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                                                                   EXHIBIT 10.39

                            PATENT LICENSE AGREEMENT

                                     BETWEEN

                          TELCORDIA TECHNOLOGIES, INC.

                   RUTGERS, THE STATE UNIVERSITY OF NEW JERSEY

                                       AND

                        SUPERCONDUCTOR TECHNOLOGIES INC.

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         This Agreement, effective on the date the last party signs it (the
"EFFECTIVE DATE"), is by and between TELCORDIA TECHNOLOGIES, INC., a Delaware
corporation , having an office at 445 South Street, Morristown, New Jersey
07960, U.S.A. ("TELCORDIA"), RUTGERS, THE STATE UNIVERSITY OF NEW JERSEY, an
academic institution organized under the laws of the State of New Jersey, having
an office at 3 Rutgers Plaza, New Brunswick, NJ 08091 ("Rutgers") and
SUPERCONDUCTOR TECHNOLOGIES INC., a Delaware corporation, having an office at
460 Ward Drive, Santa Barbara, CA 93111 U.S.A ("STI").

                                    RECITALS

         Whereas, TELCORDIA is co-owner of U.S. Patent No. 5,015,492 entitled
"Method and Apparatus for Pulsed Energy Induced Vapor Deposition of Thin Films"
("Licensed Patent");

         Whereas, Rutgers is the other co-owner of the Licensed Patent and has
made Telcordia the licensing agent with respect to the Licensed Patent;

         Whereas, TELCORDIA has offered STI a license to practice certain claims
of the Licensed Patent and a covenant not to be sued with respect to other
claims of the Licensed Patent; and,

         Whereas, STI, after evaluating its needs, has elected to accept a
license to practice certain claims of the Licensed Patent and a covenant not to
be sued with respect to other claims of the Licensed Patent.

         Now, therefore, in consideration of the mutual covenants and premises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

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                             ARTICLE I - DEFINITIONS

1.1      Terms in this Agreement (other than the names of parties, Article
         headings, and the warranty clauses) that are set forth in all uppercase
         letters have the meanings established for them in the succeeding
         paragraphs of this Article I.

1.2      An "AFFILIATE" of a party shall mean any entity that is owned or
         controlled by the party, or owns or controls the party (such entity
         being hereinafter called the "Parent"), or any entity owned or
         controlled by the Parent of the entity at the time in question. In the
         case of a corporation or similar entity, ownership, direct or indirect,
         of capital stock or other ownership interest representing more than
         fifty percent (50%) of the voting power for the election or appointment
         of directors, or person performing similar functions, shall constitute
         ownership or control thereof.

1.3      "LICENSED PATENT" shall mean (i) U.S. Patent No. 5,015,492 titled
         "Method and Apparatus for Pulsed Energy Induced Vapor Deposition"; (ii)
         any continuation, continuation-in-part, division, reissue,
         reexamination, extension, renewal or substitute of the `492 patent;
         (iii) any patent or application claiming priority to the application
         from which the `492 patent issued; and (iv) any foreign (non-U.S.)
         counterpart patent or patent that claims priority to or from any of the
         patents or patent applications specified in subsections (i)-(iii)
         above.

1.4      "NET SALES PRICE" shall mean:

         1.4.1    for a LICENSED PRODUCT that is sold or leased, the sales price
                  agreed to between STI and the third party buyer in a bona
                  fide, arm's length transaction, net of returns, allowances,
                  trade discounts, bad debts and any other amounts included in
                  the calculation of "net sales" under generally accepted
                  accounting principles. Such NET SALES PRICE shall not include
                  packing, shipping, insurance charges, import, export, excise,
                  sales and value added taxes, and customs duties.

         1.4.2    for a LICENSED PRODUCT OTHERWISE DISPOSED OF, the average
                  sales price, agreed to between STI and third party buyers in
                  bona fide, arm's length transactions (net of returns,
                  allowances, trade discounts, bad debts and any other amounts
                  included in the calculation of "net sales" under generally
                  accepted accounting principles) for similar LICENSED PRODUCTS
                  sold within ninety (90) days prior to the date of such OTHER
                  DISPOSITION OF. Such NET SALES PRICE shall not include
                  packing, shipping, insurance charges, import, export, excise,
                  sales and value added taxes, and customs duties.

