Document:

exv10w24

 

	EXHIBIT 10.24 SINO-FOREIGN EQUITY JOINT VENTURE CONTRACT Between Hunchun BaoLi Communication
Co. Ltd And Superconductor Investments (Mauritius) Limited December 8th 2007

 

 

	EXHIBIT 10.24 Chapter 1 General Principles Article 1 In accordance with the stipulations of the Law
of the People’s Republic of China on Chinese-Foreign Equity Joint Ventures, the Regulations for the
Implementation of the Law of the People’s Republic of China on Chinese-Foreign Equity Joint
Ventures and other related laws and rules, Hunchun Baoli Communication Co., Ltd. (hereinafter
referred to as Party A) from China and Superconductor Investments (Mauritius) Limited (hereinafter
referred to as Party B) from the Mauritius hereby agree to form a Sino-Foreign Joint Venture
Company (hereinafter referred to as “JV Company”), and enter into this contract. Article 2 Name of
JV Company: The Chinese name of the JV Company is and the English name of the JV Company is “Baoli
Superconductor Technology Co., Ltd.” Statutory Address: Baoli Electronic Communication Industrial
Park, Hunchun City, Jilin Province, China “Baoli Superconductor Technology Co., Ltd. “0 Article 3
Company Name, Statutory Address, and Legal Representative of the two parties to the JV Company are
as follows: Party A: Hunchun Baoli Communication Co., Ltd. Statutory Address: Baoli Electronic
Communication Industrial Park, Hunchun City, Jilin Province, China Legal Representative: Mr. Yi
Zhang, Chairman, Chinese Nationality Party B: Superconductor Investments (Mauritius) Limited, a
wholly owned subsidiary of Superconductor Technologies, Inc. Statutory Address: 1” Floor, Felix
House, 24 Dr. Joseph Riviere Street, Port Louis, Mauritius Legal Representative: Mr. Jeff Quiram,
President, President and Chief Executive Officer of Superconductor Technologies and lead director
and designated legal representative for Superconductor Investments (Mauritius) Limited. 2/28

 

 

	EXHIBIT 10.24 Article 4 The JV Company shall be a limited liability company. Article 5 The JV
Company has the status of a legal person and is subject to the jurisdiction and protection of
Chinese laws concerned. All the activities of the JV Company shall be governed by the laws,
decrees, pertinent rules and regulations of the People’s Republic of China. 3/28

 

 

	EXHIBIT 10.24 Chapter 2 Article 6 Purpose of the N Company: With Party B’s superconductor
wave-filtering technology, the JV Company aims to produce and market high temperature
superconductor wave-filtering equipment in an effort to tap the market for telecommunication
equipment. and reap satisfactory economic benefits for the two parties of the JV Company. Article 7
Business Scope of the JV Company: to design, produce and market high temperature superconductor
wave-filtering system and equipment (Party B’s SuperLink Product) and provide related technology
support and services. Article 8 Production Scale of the JV Company: In the initial operation phase,
it is planned that the JV Company will produce 500 units for the first year, 1,500 units for the
second year, and 5,000 units for the third year. The Parties may decide to expand the production
scale of the JV Company later. Article 9 The Parties plan that
the JV Company will sell its products
to the domestic and international market in the following proportions: The first year: 20% of
Product production by the JV Company is expected to be sold to HK and Macao and 80% to the domestic
market; The second year: 30% of Product production by the JV Company is expected to be sold to HK
and Macao and 70% to the domestic market; The third year: 50% of
Product production by the JV
Company is expected to be sold to HK and Macao and 50% to the domestic market. Additional Product
production by the JV Company may be sold to STI or its designees in the international market at any
time. Actual sales by the JV Company shall be decided by the JV Company’s Board of Directors.
Marketing channel, method and responsibility shall be allocated as
follows: The Company JV shall be
responsible for marketing in China (including HK and Macao, but not Taiwan) Party B shall retain
all rights in Taiwan and the international market exclusive of China. 4/28

 

 

	EXHIBIT 10.24 5/28

 

 

	EXHIBIT 10.24 Chapter 3 Total Amount of Investment and the Registered Capital Article 10 The total
amount of investment of the JV Company shall be thirty million US dollars ($30,000,000.00) and the
registered capital of the JV Company shall be twenty-five point five million US dollars
($25,500,000.00). ($25,500,000.00 ), Article 11 Capital Contribution to be made by the two parties
of the JV Company shall be as follows: Party A: to invest fourteen million and twenty-five thousand
US dollars ($14,025,000.00), which includes: Cash $7,012,500.00 US dollars Mechanical Equipment
worth void US dollars Workshop worth $2,000,000.00 US dollars Land Use Right worth $5,012,500.00 US
dollars Industrial Property Right worth void US dollars Others worth void US dollars Party B: to
invest eleven million and four hundred and seventy-five thousand US dollars ($11,475,000.00), which
includes: Cash void US dollars Mechanical Equipment worth void US dollars Intellectual Property
Rights worth $11,475,000 US dollars Others worth void US dollars Article 12 Two parties of the JV
Company shall effect their capital contribution within the following time limits: All capital will
be contributed in two years in accordance with Chinese applicable laws. 6/28

 

 

	EXHIBIT 10.24 Article 13 When a capital contribution is effected, the JV Company shall issue a
certificate for capital contribution on condition that such contribution has been verified by a
certified accountant appointed by the JV Company. The main content of such certificate shall be:
Name of JV Company, Date of Establishment, Two Parties of the JV Company and Respective Capital
Contribution and the respective equity ratio, Date of Contribution and Date of Issue. Such
certificate shall be signed by the Chairman, and affixed with the corporate chop of the JV Company.
However, the non-issuance of such certificate shall not affect the Parties’ rights as shareholders
of the JV Company. Article 14 During the Joint Venture period, the JV Company shall not reduce the
amount of the registered capital. However, in case of severe difficulties, registered capital
reduction may be applied for to the original approval authority and implemented after obtaining
such approval. Article 15 Any increase or decrease in registered capital of the JV Company must be
agreed by both parties. Any such increase or decrease shall be approved by the original approval
authority and registered with the original registration authority. If any Party fails to make its
capital increase contribution after both Parties have agreed to such capital increase, the other
Party may at its discretion: (a) give the failing Party a ninety (90) days’ prior written notice,
and contribute all or part of the shortfall amount not contributed by the failing Party if no
contribution is made by the failing Party upon expiry of the said notice period, whereupon both
Parties’ shareholding percentages in the JV Company shall be adjusted so as to be in proportion to
the registered capital of the Company actually contributed by each of them respectively, and the
number of Directors appointed by each Party to the Board of Directors shall, without changing the
total number of Directors of the Company, be reduced or increased accordingly to match to the
fullest extent each Party’s then shareholding percentage in the JV Company; or (b) treat such
failure as a material breach of this Contract by the failing Party. Both Parties agree to execute
all such documents and take all such steps as required to legally effect either of the above
options taken by the non-failing Party in good faith. 7/28

 

 

	EXHIBIT 10.24 Article 16 If one party transfers its capital contribution or any interest in the JV
Company, either partially or totally, it shall notify the other party in written form thirty (30)
days in advance. The details of the conditions of the transfer shall
be specified in the notice,
such as the amount and the price of registered capital to be transferred, and the brief description
of the proposed transferee. No transfer may occur without the approval of both parties. The non
transferring party shall have the preemptive right to purchase the interest to be transferred, or,
together with the transferring party, to transfer a similar portion of its interest on the same
terms, in which case the non-transferring party shall reduce its portion of the interest to be
transferred and shall cause the transferee to accept the transfer by the non-transferring party on
the same terms as those applied to the transferring party. 8/28

 

 

