Development and License Agreement
This Development and License Agreement (the "Agreement") is entered
into as of November 15, 2003 (the "Effective Date") by and between C and T Co.
Inc., ("C&T") a corporation incorporated under the laws of the Province of
Ontario with its principal offices located at 100 Caster Avenue, Woodbridge,
Ontario, Canada, L4L 5Y9; and AXION POWER CORPORATION ("Axion"), a corporation
incorporated under the laws of the Province of Ontario with offices located at
100 Caster Avenue, Woodbridge, Ontario, Canada, L4L 5Y9.
WHEREAS, C&T has developed to the laboratory stage the technology, know-how and
prototypes for a hybrid lead-carbon battery/capacitor, sometimes referred to as
the E3Cell, as more particularly described and defined on Schedule A (the
AND WHEREAS, Axion has been established in order to bring the Technology to the
market, and to do so, it is necessary for Axion to obtain from C&T sole
exclusive world-wide licenses to the Technology so that Axion, , may (a) Develop
(as such term is hereinafter defined), manufacture and distribute, and (b)
sublicense assembly or manufacturing of, a commercial version of the Technology
(the "Axion Battery"), and C&T is willing to grant to Axion such licenses on the
terms and conditions set forth in this Agreement;
AND WHEREAS, Axion desires to engage C&T to perform additional research and
development work in order to develop enhancements and refinements to the
Technology (the "Enhancements"), and collaborate with Axion in the development
and Technical Commercialization of the Axion Battery, incorporating enhanced
versions of C&T's Technology Intellectual Property and lab prototypes, and C&T
is willing to perform such development services, and grant to Axion additional
licenses to use the Enhancements, on the terms and conditions set forth in this
AND WHEREAS, C&T has developed and, under the Development Effort, will be
developing know-how, tools, techniques, processes and methods to support
Technical Commercialization of the Base C&T Technology and the Enhancements and
Axion desires to obtain such Technical Commercialization Know-How from C&T by
way of technology transfer and C&T is willing to engage in such technology
transfer on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, and for other valuable consideration, the receipt and sufficiency of
which the parties hereby acknowledge, the parties agree as follows:
As used in this Agreement, including the recitals and definitions:
1.1 "Affiliate" of a party means any entity directly or indirectly controlling,
controlled by, or under common control with such party, where "control" means
(a) ownership of more than fifty percent (50%) of the equity or beneficial
interests of such entity or party, or (b) , actual control of the day-to-day
operations of such entity or party.
1.2 "Application Areas" has the meaning set out in Schedule A.
1.3 "Axion Battery" means a Business Commercialized version of the
1.4 "Axion Documentation" means the Documentation accompanying or
pertaining to the Axion Know-How developed by or on behalf of Axion.
1.5 "Axion Know-How" means the know-how, trade secrets, applications,
processes, techniques and methods Developed by or on behalf of Axion.
1.6 "Axion Project Manager" has the meaning set out in Section 4.1(d)
1.7 deleted .
1.8 "Base C&T Technology" means the Technology, as existing as of the Effective
Date, any existing Derivatives thereof and, for more certainty, the Technology,
which is currently in the laboratory stage and which contains all of the base
elements for future Technical Commercialization.
1.9 "Beta End Date" means completion of the key milestone of the initial Project
Plan when the Technology is Commercializable.
1.10 "Beta Testing" means a process by which a testing party identifies problems
with a particular product by confirming or validating that it works in
accordance with the applicable Specifications (which specifications are to be
agreed upon within sixty (60) days of this Agreement) as it was intended in
situations appropriate to its targeted operating environment..
1.11 "Business Commercialization" means the efforts of Axion in such areas as
marketing, contractual negotiations, sales and production, to bring the
Technology to the marketplace.
1.12 "C&T Documentation" means the Documentation accompanying or pertaining to
the Base C&T Technology, the Enhancements, and the Technical Commercialization
1.13 "C&T Key Scientists" means those scientists whose names and details are
set out on Schedule E.
1.14 "C&T Know-How" means all proprietary inventions, technology, trade secrets,
research notes, records and test results, all primary and secondary reference
materials, including those authored by third parties, in all forms, including in
electronic format, and any physical, chemical or biological material, or other
information, owned or acquired with right to sublicense by C&T or any Affiliate
of C&T, which, , are necessary or useful to Axion in the development,
formulation, manufacture, use or sale of the Axion Battery.
1.15 "C&T Patent Rights" mean the rights under patents and patent applications,
both foreign and domestic, which cover hybrid lead-carbon battery/capacitor