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         1.4.3    for LICENSED PRODUCTS made by or on behalf of STI, but not
                  sold, leased or OTHERWISE DISPOSED OF in the event of
                  expiration or termination of this Agreement, shall be the
                  average NET SALES PRICE as defined in Section 1.4.1 for
                  similar LICENSED PRODUCTS sold within ninety (90) days prior
                  to the date of such expiration or termination.

1.5      "LICENSED PRODUCT" shall mean a cryogenic receiver front-end device for
         wireless communications networks which contains a thin film radio
         frequency filter manufactured using high-temperature superconducting
         materials and either pulsed energy deposition or pulsed laser
         deposition. A list of the current LICENSED PRODUCTS of STI, is set
         forth as Exhibit 1. Additional LICENSED PRODUCTS may be added to this
         list by STI upon written notice to TELCORDIA.

1.6      "LICENSED EQUIPMENT" shall mean an apparatus performing pulsed energy
         deposition and/or pulsed laser deposition claimed in the LICENSED
         PATENT.

1.7      "OTHERWISE DISPOSE OF," "OTHERWISE DISPOSED OF", "OTHERWISE DISPOSES
         OF" and "OTHER DISPOSITION OF" as used in conjunction with LICENSED
         PRODUCT shall mean any transaction that is not an arms length sale,
         lease or disposition to a third party of a LICENSED PRODUCT in
         consideration for products and/or services from such third party. These
         phrases shall not include any LICENSED PRODUCTS which are (a)
         destroyed, damaged or defective or (b) on loan to third parties for
         testing, evaluation or field trials.

1.8      "STI" shall mean SUPERCONDUCTOR TECHNOLOGIES INC. and any other company
         or entity that is currently an AFFILIATE but only for so long as it
         remains an AFFILIATE. "STI" shall also include AFFILIATES subsequently
         acquired by STI, but the licenses and covenants not to sue granted
         herein with respect to such subsequently acquired AFFILIATES shall only
         be with respect to LICENSED PRODUCTS made by or on behalf of, sold,
         offered for sale, leased, imported used or OTHERWISE DISPOSED OF by
         such subsequently acquired AFFILIATES after such acquisition. The
         release granted to STI herein is only with respect to SUPERCONDUCTOR
         TECHNOLOGIES INC. and current AFFILIATES of SUPERCONDUCTOR
         TECHNOLOGIES, INC. as of the EFFECTIVE DATE.

1.9      "LICENSOR" shall mean either Telcordia Technologies, Inc. or Rutgers
         University, The State University of New Jersey.

1.10     "LICENSORS" shall mean Telcordia Technologies, Inc. and Rutgers
         University as joint owners of the Licensed Patent.

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                    ARTICLE II - GRANT OF LICENSE AND RELEASE

2.1      LICENSORS hereby grant to STI, for the term of this Agreement, a
         worldwide and nonexclusive license under the method claims of the
         LICENSED PATENT to make, have made, use, lease, offer to sell, sell,
         distribute, import or OTHERWISE DISPOSE OF LICENSED PRODUCTS and to use
         LICENSED EQUIPMENT to manufacture LICENSED PRODUCTS.

2.2      The license granted in Section 2.1 hereof does not include: any right
         to grant sublicenses to others provided, however, that nothing herein
         will prevent STI from (a) using resellers, distributors, or AFFILIATES
         for distribution of LICENSED PRODUCTS made by STI or its contract
         manufacturers pursuant to STI's have made rights and bearing an STI
         brand and (b) to grant sublicenses to third party suppliers in exercise
         of STI's have made rights.

2.3      LICENSORS covenant not to sue STI for infringement of the apparatus
         claims of the LICENSED PATENT based on the manufacture by or on behalf
         of STI of LICENSED EQUIPMENT or STI'S use of LICENSED EQUIPMENT to
         manufacture LICENSED PRODUCTS; provided that STI has made all payments
         in a timely manner as required by Article III of this Agreement.

2.4      STI acknowledges and agrees that nothing in this Agreement shall be
         construed as granting to STI any right or license, express or implied,
         under any patent owned or controlled by LICENSORS, except for the
         LICENSED PATENT, and that nothing in this Agreement shall restrict
         either LICENSOR from asserting any of its patents, except for the
         LICENSED PATENT, against STI and STI's customers, mediate and immediate
         (including resellers, distributors, and end users) in the event any
         product of STI, including the LICENSED PRODUCT or LICENSED EQUIPMENT,
         should infringe any such patent. STI acknowledges and agrees that
         nothing in this Agreement shall be construed as granting to STI any
         right to sell, lease or OTHERWISE DISPOSE OF any LICENSED EQUIPMENT.