	EXHIBIT 10.24 Chapter4 Board of Directors Article 17 The JV Company shall have Board of Directors
with the highest authority over the JV Company. Article 18 The Board of Directors shall consist of
five (5) directors, of which three (3) directors shall be appointed by Party A and two (2)
directors by Party B. The term of office for the directors is four (4) years unless sooner removed
by the Party with the corresponding power of appointment, and may be renewed by that Party. Article
19 The Board of Directors shall have one director designated as Chairman by Party A and one
director designated as Vice Chairman by Party B. Article 20 When any party of the JV Company
appoints or replaces a director, a written notice shall be submitted to the Board of Directors, and
it shall also notify the other party. Article 21 The Board of Directors shall convene one regular
meeting every year. An interim meeting may be convened based on a proposal made by more than one
third of all the directors. Article 22 The Board meeting shall be held at the principal business
location of the JV Company unless otherwise agreed by the Directors. Article 23 The Chairman shall
convene and preside at any Board Meetings. Should the Chairman be unable to attend the Board
meeting, the Vice Chairman shall convene and preside at the Board meeting. 9/28

 

 

	EXHIBIT 10.24
Article 24 The Chairman shall issue a written notice thirty (30) days before the date
of any Board meeting. The notice shall cover the agenda, time and place of the meeting. The agenda
may only be changed with the consent of all of the directors. Article 25 Should a director be
unable to attend the Board meeting, he may entrust another person (including another director) to
attend on his behalf, provided that a written proxy signed by the non-attending director must be
presented to the Board. Article 26 The Board meeting requires a quorum of over two thirds of the
total number of the directors (in person or by proxy) and at least one Director appointed by each
of Party A and Party B attends. Each Director shall have one (1) vote. When the quorum is not
present, any purported decisions adopted by the Board meeting are invalid. Article 27 Detailed
written records shall be made for each Board meeting and signed by all the attended directors or by
the attended proxy. The record shall be made in Chinese and in English and shall be filed by a
specially-assigned person by the Board. Each director shall be given a copy of such minutes and
resolutions. No one shall amend or destroy the record during the Joint Venture term. Article 28
Directors are entitled to attend Board meetings via telephone, video conferencing or other
electronic means, provided that a quorum is present and that each attendee can speak to each other
attendee at the same time. In lieu of a Board meeting, resolutions in writing signed in person or
via facsimile by all of the Directors of the JV Company shall have the same force and effect as if
such resolutions had been passed at a duly constituted and convened meeting of the Board of
Directors. 10/28

 

 

	EXHIBIT 10.24 Article 29 As for the following issues, unanimous approval by the Board shall be
required: 29.1 amendment to the articles of association of the JV Company 29.2 the termination and
dissolution of the JV Company 29.3 adjustment to the registered capital of the JV Company 29.4
merger, break up or reorganization of the JV Company 29.5 transfer of registered capital by one or
several parties 29.6 mortgage or pledge of registered capital by one or several parties to its
creditor 29.7 sell, exchange or otherwise dispose of all or substantially all of the JV Company’s
assets, other than in the ordinary course of the JV Company’s business; 29.8 license all or any
substantial portion of the JV Company’s intellectual property; 29.9 acquire or sell equity
interests in other entities or be a promoter, incorporator, general partner, limited partner, owner
of any other entity, except wholly owned subsidiaries; 29.10 authorize any sale, acquisition,
mortgage, pledge, or other disposition of any asset of the JV Company, which would materially
impair or change the conduct of the ordinary business of the JV Company. 29.11 authorize any
activity or the JV Company entity commitment where the consideration to be paid by the JV Company
entity is in excess of or as a result of which the JV Company entity may become obligated, directly
or indirectly, for an amount in excess of or that would otherwise cause the JV Company entity to
incur liability in excess of $500,000 (or as specifically pre-authorized or delegated by a
unanimous vote of the Board of Directors, or is a line item in the budget previously approved by
the Board of Directors in the manner set forth herein), 29.12 authorize any activity that is
outside the ordinary course of the JV Company’s business; 29.13 incur indebtedness in excess of
$1,000,000 in the aggregate; 29.14 pledge or otherwise encumber any assets of the JV Company; 29.15
purchase, take, receive, lease or otherwise acquire, own, hold, improve, use and otherwise deal in
or with real property or any interest in real property; 29.16 indemnify an owner, Director or any
other person except pursuant to an agreement approved by both of the parties; 29.17 enter into any
transaction with an owner of the JV Company or an affiliate of any owner; 29.18 sell any product at
a gross margin of less than 30%; 29.19 change tile principal accounting firm or auditor of the JV
Company; 29.20 materially deviate from the JV Company’s business plan; and 29.21 knowingly do any
act in contravention of the Joint Venture Agreement or the JV Company’s articles of association.
11/28

 

 

	EXHIBIT 10.24 Article 30 As for the following issues, approval by over two thirds of all the Board
of Directors shall be required: 30.1 decide annual business principle, business plan (including
proportion of sale in domestic and international markets) and budget and development plan; 30.2
exam and approve annual financial budget, final accounts and annual financial statement or
increases in expenditures from the approved budget by more than 10%; 30.3 exam and approve the
annual business report submitted by the general manager; 30.4 decide annual profit sharing scheme
of the JV Company; 30.5 finalize labor contract and rules and regulations of the JV Company; 30.6
decide capital deployment and loan limit; 30.7 appoint and dismiss general manager, deputy general
manager and other senior administrative personnel recommended by the general manager and decide
their salary package; 30.8 formulate the welfare system for staff and workers of the JV Company in
accordance with the relevant regulations of China; and 30.9 decide the organization structure of
the JV Company and increase or remove subordinate functional departments. 30.10 decide bank account
opening and signing procedures. 12/28

 

 

	EXHIBIT 10.24 Article 31 Directors who do not hold positions in the Joint Venture Company shall not
be compensated by the Joint Venture Company. All costs related to Board meetings shall be borne by
the JV Company. 13/28

 

 

	EXHIBIT 10.24 Chapter 5 Business Management Organization Article 32 The JV Company shall establish
a management organization/system under which there shall have production, technology, Human
Resource, Finance and Administration Departments (subject to actual conditions of the JV Company).
Article 33 The JV Company shall have one general manager and one deputy general manager appointed
by the Board. The inaugural general manager shall be appointed by Party A and inaugural deputy
general manager shall be appointed by Party B. Unless otherwise agreed by the parties, successors
shall also be appointed by the party originally appointed such officer. Article 34 The general
manager shall be responsible to the Board of Directors directly, carry out the resolutions of the
Board of Directors and organize the daily work on production, technology and management of the JV
Company. The deputy general manager shall assist the general manager and perform the function of
the general manager should the general manager be absent. Article 35 Decisions on important matters
concerning JV Company’s daily work require joint signatures from the general manager as well as the
deputy general manager and such matters requiring joint signatures shall be specified by the Board
of Directors. When dealing with other significant issues not
requiring joint approval, the General
Manager shall consult with the Deputy General Manager. Article 36 The term of office for general
manager and deputy general manager is four (4) years and may be renewed by the Board of Directors.
Article 37 14/28

 

 

	EXHIBIT 10.24 At the invitation of the Board of Directors, the Chairman, Vice Chairman and
Directors of the Board may concurrently be the general manager, deputy general manager and other
senior staffs of the JV Company. Article 38 The general manager or deputy general manager of the JV
Company shall not hold positions concurrently as general manager or deputy general manager of other
economic organizations and shall not engage in activities of other economic organizations on
commercial competition with the JV Company. Article 39 The JV Company shall have one Chief
Engineer, one Chief Accountant and one Auditor appointed by the Board of Directors. Article 40 The
Chief Engineer, Chief Accountant and Auditor shall be under the leadership of the general manager.
The Chief Accountant shall supervise accounting issues, carry out overall economic check and
perform economic responsibility system. The Auditor shall conduct internal audit, check and verify
financial income and spending, accounting statement, and file report to the general manager as well
as the Board of Directors. Article 41 The general manager, deputy general manager, chief engineer,
chief accountant, auditor and other senior administrative personnel who ask for resignation shall
submit their written reports to the Board of Directors thirty (30) days before their resignation.
In case any of the above-mentioned persons practice graft or be seriously derelict of duty, they
may be dismissed at any time upon the decision of the Board, and if such conduct violates the
criminal law, they may bear legal responsibilities. 15/28

 

