. by 12/31/07;
provided, however, that if such a Purchase Order is not issued to
Emcore
by WorldWater & Power Corp., or by third parties introduced by
WorldWater & Power that are reasonably acceptable to Emcore, so that
Emcore can reasonably have time to deliver by 12/31/07 on such a
Purchase
Order, WorldWater & Power Corp. will either (i) place a purchase order
(within the specified lead times) for, take delivery of and pay Emcore
by
1/31/08 for 40,200 MJ1
at
$*****
per cell or (ii) pay Emcore $*****
by
1/31/08 in respect of its purchase requirements for calendar 2007.
|
| b. |
10
MW to be delivered by Emcore to WorldWater & Power Corp. by 12/31/08;
provided, however, that if such a Purchase Order is not issued to
Emcore
by WorldWater & Power Corp., or by third parties introduced by
WorldWater & Power that are reasonably acceptable to Emcore, so that
Emcore can reasonably have time to deliver by 12/31/08 on such a
Purchase
Order, WorldWater & Power Corp. will place a purchase order (within
the specified lead times) for, take delivery of and pay Emcore by
1/31/09
for 365,600 MJ at $*****
per cell;
provided,
however, that the parties will negotiate in good faith an adjustment
to
such cell pricing to ensure that the overall CPV system from a price
and
performance perspective is competitive with other solar energy systems
(e.g., MJ CPV, silicon flat plate or silicon CPV). For the sake of
clarity, such adjustment may either result in an increase or decrease
to
the reference price.
|
| c. |
15
MW to be delivered by Emcore to WorldWater & Power Corp. by 12/31/09;
provided, however, that if such a Purchase Order is not issued to
Emcore
by WorldWater & Power Corp., or by third parties introduced by
WorldWater & Power that are reasonably acceptable to Emcore, so that
Emcore can reasonably have time to deliver by 12/31/09 on such a
Purchase
Order, WorldWater & Power Corp. will place a purchase order (within
the specified lead times) for, take delivery of and pay Emcore by
1/31/10
for 502,700 MJ at $*****
per cell; provided, however, that the parties will negotiate in good
faith
an adjustment to such cell pricing to ensure that the overall CPV
system
from a price and performance perspective is competitive with other
solar
energy systems (e.g., MJ CPV, silicon flat plate or silicon CPV).
For the
sake of clarity, such adjustment may either result in an increase
or
decrease to the reference price.
|
| 4. |
Without
limiting the MJ purchase obligations set forth in paragraph 3 above,
WorldWater & Power Corp. and its subsidiaries and affiliates will
purchase MJ exclusively from Emcore, provided Emcore is able to meet
mutually agreed price, performance and delivery requirements; provided
further that Emcore shall not be required to be the lowest cost provider
of the MJ cells to maintain exclusivity.
|
| 5. |
The
MJ purchase obligations set forth in paragraph 3 above are irrevocable,
non-cancelable and non-reschedulable on a take or pay basis.
|
| 6. |
This
Letter Agreement and the Strategic Agreement shall be governed by,
and
construed in accordance with, the laws of the State of New York,
applicable to agreements made and to be performed within such State
without regard to its conflicts of laws provisions which may direct
the
dispute to be resolved in accordance with the laws of another
jurisdiction. Each Party consents to the jurisdiction of the Federal
District Court for the Southern District of New York, and agrees
to waive
any objections to as to venue or personal
jurisdiction.
|
| 7. |
Each
Party hereto hereby acknowledges that all Parties hereto participated
equally in the negotiation and drafting of this Letter Agreement
and that,
accordingly, no court construing this Letter Agreement shall construe
it
more stringently against one Party than against the
other.
|
| 8. |
This
Letter Agreement is subject to the confidentiality agreement between
the
parties entered into on October 9, 2006 (the "Nondisclosure
Agreement").
|
| 9. |
Neither
party may assign this Letter Agreement without the prior written
consent
of the other party, except that Emcore may assign its rights under
this
Letter Agreement in connection with the sale of all or substantially
all
of the business to which this Letter Agreement
relates.
|
| 10. |
This
Letter Agreement may be executed in any number of counterparts (including
by facsimile) and by different parties hereto in separate counterparts,
with the same effect as if all parties had signed the same document.
All
such counterparts shall be deemed an original, shall be construed
together
and shall constitute one and the same instrument. This Letter Agreement
shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties
hereto.
|
[Execution
Page Follows]
IN
WITNESS WHEREOF, this Letter Agreement has been duly executed by each of the
parties hereto as of the date first written above.
EMCORE
Corporation
By:
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Chief
Legal Officer, Executive Vice-President and Secretary
WorldWater
& Power Corp.
By:
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Chairman
1Quantities
and Pricing based on Part No. 608584,
T1000 MJ Cell. The parties may agree to a different cell size. Price per
cell to
WorldWater & Power Corp. for any other solar cell product will be adjusted
accordingly so that Emcore realizes its normal fully yielded and burdened
profit
margin.