2.5      STI represents that, prior to the EFFECTIVE DATE, it has not, sold,
         leased, or OTHERWISE DISPOSED OF any LICENSED PRODUCTS, including but
         not limited to LICENSED PRODUCTS, other than to the extent disclosed in
         Exhibit 2. Such disclosure shall include the identity and quantity of
         all LICENSED PRODUCTS sold, leased or OTHERWISE DISPOSED OF prior to
         the EFFECTIVE DATE. Subject to the forgoing representation and upon
         payment to LICENSORS of the amount specified in Section 3.3, each
         LICENSOR, for itself, its successors, and assigns, hereby releases and
         forever discharges STI (defined in this Section 2.5 as Superconductor
         Technologies Inc. and its current AFFILIATES as of the EFFECTIVE DATE),
         from any and all causes of action, claims, and demands whatsoever in
         law or in equity arising or claimed to arise out of any infringement or
         asserted infringement of the LICENSED PATENT by any LICENSED PRODUCTS
         sold, leased, or OTHERWISE DISPOSED OF by STI at any time prior to the
         EFFECTIVE DATE of this Agreement. This release shall not apply to any
         infringement of any

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         patent owned or controlled by either LICENSOR except for the LICENSED
         PATENT. The release provided by this paragraph does not provide a
         release for infringement of the LICENSED PATENT by any entity that
         becomes an AFFILIATE of STI after the EFFECTIVE DATE of this Agreement.

                ARTICLE III - CONSIDERATION, REPORTS AND RECORDS

3.1      STI shall pay LICENSORS within ten (10) days of the EFFECTIVE DATE of
         this Agreement a non-refundable initial license fee of ________________
         ________________.

3.2      STI shall also pay LICENSORS within ten (10) days of the EFFECTIVE DATE
         of this Agreement a non-refundable initial covenant fee of
         __________________________________.

3.3      STI shall also pay LICENSORS within ten (10) days of the EFFECTIVE DATE
         of this Agreement a non-refundable fee of _____________________________
         for the release provided in Section 2.5.

3.4      STI shall pay to LICENSORS a royalty payment of _______________________
         of the aggregate NET SALES of LICENSED PRODUCTS manufactured, sold,
         leased or OTHERWISE DISPOSED OF in the United States by STI after the
         EFFECTIVE DATE. STI shall pay LICENSORS a minimum annual royalty of
         _______________________, which will be deemed advance payment of (and
         credited towards) royalties owing for LICENSED PRODUCTS sold, leased or
         OTHERWISE DISPOSED OF by STI during such year. The first minimum annual
         royalty of _________________________ shall be due and payable within
         thirty (30) days of the EFFECTIVE DATE. Subsequent minimum annual
         royalties of ______________________ are due January 1st for each year
         thereafter. LICENSORS shall not be obligated to refund any portion of
         the minimum annual royalty even if the actual royalty due is less than
         the annual minimum royalty.

3.5      STI shall pay LICENSORS an annual covenant fee of _____________________
         which will be deemed payment for the covenant not to sue provided
         pursuant to Section 2.3 of this Agreement for LICENSED EQUIPMENT
         manufactured by or on behalf of STI during such year. The first annual
         covenant fee of _____________________________ shall be due and payable
         within thirty (30) days of the EFFECTIVE DATE. Subsequent annual
         covenant fees of ____________________________ are due January 1st for
         each year thereafter. LICENSORS shall not be obligated to refund any
         portion of the covenant fee.

3.6      A LICENSED PRODUCT shall not be subject to royalty under Section 3.4 if
         the LICENSED PRODUCT is sold, leased or OTHERWISE DISPOSED OF to a
         third party, if and to the extent that (i) such third party is licensed
         by either LICENSOR under the LICENSED PATENT to have such

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         LICENSED PRODUCT made, (ii) such third party advises STI, in writing
         prior to or promptly after the time of such sale, lease or OTHER
         DISPOSITION OF such LICENSED PRODUCTS, that it is exercising its own
         have made license from a LICENSOR under the LICENSED PATENT, and (iii)
         STI promptly provides written notice to LICENSORS of the exercise of
         such have made license. LICENSORS shall include a substantially similar
         clause to this Section 3.6 in all other licenses LICENSORS provide to
         others under the LINCENSED PATENT.

