NON-EXCLUSIVE
      LICENSE AND CROSS-LICENSE AGREEMENT

     

    This
      Non-Exclusive License and Cross-License Agreement (the “License”)
      is
      made and entered into effective as of May
      30,
      2008
      (“Effective
      Date”)
      by and
      between the XsunX, Inc., a Colorado Corporation ("XsunX"),
      MVSystems, Inc., a Colorado Corporation (“MVSI”),
      and
      Arun Madan (“Dr.
      Madan”),
      an
      individual (collectively, the “MVS
      Parties”).
      XsunX
      and the MVS Parties hereinafter may be referred to individually as a
“party”
and
      collectively as the “parties.”
      

     

    RECITALS

     

    A.       WHEREAS,
      XsunX and the
      MVS
      Parties are
      parties to that certain Technology Sharing and License Agreement dated September
      17, 2004, as amended (“Technology
      Sharing and License Agreement”),
      under
      which the MVS Parties licensed certain technologies to XsunX, in accordance
      with
      the terms set forth therein, including, without limitation, the Licensed Patents
      (as defined below).

     

    B.       WHEREAS,
      XsunX and the MVS Parties are parties to that certain Expanded Use License
      Agreement dated October 12, 2005 (“Expanded
      Use License Agreement”),
      under
      which the Technology Sharing and License Agreement was amended to expand the
      scope and use of certain technology, all in accordance with the terms set forth
      therein. The Technology Sharing and License Agreement and the Expanded Use
      License Agreement hereinafter are collectively referred to as the “Original
      License Agreements.”
      

     

    C.       WHEREAS,
      XsunX and MVSI are parties to those certain Phase
      Agreements,
      as
      defined below, pursuant which MVSI agreed to undertake certain research and
      development activities on a no-profit basis, all in accordance with the terms
      set forth in the applicable Phase Agreement and in accordance with the terms
      and
      conditions set forth in the Original License Agreements.

     

    D.
             WHEREAS, the parties have determined
      to terminate their business relationship and wish to have no obligation to
      one
      another after the date hereof, whether arising under the Original License
      Agreements, the Phase Agreements or any other agreement between or among the
      parties existing prior to the Effective Date, and to mutually release each
      other, and, in furtherance of such goal, have contemporaneously herewith entered
      into that certain Separation
      Agreement and Mutual Release effective
      as of May
      30, 2008
      (the
“Agreement”)
      under
      which Agreement any and all prior agreements between the parties, including
      without limitation, the Original License Agreements (including all attachments
      and agreements appended thereto, and all amendments, purported or otherwise)
      and
      the Phase Agreements (including all attachments thereto, and all amendments,
      purported or otherwise) are being completely terminated with no surviving
      obligations or duties, and pursuant to which Agreement, the parties desire
      to
      execute this License whereby (i) the MVS Parties shall license the Licensed
      Patents to XsunX, and (ii) XsunX shall license the Derivative Works (as defined
      below) to MVSI. 

     

           NOW
      THEREFORE, in consideration of the foregoing Recitals, which are made a part
      of
      this License, the mutual covenants, agreements, representations, and warranties
      contained in this License, and other good and valuable consideration, the
      adequacy and receipt of which are hereby acknowledged, the parties agree as
      follows:

     

    AGREEMENT

     

    1.       DEFINITIONS.
      

     

    In
      addition to the terms defined elsewhere in this License and in any attached
      exhibits or schedules, the following terms shall have the meanings set forth
      below:

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    1.1.       “Commercial
      Development”
      means
      development, manufacturing, marketing, sale, offer(s) to sell, lease, licensing,
      installation, application, service, training, use, import, export or other
      promotional or market activities of any kind. 

     

    1.2.       “Derivative
      Works” shall
      mean any product or process, including research or development related to such
      product or process, whether in complete or incomplete form, developed by the
      parties between September 17, 2004 and the Effective Date pursuant to the
      Original License Agreements or the Phase Agreements and delivered to the parties
      in connection therewith.

     

    1.3.       “IP
      Rights”
      means
      all
      forms of intellectual property rights or industrial property rights and
      protections throughout the world, whether currently existing or hereafter
      developed or acquired and whether now known or hereafter recognized, and whether
      arising under United States (state or federal) or foreign common or statutory
      law, granted by contract, license, or otherwise and including, without
      limitation, all: (a) inventions and discoveries (whether patentable or
      unpatentable and whether or not reduced to practice), utility models, and all
      related patents, patent applications and patent disclosures, together with
      all
      reissuances, continuations, continuations-in-part, revisions, extensions and
      reexaminations thereof; (b) trademarks, service marks, trade dress, slogans,
      logos, together with all goodwill associated therewith, and all applications,
      registrations and renewals in connection therewith; (c) copyrightable works,
      all
      copyrights and all applications, registrations and renewals in connection
      therewith; (d) know-how, software programs (in object code and source code
      form), modules, components, utilities, subsets, objects, program listings,
      rights in databases, rights to confidential or other proprietary information
      and
      equivalent rights; (e) rights relating to substrate glazing agents and reagents,
      disposables, chemical compounds and like materials; (f) any other proprietary
      and/or intellectual property rights; (g) copies, personal property and tangible
      embodiments of any of the foregoing (in whatever form or medium); and (h) any
      improvements, modifications, enhancements and/or derivatives of the
      foregoing.

