EXHIBIT 10.40
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(b)(4),
200.83 and 240.24b-2
LICENSE AND SUPPORT AGREEMENT
--------------------------------------------------------------------------------
between
ALLIANT/VALENCE, LLC
and
VALENCE TECHNOLOGY, INC.
VALENCE TECHNOLOGY CAYMAN ISLANDS INC.
on
OCTOBER 7, 1996
ALLIANT/VALENCE / VALENCE CONFIDENTIAL
THIS AGREEMENT, entered into as of October 7, 1996 ("Effective Date") by and
between Valence Technology, Inc. with offices at 000 Xxxxxxxxx Xxx, Xxxxxxxxx,
Xxxxxx ("Valence US") and its wholly-owned subsidiary Valence Technology Cayman
Islands Inc. with offices at X.X. Xxx 000, Xxxxx Xxxxxx, Xxxxxx Xxxxxxx,
Xxxxxxx Xxxx Indies ("Valence Cayman") (collectively "Valence") and
Alliant/Valence, LLC, with offices at Power Sources Center, 000 Xxxx Xxxx,
Xxxxxxx, Xxxxxxxxxxxx 00000 ("Alliant/Valence").
WHEREAS, Valence has the knowledge, expertise and technology to design,
develop, manufacture and sell solid polymer electrolyte batteries, and Valence
owns or has rights to certain patents, trademarks, know-how, technology and
other intellectual property related to the design, manufacture, and sell such
batteries, and the laminates that are used in such batteries;
WHEREAS, Alliant/Valence desires to enter the business of designing,
manufacturing, marketing, selling, repairing, installing, maintaining,
exploiting, applying, distributing and dealing in products that use such
batteries;
WHEREAS, Alliant/Valence, initially having no technology or know-how of its own
on solid polymer electrolyte battery technology, desires to license from
Valence the certain technology and know-how, and obtain from Valence certain
support.
NOW, THEREFORE, In consideration of the mutual covenants and promises herein
set forth, Joint Venture Alliant/Valence and Valence agree as follows:
1. DEFINITIONS
1.1 AFFILIATED COMPANIES shall mean all subsidiaries, parent
companies, and subsidiaries of parent companies, where the party or parent owns
at least fifty percent (50%) of the subsidiary, or where the party's parent
owns at least fifty percent (50%) of the party.
1.2 APPLICATIONS shall mean applications for use in the Joint
Venture Markets, except for those applications for which Valence has already
granted an exclusive license to another party, such as automotive, traction and
utility load leveling markets licensed to General Motors, personalized lighting
systems and uninterruptable power supplies licensed to Goldtron Ltd., and any
applications in Korea licensed to Hanil Telecom Co., Ltd.
1.3 BATTERIES (or BATTERY, singular) shall mean the advanced
rechargeable solid polymer electrolyte batteries manufactured by
Alliant/Valence utilizing Laminates based on the solid polymer electrolyte
technology owned and licensed by Valence.
1.4 JOINT VENTURE AGREEMENT shall mean the agreement entered into
between Alliant Techsystems Inc. and Valence on October 7, 1996.
1.5 JOINT VENTURE MARKETS shall mean United States Military, foreign
military sales and United States government specialized markets, not including
Valence standard product sales into such markets.
1.6 INTELLECTUAL PROPERTY RIGHTS shall mean all copyright, patent
rights, trademark rights and all common law rights connected therewith and all
other intellectual property rights, and shall include rights to new inventions,
discoveries, works of authorship and improvements existing during the term of
this Agreement.
1.7 LAMINATES shall mean cathode, separator and anode laminates, or
films, of the Battery, produced exclusively by Valence.
1.8 SPACE BASED APPLICATIONS shall mean Batteries intended for use
on deployment in products in space.
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CONFIDENTIAL TREATMENT REQUESTED
1.9 VALENCE shall mean Valence US and Valence Cayman jointly and
separately, provided that Valence US shall accept any rights or obligations
that arise under this agreement in the United States, Canada or Mexico, and
Valence Cayman shall accept any rights or obligations that arise under this
agreement in the remainder of the world.