3.7      STI shall furnish LICENSORS within forty-five (45) days following the
         end of each calendar quarter thereafter, a report in writing and signed
         by an executive level officer of the company specifying separately by
         model and type of LICENSED PRODUCT the total quantity and NET SALES of
         all LICENSED PRODUCTS manufactured, sold, leased or OTHERWISE DISPOSED
         OF in the United States by STI, the amount of royalties payable
         thereon, all exclusions from royalties pursuant to Section 3.6 and the
         total royalties due LICENSORS during the preceding three calendar
         months. In addition, each report shall also include the total aggregate
         royalties paid to LICENSORS and cumulative total of the NET SALES of
         all LICENSED PRODUCTS made by STI and sold, leased or OTHERWISE
         DISPOSED OF. Each such report shall be accompanied by payment in full
         of the royalties due pursuant to Section 3.4 of this Agreement.

3.8      LICENSED PRODUCTS shall be considered sold, leased or OTHERWISE
         DISPOSED OF when such transaction is recognizable in accordance with
         STI's revenue recognition policy then in effect provided such policy is
         in accordance with generally accepted accounting policies. LICENSED
         PRODUCTS placed into field trials with potential customers shall not be
         considered sold, leased or OTHERWISE DISPOSED OF unless and until the
         potential customer agrees to purchase or lease or otherwise acquire
         such LICENSED PRODUCTS. Any LICENSED PRODUCTS made but not sold, leased
         or OTHERWISE DISPOSED OF, as of the date of termination of this
         Agreement shall be subject to royalty under Section 3.4 on the date of
         termination of this Agreement unless STI certifies in writing that it
         has destroyed such LICENSED PRODUCTS. Conversion to United States
         dollars of the NET SALES PRICE on sales, lease or OTHER DISPOSITION
         made in currencies other than United States dollars shall be at the
         prevailing rate for bank cable transfers, as quoted by STI's bank on
         the date of such sale, lease of OTHER DISPOSITION OF LICENSED PRODUCTS.

3.9      STI shall keep full, clear and accurate records with respect to all
         LICENSED PRODUCTS and LICENSED EQUIPMENT for four (4) years from the
         date such product is sold, leased, used or OTHERWISE DISPOSED OF.
         LICENSORS shall have the right to appoint a third party auditor(s)
         reasonably acceptable to STI to make an examination, during normal
         business hours, no more than once annually of all technical
         information, records and accounts bearing upon the selection of
         LICENSED PRODUCTS and LICENSED EQUIPMENT, sales, lease, use or OTHER
         DISPOSITION OF LICENSED PRODUCTS and LICENSED EQUIPMENT, the amount of
         royalty payable to LICENSORS hereunder and the basis of the reports
         required in Section 3.7. STI shall use

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         reasonable efforts to provide facilities and assistance to the third
         party auditor during normal business hours subject to their prior
         execution of a confidentiality agreement reasonably acceptable in form
         and substance to STI. LICENSORS shall complete the audit within a
         reasonable time and without undue interference or burden of STI. Within
         thirty (30) days of receiving an invoice STI shall pay any unpaid
         royalties due unless the subject of a bona fide dispute. STI shall then
         have 90 days to present supporting information to the auditor(s) who
         shall review and consider such information. STI shall pay LICENSORS
         their reasonable expenses in retaining such third party auditor for
         such examination which discloses an underpayment of royalties of five
         percent (5.0%) or more due LICENSORS for the audited period. All
         materials reviewed or produced in connection with such audit, together
         with all reports or other information relating to the manufacture, sale
         or distribution of LICENSED PRODUCTS, shall be deemed to be the
         Confidential Information of STI.

3.10     All payments pursuant to this Agreement shall be payable to Telcordia
         Technologies, Inc. and wire transferred to:

                  Chase Manhattan Bank
                  New York, New York

         The above payment instructions may be modified at any time by TELCORDIA
         upon reasonable written notice to STI. All royalty reports shall be
         sent to TELCORDIA at the address set forth in Section 8.3.

3.11     Past due payments hereunder shall be subject to a late payment charge,
         compounded daily, and calculated at an annual rate of seven percent
         (7.0%)over the lowest prime rate available in New York City, as
         published by The Wall Street Journal on the first Monday (or next
         business day if such Monday is a holiday) following the payment due
         date. If the amount of such charge exceeds the maximum permitted by law
         for such charge, such charge shall be reduced to such maximum amount.
         If STI fails to make any payment set forth herein (except any amounts
         that are the subject of a bona fide dispute), STI shall pay LICENSORS
         all reasonable expenses, including attorney fees, incurred by LICENSORS
         in collecting such payment.