     

    1.4.       “Licensed
      Patents” means
      the
      following patents and patent application and any reissues, re-examinations,
      divisionals, continuations and extensions thereof: (a)
      U.S.
      Patent No. 6,488,777 B2; (b) U.S. Patent No. 6,258,408 B1; and (c) U.S. Patent
      Appl. No. 10/905,545 (Pub. No. US 2005/0150542 A1).  

     

    1.5.       “MVS Improvement”
means
      any innovation, variation, enhancement, modification, improvement, change
      relating to, or derivative work of, the Licensed Patents or Derivative Works
      which the MVS Parties, their Related Persons, sub-licensees or any of their
      employees or agents or any other party engaged by the MVS Parties, make, author,
      invent, discover, originate, conceive or reduce to practice solely or in
      conjunction with others not a party to this License following the Effective
      Date
      of this License. 

     

    1.6.       “Phase
      Agreements”
means
      the Phase 2 Development Agreement, Phase 3 Development Agreement, Phase 4
      Development Agreement, and Phase 4 X4-Base Line Production
      Agreement.

     

    1.7.       “Phase
      2 Development Agreement”
means
      that certain written agreement between XsunX and MVSI effective June 1, 2004,
      as
      amended.

     

    1.8.       “Phase
      3 Development Agreement”
means
      that certain written agreement between XsunX and MVSI effective February 22,
      2005, as amended.

     

    1.9.       “Phase
      4 Development Agreement”
means
      that certain written agreement between XsunX and MVSI entitled “Four Terminal
      Development” dated December 22, 2005, as amended, together with the “Addendum to
      Phase 4 proposal” between XsunX and MVSI dated December 22, 2005.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    1.10.       “Phase
      4 X4-Base Line Production Agreement”
means
      that certain written agreement between XsunX and MVSI for work memorialized
      in
      proposals effective December 2, 2005.

     

    1.11.       “Related
      Person”
      means
      any
      person or entity directly, or indirectly through one or more intermediaries,
      controlling, controlled by, or under common control with, a party to this
      License, as the case may be and as context requires. For purposes of this
      definition, “control” means the possession, directly or indirectly, of the power
      to direct or cause the direction of the management and policies of a person
      or
      entity, whether through ownership of voting securities or otherwise; provided,
      that a person or entity shall no longer be a Related Person when through loss,
      divestment, dilution or other reduction of ownership or management or
      operational responsibility, the requisite control no longer exists.

     

    1.12.       “Reserved
      Fields of Use”
means
      all
      fields of use other than the XsunX Field of Use.

     

    1.13.       “XsunX
      Field of Use”
      means
      Commercial Development by XsunX of commercial-grade (i.e.,
      web
      width 30 cms or more and nominal output exceeding 1 megawatt/year based on
      1
      shift operation) semi-transparent (greater than 5% transparency) and opaque
      solar cells, photovoltaic technologies, solar cell panels and methods of
      manufacture.

     

    1.14.       “XsunX Improvement”
means
      any innovation, variation, enhancement, modification, improvement, change
      relating to, or derivative work of, the Licensed Patents or Derivative Works,
      which XsunX, its Related Persons, sub-licensees or any of their employees or
      agents or any other party engaged by XsunX, make, author, invent, discover,
      originate, conceive or reduce to practice solely or in conjunction with others
      not a party to this License following the Effective Date of this
      License.

     

    2.       GRANT
      AND SCOPE OF RIGHTS.

     

    2.1.       Grant
      and Scope of License.
      

     

    
      	 	
              a)

            	
              During
                the term of this License and subject to the terms and conditions
                hereof,
                the MVS Parties grant to XsunX a worldwide, non-exclusive, royalty-free,
                irrevocable, fully-paid up right and license, with
                the right to sublicense under the terms of Section 2.2
                (Sublicenses), to
                use
                and practice the Licensed Patents solely
                in the XsunX Field of Use. For
                the avoidance of doubt, the foregoing license grant to XsunX expressly
                excludes the use, transfer and/or Commercial Development of the Licensed
                Patents in the Reserved Fields of Use;
                provided, however, that XsunX or its sub-licensee shall be permitted
                to
                develop non-commercial grade semi-transparent and opaque solar cells
                solely for internal research and development of XsunX or its sub-licensee
                and not for any use or sale or other transfer by XsunX or its sub-licensee
                to a third party.
                 

            


    

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	 	
              b)

            	
              During
                the term of this License and subject to the terms and conditions
                hereof,
                XsunX hereby grants to MVSI a worldwide, non-exclusive, royalty-free,
                irrevocable, fully-paid up right and license, with
                the right to sublicense under the terms of Section 2.2
                (Sublicenses), to
                use,
                practice, modify, adapt, distribute, sell, transfer, and/or commercialize
                the Derivative Works.
                

            


    

     

    2.2.Sublicenses.

     

    
      	 	
              a)

            	
              During
                the term of this License and subject to the terms and conditions
                hereof,
                the MVS Parties grant to XsunX the right to grant
                limited, non-transferable, revocable sublicenses
                to third parties, without further right to sublicense, to use or
                practice
                the Licensed Patents solely
                in the XsunX Field of Use and otherwise in
                accordance with the rights, restrictions and obligations of XsunX
                under
                this License. Unless prohibited by law, XsunX shall ensure that the
                terms
                of any sub1icense granted by it prohibits its sub-licensees from
                granting
                to any other person a license of the rights granted to such sub-licensee
                by XsunX . 