 

	EXHIBIT 10.24 Chapter 6 Finance and Accounting Article 42 The finance and accounting of the JV
Company shall be handled in accordance with all applicable law and regulations. Article 43 The
fiscal year of the JV Company shall be calendar year from January 1 to December 31, and the first
fiscal year shall start from the JV Company’s date of establishment till the end of that calendar
year. Article 44 All vouchers, accounting books, accounting statements and reports shall be written
in Chinese and can put English notes if requested by other parties. Article 45. The JV Company
shall adopt Renminbi (RMB) as its accounts keeping unit. The conversion of RMB into other currency
shall be in accordance with the exchange rate of the converting day published by the Foreign
Exchange Trading Center authorized by the People’s Bank of China. Article 46 The JV Company shall
open accounts in RMB and foreign currency with Bank of China or other banks approved by the Board.
Bank signature procedures shall be approved by the Board. Article 47 The JV Company shall adopt
internationally used accrual basis and debit and credit accounting system. The JV Company will
operate so as to permit Party B to comply with its reporting obligations under United States public
company reporting requirements in a manner which enables the JV Company to produce financial
information that is to be provided to Party B within 25 days of the end of any calendar financial
quarter. The JV Company will choose an audit partner and accountant approved by both parties. The
chosen accounting partner will work closely with Party B’s audit firm (Stonefield Josephson) and
its Hong Kong office. The JV Company will cooperate as necessary in the preparation 16/28

 

 

	EXHIBIT 10.24 of such financial reports and other compliance issues of Company B, and its books and
records will be subject to quarterly audit by the parties and open at all times for reasonable
review by each party and its agents. Article 48 The accounting books of the JV Company shall
include the follow contents: 48.1 all amount of income and payment in cash of the JV Company 48.2
situations concerning sale and purchasing the materials of the JV Company 48.3 situations
concerning registered capital and debt of the JV Company 48.4 situations concerning date of
settlement, increase and transfer of the registered capital of the JV Company Article 49 In the
first three months of each fiscal year, the Finance Department shall prepare the previous fiscal
year’s balance sheet, profit and loss statement and cashflow statement, and prepare proposal
regarding the disposal of profits which should be examined and signed by the auditor, then submit
to the Board of Directors. Article 50 The two parties of the JV Company have the right to invite
an auditor to undertake annual financial check and examination at his own expense. The JV Company
shall cooperate in all reasonable ways for the check and examination. Article 51 The depreciation
period for the fixed assets of the JV Company shall be decided by the Board of Directors in
accordance with applicable law and regulations. 17/28

 

 

	EXHIBIT 10.24 Article 52 All matters concerning foreign exchange shall be handled in accordance
with applicable law and regulations as well as the stipulations in the Joint Venture Contract.
18/28

 

 

	EXHIBIT 10.24 Chapter 7 Profit Sharing Article 53 The JV Company shall allocate the reserve fund,
the expansion fund and the bonuses welfare fund for staff and workers after payment of taxes and in
accordance with law. The proportion of allocation shall be decided by the Board of Directors.
Article 54 Unless otherwise agreed and stipulated by the Board of Directors, after paying the taxes
in accordance with law and drawing various funds, the profits in net will be distributed according
to the proportion of each party’s investment in the registered capital. Article 55 The JV Company
shall distribute its profits once a year. The profit distribution plan and amount of profit to be
distributed to each party shall be reported to the Board within the first three months following
each fiscal year. Article 56 The JV Company shall not distribute its profits in case the losses in
the previous years have not been made up. Profits not yet distributed in the previous year shall be
allocated to the existing fiscal year. 19/28

 

 

	EXHIBIT 10.24 Chapter 8 Staff and Workers Article 57 The employment, dismissal, resignation of the
staff and workers of the JV Company and their salary, welfare, labor insurance, labor protection,
labor discipline and other matters shall be handled according to applicable law and regulations.
Article 58 The recruitment of the staff and workers of the JV Company shall be conducted by the JV
Company publicly in open channels. Article 59 The JV Company has the right to take disciplinary
actions, such as warning, demerit recording and salary reducing against those staff and workers who
violate the rules and regulations of the JV Company and labor disciplines. The JV Company’s labor
practices shall be in compliance with law. Article 60 The salary treatment of the staff and workers
shall be set by the Board of Directors according to the specific situation of the JV Company with
reference to the regulations issued by the Government, and shall be specified in detail in the
labor contract. The salary of the staff and workers shall be
increased correspondently with the
development of production and the progress of the worker’s ability and technology. Article 61
Matters concerning welfare, bonus, labor insurance and labor protection shall be stipulated in
rules and regulations of the JV Company to ensure that the staff and workers go in for production
and work under normal condition. 20/28

 

 

	EXHIBIT 10.24 Chapter 9 The Trade Union Organization Article 62 The staff and workers of the JV
Company have the right to establish trade union organization and carry out activities in accordance
with the stipulation of the Trade Union Law of the People’s Republic of China. Article 63 Trade
union activities and the JV Company’s dealings with the trade union shall be in compliance with
law. Article 64 The JV Company shall annually allocate a total of 2% of all salaries of the staff
and workers of the JV Company as trade union’s funds which shall be used by trade union in
accordance with the Management Rules for the Trade Union Funds formulated by All China Federation
of Trade Union. 21/28

 

 

	EXHIBIT 10.24 Chapter 10 Duration, Termination and Liquidation of the Joint Venture Article 65 The
duration of the JV Company is thirty (30) years. The establishment of the JV Company shall start
from the date on which the business license of the JV Company is issued. Article 66 A written
application for the extension of the duration unanimously proposed by two parties of the JV Company
and embodied in the resolution of the Board of Directors shall be submitted to the relevant foreign
investment authority six months prior to the expiry date of the Joint Venture Contract. The
duration shall extend upon approval and shall file for amendment to registration information with
the relevant company registration authority. Article 67 With the agreement between both parties on
the termination which should be pursuing the best benefits for the parties, the JV Company shall
be terminated in advance of its term expiry. In this case, the decision for the termination shall
be made by the plenary meeting of the Board of Directors and file for approval from the relevant
foreign investment approval authority. Article 68 The JV Company and tins Joint Venture Contract
shall be terminated at the option of either Party if any of the following occurs, and a
liquidation application shall be submitted to the original Examination and Approval Authority for
approval: (a) one party materially breaches this Joint Venture Contract, and such breach (if
capable of being rectified) is not rectified within 60 days of being notified by the other party;
(b) neither Party intends or is able to continue the business cooperation; (c) the Company has
suffered losses for a consecutive period of 3 years, causing the JV Company to be insolvent; (d) the
Joint Venture Term expires and no resolution on the extension of the term is approved by the Board;
or (e) the Board resolves to terminate the JV Company for any other reason. 22/28

 

 

	EXHIBIT 10.24 Article 69 Upon the expiration of the duration or termination of the JV Company, a
liquidation committee for liquidating the assets of the JV Company shall be established in
accordance with all applicable law. Article 70 The tasks of the liquidation committee are: to
conduct thorough check of the property of the JV Company, its claims and indebtedness; to work out
the statement of assets and liabilities and list of property; to formulate liquidation plan which
shall be carried out upon the approval of the Board of Directors. Article 71 During the liquidation
period, the liquidation committee shall handle litigation matters on behalf of the JV Company.
Article 72 The remuneration for the members of the liquidation committee shall have the priority to
be effected from existing property of the JV Company. Article 73 The liquidation committee shall
revalue the assets of the JV Company based on depreciated book value with reference to current
value. Article 74 The remaining property after the clearance of debts of the JV Company shall be
allotted according to two parties’ contribution to the registered capital of the JV Company. 23/28

 

 

	EXHIBIT 10.24 Article 75 On completion of the liquidation, the JV Company shall submit a
liquidation report to the foreign investment approval authority, go through the formalities for
nullifying its registration relevant company registration authority and hand in its business
license, at the same time, make an announcement to the public. After winding up of the JV Company,
its accounting books shall be kept in the care of its Chinese party. Article 76 If either party
breaches this Joint Venture Contract, it shall be liable for all direct economic losses suffered by
the other party as a result of such breach. If both parties are at fault, their respective
liability shall be proportional to their fault. 24/28