2. LICENSES
2.1 Valence hereby grants to Alliant/Valence a personal,
non-transferable, non-sublicensable license to all of Valence's Intellectual
Property Rights necessary to design, manufacture, use, sell, and distribute
Batteries, using Laminate supplied exclusively by Valence, [
] for
Applications in the Joint Venture Markets, but specifically excluding
Intellectual Property Rights relating to the composition or manufacturing of
Laminates. This license shall be exclusive in the United States and
non-exclusive elsewhere.
2.2 Valence hereby grants to Alliant/Valence the right to
manufacture, assemble, fabricate and package Batteries, using Valence supplied
Laminates, for Valence as a sub-contractor of Valence, upon terms and
conditions to be agreed between Alliant/Valence and Valence.
2.3 Alliant/Valence hereby grants to Valence, and its Affiliated
Companies, a non-exclusive, world-wide, royalty-free, non-transferable,
non-sublicensable, personal license to all intellectual property created by
Alliant/Valence during the term of this Agreement, except for Joint Venture
Markets. Notwithstanding the forgoing, such license shall be assignable
incident to the transfer of all or substantially all of Valence's, or its
Affiliated Companies', business.
2.4 Patents arising out of inventions made jointly by employees of
Valence and Alliant/Valence shall be jointly owned by the parties. The parties
shall mutually agree as to which party shall file any resulting patent
applications. The cost for such applications shall be equally shared.
2.5 Valence hereby grants to Alliant/Valence a non-exclusive,
personal, non-transferable, non-sublicensable license to Valence's Trademarks
necessary to market, sell, and distribute Batteries for Applications in the
Joint Venture Market. Alliant/Valence's use of the Valence trademarks shall
inure to the benefit of Valence, and Alliant/Valence shall not register nor
attempt to register such trademarks in its own name. Other than the rights
granted herein, each party recognizes the right, title, and interest of the
other party and its affiliates in and to all service marks, trademarks, and
trade names used by the other and agrees not to use any of the other party's
service marks, trademarks, and trade names without the other party's express
written permission, other than provided herein. Any promotional material
produced by Alliant/Valence that specifically references any Battery
performance specifications or promotes the additional value of such Batteries,
shall also include a reference to Valence and an appropriate promotional copy
supplied by Valence. Valence must approve any specifications prior to
publication or distribution.
2.6 Alliant/Valence shall xxxx all its Batteries with the Valence
logo and/or name under the license provided above. Because Valence's logo
and/or name will be on the Batteries, Valence shall have right to stop
manufacturing, sales and/or distribution of Batteries, if, in Valence's sole
judgement, there is any safety defect. Additionally, Valence shall have the
right to cause Alliant/Valence to conduct a recall of Batteries, if such a
defect is discovered in Batteries already distributed outside Alliant/Valence.
Alliant/Valence shall install and maintain a lot tracking system adequate to
allow an effective and timely recall. Further, Valence shall review design and
quality of products to assure such products meet Valence design and quality
standards. Alliant/Valence shall provide representative samples of Batteries
prior to their first sale, and upon incorporation of any material change.
2.7 Alliant/Valence shall market and sell the Batteries for the
Applications under names, trade marks, trade names, designs, logos and get-up
and all other trademark rights relating to the marketing and sale of the
Batteries for the Applications. Such Alliant/Valence created trademarks,
except for any marks derived from, identical with or similar to Valence's
trademarks or trade name, shall belong to and be the absolute property of
Alliant/Valence.
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CONFIDENTIAL TREATMENT REQUESTED
2.8 Valence hereby grants Alliant/Valence a right of first refusal
to the Space Based Applications market for Valence's battery technology. Prior
to granting any license for Spaced Based Applications, Valence shall offer such
an offer, on the same terms as are being offered to a third, to
Alliant/Valence. Alliant/Valence shall have ten (10) days to accept such an
offer.