            


    

     

    
      	 	
              b)

            	
              During
                the term of this License and subject to the terms and conditions
                hereof,
                XsunX grants to MVSI the right to grant
                limited, non-transferable, revocable sublicenses
                to third parties, without further right to sublicense, to use, import,
                sell and offer to sell the
                Derivative Works in
                accordance with the rights, restrictions and obligations of MVSI
                under this License. Unless prohibited by law, MVSI
                shall ensure that the terms of any sublicense granted by it prohibits
                its
                sub-licensees from granting to any other person a license of the
                rights
                granted to such sub-licensee by MVSI. 

            


    

     

    
      	 	
              c)

            	
              Sublicenses
                granted under this Section shall be in writing signed by each sub-licensee
                and shall contain all of the material terms, conditions, restrictions
                and
                reservations of this License and shall preserve the rights and
                reservations of each party existing under this License. Notwithstanding
                anything herein to the contrary, any
                breach of such terms or conditions of this License by any sub-licensee
                shall be deemed to be a breach of this License by the party granting
                such
                sub-license. Without limiting any rights or remedies of either party
                hereunder, provided herein or otherwise available at law or in equity,
                each party hereby appoints and designates the other party as a third
                party
                beneficiary of each sublicense granted by such party; the party granting
                the sublicense shall include in each sublicense a stipulation that
                the
                other party shall retain third party beneficiary rights to enforce
                (in
                such other party’s name, if required by law) such other party’s rights and
                remedies in connection therewith.

            


    

     

    
      	 	
              d)

            	
              Termination
                of this License by either party shall automatically operate as a
                termination of any sublicense granted by the non-terminating party
                pursuant to the Section 2 and an assignment by such non-terminating
                party
                to the terminating party of all of the non-terminating party’s right,
                title and interest in and to such sublicense.


            


    

     

    
      	 	
              e)

            	
              Each
                party shall be free to determine the royalties or pricing at which
                it
                enters into a permitted
                sub-license.

            


    

     

    3.       TERM,
      DEFAULT AND TERMINATION.

     

    3.1.       Term.
      This
      License shall be effective upon the Effective Date and,
      unless
      sooner terminated by operation of law or pursuant to Section 3.3 of this
      License,
      shall
      continue in force and effect from
      the
      Effective Date until the expiration of the last to expire of the patents
      included within the Licensed Patents.  

     

    3.2.       Default.
      

     

    A
      default
      shall occur under this License in the event of: (a) any breach of a material
      term of this License which is not cured (if curable) by the defaulting party
      within thirty (30) business days after receiving written notice of default
      from
      the non-defaulting party; or (b)       the
      filing by a Party of a voluntary petition in bankruptcy or under any similar
      insolvency law, or an assignment for the benefit of creditors, or the filing
      of
      an involuntary petition in bankruptcy or under any similar insolvency law which
      remains undismissed thirty (30) days after such filing, or a levy or attachment
      against all or substantially all of a Party’s assets, or if a Party ceases to
      function as a going concern or ceases to conduct its operations in the normal
      course of business or is wound up or dissolved or declared insolvent.


     

    (c)       A
      default by any one of the MVS Parties shall be deemed a default of the other
      of
      the MVS Parties.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    3.3.       Termination.
      In
      the
      event of a default under Section 3.2(a), 3.2(b) or 3.2(c), the non-defaulting
      party may elect to terminate this License. Except as otherwise expressly
      provided in this License, in the event of such termination, no residual rights
      will remain with the parties and within fifteen (15) calendar days of such
      termination: (a) MVSI shall cease all use of the Derivative Works and shall
      notify any sublicensee of the Derivative Works that the sublicense is terminated
      pursuant to this License and provide a copy of such notification to XsunX;
      and
      (b) XsunX shall cease all use of the Licensed Patents and shall notify any
      sublicensee of the Licensed Patents that the sublicense is terminated pursuant
      to this License and provide a copy of such notification to the MVS
      Parties.

     

    3.4.       Other
      Remedies; Preservation of Rights Under Section 365(n) of Bankruptcy
      Code.
      Subject
      to the terms of this License, in the event of a default of this License, the
      non-defaulting Party(ies)’s right to terminate this License pursuant to Section
      3.3 shall be non-exclusive, and the non-defaulting Party(ies) shall be entitled
      to pursue any additional or other remedy available by law. Without limiting
      the
      foregoing, nothing in this License shall be deemed a waiver with respect to
      the
      rights of any Party arising under Section 365(n) of the United States Bankruptcy
      Code, 11 U.S.C. § 365(n), or any other remedy available by law. 

     

    3.5.       Survival.
      The
      rights and obligations of the parties which by their nature are intended to
      survive any such termination, shall survive the termination of this License
      and
      continue in force.

     

    4.       PROPRIETARY
      RIGHTS.

     

    4.1.       Ownership
      of Licensed Patents and/or Derivative Works.
      

     

    
      	 	
              a)

            	
              Subject
                to the license granted to XsunX in Article 2 (Grant and Scope of
                Rights)
                and except for the Derivative Works, XsunX
                acknowledges that, as between the
                MVS Parties
                and XsunX, the
                MVS Parties
                are
                and shall remain the exclusive owner of all right, title and interest
                in
                and to the Licensed Patents. Except for the Derivative Works, if
                XsunX or
                any third party engaged by XsunX is deemed to have any ownership
                interest
                or rights in any of the Licensed Patents, then XsunX shall assign
                and/or
                cause such third party to assign, and XsunX does hereby irrevocably
                and
                royalty-free assign, all of such ownership interest and rights to
                the
                MVS Parties.