 

 

	EXHIBIT 10.24 Chapter 11 Rules and Regulations Article 77 Following are the rules and regulations
to be formulated by the Board of Directors of the JV Company; 77.1 Management regulations,
including powers and functions of the management branches and its working rules and procedures;
77.2 Rules for the staff and workers; 77.3 System of labor and salary; 77.4 System of work
attendance record, promotion and awards and punishment for the staff and workers; 77.5 Detailed
rules of staff and workers’ welfare; 77.6 Finance system; 77.7 Liquidation procedures upon the
dissolution of the JV Company; 77.8 Other necessary rules and regulations. 25/28

 

 

	EXHIBIT 10.24 Chapter 12 0 Supplementary Articles Article 78 The amendment to the Joint Venture
Contract shall be unanimously agreed and decided by the Board of Directors and submitted to the
original examining and approving authority for approval. Article 79 The Joint Venture Contract
shall be written in Chinese and in English. Both languages are of
equal validity. In events of any
discrepancy between the two aforementioned versions, the Chinese version shall prevail. Article 80
The Joint Venture Contract shall come into effect upon the approval by the relevant foreign
investment approval authority. Article 81 The Parties shall use reasonable efforts to resolve and
settle amicably through consultations any dispute, controversy or claim (a “Dispute”). If any
Dispute is not settled amicably through consultations within one hundred twenty (120) days of one
Party’s receipt of the other Party’s notice of a Dispute, then any Party involved in the Dispute
may elect to submit such Dispute to arbitration, in which event such Dispute shall be exclusively
and finally settled by binding arbitration in Singapore under the auspices of the Singapore
International Arbitration Centre, by a sole arbitrator. The arbitration proceedings shall be
conducted in the English language, and all documentation to be reviewed by the arbitrator or
submitted by the Parties shall be in the English language. The arbitration tribunal shall apply the
Arbitration Rules of the United Nations Commission on International Trade Law in effect at the time
of the arbitration. However, if such rules are in conflict with the provisions here set forth,
including the provisions concerning the appointment of the arbitrator, these provisions shall
prevail. 26/28

 

 

	EXHIBIT 10.24 During arbitration, the Parties shall perform this Joint Venture Contract to the
fullest extent possible, except for the matter or matters in dispute. The arbitrator shall render a
written decision in English stating their reasons for their decision within twelve (12) months of
the request for arbitration, and such award shall be final and binding upon the Parties without any
right of review or appeal. Any compensation shall be calculated and paid in United States Dollars
if to be paid to Party B. The Convention on the Recognition and Enforcement of Foreign Arbitral
Awards (also known as the “New York Convention”) shall apply to this Joint. Venture Contract. and
to any arbitral award or order resulting from any arbitration conducted hereunder. Judgment upon
the award rendered by the arbitrator may be entered in any court of record of competent
jurisdiction in any country, or application may be made to such court for judicial acceptance of
the award and an order of enforcement, as the law of such jurisdiction may require or allow. The
Parties agree that the award of the arbitral tribunal shall be the sole and exclusive remedy among
them regarding any and all claims and counterclaims presented to the tribunal. The Parties further
agree that this arbitration clause is an explicit waiver of any immunity or defense that may apply
against the enforcement and execution of any arbitral award or any judgment thereon. The
substantially prevailing Party in an arbitration proceeding shall be entitled, in addition to such
other relief as may be granted, to recover its attorneys’ fees and costs, and the other Party shall
pay all costs of the arbitration. The arbitrator shall determine which of the Parties has
substantially prevailed based upon an assessment of which Party’s major arguments or positions
taken in the proceedings could fairly be said to have prevailed over the other Party’s major
arguments or positions on major disputed issues. Article 82 This contract is governed by and
construed in accordance with Chinese law. 27/28

 

 

	EXHIBIT 10.24 Ai1icle 83 This contract is executed in Shenzhen, China by the authorized
representatives of the parties on December 8th, 2007. Authorized representative of Hunchun Baoli
Communication Co., Ltd. (Party A) Signature: Date: Authorized representative of Superconductor
Investments (Mauritius) Limited (Party B) Signature: Date: 28/28exv10w25

 

EXHIBIT 10.25

Form of Technology and Trademark License Agreement

Superconductor Technologies Inc., a Delaware corporation Superconductor Investments (Mauritius) Ltd
(“STI”) and BAOLI Superconductor Technology Co, Ltd, a technologically-advanced contractual
joint venture in the People’s Republic of China (“BSTC”), make this License of Technology
and Trademark Agreement (“License Agreement”) as of                 , 2007. Certain capitalized
terms are defined in Schedule A—Definitions.

Recitals

A. Hunchun BaoLi Communications Co. Ltd., a Chinese enterprise (“BaoLi Communications”) and STI
have established BSTC as a technologically-advanced contractual joint venture, within the
territory, and under the laws, of the People’s Republic of China to manufacture, market and sell
the Product in the Territory and to manufacture the Product for export from the Territory by sale
to STI and its designees.

B. STI makes this License Agreement with BSTC: (a) to enable it (i) to manufacture the Product in
the Territory so that BSTC may market and sell such Product in the Territory and (ii) to
manufacture the Product for export from the Territory by sale to STI and its designees pursuant to
that certain Export Supply Agreement entered into by and between the parties (the “Export Supply
Agreement”); and, (b) to use certain marks of STI in connection with the foregoing.

Now therefore, in consideration of the promises herein, and for good and valuable consideration,
the sufficiency and receipt of which is hereby acknowledged, and intending to be legally bound, the
parties hereby agree as follows:

1. Grant of Technology License

As of the Effective Date, STI grants to BSTC, subject to the limitations of this License Agreement,
an exclusive license, for a term of thirty years (subject to earlier termination as provided
herein), without any right to sub-license, to use the Technology within the Territory solely to the
extent needed to make, reproduce, and manufacture, the Product: (i) to market, sell, and offer for
sale such Product solely for use within the Territory, in every instance only for Qualified Uses,
and (ii) to sell such Product to STI and its designees for use outside the Territory pursuant to
the terms of the Export Supply Agreement. For the avoidance of doubt, BSTC expressly agrees that
this license to use the Technology shall not serve to restrict in any manner STI’s exercise of
rights with regard to the Technology outside the Territory. As an express condition of this
license, BSTC shall not have the right to modify or create derivative works of the Technology
without the express permission of STI, nor to use the Technology to make, reproduce, manufacture,
market, sell, or offer for sale any products other than the Product. All rights not expressly
granted herein regarding the Technology are reserved to STI.

2. Grant of Trademark License

As of the Effective Date, STI grants to BSTC, subject to the limitations of this License Agreement,
an exclusive, royalty-free license, coterminous with the license of Section 1, without any right to
sub-license, to use the Licensed Trademarks only in connection with the manufacture, sale and
service of the Product within the Territory, in each case only for Qualified Uses and only as the
Product is permitted to be manufactured, sold and serviced in conformity with the license granted
in Section 1.

Confidential

1

 

EXHIBIT 10.25

3. Related Services

3.1 Transition Assistance
During the first year after the Effective Date, (i) STI will supply BSTC with kits for up to 500
units of the Product, priced at direct material and labor cost plus 20%, as reasonably requested by
BSTC on not less than 90 days’ notice and (ii) STI will provide reasonable consulting support to
BSTC’s efforts in assembling the kits and acquiring and/or building the specialty equipment and
fixtures necessary to manufacture the Product in accordance with the training plan attached to this
Agreement as Schedule E—Training Plan. BSTC will pay for all costs required to send its
technical staff to STI to be trained; as well as the expenses (living and travel costs within the
Territory) of any STI staff while within the Territory. STI will pay for any travel costs to get
its personnel to the Territory as required by the training plan. STI may sell any excess equipment
and fixtures it may have to BSTC as mutually agreed.

