LICENSE BACK AGREEMENT
This LICENSE BACK AGREEMENT (this "AGREEMENT") is entered into as of
November 3, 2000, by and between Valence Technology, Inc., a Delaware
corporation ("VALENCE"), Valence Technology (Nevada), Inc., a Nevada corporation
and wholly owned subsidiary of Valence ("US LICENSOR"), and Valence Technologies
Cayman Islands Limited, a Cayman Islands company ("FOREIGN LICENSOR")
(hereinafter, US Licensor and Foreign Licensor are collectively referred to as
the "LICENSORS") and Telcordia Technologies, Inc., a Delaware corporation
("Telcordia").
RECITALS
A. Pursuant to that certain purchase agreement of even date herewith
between Valence, Licensors and Telcordia (the "PURCHASE AGREEMENT"), Licensors
purchased certain intellectual property assets concerning lithium or sodium ion
polymer battery technology from Telcordia.
B. As a condition to the Purchase Agreement, the parties agreed to enter
into this Agreement whereby Licensors grant to Telcordia a fully-paid license to
certain intellectual property assets in a specific field of use, all as set
forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
1. DEFINITIONS
For purposes of this Agreement the following terms have the meanings set
forth below:
1.1 "ACTION" shall have the meaning set forth in SECTION 8.9 below.
1.2 "AFFILIATE" means, with respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition and this Agreement, the term "control" (and
correlative terms) means the power, whether by contract, equity ownership or
otherwise, to direct the policies or management of a Person.
1.3 "CONFIDENTIAL INFORMATION" shall have the meaning set forth in SECTION
4.1 below.
1.4 "INDEMNIFIED PARTY" shall have the meaning set forth in SECTION 7.3
below.
1.5 "INDEMNIFYING PARTY" shall have the meaning set forth in SECTION 7.3
below.
1.6 "INTELLECTUAL PROPERTY" means the Knowledge Transfer Book and Patents,
including the contract and licensing rights, and legal claims and defenses
related to any of the foregoing as may exist now and/or hereafter come into
existence, and all renewals and extensions thereof, whether registered or not,
licensed to or owned by the Licensors.
1.7 "KNOWLEDGE TRANSFER BOOK" means the compilation of ideas, formulas,
compositions, manufacturing and production processes and techniques, technical
data, research, techniques, performance criteria and the like as such is
provided to licensees of the Licensors', including the copyrights, copyright
registrations and applications for registration related thereto and further
including the right to practice all inventions, processes and techniques
described therein..
1.8 "LICENSED PROPERTY" means the Patents and the Knowledge Transfer Book.
1.9 "LICENSORS INDEMNIFIED PARTIES" shall have the meaning set forth in
SECTION 7.1 below.
1.10 "PATENTS" means the patents and patent applications listed in SCHEDULE
1.1 attached hereto, including (i) the patent rights in such patents and patent
applications, and the inventions covered thereby, including, without limitation,
the exclusive right to make, use and sell the inventions, (ii) any additional
patent rights, which are continuations, continuations-in-part, divisionals or
substitutes of such patents or patent applications , and the inventions covered
thereby, (iii) any reexaminations, reissues, renewals or extensions of any and
all of the foregoing patents or patent applications, and (iv) foreign
counterparts of any and all of the foregoing, in each such patent or patent
application.
1.11 "PERSON" means an individual, corporation, partnership, limited
liability company, association, trust, joint stock company, joint venture,
unincorporated organization, or other entity.
1.12 "PERMITTED TECHNOLOGY" means (a) polymer supercapacitors, (b) polymer
asymmetric hybrid devices having a capacity of no more than 80 watt-hours per kg
and (c) other non-battery application (e.g. electrochromic devices and sensors).
1.13 "REGULATORY ACTION" means any claim, demand, action or proceeding
(including, without limitation, any civil, criminal and/or administrative
proceeding) brought, threatened or initiated by any governmental authority in
connection with the acts of the Indemnifying Party, or any of its subsidiaries,
Affiliates, officers, directors, attorneys, accountants, agents or employees,
including without limitation, performance under the terms of this Agreement.
