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EXHIBIT 10.40
LICENSE AGREEMENT
This Agreement, entered into as of September 22, 1997, is made between
LITHIUM TECHNOLOGY CORPORATION ("Company"), a Delaware corporation having its
principal place of business at 0000 Xxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx
00000, and LITHIUM LINK LLC ("Licensee"), a Delaware limited liability company
having its principal place of business at 00000 Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000. Capitalized terms used herein and not otherwise defined
shall have the meaning ascribed thereto in the Senior Secured Convertible Note
Purchase Agreement of even date herewith (the "Note Purchase Agreement") between
the Company and Licensee.
RECITALS
WHEREAS, the Company and the Licensee are parties to the Note
Purchase Agreement;
WHEREAS, the execution and delivery of this License Agreement is a
condition to the obligations arising under the Note Purchase Agreement;
WHEREAS, the Licensee had desired to obtain a security interest
respecting all of the Company's assets in order to secure the repayment of the
Term Loans, however the Company's previous contractual obligations include
covenants against the Company's granting of a security interest respecting the
Company's intellectual property and in lieu of such security interest the
Company is willing to grant, and the Licensee desires to obtain, the license
rights granted herein.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement and in the Note Purchase Agreement, the parties, intending to be
legally bound, hereby agree as follows:
ARTICLE 1.0 - DEFINITIONS
Capitalized terms used herein and not otherwise defined in the Note
Purchase Agreement shall have the meanings given in the Schedule of Definitions
attached as Exhibit A hereto.
ARTICLE 2.0 - GRANT OF LICENSE
2.1 The Company hereby grants, and Licensee hereby accepts, a
nonexclusive, royalty-free, assignable, and sublicenseable license to use the
Licensed Patents and the Company's other intellectual property (collectively,
the "Licensed Subject Matter") for the manufacture and distribution of
lithium-ion polymer batteries in the Territory, provided that no license is
granted for
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the use of the Licensed Subject Matter for the manufacture of lithium metal
polymer battery products.
2.2 The license granted by the Company pursuant to Section 2.1 shall
terminate simultaneously with and upon the earliest to occur of (a) the payment
in full of the Term Notes, (b) the conversion of all the Term Notes, or (c) the
combination of payment and conversion with respect to all of the Term Notes.
2.3 The Licensee agrees that it will refrain from directly or
indirectly: exercising, using or applying the Licensed Subject Matter; assigning
the Licensed Subject Matter; and/or sublicensing the Licensed Subject Matter
unless and until the occurrence of an event of default as defined in Subsection
6.1(d) of the Note Purchase Agreement (a "Bankruptcy Default") and the failure
of the Company to cure such Bankruptcy Default within the specified cure
periods. If the Company cures such Bankruptcy Default, the Licensee's (and any
assignee's and/or sublicensee's) rights under this License Agreement shall
revert to the pre-Bankruptcy Default status as provided in the first sentence of
this Section 2.3 until the subsequent occurrence, if any, of another such
Bankruptcy Default in which case this Section 2.3 shall be applied de novo.
2.4 In addition to, and without limitation of, the terms set forth in
Section 2.3 hereof, the Licensee agrees that in the event of (a) a Bankruptcy
Default and the failure of the Company to cure such Bankruptcy Default within
the specified cure period and/or (b) an Event of Default (as otherwise defined
in the Note Purchase Agreement), the Licensee shall refrain from the same acts
specified in Section 2.3 hereof until first giving written notice of the
Bankruptcy Default and/or the Event of Default to Mitsubishi Materials
Corporation ("MMTL") and permitting MMTL or MMTL's designee sixty (60) days
after such notice to cure the noticed Bankruptcy Default and/or Event of
Default. If MMTL or its designee cures the noticed Bankruptcy Default or Event
of Default, the Licensee's (and any assignee's and/or sublicensee's) rights
under this License Agreement shall revert to the pre-Bankruptcy Default or
pre-Event of Default status as provided in the first sentence of Section 2.3
hereof until the subsequent occurrence, if any, of another Bankruptcy Default or
Event of Default in which case this Section 2.4 shall be applied de novo.
ARTICLE 3.0 - CONFIDENTIALITY
3.1 Subject to Sections 2.3 and 2.4 hereof, the Licensee agrees to
maintain in confidence all information received from the Company under this
Agreement and agrees not to disclose the same to third parties or to directly or
indirectly benefit or profit from this Agreement, and agrees to obligate all of
its employees, agents, consultants and others having access to such information
to adhere to this obligation of confidentiality. This Section 3.1 shall not
apply to any information which is or becomes public
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knowledge through no fault of the Licensee or which the Licensee can demonstrate
in writing was known to the Licensee prior to the disclosure by the Company or
which is obtained by the Licensee from a third party with an unrestricted legal
right to disclose the same to others. This Section 3.1 shall apply to any and
all assignees and/or sublicensees of the Licensee and their employees, agents,
consultants and others having access to such information.
ARTICLE 4.0 - TERM AND TERMINATION
4.1 This Agreement shall commence on the date set forth above and shall
continue until terminated pursuant to Section 2.2 hereof except that Section 3.1
hereof shall survive any termination of this Agreement.
4.2 In the event that the Licensee materially breaches this Agreement
or the Note Purchase Agreement and fails to remedy such breach within ten (10)
days after notice thereof, the Company shall be entitled to terminate this
Agreement upon written notice of such termination.
4.3 Upon termination of this Agreement, the Licensee (and any
sublicensee and/or assignee) shall cease its use of the Licensed Subject Matter
as of the effective date of such termination.
ARTICLE 5.0 - NOTICE
5.1 Any notice, consent, or communication required to be given to
either party shall be sent in accordance with the notice provisions of the Note
Purchase Agreement.
ARTICLE 6.0 - ASSIGNMENT
6.1 The rights granted herein may not be assigned by either party by
their respective acts or by operation of law, without the prior written consent
of the other party hereto except as expressly set forth herein.
ARTICLE 7.0 - MISCELLANEOUS
7.1 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
7.2 Article headings contained in this Agreement are included for
convenience only and form no part of the agreement between the parties hereto.
7.3 Any delays in or failure by either party in their performance under
this Agreement shall be excused if and to the extent that such delays or
failures are caused by occurrences beyond such party's control.
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7.4 This Agreement constitutes the entire understanding between the
parties with respect to the subject matter hereof and may be amended only by a
document in writing.
7.5 No modification, renewal, extension, or waiver of this Agreement or
any of its provisions shall be binding unless in writing and mutually accepted.
7.6 This Agreement shall be interpreted and construed and the legal
relations created herein shall be determined, in accordance with the laws of the
state of New Jersey.
IN WITNESS WHEREOF, the parties have executed and delivered this
License Agreement as of the date first above written.
LITHIUM TECHNOLOGY CORPORATION
By:
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Name:
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Title:
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LITHIUM LINK LLC
By:
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Name:
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Title:
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