            


    

     

    
      	 	
              b)

            	
              Subject
                to the license granted to MVSI
                in
                Article 2 (Grant and Scope of Rights) and except for the Licensed
                Patents,
                the
                MVS Parties
                acknowledge that, as between the
                MVS Parties
                and XsunX, XsunX is and shall remain the exclusive owner of all right,
                title and interest in and to the Derivative Works. Except for the
                Licensed
                Patents, if MVSI
                or
                any third party engaged by the
                MVSI is
                deemed to have any ownership interest or rights in any of the Derivative
                Works, then the
                MVSI
                shall assign and/or cause such third party to assign, and MVSI
                hereby
                does irrevocably and royalty-free assign, all of such ownership interest
                and rights to XsunX. 

            


    

     

    4.2.       Ownership
      of Improvements.

     

    
      	 	
              a)

            	
              As
                between the
                MVS Parties
                and XsunX, any and all MVS Improvements, and all IP Rights therein,
                shall
                be the sole and exclusive property of the MVS Parties and are expressly
                excluded from this License. 

            


    

     

    
      	 	
              b)

            	
              As
                between the
                MVS Parties
                and XsunX, any and all XsunX Improvements, and all IP Rights therein,
                shall be the sole and exclusive property of XsunX and are expressly
                excluded from this License.

            


    

     

    


    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    4.3.       IP
      Rights and Patent Prosecution; Maintenance; Disclaimer.

     

    
      	 	
              a)

            	
              The
                MVS Parties shall have the sole right to file and maintain IP Rights
                protections, perfections or registrations with respect to the Licensed
                Patents and any the MVS Improvements and the issuance of such applications
                or registrations shall be in the MVS Parties’ or their designee’s name.
                Any IP Rights protections, perfections or registrations with respect
                to
                the Licensed Patents and/or MVS Improvements shall be prosecuted
                to
                issuance or final rejection or abandonment by the MVS Parties in
                their
                sole and absolute discretion; provided
                however,
                that the MVS Parties shall use commercially reasonable efforts to
                prosecute U.S. Patent Appl. No. 10/905,545 (Pub. No. US 2005/0150542
                A1)
                (“Application”) to issuance or final rejection or abandonment and shall
                provide to XsunX copies of all correspondence with the United States
                Patent and Trademark Office regarding the Application within fifteen
                (15)
                days of delivery or receipt. If the MVS Parties determine to abandon
                the
                Application, the MVS Parties will provide timely notice to XsunX
                and shall
                provide to XsunX reasonable opportunity to continue to prosecute
                or
                maintain such Application, at XsunX’s sole cost and
                expense.

            


    

     

    
      	 	
              b)

            	
              Notwithstanding
                anything to the contrary contained in Section 4.3(a), XsunX acknowledges
                and agrees that the prosecution of patent applications is uncertain
                and
                that certain claims therein may not be allowed or may receive narrower
                breadth of scope than when originally filed and that patent applications
                within the Licensed Patents may not issue as a U.S.
                patent.
                Therefore, the MVS Parties provide no representation or warranty
                that any
                of the Licensed Patents, including without limitation U.S. Patent
                Appl.
                No.10/905,545
                (Pub.
                No. US
                2005/0150542 A1),
                will issue as U.S.
                Patents
                or that the scope of claims coverage of any resulting patent issuing
                thereon will have the same scope of claims coverage as when filed
                by
                the
                MVS Parties. 

            


    

     

    
      	 	
              c)

            	
              XsunX
                shall have the sole right and obligation to file IP Rights
                protections, perfections or registrations with respect to the Derivative
                Works and any XsunX Improvements and the issuance of such applications
                or
                registrations shall be in XsunX’s or its designee’s name.
                XsunX shall be solely responsible for filing, prosecution and maintenance
                of any and all such IP Rights protections,
                perfections or registrations
                and for the maintenance and other management of the same.
                

            


    

     

    4.4.       Markings;
      Use of Names, Trade Names and Trademarks.
      Each
      party agrees that it will not use the name, trademark or other identifier of
      the
      other party for any advertising, promotion, or other commercially related
      purpose without the express prior written consent of the other party, which
      may
      be withheld at such party’s sole discretion. Except as permitted by Section
      8.10, nothing contained in this License shall be construed as conferring any
      right to use in advertising, publicity or other promotional activities any
      name,
      trade name, trademark or other designation of a party hereto including any
      contraction, abbreviation or simulation of any of the foregoing, unless the
      express written permission of the other party has been obtained, provided that
      each party may state the existence of this License and the fact that all of
      the
      parties entered into it. 

     

    5.       NO
      ONGOING OBLIGATIONS. 

     

    5.1.       No
      Technology Sharing; Consulting, Audit Rights.
      The
      parties hereby acknowledge and agree that with respect to this License, as
      of
      the Effective Date, there are no obligations between the parties to share or
      collaborate with, deliver and/or disclose to the other party any further
      information, whether oral and/or written, concerning the Licensed Patents,
      the
      Derivative Works and/or any processes related thereto, or any other information
      or data pertaining to the licenses granted herein, and neither party shall
      have
      any such ongoing or future obligation in connection therewith. The parties
      further acknowledge and agree that under this License, neither party has the
      right to inspect or view each others’ books and records, and nothing in this
      License is intended to confer or does confer on either party any such
      right.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    5.2.       Infringement/Indemnifications.
      