1.14 "TELCORDIA INDEMNIFIED PARTY" shall have the meaning set forth in
SECTION 7.2 below.
1.15 "TERM" shall have the meaning set forth in SECTION 3.1 below.
1.16 "THIRD PARTY CLAIM" means any third party claim, action, demand or
proceeding (other than Regulatory Actions) made, asserted or threatened against
any Indemnified Party arising out of any of the acts of the Indemnifying Party,
or any of its subsidiaries, Affiliates, officers, directors, attorneys,
accountants, agents or employees, including without limitation, arising out of
the Indemnifying Party's performance under the terms of this Agreement.
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2. LICENSE GRANT
2.1 LICENSE GRANT. Licensors hereby grant to Telcordia a worldwide, fully
paid, nonexclusive license to make and use the Licensed Property during the
Term, solely to research, design and develop the Permitted Technology. Licensors
also hereby grant to Telcordia a worldwide, fully paid, nonexclusive right to
sublicense the Licensed Property in connection with the Permitted Technologies
to (1) distributors solely to manufacture and distribute the Permitted
Technology and (2) end users to use the Permitted Technology. Nothing herein
shall grant any right, either expressly or by implication, to exploit the
Licensed Property as a standalone technology or to manufacture and/or distribute
batteries. Licensors also hereby grant to Telcordia a worldwide, fully paid,
nonexclusive license to use the Knowledge Transfer Book in performing consulting
services to third parties. Except as noted above, this license does not grant
Telcordia the right to disclose or license the Knowledge Transfer Book or the
information contained therein, to such third parties.
2.2 PATENT MARKING. Licensors may require that any Permitted Technology
incorporating any patented technology be marked with patent numbers representing
patents covering such technology pursuant to 00 Xxxxxx Xxxxxx Code ss.287 or
similar laws in other nations.
2.3 GOVERNMENTAL REQUIREMENTS. Telcordia 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 technology of United States origin,
Telcordia shall comply with all current and future United States export
regulations, including export embargoes and export licensing provisions.
3. TERM AND TERMINATION
3.1 TERM. The term of this Agreement shall continue from the Effective Date
until the last of the patents making up the Licensed Properties expires unless
terminated earlier by either party pursuant to the terms of SECTION 3.2 below
(the "TERM").
3.2 TERMINATION.
3.2.1 TERMINATION FOR CAUSE. Either party may terminate this Agreement
immediately by giving written notice to the other party if (1) the other party
commits a material breach of any of its obligations under this Agreement and
such breach is not cured within thirty (30) days after the breaching party
receives notice of such breach from the non-breaching party or, where the breach
is such that it cannot be completely remedied within thirty (30) days, the
breaching party has not commenced a remedy within the thirty day period or after
commencing a remedy, the breaching party has not continued to diligently and
expeditiously take all steps necessary to remedy such default or (2) any
representation, warranty or covenant statement by the other party to this
Agreement is breached, proves to have been incorrect in any material respect or
contains any material omissions.
3.3 BREACH BY A SUB-LICENSEE. In the event that Telcordia sublicenses the
Licensed
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Property to a third party pursuant to the terms of this Agreement, and such
third party breaches its agreement with Telcordia, such breach shall not result
in or be considered a breach of this Agreement by Telcordia.
3.4 OBLIGATIONS UNDER TERMINATION. Upon termination of this Agreement, the
following shall occur:
3.4.1 Telcordia shall immediately stop exploiting the Licensed Property,
including but not limited to, making, using, and/or sublicensing the Licensed
Property;
3.4.2 Telcordia agrees that it will destroy or return any and all documents
in its possession concerning the Licensed Property; and
3.4.3 Each party agrees that it will destroy or return to the other party
any and all Confidential Information received from the other party pursuant to
this Agreement.
3.5 EFFECT OF TERMINATION ON END USERS. Notwithstanding the provisions of
SECTION 3.4 above, in the event of termination or expiration of this Agreement,
any sublicenses of the Licensed Properties granted to end users of the Permitted
Technology pursuant to this Agreement will survive in order to allow such end
user to continue using its validly obtained and licensed Permitted Technology.