3.2 Manufacturing arrangements

If STI determines that it wishes to have the Product made in China, upon STI’s request from time to
time, BSTC will manufacture the Product for sale by STI outside the Territory, priced to STI at
direct material and labor cost plus 20%.

The parties acknowledge that certain aspects of the manufacturing process may be retained by STI
based on factors including economics, feasibility and regulatory climate. To the extent consistent
with compliance with any prohibitions as to export of pertinent technology, STI will sell to BSTC,
priced to BSTC at direct material and labor cost plus 20%, any components as to which it retains
the manufacturing process.

4. Royalties; payment terms

4.1 Royalties

In consideration, and as a condition to the continuance, of the license granted under Section 1,
BSTC shall timely pay STI royalties equal to the greater of (i) 7% of Revenues for the
corresponding quarter or (ii) any applicable Minimum Royalty for the corresponding quarter. No
payment of Minimum Royalty hereunder is creditable towards royalty due for future quarters.

4.2 Reporting; payment

During the term of this Agreement and for a period of two (2) years thereafter, BSTC shall keep and
maintain all books of account relating to Revenue reasonably needed to support the calculation of
royalties under this Agreement at its principal offices, in conformity with generally accepted
accounting practices as observed in the United States. Within 15 days after the end of each
calendar quarter, BSTC shall render a Royalty Statement to STI. BSTC shall pay to STI the royalty
due for each calendar quarter within 15 days after the end of each calendar quarter by wire
transfer in United States Dollars in readily available funds to an account designated by STI in the
United States or such other place as STI may identify.

STI may audit the books and records of BSTC relating to the calculation of any Royalty Statement.
BSTC shall pay all costs and expenses of any audit if it shows an underpayment in connection with
any such Royalty Statement by more than 5%.

4.3 Taxes

In the event that BSTC is required by the laws of the People’s Republic of China to withhold or
deduct any taxes, levies, fees, imposts, duties or similar charges (“Local Taxes”) from any
payments hereunder to STI, or in the event that payments by BSTC to STI hereunder are otherwise
subject to Local Taxes (in each case other than the national withholding tax on Chinese-source
royalties paid to nonresidents of China that is currently imposed under Chinese domestic law (the
“Withholding

Confidential

2

 

EXHIBIT 10.25

Tax”), but only to the extent that the Withholding Tax does not exceed a rate of 10%) then BSTC
will pay such additional amounts to STI as shall be necessary in order that the net amounts
received by STI, after withholding, deduction or payment of such Local Taxes, equal the amounts
that would otherwise have been receivable by STI pursuant to this License Agreement in the absence
of such Local Taxes.

5. Ownership matters

5.1 Technology

As between the parties, STI retains all title, and (except as expressly granted in this License
Agreement) all rights and interest in and to the Technology and any and all portions thereof. BSTC
hereby grants to STI a perpetual royalty-free license, with right to sublicense, to all rights,
title and interest in and to any BSTC Technology, which license shall be non-exclusive for the
Territory and exclusive outside the Territory. STI consents to the grant by BSTC to BaoLi
Communications of a perpetual, non-exclusive royalty-free license for the Territory to all rights,
title and interest in and to any BSTC Technology.

5.2 Licensed Trademarks

All right, title and interest in and to the Licensed Trademarks, other than the specific rights
granted to BSTC in this License Agreement, are retained by STI for its own use or license to
others. BSTC recognizes the value of the goodwill associated with the Licensed Trademarks and
acknowledges that (as between the parties) such goodwill belongs exclusively to STI. BSTC agrees
that (i) it will not assert any interest or property rights in any rights included in the Licensed
Trademarks other than the license set forth herein; (ii) all permitted uses of the Licensed
Trademarks by BSTC shall inure to the benefit of and be on behalf of STI; and (iii) nothing in this
License Agreement shall give BSTC any interest in the Licensed Trademarks other than the right to
use the Licensed Trademarks in accordance with this License Agreement. BSTC shall not attack,
directly or indirectly, the validity of the Licensed Trademarks or STI’s title in or to the
Licensed Trademarks. BSTC will not modify, enhance, or create a derivative work of the Licensed
Trademarks (“Junior Marks”) without the prior written consent of STI, and STI will own all
right, title and interest in and to the Junior Marks, including all intellectual property rights
therein. BSTC irrevocably transfers and assigns to STI, and agrees to irrevocably transfer and
assign to STI, all right, title and interest in and to the Junior Marks, including all intellectual
property rights therein. At STI’s request and expense, during and after the term of this License
Agreement, BSTC will assist and cooperate with STI in all respects (and will cause its employees
and subcontractors to assist and cooperate with STI in all respects), and will execute documents
(and will cause its employees and subcontractors to execute documents), and will take such further
acts reasonably requested by STI to enable STI to acquire, perfect, maintain and enforce STI’s
intellectual property rights in and to the Junior Marks. BSTC hereby appoints the officers of STI
as BSTC’s attorney-in-fact to execute documents on behalf of BSTC and its employees and
subcontractors for this limited purpose. BSTC also, on behalf of itself and its employees and
subcontractors, irrevocably transfers and assigns to STI, and agrees to irrevocably transfer and
assign to STI, and waives and agrees never to assert, any and all moral rights that BSTC or its
employees or subcontractors may have in or with respect to the Junior Marks, even after termination
of the licenses granted by this License Agreement. BSTC will not register, nor attempt to
register, any trade name, domain name, service mark, or trademark which, in whole or in part,
incorporates or is confusingly similar to the Licensed Trademarks.

5.3 Clearances

BSTC will be responsible for verifying that its use of any patent rights, trademark rights or other
intellectual property rights related to the manufacture, marketing or sale of the Product in the

Confidential

3

 

EXHIBIT 10.25

Territory, including the Technology and the Licensed Trademarks, does not violate intellectual
property rights of any other person.

5.4 Filings; costs

BSTC agrees to assist STI: (i) in recording this License Agreement with appropriate government
authorities where such recording is required by law or regulation or where such recording is
permitted or desired by STI; and, (ii) in applying in the name of STI for patents and/or trademarks
on all or any of the Technology or the Licensed Trademarks in the Territory. BSTC shall not apply
for any patents on the Technology without the prior written consent of STI. All costs associated
with recording this License Agreement, the licenses granted herein and registering, maintaining, or
renewing rights in and to the Technology or Licensed Trademarks in the Territory shall be borne by
BSTC.

5.5 Infringements

If, at any time, BSTC learns that another party is or may be making unauthorized use of the
Licensed Trademarks or the Technology, BSTC agrees to give STI prompt notice of that infringement.
STI, at its option and for its own account, may take actions with respect to any such infringement
and any other infringements, and BSTC agrees to cooperate with STI (at the sole expense of STI) in
connection with any action taken by STI with respect to infringements.

5.6 Use

During the term of this License Agreement, BSTC agrees sufficiently to use and employ the Licensed
Marks so as to maintain and preserve the legal validity and enforceability of the Licensed Marks in
the Territory.

5.7 Quality Control

(i) Maintenance of Quality. BSTC agrees that its manufacture of the Product and its
marketing and service thereof will be of high quality and at least of the quality offered by STI at
the time that this License Agreement is entered. BSTC agrees that it will maintain the same level
of quality for its manufacture of the Product and its marketing and service thereof throughout the
term of this License Agreement and throughout any renewals thereof.

(ii) Investigation. STI may periodically request samples of marketing materials showing
use of the Licensed Trademarks to view how BSTC is using the Licensed Trademarks. BSTC shall
comply with all reasonable instructions given by STI to BSTC as to the use of the Licensed
Trademarks. STI will have the right to access BSTC’s premises during normal business hours on
reasonable advance notice for the purpose of inspecting the facilities used by BSTC in connection
with the manufacturing, marketing and service of the Product associated with the Licensed
Trademarks in order to ensure the quality thereof.

6. Competition

6.1 Direct or indirect competition

During the term of this License Agreement, except as permitted hereunder BSTC will not directly or
indirectly promote market or sell any products in or outside the Territory which compete directly
or indirectly with any STI products, nor will it assist any other person in doing so.