     

    
      	 	
              a)

            	
              In
                the case of a third party claim of infringement against a party (“accused
                party”), the other party shall have no obligation to defend against such
                claim nor to indemnify or hold harmless the accused party against
                such
                claim or procure the right for the accused party, or the accused
                party’s
                Related Persons or any of its sub-licensees, representatives, successors
                or assigns to continue using the Licensed Patents and/or the Derivative
                Works. Notwithstanding
                the foregoing, in no event shall either party enter into a settlement
                or
                compromise of any claim of infringement if such settlement or compromise
                would adversely affect the Licensed Patents or Derivative
                Works.

            


    

     

    
      	 	
              b)

            	
              In
                the case of a third party’s alleged infringement of the Licensed Patents
                or the Derivative Works, the parties’ only obligation with respect to
                third party infringement
                shall be to promptly inform the other party of (i) any alleged
                infringement of the Licensed Patents or the Derivative Works by a
                third
                party of which such party is aware and (ii) any actions or possible
                actions by third parties which may affect the ownership or validity
                of the
                Licensed Patents or the Derivative
                Works.

            


    

     

    
      	 	
              c)

            	
              If
                a party elects to bring or defend against a legal action, such
                action shall be at the sole expense of the party initiating or defending
                such legal action and all
                damages, awards, settlement proceeds or other recovery or special
                or
                punitive damages shall
                belong solely and exclusively to such
                party.

            


    

     

    6.       REPRESENTATIONS,
      WARRANTIES AND DISCLAIMER.

     

    6.1.       By
      the
      MVS Parties.
      The MVS
      Parties represent, warrant and covenant to XsunX that (a) the execution of
      this
      License and performance of the transactions contemplated by this License have
      been approved by the MVS Parties and will not conflict with or result in any
      breach of any of the terms, conditions or provisions of, or constitute a default
      under, any agreement to which MVSI or Dr. Madan is a party or by which MVSI
      or
      Dr. Madan is bound, (b) the MVS Parties own or have licensed and sub-licensable
      interest in the Licensed Patents and have the right to grant to XsunX the
      license set forth herein, (c) this License, when duly executed and delivered,
      shall constitute a legal and binding obligation of the MVS Parties enforceable
      against the MVS Parties in accordance with its terms; (d) the Licensed Patents
      are not subject to any lien, encumbrance or other interest of a third party;
      (e)
      as of the Effective Date, the MVS Parties are not aware of any infringement
      of
      the Licensed Patents by a third party; and (f) as of the Effective Date, MVSI
      has delivered to XsunX all technical data, documentation and reports relating
      to
      its research, development or other work performed pursuant to the Original
      License Agreements or the Phase Agreements. 

     

    6.2.       By
      XsunX.
      XsunX
      represents, warrants and covenants to the MVS Parties that (a)
      the
      execution of this License and performance of the transactions contemplated
      by
      this License have been approved by XsunX and will not conflict with or result
      in
      any breach of any of the terms, conditions or provisions of, or constitute
      a
      default under, any agreement to which XsunX is a party or by which XsunX is
      bound; (b) XsunX owns or has a licensed and sub-licensable interest in the
      Derivative Works and has the right to grant to MVSI the license set forth
      herein; (c) this License, when duly executed and delivered, shall constitute
      a
      legal and binding obligation of XsunX enforceable against XsunX in accordance
      with its terms; (d) the Derivative Works are not subject to any lien,
      encumbrance or other interest of a third party; (e) as of the Effective Date,
      XsunX is not aware of any infringement of the Derivative Works by a third party,
      and (f) as of the Effective Date, XsunX has delivered to MVSI all technical
      data, documentation and reports relating to the Derivative Works.  

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    6.3.       Disclaimer.
      

     

    (a)       The
      express representations and warranties set forth in this Section 6 are the
      sole
      representations and warranties made by each party with respect to this License
      and the transactions contemplated herein. Without limiting the generality of
      the
      foregoing, nothing
      in
      this License shall be construed as:

     

    (1)
      a
      warranty or representation by the
      MVS
      Parties
      as to
      the validity or scope of the Licensed Patents, or a warranty or representation
      by XsunX
      as
      to the
      validity or scope of the Derivative Works;

     

    (2)
      an
      obligation of either party to bring or prosecute actions or suits against third
      parties for infringement;

     

    (3)
      an
      obligation by MVSI or Dr. Madan or XsunX to furnish any technical or other
      assistance.