4. CONFIDENTIALITY
4.1 CONFIDENTIAL INFORMATION. During the term of this Agreement, either
party may come into possession of the other party's Confidential Information.
For the purposes of this Agreement, "CONFIDENTIAL INFORMATION" means any
information that a party designates as confidential in writing or which the
receiving party knows or has reason to know is confidential. Without limiting
the foregoing, Confidential Information includes financial, business and
technical plans and strategies, inventions, new products or services,
technology, any know how and other trade secrets that Telcordia develops,
related to the Intellectual Property under this Agreement, and any passwords for
servers. Confidential Information does not include information which is: (a)
already known by the receiving party at time of disclosure; (b) or becomes,
through no act or fault of the receiving party, publicly known; (c) received by
the receiving party from a third party without a restriction on disclosure or
use; or (d) independently developed by the receiving party without reference to
the disclosing party's Confidential Information. The receiving party may
disclose Confidential Information to the extent required to be disclosed by a
court or governmental agency pursuant to a statute, regulation or valid order;
provided that the receiving party first notifies the disclosing party and gives
it the opportunity to seek a protective order or to contest such required
disclosure.
4.2 RESTRICTIONS. Each party will hold the disclosing party's Confidential
Information in confidence and will not use such information except as permitted
under this Agreement. Each party will use the same precautions to prevent
disclosure to third parties of such information as it uses with its own
confidential information, but in no case less than reasonable efforts.
4.3 ADDITIONAL OBLIGATIONS. The parties agree (i) not to alter or remove
any
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identification of any copyright, trademark or other proprietary rights notice
which indicates the ownership of any part of the Confidential Information, and
(ii) to notify the other party of the circumstances surrounding any possession,
use or knowledge of the Confidential Information by any person or entity other
than those authorized by this Agreement.
5. REPRESENTATIONS AND WARRANTIES
5.1 MUTUAL REPRESENTATIONS AND WARRANTIES.
5.1.1 ORGANIZATION AND QUALIFICATION. Each party represents and warrants
that it is duly organized and existing in good standing under the laws of the
jurisdiction in which it is organized, is duly qualified and in good standing as
a foreign corporation in every state in which the character of its business
requires such qualifications, and has the power to own its property and to carry
on its business as now being conducted.
5.1.2 AUTHORIZED AGREEMENT. Each party represents and warrants that the
execution and delivery of this Agreement, and the performance of the
transactions contemplated by this Agreement, are within its powers, have been
duly authorized by all necessary corporate action, do not require any consent or
other action by and in respect of or filing with any third party or governmental
body or agency and do not, and will not, contravene, violate or conflict with or
constitute a default under any provision of applicable law, regulation, or
published interpretive guidance or ruling.
6. DISCLAIMER & LIMITATION OF LIABILITY
6.1 DISCLAIMER OF WARRANTIES. THE WARRANTIES SET FORTH HEREIN ARE LIMITED
WARRANTIES AND ARE THE ONLY WARRANTIES MADE BY THE RESPECTIVE PARTIES. THE
PARTIES EXPRESSLY DISCLAIM, AND HEREBY EXPRESSLY WAIVE, ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE.