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3.12     A final report and payment shall be sent to LICENSORS within thirty
         (30) days after termination or expiration of this Agreement. In
         addition to the requirements of Section 3.7, the final report shall
         report on all LICENSED PRODUCTS made but not sold, leased or OTHERWISE
         DISPOSED OF as of the date of termination or expiration of this
         Agreement and shall pay the balance of the license fee required
         pursuant to Section 3.4 on all such LICENSED PRODUCTS.

     ARTICLE IV - DISCLAIMER, LIMITED WARRANTY, LIMITATION OF LIABILITY AND
                                 INDEMNIFICATION

4.1      Nothing contained in this Agreement shall be construed as:

         a)       a requirement to maintain the LICENSED PATENT or any other
                  patent owned by LICENSORS.

         b)       a warranty or representation as to the validity,
                  enforceability or scope of the LICENSED PATENT or any other
                  LICENSOR patent;

         c)       a warranty or representation that any manufacture, offer for
                  sale, sale, lease, use or importation of a LICENSED PRODUCT
                  will be free from infringement of patents or other
                  intellectual property rights, other than the LICENSED PATENT
                  under the conditions set forth herein;

         d)       an agreement to bring or prosecute actions or suits against
                  third parties for infringement of the LICENSED PATENT;

         e)       conferring any right to use, in advertising, publicity or
                  otherwise, any name, trade name, trademark, service mark, or
                  any contraction, abbreviation or simulation thereof except as
                  specifically set forth in Section 8.2;

         f)       an obligation to furnish any information or services;

         g)       conferring by implication, estoppel or otherwise any license
                  or other right under any patent or other intellectual property
                  rights, except as expressly granted herein; or

         h)       any arrangement or understanding that either Party will make
                  any purchase, lease, examination or test of, or give any
                  approval with respect to, any product.

4.2      (a) Each LICENSOR warrants that it has the right to grant the license
         granted herein and to enter into this Agreement and that it owns a
         one-half undivided interest in and to the LICENSED PATENT. Each
         LICENSOR further warrants that it has not made and will not make any
         commitments to third parties that are inconsistent with or in
         derogation of the rights licensed to STI hereunder and that the

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         LICENSORS together own all right, title and interest in and to the
         LICENSED PATENT. STI warrants that it has the right to enter into this
         Agreement.

         (b) Each LICENSOR makes no representations, extends no warranties of
         any kind other than those set forth in Section 4.2(a), and assumes no
         responsibility or liability whatsoever with respect to the manufacture,
         offer for sale, sale, lease, use or importation of any LICENSED
         PRODUCT, LICENSED EQUIPMENT or any portion thereof.

         (c) THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES,
         EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
         WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE,
         EVEN IF EITHER LICENSOR HAS BEEN MADE AWARE OF SUCH PURPOSE, AND THE
         WARRANTY AGAINST INFRINGEMENT OF PATENTS OR OTHER INTELLECTUAL PROPERTY
         RIGHTS.

         (d) OTHER THAN FOR A BREACH OF A LICENSOR'S WARRANTIES AND COVENANTS
         EXPLICITLY SET FORTH HEREIN, LICENSOR SHALL NOT BE LIABLE FOR ANY
         DAMAGES, NOR SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT DAMAGES,
         INCLUDING ANY LOST PROFITS OR OTHER INCIDENTAL OR CONSEQUENTIAL
         DAMAGES, ARISING OUT OF THIS AGREEMENT, INCLUDING THE USE OR INABILITY
         TO USE ANY LICENSED PRODUCT OR ANY TECHNOLOGY DESCRIBED IN THE LICENSOR
         PATENT. LICENSOR'S LIABILITY HEREUNDER, IF ANY, SHALL NOT EXCEED THE
         PAYMENTS RECEIVED HEREUNDER.

         (e) STI acknowledges that its decision to enter into this Agreement is
         with the full knowledge of the foregoing.