     

    (b)       THE
      LICENSED PATENTS ARE PROVIDED “AS IS,” AND THE MVS PARTIES MAKE NO
      REPRESENTATIONS OR WARRANTIES, CONDITIONS OR GUARANTEES, WHETHER EXPRESS,
      IMPLIED, STATUTORY, ORAL OR IN WRITING OR OTHERWISE, INCLUDING, WITHOUT
      LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
      PURPOSE, TITLE,
      NONINFRINGEMENT OF THIRD PARTY RIGHTS, OR WARRANTIES ARISING FROM A COURSE
      OF
      DEALING, USAGE OR TRADE PRACTICE, AND THE SAME ARE HEREBY EXPRESSLY DISCLAIMED
      TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW.
      WITHOUT
      LIMITING THE GENERALITY OF THE FOREGOING, THE MVS PARTIES DO NOT MAKE ANY
      REPRESENTATION OR WARRANTY AS TO THE VALIDITY OR SCOPE OF THE LICENSED PATENTS
      OR THE ACCURACY OR COMPLETENESS OF ANY INFORMATION DISCLOSED TO XSUNX IN
      CONNECTION WITH THIS LICENSE. THE MVS PARTIES MAKE NO REPRESENTATION OR WARRANTY
      THAT THE LICENSED PATENTS WILL MEET XSUNX’S REQUIREMENTS OR
      EXPECTATIONS
      OR THAT
      THE EXERCISE OF THE RIGHTS GRANTED TO XSUNX WITH RESPECT TO THE LICENSED PATENTS
      WILL NOT INFRINGE THE IP RIGHTS OF ANY THIRD PARTY. THE
      MVS
      PARTIES WILL NOT INDEMNIFY XSUNX, ITS EMPLOYEES, AGENTS, REPRESENTATIVES,
      RELATED PERSONS OR ANY THIRD PARTY FOR ANY LOSSES, COSTS, LIABILITIES, DAMAGES,
      FEES, OR EXPENSES WITH RESPECT TO THE LICENSED PATENTS, INCLUDING WITHOUT
      LIMITATION, ANY CLAIMS THAT THE LICENSED PATENTS THEREIN INFRINGE THE IP RIGHTS
      OF ANY THIRD PARTY. NO
      ADVICE
      OR INFORMATION, WHETHER ORAL OR WRITTEN, OBTAINED BY XSUNX FROM THE MVS PARTIES
      OR THEIR
      RELATED
      PERSONS SHALL CREATE ANY WARRANTY, REPRESENTATION, OR GUARANTEE NOT EXPRESSLY
      STATED IN THIS LICENSE.

     

    (c)       THE
      DERIVATIVE WORKS ARE PROVIDED “AS IS,” AND XSUNX MAKES NO REPRESENTATIONS OR
      WARRANTIES, CONDITIONS OR GUARANTEES, WHETHER EXPRESS, IMPLIED, STATUTORY,
      ORAL
      OR IN WRITING OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
      WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE,
      NONINFRINGEMENT OF THIRD PARTY RIGHTS, OR WARRANTIES ARISING FROM A COURSE
      OF
      DEALING, USAGE OR TRADE PRACTICE, AND THE SAME ARE HEREBY EXPRESSLY DISCLAIMED
      TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW. WITHOUT LIMITING THE
      GENERALITY OF THE FOREGOING, XSUNX DOES NOT MAKE ANY REPRESENTATION OR WARRANTY
      AS TO THE VALIDITY OR SCOPE OF THE DERIVATIVE WORKS OR THE ACCURACY OR
      COMPLETENESS OF ANY INFORMATION DISCLOSED TO MVSI IN CONNECTION WITH THIS
      LICENSE. XSUNX MAKES NO REPRESENTATION OR WARRANTY THAT THE DERIVATIVE WORKS
      WILL MEET MVSI’S REQUIREMENTS OR EXPECTATIONS OR THAT THE EXERCISE OF THE RIGHTS
      GRANTED TO MVSI WITH RESPECT TO THE DERIVATIVE WORKS WILL NOT INFRINGE THE
      IP
      RIGHTS OF ANY THIRD PARTY. XSUNX WILL NOT INDEMNIFY MVSI, ITS EMPLOYEES, AGENTS,
      REPRESENTATIVES, RELATED PERSONS OR ANY THIRD PARTY FOR ANY LOSSES, COSTS,
      LIABILITIES, DAMAGES, FEES, OR EXPENSES WITH RESPECT TO THE DERIVATIVE WORKS,
      INCLUDING WITHOUT LIMITATION, ANY CLAIMS THAT THE DERIVATIVE WORKS INFRINGE
      THE
      IP RIGHTS OF ANY THIRD PARTY. NO ADVICE OR INFORMATION, WHETHER ORAL OR WRITTEN,
      OBTAINED BY MVSI FROM XSUNX, OR ITS
      RELATED
      PERSONS SHALL CREATE ANY WARRANTY, REPRESENTATION, OR GUARANTEE NOT EXPRESSLY
      STATED IN THIS LICENSE.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    7.       LIMITATION
      OF LIABILITY.
      

     

    7.1.       EXCEPT
      AS
      EXPRESSLY PROVIDED IN THIS SECTION, NEITHER PARTY OR ITS RESPECTIVE RELATED
      PERSONS SHALL BE LIABLE TO THE OTHER PARTY FOR
      ANY
      INCIDENTAL, CONSEQUENTIAL (INCLUDING LOST PROFITS), PUNITIVE, INDIRECT, SPECIAL,
      OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO THIS LICENSE OR THE
      TRANSACTIONS CONTEMPLATED HEREIN, WHETHER BASED ON BREACH OF CONTRACT, TORT
      (INCLUDING NEGLIGENCE), IP RIGHTS INFRINGEMENT, PRODUCT LIABILITY OR
      OTHERWISE,
      EVEN IF
      THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
      NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIMITATIONS SET FORTH
      IN
      THIS SECTION SHALL HAVE NO EFFECT UPON, AND SHALL NOT LIMIT LIABILITY FOR ANY
      DAMAGES RESULTING FROM GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

     

    8.       MISCELLANEOUS.

     

    8.1.       Assignment.
      This
      License may be assigned or transferred, in whole or in part, whether by
      operation of law or otherwise, by either party without the prior written consent
      of the other party, provided the assigning party provides the other party with
      contemporaneous written notice of such assignment or transfer.
       