6.2 SCOPE OF LIABILITY. TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE
LAW, NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER PARTY FOR LOST PROFITS
OR OTHER CONSEQUENTIAL, SPECIAL, INDIRECT OR INCIDENTAL DAMAGES, BASED UPON A
CLAIM OF ANY TYPE OR NATURE (INCLUDING BUT NOT LIMITED TO CONTRACT, TORT
INCLUDING NEGLIGENCE, WARRANTY OR STRICT LIABILITY), OR CLAIMS ARISING FROM THE
TERMINATION OF THIS AGREEMENT EVEN IF ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
7. INDEMNIFICATION
7.1 INDEMNIFICATION BY TELCORDIA. Regardless of any investigation made at
any time by or on behalf of Licensors, or any information that Licensors may
have, Telcordia unconditionally agrees to protect, defend, indemnify and save
and hold Licensors, and each of Licensor's subsidiaries, Affiliates, officers,
directors, attorneys, accountants, agents and
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employees (the "LICENSORS INDEMNIFIED PARTIES"), free and harmless from and
against any and all costs, demands, losses, claims, liabilities, fines,
penalties, assessments, damages (whether or not "punitive" in nature), including
the burden and expense of defending against all Third Party Claims and
Regulatory Actions (even if such Third Party Claims or Regulatory Actions are
groundless, false or fraudulent), or amounts paid in settlement thereof,
including interest on amounts actually paid by Licensors at the rate of the
lesser of (i) 10% per annum, and (ii) the maximum rate permitted by applicable
law, from the date of any payment made by Licensors through and including the
date the amount any such payment is reimbursed by Telcordia hereunder and court
costs (including court-awarded interest) and reasonable attorneys' fees and
disbursements of counsel (including legal or other expenses reasonably incurred
in connection with investigating or defending the same), incurred by any of the
Licensors Indemnified Parties arising out of, or alleged to arise out of, or
based upon, or alleged to have been based upon any of the following:
7.1.1 any breach of any covenant of Telcordia, or inaccuracy or omission in
any representation or warranty, contained in this Agreement; or
7.1.2 any claims by any creditor or alleged creditor of Telcordia to the
effect that the Licensors Indemnified Parties, or any of them, are responsible
or liable for the debts, obligations, commitments or other obligations of
Telcordia.
7.2 INDEMNIFICATION BY LICENSOR. Regardless of any investigation made at
any time by or on behalf of Telcordia, or any information that Telcordia may
have, Licensor unconditionally agrees to protect, defend, indemnify and save and
hold Telcordia, and each of Telcordia's subsidiaries, Affiliates, officers,
directors, attorneys, accountants, agents and employees (the "TELCORDIA
INDEMNIFIED PARTIES"), free and harmless from and against any and all costs,
demands, losses, claims, liabilities, fines, penalties, assessments, damages
(whether or not "punitive" in nature), including the burden and expense of
defending against all Third Party Claims and Regulatory Actions (even if such
Third Party Claims or Regulatory Actions are groundless, false or fraudulent),
or amounts paid in settlement thereof, including interest on amounts actually
paid by Telcordia at the rate of the lesser of (i) 10% per annum, and (ii) the
maximum rate permitted by applicable law, from the date of any payment made by
Telcordia through and including the date the amount any such payment is
reimbursed by Telcordia hereunder and court costs (including court-awarded
interest) and reasonable attorneys' fees and disbursements of counsel (including
legal or other expenses reasonably incurred in connection with investigating or
defending the same), incurred by any of the Telcordia Indemnified Parties
arising out of, or alleged to arise out of, or based upon, or alleged to have
been based upon any of the following:
7.2.1 any breach of any covenant of Licensor, or inaccuracy or omission in
any representation or warranty, contained in this Agreement; or
7.2.2 any claims by any creditor or alleged creditor of Licensor to the
effect that the Telcordia Indemnified Parties, or any of them, are responsible
or liable for the debts, obligations, commitments or other obligations of
Licensor.
7.3 INDEMNIFICATION PROCEDURE. A party entitled to be indemnified, as set
forth under
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this Agreement (the "INDEMNIFIED PARTY"), shall notify the party responsible for
such indemnification (the "INDEMNIFYING PARTY") in writing as soon as
practicable, and within five (5) business days of notice or assertion of such
claim(s); PROVIDED, that failure to timely notify the Indemnifying Party within
such time frame shall not relieve such Indemnifying Party of its obligations
under this section unless and only to the extent that the Indemnifying Party is
actually prejudiced by such failure to notify. The Indemnifying Party must
afford the Indemnified Party the opportunity to participate, at its sole
expense, in the defense of any claim, PROVIDED, HOWEVER, that the Indemnifying
Party shall at all times have the right to control all aspects of the handling
of such claim, including but not limited to, the selection of counsel, and any
compromise, settlement or other resolution of such claim; PROVIDED, FURTHER,
that the Indemnifying Party shall not have the right to settle any claim against
the Indemnified Party without the Indemnified Party's prior written consent,
unless such settlement provides for a full and unconditional release of all
liability against the Indemnified Party.