6.2 Notification of opportunities

If STI learns of any opportunity for marketing the Product within the Territory, it will promptly
notify BSTC, and if BSTC learns of any opportunity for marketing the Product outside the Territory,
it will promptly notify STI.

Confidential

4

 

EXHIBIT 10.25

7. Compliance with Law

7.1 Export

BSTC agrees to comply strictly with any and all laws and regulations of the United States
applicable to the transfer of Technology and Products, whether by sale, lease, license, technical
assistance, or any other means of distribution. Without limitation, in no case may BSTC transfer
any Technology or Products in any manner or to any party in violation of the Export Administration
Regulations (15 CFR Parts 730—774.1) or the regulations of the Office of Foreign Assets Control,
U.S. Treasury Department (31 CFR Parts 500—598), or other U.S. Government agency with jurisdiction
of same. BSTC shall be responsible for obtaining any and all U.S. Governmental approvals of such
transfers, with the reasonable assistance of STI. This Agreement, and the license in Section 1,
shall not grant any license to any technology to the extent that such licensing is prohibited by
any applicable laws, regulations or other US government policies.

7.2 Civilian Use Only

None of the Technology transferred to BSTC by STI will be applied to or in any other way used by
BSTC to design or manufacture any Product for use in a military environment or by a military
end-user. Without limiting the generality of the foregoing, no Product designed or manufactured by
BSTC will be sold or otherwise distributed, directly or indirectly, to any “entity” identified by
the U.S. Government in Part 744 of the Export Administration Regulations, or to any customer who is
classified as a “military end user” by the U.S. Government without the express advance approval by
the U.S. Government.

7.3 Law; Foreign Corrupt Practices Act

BSTC agrees to comply with all laws, statutes, regulations, rules, ordinances, orders, or other
legal requirements, including, but not limited to the U.S. Foreign Corrupt Practices Act, and
Chinese law covering a similar subject matter, and to obtain and maintain all licenses and permits
required to perform its obligations hereunder. BSTC acknowledges that the U.S. Foreign Corrupt
Practices Act, and Chinese law covering a similar subject matter, specifically prohibits employees
or agents or consultants of Chinese or United States corporations and their domestic and foreign
subsidiaries from offering or making payments (whether made in China, the United States or
elsewhere) to employees or agents of foreign governments (or government controlled entities) for
the purpose of influencing official acts or decisions. Payments or offers of payment intended for
government officials disguised as compensation to agents, consultant fees and the like violate the
law as much as direct payments and are not to be made. BSTC agrees that: (i) no undisclosed or
unrecorded account, fund, or assets of the other shall be established by it for any purpose nor
shall any account, fund, or assets of either be held in the name of another entity or person; (ii)
no false, misleading, or artificial entries shall be made in the books and records of either by the
other for any reason and no arrangement that results in such entries or in any arrangement that
omits to make entries that properly should be made; (iii) no payment from funds of either shall be
approved or made by the other with the intention or understanding that any part of such payment is
to be used for any purpose other than that described by the documents supporting such payment; and
(iv) all payments of any nature made by either on behalf of the other will be properly identified
and recorded by it, and be made only in accord with the provisions of valid purchase orders,
subcontracts, blanket orders, and written sales agency or consulting agreements and that full value
will be received for each such payment. BSTC further agrees to adopt and apply the compliance
procedures applicable thereto reasonably approved by Licensor and to conduct employee training and
to audit business transactions in a manner and at such times appropriate to ensure compliance with
the Foreign Corrupt Practices Act and similar laws and regulations of such other countries.

Confidential

5

 

EXHIBIT 10.25

8. Default and termination

8.1 Causes of termination

The licenses granted by Section 1 and 2 shall terminate if an Event of Default has occurred as
provided in Section 8.2 and any non-defaulting party elects to terminate such licenses. Such
licenses shall also terminate on the termination of the BSTC joint venture. The election by a
party to terminate such licensees shall not be the exclusive remedy, and such party shall retain
any and all remedies available under law, equity, or this License Agreement.

8.2 Events of Default

The occurrence of any of the following events shall constitute an Event of Default on the part of
the party in respect of which such event occurs (the “Defaulting Party”):

	(i)	 	any material default in performance of, or any material failure to comply with, this License
Agreement or any other agreements, obligations or undertakings of such party to the other
party, and the continuation of such default for thirty (30) days following notice of such
default from the other party;

	(ii)	 	the incorrectness in any material respect of any representation or warranty contained in
this License Agreement or in any certificate or document delivered hereunder;

	(iii)	 	the institution by a party of proceedings of any nature under any laws, whether now
existing or subsequently enacted or amended, for the relief of debtors wherein such party is
seeking relief as debtor;

	(iv)	 	a general assignment by a party for the benefit of creditors, the admission by a party in
writing of its inability to pay its debts as they mature, or the institution by a party of a
proceeding under any provision of bankruptcy or insolvency law as now existing or hereafter
amended or becoming effective; or

	(v)	 	the appointment of a receiver for a party or a substantial portion of its assets which
appointment is not vacated within sixty (60) days after the filing thereof.

8.3 Effect of termination; remedies

The termination under Section 8.2 of the licenses granted by Sections 1 and 2 shall not relieve any
party from its other obligations hereunder, including any liability for past breaches.

9. Indemnification

9.1 Indemnification by STI

STI will defend, indemnify and hold harmless BSTC and its officers, directors, employees,
shareholders, customers, agents, and permitted successors and assigns from and against any and all
loss, damage, settlement or expense (including legal expenses), as incurred, resulting from or
arising out of (i) any breach of this License Agreement by STI or (ii) any third-party claim based
on Product sold by STI or its assignees outside the Territory, other than claims arising in
conjunction with a breach by BSTC of its obligations pursuant to this License Agreement.

9.2 Indemnity by BSTC

BSTC will defend, indemnify and hold harmless STI and its officers, directors, employees,
shareholders, customers, agents, and permitted successors and assigns from and against any and all
loss, damage, settlement or expense (including legal expenses), as incurred, resulting from or
arising out of (i) any breach of this License Agreement by BSTC or (ii) any third-party claim based
on Product sold by BSTC or its assignees, or any other activities of BSTC, whether in connection
with the Licensed Trademarks or otherwise, other than claims arising in conjunction with a breach
by STI of its obligations pursuant to this License Agreement.

Confidential

6

 

EXHIBIT 10.25

9.3 Procedure

	(i)	 	Notice. Promptly upon receipt by an indemnified party of a notice of a claim by a
third party that may give rise to a claim hereunder, the indemnified party shall give written
notice thereof to the indemnifying party, although failure to do so shall not affect the right
to indemnification except to the extent of actual prejudice.
	 
	(ii)	 	Control of defense. The indemnified party shall allow the indemnifying party to
assume control of the defense of any such action brought by a third party so long as such
defense will be conducted by reputable attorneys retained by the indemnifying party at the
indemnifying party’s cost and expense and the indemnifying party agrees to be solely
responsible for satisfying the claim. The indemnified party will have the right to
participate in such proceedings and to be separately represented by attorneys of its own
choosing at its own expense.
	 
	(iii)	 	Effect. The indemnifying party may contest or settle any third party claim on such
terms as the indemnifying party may choose; however, the indemnifying party will not have the
right, without the indemnified party’s written consent, to settle any such claim if such
settlement (i) arises from or is part of any criminal action, suit or proceeding, (ii)
contains an admission of wrongdoing on the part of the indemnified party, or (iii) provides
for injunctive relief which is binding on the indemnified party or limits its use of the
Licensed Trademarks.

10. Confidentiality

10.1 Obligations

Each party agrees that (a) except as provided in Section 10.3, it shall maintain the confidential
nature of any Confidential Information received from the other party, and (b) it shall use such
Confidential Information solely for the purpose of meeting its obligations under this License
Agreement and not in connection with any other business or activity. At the termination of the
licenses granted under Sections 1 and 2, or any time upon demand of a disclosing party, each of the
parties agrees to return any and all materials containing any Confidential Information.