4.3      STI shall indemnify, hold harmless and defend each LICENSOR and its
         AFFILIATES, (at STI's own expense), from and against any and all direct
         losses, damages, fines, claims, suits, actions or proceedings, and any
         judgment, settlement, compromise or resolution for damages or any other
         relief resulting therefrom, to the extent based on any allegation of
         any direct losses or damages, arising out of or in connection with the
         manufacture, use, lease, sale, offer for sale, distribution,
         importation or possession of any LICENSED PRODUCT or LICENSED EQUIPMENT
         made by STI or made on behalf of STI in exercise of its have made
         rights, regardless of the legal, equitable or factual basis thereof;
         provided, however, that STI shall not have any indemnification
         obligations under this Section 4.3 if and to the extent such losses,
         damages, fines, claims suits, actions or proceedings result from or
         arise out of (a) any material breach by a LICENSOR of any of its
         warranties set forth in Section 4.2 herein or (b) the validity or
         enforceability of the LICENSED PATENT. STI shall have no obligations
         under this Section 4.3, unless a LICENSOR provides STI with prompt
         written notification of any claim not independently received by STI;
         (ii) provides STI with all reasonable

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         information and assistance to defend or settle the claim; and (iii)
         grants STI authority and sole control of the defense or settlement of
         such claim, provided that STI shall consult with LICENSOR and LICENSOR
         shall have a right to reasonably object to any defense or settlement
         that affects the interpretation, validity or enforceability of the
         LICENSED PATENT.

                   ARTICLE V - PATENT MARKING; CONFIDENTIALITY

5.1      STI shall mark or have marked with the number of the LICENSED PATENT
         all LICENSED EQUIPMENT made by or on behalf of STI.

5.2      Each party acknowledges that it will acquire information and materials
         from the other party and knowledge about the business, products,
         customers, clients and suppliers of the other party and that all such
         knowledge, information and materials (collectively "Confidential
         Information") constitute the confidential information and/or trade
         secrets of the disclosing party. Confidential Information further
         includes the existence, terms and conditions of this Agreement.
         Confidential Information will not include any information that: (i) is
         received by the receiving party from a third party without restriction
         on use or disclosure; (ii) the disclosing party gives to third parties
         without restriction on use or disclosure; (iii) is previously known to
         the receiving party as evidenced in writing; or (iv) is independently
         developed by employees of the receiving party without access to the
         Confidential Information. Each party agrees to use reasonable efforts
         to (i) hold all such Confidential Information in confidence; (ii) not
         disclose such Confidential Information to any third party other than
         AFFILIATES; and, (iii) use such Confidential Information for any
         purpose other than for purposes set forth in this Agreement.
         Confidential Information may be disclosed: (i) to either party's
         attorneys, financial institutions, accountants or other professional
         advisors in the course of seeking professional advice provided an
         obligation of confidence exists; (ii) to the extent required by a court
         or government agency, or by applicable law, order, rule or regulation
         provided reasonable notice is provided to the disclosing party prior to
         such disclosure to such court or governmental agency; and, (iii) to
         entities with which either party is discussing a proposed sale of its
         stock, sale of all or substantially all of its assets, assignment of
         the Licensed Patent, obtaining financing or entering into a partnering
         arrangement, provided that an entity to whom the terms of this
         Agreement is to be disclosed under this clause (iii) has entered into a
         confidentiality agreement sufficient in scope to protect the parties'
         rights and interests hereunder.

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                 ARTICLE VI - TERM AND TERMINATION/CANCELLATION

6.1      The term of this Agreement is from the EFFECTIVE DATE until the
         expiration of the LICENSED PATENT (including any divisional,
         continuation or continuation-in-part, reissue, renewal or extension
         thereof or substitute thereof).

6.2      The license granted under Article II shall apply to all LICENSED
         PRODUCTS sold, distributed, leased, used, imported, offered for sale,
         or made, prior to the termination or expiration of this Agreement
         provided STI has paid royalties pursuant to Section 3.4 of this
         Agreement on all such LICENSED PRODUCTS, within thirty (30) days of the
         termination or expiration of this Agreement.

6.3      STI may terminate this Agreement on sixty (60) days prior written
         notice to LICENSORS, provided however that upon such
         termination/cancellation, STI pays LICENSORS: (i) any amount owed
         LICENSORS pursuant to Sections 3.1, 3.2, 3.3, 3.4 and 3.5 of this
         Agreement; and (ii) any late fees due pursuant to Section 3.11.

6.4      Except to the extent prohibited by law under Section 365(n) of the
         Bankruptcy Code, should STI become bankrupt or insolvent, or file a
         petition in bankruptcy, or if the business of STI should be placed in
         the hands of a receiver, assignee or trustee for the benefit of
         creditors, whether by voluntary act of STI or otherwise, and such
         petition or placement with a receiver, assignee or trustee shall not
         have been dismissed within sixty (60) days the licenses granted herein
         to STI shall terminate automatically.

