TECHNOLOGY TRANSFER AGREEMENT
THIS AGREEMENT is made and entered into this 4th day of December, 1998 by and
between Ultralife Batteries, Inc. (hereinafter referred to as "UBI") and PGT
Energy Corporation (hereinafter referred to as "PGT").
WITNESSETH THAT
WHEREAS, UBI and PGT have entered into a Joint Venture Agreement on the 10th day
of October 1998 (hereinafter referred to as "the JV Agreement") in which UBI and
PGT agree to jointly establish a Joint Venture Company in Taiwan, ROC with the
company name Ultralife Taiwan, Inc., (hereinafter referred to as "UTI",) such
that UTI shall engage in the manufacture, distribution, sales and R&D of
lithium-ion solid polymer rechargeable batteries, the parties have further
entered into an amendment thereof on the 4th day of December 1998, (hereinafter
referred to as "the Amendment";) after UTI is legally incorporated , all rights
and obligations of PGT provided in this Agreement shall be immediately assigned
to and assumed by UTI.
WHEREAS, subject to successful establishment and incorporation of UTI as defined
in the JV agreement, UBI and UTI agree to set guidelines so that the current UBI
technology transfer can be conducted most smoothly and efficiently.
WHEREAS, UBI has been engaged in the manufacture, use and sale of lithium solid
polymer rechargeable batteries, and has through its research and development and
general experience acquired certain confidential, proprietary, and technical
information, data, material and know-how, with respect to such batteries.
WHEREAS, UTI desires to obtain from UBI, and UBI is willing to disclose to UTI,
for the use of its current technical information, data, material and know-how
for the purpose of developing, manufacturing, and selling such batteries on the
terms and conditions set forth herein;
WHEREAS, UBI desires UTI, as an affiliate of UBI, to develop and manufacture for
UBI such batteries, using UBI's current lithium ion solid polymer technology,
for sale and distribution by UBI in sales regions as defined in the JV agreement
by the parties; and
NOW, THEREFORE, in consideration of the covenants and mutual benefits and
obligations contained herein, the parties agree as follows:
Article 1 - Definitions:
As used throughout this Agreement, the following terms shall have the
meanings indicated:
1.1 "UBI" shall mean Ultralife Batteries, Inc., as hereinafter defined;
1.2 "UTI" shall mean Ultralife Taiwan , Inc., as hereinafter defined;
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1.3 "Products" shall mean Solid Polymer Battery system consisting of but not
limited to UBI's current LiMn2O4 based cathode, graphite anode and UBI's
proprietary solid polymer separator;
1.4 "Technology" shall mean all necessary technical information , data,
material, know-how, and designs of machinery owned, developed or
controlled by UBI at the effective date, including any patent or patent
applications in any way related to the manufacture or use of the Product,
for:
1.4.1 the design, manufacture, testing, failure analysis, reliability, use and
sale of the Product;
1.4.2 the design and layout of a plant for the manufacture and use of the
Product;
1.5 "UBI's plant" shall mean UBI's plant located at Newark, New York;
1.6 "UTI's plant" shall mean UTI's plant located at Science-Based Industrial
Park,Hsinchu,Taiwan, ROC;
1.7 "Services" shall mean plant supervision, equipment evaluation , equipment
installation and hook-up to utilities provided by UTI, set-up operation,
and bring up operation assisted by UBI for UTI at UTI's plant pursuant to
this Agreement;
1.8 "Effective Date " shall mean the date of execution of this Agreement;
1.9 "TTC" shall mean technology transfer coordinator for both parties.