3. EXCLUSIVE USE OF VALENCE SUPPLIED LAMINATE
3.1 Alliant/Valence shall only design, manufacture, use, sell, and
distribute Batteries, using Laminate supplied by Valence, [
]
3.2 Alliant/Valence hereby covenants and warrants that it will not
design, develop, manufacture Laminate or any replacement or substitute for
Laminate. Alliant/Valence further warrants that it will not decompose or
reverse engineer Laminate.
4. VALENCE PERSONNEL SUPPORT
4.1 Initially, Valence will provide one hundred sixty (160) hours of
consulting time to Alliant/Valence, through such personnel as it deems
appropriate. Following this initial consulting, Valence, at its discretion,
shall supply consulting services as it deems necessary to support
Alliant/Valence.
4.2 Valence may fulfil this obligation by providing a variety of
qualified Valence engineers, depending on the needs of Alliant/Valence, and
their availability from Valence. Alliant/Valence shall establish, within a
reasonable amount of time, a complete battery design and test laboratory.
Alliant/Valence may, if it so desires, direct these engineers to assist
Alliant/Valence in setting up the complete battery design and test laboratory.
4.3 Valence employees at Alliant/Valence, shall at all times remain
employees of Valence. Alliant/Valence shall not be liable for any expenses of
such visiting Valence employees.
5. MANUFACTURING EQUIPMENT
5.1 Valence grants Alliant/Valence the rights to use battery
manufacturing equipment designed by or for Valence, and manufactured by Valence
or its authorized equipment suppliers. These rights include the rights to the
designs of the battery manufacturing equipment designed by or for Valence
listed in the Manufacturing Equipment Exhibit.
5.2 Valence shall use its best efforts to either sell, upon terms
and conditions acceptable to Valence and Alliant/Valence, or assist
Alliant/Valence in procuring from Valence's equipment vendors, Battery
manufacturing equipment. However, Alliant/Valence may also purchase Battery
manufacturing equipment from vendors other than Valence or its vendors.
6. COVENANTS AND WARRANTIES
6.1 The parties each covenants to the other that it shall fully
comply with any legislative and regulatory requirements (including any
regulations, statutory or otherwise, relating to environmental controls)
directly or indirectly applicable to the performance of its obligations
hereunder. Because the rights licensed under this Agreement are in part
based on some technology of United States origin, Alliant/Valence shall comply
with all current and future United States export regulations, including export
embargoes and export licensing provisions. Valence shall use its best efforts
to notify Alliant/Valence of such regulations, and any changes thereto.
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6.2 Valence warrants to Alliant/Valence that it is the legal and
beneficial owner or licensee of the technology, Intellectual Property Rights,
knowledge and expertise granted to Alliant/Valence pursuant to this Agreement
and has the power and capacity to enter into this Agreement.
6.3 Each party ("Indemnitor") shall, at its own expense, defend any
suit that is instituted against the other ("Indemnitee") to the extent such
suit alleges that any goods, information, designs, or any part, of Indemnitee,
thereof sold hereunder infringe any patent, trademark, copyright, or trade
secret. Indemnitor shall not be liable to Indemnitee if such alleged
infringement arises from any modification or addition made by anyone other than
the Indemnitor, or the use as a part of or in combination with any other
devices or parts or from the use to practice any method or process, if there
would have been no infringement but for such acts. Indemnitee shall give the
Indemnitor immediate notice in writing of any such suit and permits the
Indemnitor, through counsel of its choice, to answer the charge of infringement
and defend such suit. Indemnitee shall give the Indemnitor all the needed
information, assistance and authority, at the Indemnitor's expense, to enable
the Indemnitor to defend or settle such suit. In the case of a final award of
damages in any suit the Indemnitor, shall pay such award, but shall not be
responsible for any settlement made without its prior written consent. In the
event the use, lease or sale of the goods is enjoined, the Indemnitor may at
its own option and expense (i) procure for the Indemnitee the right to use,
lease or sell such goods, (ii) replace such goods, (iii) modify such goods, or
(iv) remove such goods and refund the aggregate payments made by the
Indemnitee, less a reasonable sum for use, damage and obsolescence. THIS ABOVE
STATES THE INDEMNITOR'S TOTAL RESPONSIBILITY AND LIABILITY, AND THE
INDEMNITEE'S SOLE REMEDY, FOR ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY
INTELLECTUAL PROPERTY RIGHT BY ANY GOODS DELIVERED HEREUNDER OR ANY PART
THEREOF. THIS SECTION IS IN LIEU OF AND REPLACES ANY OTHER EXPRESS, IMPLIED OR
STATUTORY WARRANTY AGAINST INFRINGEMENT.
