[EXHIBIT 10.3]
Memorandum of Understanding
The purpose of this memorandum of understanding is to
set forth certain non-binding understandings and binding
agreements between Third-Order Nanotechnologies, Inc., a
Nevada corporation ("TDON"), and Photon-X, LLC, a Delaware
limited liability company ("Photon X") , with respect to our
recent discussions regarding the two-phase strategic
alliance as described below. TDON and Photon X are
sometimes referred to herein as a "party" and collectively
as the "parties."
1.0 Understanding. The following section reflects our
understanding of the matters described but are not legally
binding and do not impose an enforceable obligation on
either of us to negotiate or conclude an agreement regarding
the supposed strategic alliance on such terms. This is not
a complete statement of all terms and conditions of the
proposed strategic alliance, but provides a basis for
further negotiations.
1.1 Phase One.
A. Alliance Structure. TDON shall enter into a "fee for
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services" agreement with Photon-X, which shall be payable by
TDON to Photon-X, 50% up front an 50% upon completion of
Phase One, or at Photon-X's discretion, accrued for
conversion into Third-Order common stock equity and/or
warrants pursuant to the terms of any such equity offering
conducted by TDON at the time of it's secondary offering.
B. Product/Service. Produce and evaluate waveguide
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structures based on Third-Order's revolutionary Cyclic
Surface Conduction (CSC) polymer materials. The envisioned
activities to be performed by Photon-X may potentially
include working with additional parties (eg. Universities,
lead customers, etc.).
C. Scope. Third-Order will assist Photon-X in
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understanding the molecular composition of it's material
platform, suggest processing conditions, and participate in
characterization testing. Waveguide processing shall take
place at Photon-X's facility.
1.2 Phase Two.
A. Alliance Structure. TDON shall enter into a "Fee for
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Services" agreement with Photon-X, which shall be payable by
TDON to Photon-X, 50% up front and 50% upon completion of
Phase Two. Charges shall be reviewed on a monthly basis by
Third-Order. The parties shall enter into good faith
negotiations regarding potential establishment of strategic
alliance, creation of a Joint Venture, etc.
B. Products/Services. To design, develop, produce and
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market electro-optic components based on Third-Order's
polymer technology.
C. Scope.
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i. Third-Order and Photon-X will provide the necessary
level of engineering resources to design and process
electro-optic devices based upon Third-Order's materials
and Photon-X's unique processing capabilities. The
companies will endeavor to use best reasonable efforts to
create devices with optimized electr-optic performance and
strong market demand potential (eg. 40Gb/s and 100Gb/s EO
Modulators).
ii. Characterization and qualification testing may occur at
Third-Order's facility, Photon-X's facility, at both
locations, and/or at a third party facility as required.
iii. Limited quantities (not to exceed 21 units) of devices
created under Phase Two may be marketed by either party
through the party's market channel(s) as a vehicle to
develop appropriate markets; however no commitment to
volume production and/or pricing should be made by either
party unless and until a final alliance Structure is
established.
Section 2
Certain Covenants and Restrictions
2.0 Agreement. By signing this Memorandum of
Understanding, the parties agree that the following
paragraphs will constitute a legally binding and enforceable
agreement between the parties. In consideration of the
significant expenses that both parties will incur in
pursuing a strategic alliance with respect to the mutual
undertakings described, the parties agree as follows:
2.1 Mutual Non-Disclosure Agreements. Simultaneously with
this memorandum of Understanding, each of the parties
shall execute a Mutual Non-Disclosure agreement that
shall enable appropriate detailed discussions to take
place relative to work plans, time lines, technical
specifications, production techniques, IP contributions
and the possibility of further agreements between Third-
Order and Photon-X.
2.2 Good Faith Negotiations. The parties shall negotiate
in good faith and use their best efforts to arrive at
agreements with respect to the strategic alliance as
described herein.
2.3 Access to Information. The parties shall make
available to each other all information necessary to
effectuate the intent of this Memorandum of Understanding.
To facilitate such exchange of information, the parties
shall each provide to each other a designated person of
contact.
2.4 Confidentiality and Public Announcements. Both parties
agree to allow public disclosure of the existence of this
Memorandum of Understanding between the parties and
publications of test results; however, the parties shall
consult with each other and agree as to the timing, content,
and form before issuing any press release or other public
disclosure related thereto, and such permission will not be
unreasonably withheld by either party. Notwithstanding the
previous sentence, nothing herein shall prohibit TDON from
making: (i) a public disclosure regarding this Memorandum of
Understanding, the creation of a strategic alliance between
the parties, and/or the publication of test results if, in
the opinion of it's legal counsel, such disclosure is
required by law; and (ii) reasonable and customary
disclosures without Photon-X's approval to select capital
sources as may be necessary in connection with obtaining any
financing which may be sought in connection with TDON's
business.
Further Photon-X acknowledges that during the period of
it's Memorandum of Understanding and the terms of the
strategic alliance contemplated herein, Photon-X, and
personnel at Photon-X, may become aware of "material
non-public information" (as defined under applicable
securities laws) regarding TDON. Photon-X understands,
and it will communicate to persons having knowledge of
any such information, that they are required under
applicable securities of TDON while in possession of
this information and to refrain from disclosing this
information to anyone accept as required pursuant to
this Memorandum of Understanding and the terms of the
strategic alliance contemplated herein.
Section 3
General
3.1 Expenses. Each party shall pay it's own expenses
(including but not limited to legal, accounting and other
professional services) in connection with all negotiations
and activities relating to this Memorandum of Understanding.
3.2 Termination. Each party has the right to terminate
this Memorandum of Understanding at any time with or without
cause. This Memorandum of Understanding shall automatically
terminate if no strategic alliance is created by the parties
by August 31, 2008. Following termination, neither party
shall have any obligations under this Memorandum of
Understanding, other than is set forth in section 2 herein.
3.3 Exclusive understanding. Both parties agree that this
Memorandum of Understanding is the complete and exclusive
statement of understanding between the parties and
supersedes all prior agreements, whether oral or written,
with respect to the subject matter hereof.
3.4 Non-Exclusive Agreement. This Memorandum of
Understanding shall not limit the scope of either party's
business operations, or prevent either of the parties from
entering into any other agreement with any third party with
respect to any matter.
3.5 Binding Effect. This Memorandum of Understanding is
intended to be a confirmation of interest between the
parties in pursuing negotiations for a strategic alliance
based on the terms hereof, and, other than as set forth in
Section 2 herein, shall not constitute a binding agreement
between the parties hereto. Neither party intends, in
setting forth in this Memorandum of Understanding, the
provisions of a possible strategic alliance, to create, for
itself or any other person, any legally binding obligation
of liability. No agreement shall be binding, unless and
until each party has reviewed and approved (in it's sole
discretion) a definitive written agreement incorporating all
the terms, conditions and obligations of the parties, has
had such agreement reviewed by legal counsel, and has duly
executed and delivered such agreement. The legal rights and
obligations of each party shall be only those that are set
forth in the definitive written agreement.
3.6 Counterparts. This Memorandum of Understanding may be
executed in any number of counterparts; each of which when
so executed and delivered shall be deemed an original, and
such counterparts together shall constitute only one
original.
IN WITNESS THEREOF, THE PARTIES HAVE ENTERED INTO THIS
Memorandum of Understanding as of December 7, 2006.
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THIRD-ORDER NANOTECHNOLOGIES, INC. PHOTON-X, LLC
By:/s/ Xxxxxxxxx Xxxxx By:/s/ Xxxxxxxx Xxx
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Xxxxxxxxx Xxxxx, Xx., President Xxxxxxxx Xxx, CEO