Article 2-Technology Transfer and Disclosure
2.1 Initial Disclosure of Technology
Within 60 days after the incorporation of UTI, UBI shall furnish to UTI in
English, duplicate copies of the following Technology:
2.1.1 Product specification. The specification shall include the most advanced
available technology developed by UBI;
2.1.2 Cost analysis for the Product specified on 2.1.1;
2.1.3 Chemical and raw material list, specification, and quantities of
consumable for the production of the Product;
2.1.4 Detailed Product process flow, process recipe and inspection criteria for
UBI's Product;
2.1.5 UBI's current QA(quality assurance) laboratory layout and instrument list;
2.1.6 Product reliability testing check list , procedures and conditions;
2.1.7 UBI's most current Product process equipment list, specifications,
drawings, blueprints, quotations and the list of suppliers for such
equipment;
2.1.8 De-ionized or reverse osmosis water specifications and dry room
specification for the production of the Product;
2.1.9 Technical information relating to devices, instruments, computer systems
used for the design and development efforts;
2.1.10 Any recommendations for the selection and the improvement of the current
production equipment, and the plant layout for the production capacity of
approximately 2- 4 million watt-hours per month.
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2.2 Other Assistance:
UBI shall provide the following efforts for the efficient transfer of the
Technology:
2.2.1 Assistance in obtaining such special tooling and equipment as may be
necessary;
2.2.2 Negotiation to obtain all the necessary technology licences and
authorizations in the most cost-effective manner;
2.2.3 Obtaining quality control of parts and materials offered by suppliers of
UBI;
2.2.4 Advise and consultation on the selection of key personnel;
2.2.5 Advise and special interpretation for the specifications and other
materials supplied by UBI;
2.2.6 Samples shall be supplied in accordance with the current UBI sample
policy;
2.2.7 Assistance in evaluation and development of equipment specifications and
requirements;
2.2.8 Any other assistance which may be required or desired by UTI and which UBI
is able and willing to render in order to implement the purpose of this
Agreement.
2.3 Training
UBI shall provide up to 100 man-days of instructional training and 100
man-days of on-the-job experience to engineers from UTI at UBI's facilities.
These training sessions shall be arranged at reasonable intervals and convenient
times mutually agreed by the parties.
2.4 Technical Assistance
UBI shall provide reasonable efforts to assist UTI in the start up of the
manufacturing of the product, including but not limited to the following:
2.4.1 The definition, specification development, selection of suppliers and the
delivery schedule for the equipment and materials;
2.4.2 Assistance in the integrating of all equipment and equipment systems at
UTI's plant for all equipment installation, hook-ups, qualification and
acceptance, module process development, pilot run, reliability test by
having UBI's TTC coordinate the technology transfer at UBI's production
facility in Newark, New York for a period of 4-6 months after the signing
of this agreement. At the end of this period, UBI's TTC will relocate to
Taiwan and will become an employee of UTI as UTI's TTC. UBI will then
designate another employee to serve as UBI's TTC. Additional UBI personnel
shall assist the TTC as needed and mutually agreed by the parties. UTI is
responsible for all transportation, hotel and board expenses for this
technical assistance.
2.4.3 Assistance in providing technical know how and experience in developing
products meeting potential customers' specification.
2.5 Observance of Instruction
Each party shall cause its engineers or trainees dispatched to the other
party, as the case may be, to observe the other party's regulations,
directions and instructions
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while on the other party's premises in order to prevent accidents and
other hazards. Each party shall be liable for any injury or damage caused
to the other party or its employees on account of any acts or omissions of
its engineers or trainees, as the case may be, which are contrary to the
other party's regulations, directions and/or instructions and shall hold
the other party harmless from and shall indemnify the other party for any
claim by a third party with respect to injury and/or damage caused to that
third party on account of any such acts or omissions.
2.6 Handling of Casualties
In the event that either party's engineers or trainees, as the case may
be, dispatched to the other party become ill or are injured, the other
party shall immediately notify the party dispatching such engineers or
trainees, and shall arrange for proper medical care and hospitalization,
if necessary. Further, in the event that on account of illness or injury
the said engineers or trainees are unable to provide technical assistance
or receiving training, as the case may be, the other party shall
immediately notify the party dispatching such engineers or trainees, and
the parties shall mutually determine the appropriate action to be taken.
Article 3 - Technology Bonus
In consideration for the transfer and disclosure of the Technology
pursuant to Article 2, UTI shall pay to UBI a technology bonus of US$2,500,000
as set forth in the Joint Venture Agreement.