6.5      Should STI fail to make any payment set forth herein when due or upon
         any other material breach of, or default under, this Agreement by STI,
         LICENSORS shall have the right to terminate this Agreement and the
         licenses granted herein to STI on sixty (60) days prior written notice,
         unless STI pays LICENSORS such payments, or otherwise cures the
         material breach, within such sixty (60) days.

6.6      No waiver of any breach of, or default under, this Agreement shall
         constitute a waiver of any prior, concurrent or subsequent breach of,
         or default under, this Agreement, and no waiver shall be effective
         unless made in writing and signed by an authorized representative of
         each LICENSOR.

6.7      No expiration or termination of this Agreement or of the licenses
         granted herein to STI shall relieve STI from any obligations that
         should have been performed under the terms hereof prior to such
         expiration or termination. STI's obligation to pay LICENSORS any unpaid
         royalties that have accrued prior to the expiration or termination of
         this Agreement and both parties' rights and obligations under Section
         2.3 (with respect to sale, lease or OTHER DISPOSITION prior to
         termination), Section 2.5, Section 4.2, Section 4.3, Section 5.2, and
         Article VIII shall survive any expiration or termination of this
         Agreement. Section 5.2 shall survive five (5) years after such

<PAGE>

         termination or expiration. The termination rights of the parties
         provided herein are in addition to all other rights and remedies
         available to either of the parties. Notwithstanding any other provision
         of this Agreement to the contrary, any obligation of STI, including
         payment obligations, shall immediately cease upon the final judgment of
         any court of the United States that all claims of the LICENSED PATENT
         are invalid or unenforceable, where such final judgment is unappealed
         or unappealable unless LICENSORS fail to diligently pursue an appeal.

                            ARTICLE VII - ASSIGNMENT

7.1      This Agreement has been entered into by LICENSORS in reliance upon the
         particular representations and qualifications of STI and is personal to
         STI. Neither this Agreement, nor any rights or obligations hereunder,
         may be assigned, pledged, or encumbered by STI without the express
         prior written approval of LICENSORS, which approval shall not be
         unreasonably withheld. Notwithstanding the foregoing, STI may assign
         this Agreement to any successor to substantially all of its business
         assets to which this Agreement relates, whether by merger, sale of
         assets, sale of stock or reorganization or otherwise; provided that any
         successor assignee agrees in writing to assume all obligations of STI
         under this Agreement.

7.2      LICENSORS may assign, pledge, or encumber its monetary rights under
         this Agreement and may assign this Agreement and all rights and
         obligations hereunder in conjunction with the sale of the LICENSED
         PATENT.

                        ARTICLE VIII - GENERAL PROVISIONS

8.1      This Agreement is predicated on the understanding by both Parties that
         under the Telecommunications Act of 1996 ("the Act"), TELCORDIA is
         permitted to grant the license granted herein to STI under the terms
         and conditions of this Agreement. In the event of any court or
         administrative order, with regard to which all reasonable appeals have
         been exhausted, that TELCORDIA is not permitted to perform under this
         Agreement or agreements of this type, then TELCORDIA shall have the
         right to immediately terminate or modify this Agreement by written
         notice to STI. This Agreement may also be terminated or modified, as
         required, by any state or federal law or regulation, or by judicial
         decree. Any such termination or modification shall not relieve STI from
         any obligations that accrued on or prior to such termination or
         modification, nor obligate TELCORDIA to refund any monies paid by STI
         hereunder unless and to the extent that such termination results in STI
         owing royalties to any other party for any period during which STI paid
         royalties under this Agreement (but in no event shall any refund exceed
         the amount previously paid to each LICENSOR). As of the EFFECTIVE DATE
         of this Agreement, TELCORDIA believes that this Agreement and
         performance thereunder are consistent with the terms of the Act.

<PAGE>

8.2      No party may, without written permission of the other party, use in
         advertising, publicity, packaging, labeling or otherwise any trade
         name, trademark, trade device, service mark, symbol or other
         identification, abbreviation, contraction or simulation thereof
         associated with the other party to identify its products or services.