     

    8.2.       Notices.
      Any
      notice, request, approval, authorization, consent, demand or other communication
      required or permitted to be given or made pursuant to this License shall be
      in
      writing and shall be deemed given on the earliest of (a) actual receipt,
      irrespective of the method of delivery, (b) on the delivery day following
      dispatch if sent by express mail (or similar next day air courier service),
      or
      (c) on the sixth (6th) day after mailing by registered or certified United
      States mail, return receipt requested, postage prepaid and addressed as
      follows:

     

     

    
      	
              If
                to the MVS Parties:

            	
              MVSystems,
                Inc.
                
                500
                  Corporate Circle, Unit L

                Golden,
                  CO 80401

                Attention:
                  Dr. Arun Madan 

                Telephone
                  No.:(303) 271-9907 or (303) 526-9016

                Facsimile
                  No.: (303) 526-1408

              

            


    

     

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
      


    
      	
              with
                a copy to:

            	
              Holland
                & Hart LLP

            
	 	
              555
                17th Street, Ste. 3200

            
	 	
              Denver,
                CO 80201-8749

            
	 	
              Phone:
                (303) 295-8562 

            
	 	
              Fax:
                (303) 295-8261

            
	 	
              Attention:
                Lee F. Johnston, Esq.

            
	 	 
	
              If
                to XsunX: 

            	
              XsunX,
                Inc.

            
	 	
              65
                Enterprise

            
	 	
              Aliso
                Viejo, CA 92656

            
	 	
              Attn:
                Tom Djokovich

            
	 	
              (Tel)
                (949) 330-8060

            
	 	
              (Fax)
                (949) 330-8061

            
	 	 
	
              with
                copy to:

            	
              Tobin
                D. Kern, Esq.

            
	 	
              Sherman
                & Howard, LLC

            
	 	
              633
                17th Street, Suite 3000

            
	 	
              Denver,
                Colorado 80202

            
	 	
              (Tel)
                (303) 299-8384

            
	 	
              (Fax)
                (303) 298-0940

            


    

     

    or
      to
      such substitute addresses and persons as either party may designate to the
      other
      from time to time by written notice in accordance with this Section.

    


    8.3.       Choice
      of Law; Dispute Resolution.
      This
      License shall be governed by and construed in accordance with the laws of the
      State of Colorado, other than such laws, rules, regulations and case law that
      would result in the application of the laws of a jurisdiction other than the
      State of Colorado. Any suit to enforce any provision of this License, or arising
      out of or based upon this License, shall be brought exclusively in the United
      States District Court for the District of Colorado or the District Court in
      and
      for the City and County of Denver, State of Colorado. Each party hereby agrees
      that such courts shall have in personam
      jurisdiction and venue with respect to such party, and each party hereby submits
      to the in personam
      jurisdiction and venue of such courts and waives any objection based on
      inconvenient forum. Process
      in any action or proceeding referred to in this Section may be served on any
      party anywhere in the world. The United Nations Convention on Contracts for
      the
      International Sale of Goods is hereby excluded from application to this License.
      

     

    8.4.       Counterparts.
      This
      License may be executed in two or more counterparts, each of which will be
      deemed to be an original copy of this License and all of which, when taken
      together, will be deemed to constitute one and the same agreement. Facsimile
      signatures shall be effective as original signatures. 

     

    8.5.       Headings;
      Construction.
      For
      all
      purposes of this License, except as otherwise expressly provided or unless
      the
      context otherwise requires: (a) the terms defined herein include the plural
      as
      well as the singular and vice-versa; (b) words importing gender include all
      genders; (c) all references to this License and the words “herein”, “hereof”,
“hereto” and “hereunder” and other words of similar import refer to this License
      as a whole and not to any particular Article, Section, or other subdivision;
      (d)
      all Article and Section headings are for convenience only and shall not affect
      the interpretation or construction of this License, (e) the words “including,”
“included” and “includes” mean inclusion without limitation; and (f) in the
      event of any conflict between the terms in the body of the Agreement and the
      terms in this License, the terms of this License shall prevail to the extent
      that there is such a conflict.
      This
      License is executed in the English language and that version of the Agreement
      shall control despite any other version prepared in any other language, whether
      or not executed. This
      License has been drafted jointly by the parties and in the event of any
      ambiguities in the language hereof, there shall be no inference drawn in favor
      of or against either party.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    8.6.       Binding
      Effect.
      This
      License shall be binding upon and inure to the benefit of the parties and their
      respective permitted successors and assigns. 

     

    8.7.       Entire
      Agreement; Amendment. This
      License constitutes the entire and exclusive statement of the parties’ agreement
      with respect to its subject matter and supersedes any and all prior or
      contemporaneous oral or written representations, understandings, or agreements
      relating thereto. This License may be modified, supplemented or changed only
      by
      an agreement in writing which makes specific reference to this License and
      which
      is signed by the parties.