10.2 Limitations on confidentiality obligations and use restrictions

The restrictions on use and the obligations of confidentiality contained in this License Agreement
will not apply to any item or combination of items of information (a) that the receiving party can
demonstrate (i) is then in the public domain by acts not attributable to such party, (ii) is
disclosed to a third party on an unrestricted basis by the party to whom it belonged, (iii) is
hereafter received on an unrestricted basis by the receiving party from a third party source who to
the receiving party’s knowledge after due inquiry is not and was not bound by confidentiality
obligations to the disclosing party, or (iv) was known to the receiving party as shown by its
written records prior to the date of disclosure hereunder.

10.3 Actions if disclosure required

If the receiving party is requested pursuant to, or required by, applicable law or regulation or by
legal process to make any disclosure otherwise prohibited hereunder, it shall provide the
disclosing party with prompt notice of such requests or requirements prior to disclosure so that
(a) the disclosing party (with the reasonable cooperation of the receiving party) may seek an
appropriate protective order or other remedy and/or (b) the parties can seek in good faith to agree
on the appropriate scope and approach to disclosure. If a protective order or other remedy is not
obtained, the receiving party may furnish only that portion of the Confidential Information which,
in the written opinion of counsel addressed to the disclosing party, it is legally compelled to
disclose and shall use its reasonable efforts to obtain confidential treatment for the Confidential
Information.

Confidential

7

 

EXHIBIT 10.25

10.4 Injunctions

The parties agree that remedies at law may be inadequate to protect against breach of this Article
10, and hereby agree to the granting of injunctive relief without proof of actual damage or
requirement for posting of a bond.

11. General

11.1 Relationship of parties

Nothing contained in this License Agreement will be construed as creating any agency, partnership,
or other form of joint enterprise between the parties. The relationship between the parties will
at all times be that of independent contractors. Neither party will have authority to contract for
or bind the other in any manner whatsoever. This License Agreement confers no rights upon either
party except those expressly granted herein.

11.2 Authority

Each party represents that it has full corporate power and authority to enter into this License
Agreement and comply with the terms and conditions hereof, and that the person signing this License
Agreement on behalf of such party has been properly authorized and empowered to enter into this
License Agreement.

11.3 Warranty disclaimer

STI does not warrant that the Product or the Technology will meet the needs of BSTC. STI warrants
that any Product or component manufactured and delivered to BSTC by STI will, when delivered,
conform to the documentation and specifications provided by STI. STI will replace any such STI
Product that STI provides to BSTC and that is defective, upon request by BSTC made within thirty
days after delivery of the defective item and upon return of the defective item. EXCEPT AS
EXPRESSLY PROVIDED IN THIS SECTION 11.3, STI MAKES NO WARRANTIES TO ANY PERSON OR ENTITY, EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE, REGARDING THE SUBJECT MATTER OF THIS LICENSE AGREEMENT. STI
SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, NOR ARE THERE ANY WARRANTIES CREATED BY A COURSE OF DEALING, COURSE OF PERFORMANCE OR
TRADE USAGE. STI DOES NOT WARRANT THAT THE PRODUCT WILL MEET BSTC’S OR ANY CUSTOMER’S NEEDS OR BE
FREE FROM ERRORS, OR THAT THE OPERATION OF THE PRODUCT WILL BE UNINTERRUPTED. THE FOREGOING
EXCLUSIONS AND DISCLAIMERS ARE AN ESSENTIAL PART OF THIS AGREEMENT AND FORMED THE BASIS FOR
DETERMINING THE ROYALTIES ASSESSED HEREUNDER.

11.4 Limitation of damages

STI’s liability for damages from any cause of action whatsoever, including liability for any claim
of infringement of proprietary rights will not exceed the value of its ownership interest in BSTC.
In no event will STI be liable for lost profits or other incidental or consequential damages of
BaoLi Communications or of BSTC under any circumstances whatsoever, even if advised of the
possibility of such damages.

11.5 Governing law

This License Agreement and all disputes arising out of or related to this License Agreement, or the
performance, enforcement, breach or termination hereof, and any remedies relating thereto, will be
construed, governed, interpreted and applied in accordance with the laws of California, without
regard to conflict of laws principles. Except (i) with reference to enforcement of the obligations
of Section 10, (ii) with reference to enforcement of any final judgment duly obtained, and (iii) as

Confidential

8

 

EXHIBIT 10.25

provided in this Section 11.5 and Section 11.6, the sole jurisdiction and venue for actions related
to the subject matter hereof will be state and federal courts in Los Angeles, California and each
of the parties hereto submits itself to this exclusive jurisdiction and venue of such courts for
the purpose of such action. Each party acknowledges that its breach of this License Agreement may
cause irreparable injury to the other for which monetary damages may not be an adequate remedy.
Accordingly, and without prejudice from the dispute resolution mechanisms of Section 11.6, a party
in the event of such a breach by the other will be entitled without the requirement for posting of
any bond to seek injunctions or other equitable remedy in any jurisdiction through which the
potential for irreparable injury may be mitigated or prevented.

11.6 Arbitration of disputes

	(i)	 	The parties shall use reasonable efforts to resolve and settle amicably through
consultations any dispute, controversy or claim (a “Dispute”) arising out of or in connection
with this License Agreement or its validity, interpretation, performance, breach or
enforceability.
	 
	(ii)	 	If any Dispute is not settled amicably through consultations within one hundred twenty (120)
days of one party’s receipt of the other party’s notice of a Dispute, then any party involved
in the Dispute may elect to submit such Dispute to arbitration, in which event such Dispute
shall be exclusively and finally settled by binding arbitration in Singapore under the
auspices of the Singapore International Arbitration Centre through a sole arbitrator.
	 
	(iii)	 	The arbitration proceedings shall be conducted in the English language, and all
documentation to be reviewed by the arbitrator or submitted by the parties shall be in the
English language. The arbitration tribunal shall apply the Arbitration Rules of the United
Nations Commission on International Trade Law in effect at the time of the arbitration.
However, if such rules are in conflict with the provisions here set forth, including the
provisions concerning the appointment of the arbitrator, the provisions here set forth shall
prevail.
	 
	(iv)	 	During arbitration, the parties shall perform this License Agreement to the fullest extent
possible, except for the matter or matters in dispute.
	 
	(v)	 	The arbitrator shall render a written decision in English stating its reasons for its
decision within twelve (12) months of the request for arbitration, and such award shall be
final and binding upon the parties without any right of review or appeal. Any compensation
shall be calculated and paid in United States Dollars.
	 
	(vi)	 	The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (also known as
the “New York Convention”) shall apply to this License Agreement and to any arbitral award or
order resulting from any arbitration conducted hereunder. Judgment upon the award rendered by
the arbitrator may be entered in any court of record of competent jurisdiction in any country,
or application may be made to such court for judicial acceptance of the award and an order of
enforcement, as the law of such jurisdiction may require or allow. The parties agree that the
award of the arbitral tribunal shall be the sole and exclusive remedy among them regarding any
and all claims and counterclaims presented to the tribunal. The parties further agree that
this arbitration clause is an explicit waiver of any immunity or defense that may apply
against the enforcement and execution of any arbitral award or any judgment thereon.
	 
	(vii)	 	The substantially prevailing party in an arbitration proceeding shall be entitled, in
addition to such other relief as may be granted, to recover its attorneys’ fees and costs, and
the other party shall pay all costs of the arbitration. The arbitrator shall determine which
of the parties has substantially prevailed based upon an assessment of which party’s major
arguments or positions

Confidential

9

 

EXHIBIT 10.25

taken in the proceedings could fairly be said to have prevailed over the other party’s major
arguments or positions on major disputed issues.

11.7 Attorneys fees

If the services of an attorney are required by any party to secure the performance of this License
Agreement or otherwise upon the breach or default of another party to this License Agreement, or if
any judicial remedy or arbitration is necessary to enforce or interpret any provision of this
License Agreement or the rights and duties of any person in relation thereto, the prevailing party
shall be entitled to reasonable attorneys’ fees, costs and other expenses, in addition to any other
relief to which such party may be entitled. Any award of damages following judicial remedy or
arbitration as a result of the breach of this License Agreement or any of its provisions shall
include an award of prejudgment interest from the date of the breach at the maximum amount of
interest allowed by law.