6.4 The above indemnity obligation with regard intellectual property
rights is the sole and only indemnity obligation owed by each party to the
other party under this Agreement.
7. TERMINATION
7.1 A party shall be deemed to have breached or defaulted if:
7.1.1 any representation, warranty or statement by such
party in this Agreement or in any document delivered under
this Agreement is not complied with or is or proves to have
been incorrect in any material respect when made;
7.1.2 such party does not perform or comply with any one
or more of its material obligations under the Agreement and
such party in breach shall fail to rectify that breach within
sixty (60) days of written notice of breach being given to
that party in the terms of this Section; or
7.1.4 a winding up or bankruptcy petition is presented, an
order is made, an effective resolution passed or legislation
enacted for the winding-up other than for the purpose of
reconstruction or amalgamation of such party or if a receiver
and/or manager is appointed of the undertaking or part thereof
of such party; or
7.1.5 such party is unable to pay its debts as they fall
due or stops payment of its debts generally or commences
negotiations with its creditors with a view to readjustment or
re-scheduling of its debts or compounds or enters into any
arrangement with or makes any assignment for the benefit of
its creditors generally or attempts to do any of the foregoing
(except as part of or pursuant to a scheme for reconstruction
or amalgamation);
7.2 In the event a party commits a breach or default, as described
above in Section 7.1, the other party hereto shall, without prejudice to any
other rights and remedies such party may have, be entitled by notice in writing
to the party in breach or default to terminate this Agreement forthwith as
against such party.
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7.3 In the event of a termination of this Agreement because of the
breach or default a party, all licenses granted to the other party, and its
Affiliated Companies, under this Agreement shall terminate.
7.4 The provisions of this Agreement with regard to confidential
information and intellectual property rights indemnity shall survive the
termination of this Agreement.
7.5 This Agreement shall immediately and automatically terminate
upon the termination of the Joint Venture Agreement
8. TAXES
8.1 Each party hereto shall be responsible for its own taxes,
whether present or future including income tax payable in respect of any sum
received by it, levies, goods and services tax, value added tax, impost,
deductions or withholding imposed, assessed or collected by any political
subdivision or taxing authority of any country in respect of this Agreement,
any transaction or any documents contemplated herein. In no circumstances
shall either party be obliged to gross up the amount of any payment which it is
otherwise obliged to make pursuant to this Agreement so as to ensure that the
net amount received by the recipient equals that amount which the recipient
would have been entitled to receive in the absence of any applicable
withholding tax.
8.2 Where Alliant/Valence is obliged to withhold any tax or other
charge from payments otherwise due by Alliant/Valence under this Agreement,
Alliant/Valence shall promptly forward to Valence the original tax payment
certificates evidencing that such withholding taxes or other charges have been
paid.
9. CONFIDENTIALITY AND PUBLIC DISCLOSURE
9.1 "Confidential Information" shall mean that information of
either party which is disclosed to the other party ("Recipient") by reason of
the parties' relationship hereunder, either directly or indirectly in any
written or recorded form, orally, or by drawings or inspection of parts or
equipment, and, either in writing and marked as confidential or proprietary, or
if oral, reduced to writing similarly marked within thirty (30) days of
disclosure.