8. GENERAL
8.1 GOVERNING LAW. This Agreement will be interpreted in accordance with
the laws of the State of [Delaware], without regard to the conflicts of laws
principles thereof.
8.2 ASSIGNMENT. This Agreement may not be assigned by either party to any
third party without the express written approval of the other party, such
approval not to be unreasonably withheld, and any attempt at such an unapproved
assignment will be null and void.
8.3 NOTICES. All required legal notices will be in writing addressed to the
respective parties as set forth herein and will either be (i) personally
delivered, (ii) transmitted by postage prepaid certified mail, return receipt
requested, (iii) transmitted by nationally recognized private express courier,
or (iv) sent by telecopier or facsimile transmission, and will be deemed to have
been given on the date of receipt. Either party may change its address for
purposes hereof by written notice to the other in accordance with the provisions
of this section. The addresses for the parties are as follows:
If to Telcordia: Telcordia Technologies, Inc.
000 Xxxxx Xxxxxx 0X000X
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
If to Licensors: c/o Valence Technology, Inc.
000 Xxxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: Xxx X. Xxxxxx
Facsimile: (000) 000-0000
8.4 FORCE MAJEURE. Neither party will be responsible for any failure to
perform its obligations under this Agreement due to acts of God, war, riot,
embargoes, acts of civil or military authorities, fire, or floods.
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8.5 WAIVER. The waiver, express or implied, by either party of any breach
of this Agreement by the other party will not waive any subsequent breach by
such party of the same or a different kind.
8.6 HEADINGS. The headings to the sections and exhibits of this Agreement
are included merely for convenience of reference and do not affect the meaning
of the language included therein.
8.7 INDEPENDENT CONTRACTORS. The parties acknowledge and agree that they
are dealing with each other hereunder as independent contractors. Nothing
contained in this Agreement will be interpreted as constituting either party the
joint venturer, employee or agent of the other party or as conferring upon
either party the power of authority to bind the other party in any transaction
with third parties.
8.8 SEVERABILITY. In the event any provision of this Agreement is held by a
court or other tribunal of competent jurisdiction to be unenforceable, the other
provisions of this Agreement will remain in full force and effect.
8.9 ATTORNEY'S FEES. Should either party hereto initiate a legal or
administrative action or proceeding (an "ACTION") to enforce any of the terms or
conditions of this Agreement, the prevailing party (as determined by the court
or other fact-finder) will be entitled to recover from the losing party all
actual costs of the Action, including without limitation attorneys' fees and
costs regardless of any statutory awards or limitations.
8.10 SURVIVAL. SECTIONS 1, 2.2-2.3, 3.4-3.5 AND 4-8 will survive
termination of this Agreement.
8.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original. For purposes hereof, a
facsimile copy of this Agreement, including the signature pages hereto, will be
deemed to be an original.
8.12 ENTIRE AGREEMENT. This Agreement, including the exhibits attached
hereto, constitutes the entire Agreement and understanding between the parties,
and integrates all prior discussions between the parties related to its subject
matter. No modification of any of the terms herein will be valid unless in
writing and signed by an authorized representative of each party.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
VALENCE TECHNOLOGIES, INC. TELCORDIA TECHNOLOGIES, INC.
By: /S/ XXX X. XXXXXX By: /S/ XXXX XXXX
-------------------------- -----------------------------
Name: XXX X. XXXXXX Name: Xxxx Xxxx
Title: CEO Title: CVP and CFO
VALENCE CAYMAN ISLANDS LIMITED VALENCE TECHNOLOGY (NEVADA), INC.
By: /S/ XXX X. XXXXXX By: /S/ XXX X. XXXXXX
-------------------------- -----------------------------
Name: XXX X. XXXXXX Name: XXX X. XXXXXX
Title: CEO Title: CEO