8.3      Any notice or other communication hereunder shall be in writing and
         shall be sufficiently given and effective when received by certified
         mail: by TELCORDIA at the address specified herein (Attention: Vice
         President and General Manager, Intellectual Capital Products, NVC
         3X-387A, 331 Newman Springs Road, Red Bank, NJ 07701-5699), or by STI
         at the address specified herein (Attention: Robert B. Hammond, Chief
         Technology Officer, Superconductor Technologies Inc., 460 Ward Avenue,
         Santa Barbara, CA 93111-2358 ) or RUTGERS at the address specified
         above (Attention: William T. Adams, Office of Corporate Liaison &
         Technology Transfer, Room 335, Administrative Services Building III,
         Cook Campus). Any party may change its address for receipt of notices
         by written notice to the other.

8.4      There may be countries in which STI may have, as a consequence of this
         Agreement, rights against infringers for infringement of the LICENSED
         PATENT. STI hereby expressly waives any such right it may have by
         reason of the infringement or alleged infringement of the LICENSED
         PATENT.

8.5      If any provision or portion of a provision of this Agreement shall be
         held invalid or unenforceable, the remainder of this Agreement shall
         not be affected thereby and the remaining terms shall continue in
         effect and be binding on the parties, provided such invalid provision
         or portion is not a material right or obligation under this Agreement.
         If such invalid provision or portion is a material right or obligation
         under this Agreement, then the parties shall negotiate in good faith to
         replace the invalid or unenforceable provision by a mutually
         acceptable, valid and enforceable provision that is consistent with and
         fulfills the stated intention of the parties.

8.6      This Agreement (i) is binding upon the parties only when it is duly
         authorized, executed and delivered by each party, and (ii) sets forth
         the entire agreement and understanding between the parties as to the
         subject matter hereof and merges all prior discussions between them.
         Neither of the parties shall be bound by any warranties, understanding
         or representations with respect to such subject matter, other than as
         expressly provided herein or as set forth on or subsequent to the
         execution hereof in writing signed by an authorized representative of
         the party to be bound thereby.

8.7      Nothing herein shall be deemed to create an agency, joint venture, or
         partnership relation between the parties hereto.

8.8      The construction and performance of this Agreement shall be in
         accordance with the law of the State of New Jersey, without regard to
         its conflict of laws principles.

<PAGE>

8.9      This Agreement may be amended only by a written document signed by
         authorized representatives of each party.

8.10     This Agreement and the Exhibits hereto shall not be construed as an
         admission of any liability, wrongdoing or infringement by STI. Without
         limiting the foregoing, the parties acknowledge that the definition of
         "LICENSED PRODUCTS" in Section 1.5 does not make reference to the
         claims of the LICENSED PATENT. This definition was formulated without
         such a reference for the convenience of the parties at the request of
         the LICENSORS based on their assertion that it would be unduly
         difficult for the LICENSORS to successfully audit STI's royalty reports
         if the definition of LICENSED PRODUCTS was limited to products
         manufactured using methods covered by the claims of the LICENSED
         PATENT. STI has agreed to this broad definition of "LICENSED PRODUCT"
         in reliance on its absolute right under Section 6.3 to terminate this
         Agreement, and STI may elect to do so if it concludes that it can
         manufacture the LICENSED PRODUCTS without infringing any claims of the
         LICENSED PATENT. Accordingly, no inferences regarding infringement
         shall be drawn from the use of this broad definition of a "LICENSED
         PRODUCT" or the existence of this Agreement, and the parties each
         reserve their respective rights and positions concerning the scope of
         the claims of the LICENSED PATENT and any alleged infringement of the
         LICENSED PATENT.

<PAGE>

                                   Signatories

TELCORDIA TECHNOLOGIES, INC.                   SUPERCONDUCTOR TECHNOLOGIES, INC.

By:   /s/                                      By:  /s/
    ---------------------------------             -----------------------------

Name: Joseph Giordano                          Name: Robert B. Hammond

Title: Deputy General Counsel Intellectual     Title: Senior VP, Chief
       Property                                       Technology Officer

Date: ____________________________________     Date: 7/13/02

RUTGERS, THE STATE UNIVERSITY OF
NEW JERSEY

By: /s/
   --------------------------------------

Name: William T. Adams

Title: Director, Office of Corporate Liaison & Technology Transfer

Date:________________________________

<PAGE>

                          EXHIBIT 1 - LICENSED PRODUCTS

         SuperFilter(R)
         SuperFilter(R) II
         SuperFilter(R) PCS

<PAGE>

                             EXHIBIT 2 - PRIOR SALES

         Introductory Note -- This Exhibit shall not be construed as an
admission of any liability, wrongdoing or infringement by STI.