9.2 Recipient shall receive and use the Confidential Information
only for performance of Recipient's obligations hereunder, and will not use
Confidential Information for any other purpose, and shall not disclose such
Confidential Information to any person or persons who do not need to have
knowledge of such Confidential Information in the course of their employment.
Recipient further agrees that except as authorized by the Export Administration
Regulations of the U. S. Department of Commerce it will not transmit, directly
or indirectly, any "technical data" acquired from the other party hereto or any
"Q, S, W, Y or Z" country as those terms are defined in the Regulations.
9.3 It is expressly understood that Recipient shall not be liable
for disclosure of any Confidential Information if the same:
9.3.1 was in the public domain at the time it was disclosed;
9.3.2 was known to Recipient at the time of disclosure;
9.3.3 is disclosed with the prior written approval of the
other party hereto;
9.3.4 is disclosed after five (5) years from the termination
of this Agreement;
9.3.5 was independently developed by Recipient; or
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9.3.6 becomes known to Recipient, on a non-confidential
basis, from a source other than the other party hereto,
without breach of this Agreement by Recipient.
9.4 Each party hereto shall not except as authorized by the Board of
Directors of Alliant/Valence, or required by any applicable law or regulation
of the Cayman Islands or the United States of America, reveal to any person,
firm or Alliant/Valence any of the trade secrets, secret or confidential
operations, processes or dealings or confidential information of
Alliant/Valence or any information concerning the organization, business,
finances, transitions or affairs of Alliant/Valence which may come to his
knowledge hereunder and shall keep with complete secrecy all trade secrets and
other confidential information entrusted to him and shall not use or attempt to
use any such information in any manner which may injure or cause loss either
directly or indirectly to Alliant/Valence or its Business or may be likely to
do so.
9.5 Valence and Alliant/Valence agree that the terms and conditions
of this Agreement shall not be disclosed to any other party without the prior
written consent of the other, which consent should not be unreasonably
withheld. Neither Valence nor Alliant/Valence shall publish or use any
advertising, sales promotion, press release or publicity matters relating to
this Agreement, without the prior written approval of the other, which approval
shall not be unreasonably withheld. Notwithstanding the forgoing, either party
may make such disclosures and press releases as are necessary to meet its
disclosure requirements under the laws, regulation and rules of the Cayman
Islands or the United States of America.
9.6 Alliant/Valence shall not enter into any agreement that would
require it to disclose or encumber any Valence or Alliant/Valence confidential
information or Intellectual Property Rights.
10. GOOD FAITH AND RELATIONSHIP BETWEEN PARTIES
10.1 In entering into this Agreement the parties hereto recognize
that it is impracticable to make provisions for every contingency that may
arise in the course of the performance thereof. If by reason of any unforeseen
occurrence or development the operation of this Agreement is likely to cause
any inequitable hardship to any of the parties hereto, the parties hereto shall
negotiate immediately in good faith as to what manner the terms and conditions
of this Agreement may be modified in order to provide an equitable solution in
so far as such is possible within the spirit of this Agreement for such
unforeseen occurrence or development.
10.2 The parties hereto hereby agree and declare that they will
execute and do all such acts and things as are necessary and within their power
and authority for the time being to carry into effect and/or to comply with the
provisions of this Agreement.
10.3 Nothing in this Agreement shall be construed to imply the
existence of a partnership between the parties hereto. Valence and
Alliant/Valence each represent and warrant to the other that they have entered
into no contracts, nor are subject to any obligations, which prevent them from
entering into and performing this Agreement. It is understood and agreed that
Valence and Alliant/Valence are, and at all times shall remain, independent
contractors. At no time shall either Party represent to any third party that
it is the agent of the other for any reason whatsoever. Valence and
Alliant/Valence further covenant that no authorization shall be given to any
employee to act for the other Party to this Agreement. In no event shall
either Party at any time have authority to make any contracts or commitments on
behalf of or as an agent of the other or otherwise make use of its relationship
with the other, without the other's express consent in each instance.