Article 4 - Improvement
4.1 During the term of this agreement, UBI agrees to periodically disclose and
exchange with UTI any improvement to the technology or product developed
or acquired by UBI during the term hereof (except as provided in 4.3
below). The information exchange shall be limited to technology related to
yield improvement, energy density, cycle life, fade optimization, shelf
life improvement, stand life improvement, temperature improvement, cost
reduction, and safety.
4.2 In the event that any such improvement to the Technology or Product is
patenable and should any patent be applied for during the term of this
agreement by either party, the patent shall be owned by the respect party,
and the other party shall be entitled to have the free access of such
improvement.
4.3 UTI shall be invited to participate in the R&D efforts of UBI. The R&D
efforts may include the development of new materials, tolerance for the
extremely high and low temperatures, new technology in packaging
materials, aerospace cells, etc. UTI shall have free access to new
technology if UTI contributes, in advance of the development, 50% of the
cost or efforts agreed by partners for such development.
Article 5 - Patent Infringement
UBI represents that, as of the date of this agreement and to the best of
its knowledge, its current technology does not infringe on any U.S. or foreign
patents. For the duration of this agreement, UBI will assist UTI in the defense
of any action against UTI by a third
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party claiming patent infringement. UBI's assistance will be in the form of
transfer of information supportive of UTI's defense. In the event UBI is alleged
to infringe on the patent of a third party during the duration this agreement,
UBI will use reasonable efforts to extend to UTI, as its affiliate, the benefits
of any settlement provisions that would insulate UTI from a separate action by
such third party.
Article 6 - Return of Technology
This agreement and the authorization granted from UBI to UTI for the
Manufacturing of the Product are automatically terminated if UTI is ceased to
exist or during the terms of this Agreement, the JV Agreement is terminated. UTI
shall promptly return to UBI all written information concerning and relating to
the product specification, equipment design and specification, plant lay-out,
quality control procedures, business development plan, and other written
confidential information that is obtained from UBI.
Article 7 - Notice
Any and all notices given by either party to the other party shall be in
writing sent by facsimile transmittal (with same day mailed confirmation) or by
prepaid registered airmail (return receipt requested) , and shall be deemed
served on the date actually received by the other party. Such notices shall be
addressed respectively:
As to UBI: Ultralife Batteries, Inc.
160 Summit Avenue, Montvale, New Jersey 07645 U.S.A.
Attention: Bruce Jagid, CEO
Fax. No.: 201-930-1144
As to UTI: Ultralife Taiwan , Inc.
5th Fl., No.6 Lih-sing Road, Science-Based Industrial Park,
Hsinchu, Taiwan, ROC
Attention: R.T. Lo, President
Fax. No.: 886-3-5785555
Or to any other address or Fax. No. which the parties may have subsequently
communicated to the other party in writing.
Each party hereto agrees that upon receipt of any notice which is designated as
an "Official Notice" for the other party, it shall confirm receipt of such
official notice by return facsimile to the other party.
Article 8 - Waiver
No waiver by either party of any breach of any of the terms or conditions herein
provided to be performed by the other party shall be construed as a waiver of
any subsequent breach, whether of the same of any other term or condition
hereof.
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Article 9 - Severability
If any provision of this agreement shall, to any extent, be unlawful, invalid or
unenforceable, the remainder of this Agreement shall not be affected thereby and
shall be lawful, valid and enforceable to the fullest extent permitted by law;
provided, however, that if such unlawfulness, invalidation or unenforceability
substantially injures the rights and interests of either party hereunder, the
parties hereto shall re-negotiate this Agreement in good faith.
Article 10 - Term of Agreement
The term of this agreement shall be three (3) years. It may be renewed for an
additional two (2) year period upon the mutual consent of both parties.
The validity, construction and performance of this Agreement shall be
determined, construed, and interpreted in accordance with the laws of the
Republic of China. IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year hereinabove set forth.
Ultralife Batteries, Inc. PGT Energy Corporation
BY: /s/ Bruce Jagid BY: /s/ J.F. Hsu
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Name: Bruce Jagid Name: J.F. Hsu
Title: Chairman & Chief Executive Officer Title: Chairman
Date: 12/4/98 Date: 12/4/98
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