     

    8.8.       Waiver.
      The
      rights and remedies of the parties to this License are cumulative and not
      alternative. Neither the failure nor any delay by any party in exercising any
      right, power, or privilege under this License or the documents referred to
      in
      this License will operate as a waiver of such right, power, or privilege, and
      no
      single or partial exercise of any such right, power, or privilege will preclude
      any other or further exercise of such right, power, or privilege or the exercise
      of any other right, power, or privilege. To the maximum extent permitted by
      applicable law, (a) no claim or right arising out of this License or the
      documents referred to in this License can be discharged by one party, in whole
      or in part, by a waiver or renunciation of the claim or right unless in writing
      signed by the other party; (b) no waiver that may be given by a party will
      be
      applicable except in the specific instance for which it is given; and (c) no
      notice to or demand on one party will be deemed to be a waiver of any obligation
      of such party or of the right of the party giving such notice or demand to
      take
      further action without notice or demand as provided in this License or the
      documents referred to in this License.

     

    8.9.       Severability.
      In the
      event that any one or more of the provisions contained in this License shall,
      for any reason, be held to be invalid, illegal or unenforceable in any respect,
      such invalidity, illegality or unenforceability shall not affect any other
      provision of this License, and all other provisions shall remain in full force
      and effect. If any of the provisions of this License is held to be excessively
      broad or invalid, illegal or unenforceable in any jurisdiction, it shall be
      reformed and construed by limiting and reducing it so as to be enforceable
      to
      the maximum extent permitted by law in conformance with its original
      intent.

     

    8.10.       Publicity.
      Except
      as necessary for a Party to comply with its legal or financial reporting and
      disclosure obligations, including filings by XsunX with the U.S. Securities
      and
      Exchange Commission and financial reporting by XsunX in conformity with
      Generally Accepted Accounting Principles (GAAP), none of the Parties, nor any
      of
      their Related Persons, shall originate any publicity, news release or other
      public announcement (“Announcements”),
      written or oral, relating to this License or the existence of an arrangement
      between the parties, without the prior written approval of the other party,
      which approval shall not be unreasonably withheld. 

     

    8.11.       No
      Agency.
      The
      relationship of XsunX, on the one hand, and the
      MVS
      Parties
      and
      their respective successors in interest, on the other hand, is that of licensee
      and licensor, and not one of principal and agent, joint venture or partnership.
      Neither XsunX, on the one hand, nor MVS or Dr. Madan, on the other hand, shall
      have any authority to create or assume, in the name or on behalf of the other
      party, any obligation, express or implied, nor to act or purport to act as
      the
      agent or the legally empowered representative of the other party for any purpose
      whatsoever. 

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    8.12.       No
      Individual Liability for Dr. Madan.
      Except
      as to Sections 4.3(a) and 6.1, the Parties agree that no individual duties,
      obligations or liabilities shall be deemed to arise under this License with
      respect to Dr. Madan. 

     

    8.13.       Force
      Majeure.
      Neither
      the MVS Parties nor XsunX shall be liable to the other for failure or delay
      in
      the performance of a required obligation, other than the payment of monies
      due
      and owing, if such failure or delay is caused by strike, riot, fire, flood,
      natural disaster, or other similar cause beyond such party’s control, provided
      that such party gives prompt written notice of such condition and resumes its
      performance as soon as possible, and provided further that the other party
      may
      terminate the Agreement if such condition continues for an uninterrupted period
      of ninety (90) days from the initial occurrence of such condition. Neither
      the
      MVS
      Parties nor XsunX
      is
      entitled to relief under this Section to the extent that any event otherwise
      constituting such event of force majeure results from the negligence or fault
      of
      the applicable party or its Related Persons.

     

    8.14.       No
      Third-Party Beneficiaries.
      Except
      as provided in Section 2.2 (Sublicenses), nothing in this License, expressed
      or
      implied, is intended or shall be construed to confer upon any entity, other
      than
the
      MVS
      Parties
      and
      XsunX (and the parties’ and respective Related Persons, and permitted successors
      and assigns), any remedy or claim by reason of this License, and any such
      remedies or claims shall be for the exclusive benefit of the MVS Parties and
      XsunX.
      

     

    8.15.       Expenses.
      Each of
      the parties shall pay its own costs and expenses associated with the execution
      and performance of this License.

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this License to be effective as of the Effective
      Date. The persons signing below warrant their authority to sign the Agreement
      on
      behalf of the MVS Parties and XsunX, respectively.

     

    
      	
              MVSystems,
                Inc.

            	
              XsunX,
                Inc. 

            
	 	 	 	 
	
              By

            	
               

            	
              By:

            	
               

            
	 	
              Signature

            	 	
              Signature

            
	 	 	 	 
	 	
              Printed
                Name

            	 	
              Printed
                Name

            
	 	 	 	 
	 	
              Title

            	 	
              Title

            
	 	 	 	 
	 	
              Date

            	 	
              Date

            
	 	 	 	 
	 	 	 	 
	
              Dr.
                Arun Madan

            	 	 	 
	
               

            	 	 	 
	
              By:

            	
               

            	 	 
	 	
              Signature

            	 	
               

            
	 	
               

            	 	 
	 	
              Printed
                Name

            	 	
               

            
	 	
               

            	 	
               

            
	 	
              Date

            	 	
               

            


    

    


    


    
      
         

      

      
        12