11. LIMITATION OF LIABILITY
In no event shall either party be liable for any indirect, special, incidental
or consequential damages resulting from its performance or failure to perform
under this Agreement, whether due to a breach of contract, breach of warranty,
or such party's negligence. Neither parties' liability hereunder shall exceed
the amounts paid hereunder.
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12. GENERAL
12.1 Neither party may assign its rights or obligations under this
Agreement without the prior consent of the other, and any purported assignment
without such consent shall have no force or effect, except that a party may
assign this Agreement incident to the transfer of all or substantially all of
its business. Subject to the foregoing, this Agreement shall bind and inure to
the benefit of the respective parties hereto and their successors and assigns.
12.2 No failure or delay by either party to enforce or take advantage
of any provision or right under this Agreement shall constitute a subsequent
waiver of that provision or right, nor shall it be deemed to be a waiver of any
of the other terms and conditions of this Agreement.
12.3 Neither party to this Agreement shall be liable for its failure
to perform any of its obligations hereunder during any period in which such
performance is prevented by any cause beyond its reasonable control. In the
event of any such delay the date of delivery or performance hereunder shall be
extended by a period equal to the time lost by reason of such delay. In the
event Valence's production is curtailed, Valence may allocate its available
production, as reasonably equitable, among its various customers.
12.4 The validity, performance and construction of this Agreement
shall be governed by the laws of the state of Delaware (excluding its conflict
of laws provisions).
12.5 Each party hereto shall bear its own costs and expenses in
respect of the preparation, negotiation, finalize and execution of this
Agreement and the other agreements or documents contemplated herein.
12.6 All notices or communications to be given under this Agreement
shall be in writing and shall be deemed delivered upon hand delivery, upon
acknowledged telex or facsimile communication, or seven (7) days after deposit
in the mail, postage prepaid, by certified, registered or first class mail,
addressed to the parties at their addresses set forth above.
12.7 In the event that any provision of this Agreement is prohibited
by any law governing its construction, performance or enforcement, such
provision shall be ineffective to the extent of such prohibition without
invalidating thereby any of the remaining provisions of the Agreement.
12.8 The terms and conditions of this Agreement may not be
superseded, modified, or amended except in writing which states that it is such
a modification, and is signed by an authorized representative of each party
hereto. This Agreement shall not be modified, supplemented, qualified, or
interpreted by any trade usage or prior course of dealing not made a part of
the order by its express terms.
12.9 Section titles used herein are for reference only and shall not
be for purposes of interpretation.
12.10 This Agreement may be executed in several counterparts, each of
which shall be deemed an original and all of which shall constitute one and the
same instrument.
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12.11 This Agreement, including exhibits, constitutes the entire
Agreement between the parties as to the subject matter hereof, and supersedes
and replaces all prior or contemporaneous agreements, written or oral,
regarding such subject matter, and shall take precedence over any additional or
conflicting terms which may be contained in either party's purchase orders or
order acknowledgment forms.
ACCEPTED AND AGREED:
VALENCE TECHNOLOGY, INC. ALLIANT/VALENCE, LLC
By: By:
----------------------------------- -----------------------------------
signature of authorized representative signature of authorized representative
Xxxxxx X. Xxxx
-------------------------------------- --------------------------------------
printed name printed name
President
-------------------------------------- --------------------------------------
title title
-------------------------------------- --------------------------------------
date date
VALENCE TECHNOLOGY CAYMAN ISLANDS INC.
By:
--------------------------------------
signature of authorized representative
Xxxxxxx Xxxxxx
--------------------------------------
printed name
General Manager
--------------------------------------
title
--------------------------------------
date
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CONFIDENTIAL TREATMENT REQUESTED
Manufacturing Equipment Exhibit
1. [
]
2. [
]
3. [
]
4. [
]
5. [
]
6. [
]
7. Miscellaneous equipment
a. Battery testing equipment
b. Battery tester network and database systems
c. Battery safety test equipment and test xxxxxxxx
d. Specialized laboratory equipment for component testing
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