11.8 Assignment; transfer

This License Agreement and the rights and obligations hereunder are not transferable or assignable
without the prior written consent of the parties hereto, except that a person or entity who
acquires all or substantially all of the assets or business of STI, whether by sale, merger or
otherwise will have the right to assume all the rights and obligations of STI hereunder.

11.9 Notices

All notices will be in writing and sent by express courier (with written acknowledgment of
receipt), to the following addresses, or such other address as either party may provide under this
Section 11.9:

To BSTC:

 

Jilin Province

People’s Republic of China

Attention:                     

To STI:

Superconductor Technologies Inc. (STI)

460 Ward Drive

Santa Barbara, CA 93111|

USA

Attention: Chief Executive Officer

11.10 Integration; severability

This License Agreement and all schedules, exhibits and attachments hereto constitute the entire
agreement between the parties concerning the subject matter hereof. This License Agreement
replaces and supersedes any prior verbal or written understandings, communications, or
representations between the parties with respect to its subject matter. If any provision of this
License Agreement will be held to be illegal or unenforceable, that provision will be limited or
eliminated to the minimum extent necessary so that this License Agreement will otherwise remain in
full force and effect and enforceable.

11.11 Construction; headings

Unless the context otherwise requires, the term including means “including but not limited to.”
The section headings herein are provided for ease of reference only and will have no legal effect.
This Agreement has been negotiated by the parties, which have had reasonable access to legal
counsel. This Agreement will be fairly interpreted in accordance with its terms, without any
construction in favor of or against either party as a result of having drafted any particular
provision.

Confidential

10

 

EXHIBIT 10.25

11.12 Amendments; waivers; counterparts

This License Agreement may be amended or modified only with the prior written consent of both
parties. The failure by a party to exercise any rights hereunder will not operate as a waiver of
such party’s right or any other right in the future. This License Agreement may be executed in
counterparts, each of which will be deemed an original.

In witness whereof, each of the parties has caused this License Agreement to be executed as of the
date first written above by its duly authorized officer.

	 	 	 	 	 	 	 
	Superconductor Investments (Mauritius)	 	BAOLI Superconductor Technology Co,
	LTD, a Delaware corporation	 	Ltd, a technologically-advanced contractual joint
	 	 	 	 	venture within the territory of the People’s
	 	 	 	 	Republic of China
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:
	 	 	 	Name:
	 

	 	Title:
	 	 	 	Title:

Confidential

11

 

EXHIBIT 10.25

Schedule A– Definitions

“BaoLi Communications” means BAOLI Superconductor Technology Co, Ltd., a Chinese enterprise.

“Confidential Information” means all oral, written or recorded information about or related to the
party (or any of its subsidiaries or other affiliates) or its or their technology, assets,
liabilities, or business, which is furnished by its officers, directors, employees, agents or
controlling persons, whether furnished before or after the date hereof, and regardless of the
manner in which it is furnished, together with any summaries, extracts, analyses, compilations,
studies or other documents or records prepared by the receiving party which contain, reflect or are
generated from such information, regardless of whether explicitly identified as confidential.
Confidential Information also includes the Proprietary Information and the Technology. For purpose
of clarification, the Licensed Trademarks are not Confidential Information.

“Documentation” means any documentation or materials including reference, user, installation,
systems administrator and technical guides relating to the use of the Technology.

“Effective Date” means the date ten days after the completion of the contribution to the
capitalization of BSTC of BaoLi Communications as contemplated by the Joint Venture Contract
between BaoLi Communications and STI dated December 8, 2007.

“BSTC Technology” means inventions or proprietary information that BSTC accomplishes or creates or
to which BSTC acquires rights, other than the Technology.

“BSTC” means Huichun BaoLi Superconductor Technology Co Ltd, a technologically-advanced contractual
joint venture in the People’s Republic of China.

“Junior Marks” is defined in Section 5.2.

“Licensed Trademarks” means the marks identified on Schedule D—Description of Licensed Trademarks.

“Minimum Royalty” means (x) zero in each calendar quarter through December 31, 2009 and (y)
$250,000 per quarter in each calendar quarter thereafter.

“Product” means STI’s proprietary, cryogenic front-end receiver product to improve the performance
of base stations in wireless telecommunication networks, more fully described as follows:

The Product is comprised of (i) a fixed frequency filter that passes the signals received from cell
phone handsets and rejects other frequencies and (ii) an amplifier that increases the level of the
signals that pass through the filter and adds very little noise in the process.

The filter is made using high temperature superconductor material, and because of the proprieties
of this material, the filter can select frequencies to pass that are only slightly different than
the frequencies that are rejected. This selectivity allows for example 849MHz to pass the filter,
but 851MHz to be rejected, so that less than one millionth of the power leaks through the filter at
that frequency.

The amplifier is a cryogenically-cooled, low-noise radio-frequency amplifier. All amplifiers add
some electronic noise to the signal that is amplified, but because the Product’s amplifier is
cooled to -320F, the electronic noise that it adds to the desired signal is minimized.

Confidential

Schedule A-1

 

EXHIBIT 10.25

The Product’s use is limited to serving cellular base stations. Typically cellular base stations
use six separate antennas to receive the signals for cell phones, so each unit of the Product has
six filters and six amplifiers.

The filters and amplifiers are mounted in a small enclosure (called a micro-enclosure) which is
then placed inside a larger enclosure (called a dewar). The dewar is then evacuated to provide
thermal isolation between the cryo-cooled micro-enclosure and the ambient environment. A cooler is
then attached to the dewar to achieve the low temperatures necessary for the high temperature
superconductor to work. A control board is added to monitor and control the functions of the unit.

The Product will have each of two specific forms:

1) For use in the 850MHz CDMA cellular network, the only variation in the Product from that
heretofore implemented in the United States is an optimization of the filter (China uses only a
sub-set of the frequencies used by the United States so an optimum design would narrow the filter
used in STI’s SuperLink product), and a minor modification of the power supply.

2) For use in the TD-SCDMA network that is planned to operate in the 2,000MHz band, the only
variation in the Product from that heretofore implemented in the United States is a modification to
operate at 2,000MHz.

“Proprietary Information” means all information of STI that is not generally known to the public,
whether of a technical, business or other nature (including trade secrets, know-how and information
relating to the technology, customers, business plans, marketing activities, finances and other
business affairs of STI), that is disclosed by STI to BSTC in written, oral, electronic and/or
other form or that is otherwise learned by BSTC in the course of its discussions or dealings with,
or its physical or electronic access to the premises of, STI, and that has been identified as being
proprietary and/or confidential or that by the nature of the circumstances surrounding the
disclosure or receipt should reasonably be construed as proprietary or confidential. Proprietary
Information also includes (a) all information concerning the existence and progress of the parties’
dealings and the identity of STI’s vendors and strategic partners and (b) the existence of, and the
data generated by, field trials involving STI’s products.

“Qualified Uses” of the Product means use by commercial and civilian telecommunications industry
customers and shall expressly not include military use of any type or nature, whether direct or
indirect.

“Revenues” means (a) gross revenues of BSTC or any successor or assign received or earned from
sales of the Product either (i) using any Technology or (ii) associated with any Licensed
Trademarks less (b) sales commissions paid to any unaffiliated third party and less (c) discounts
and allowances to customers on such revenues and less (d) related shipping and taxes on revenues,
but excluding (e) revenues and sales commissions on (i) the first 500 units of Product built during
the initial development period from the kits provided by STI as contemplated herein and (ii) any
sales from BSTC to STI or its designees.

“Royalty Statement” means a statement in English setting forth the Revenues during such quarterly
period and a calculation of royalty due for the period.

“Technology” means (a) the Proprietary Information pertinent to the technology described on
Schedule B—Description of Proprietary Information included in the Technology included in the
Technology, together with the Documentation, delivered by STI to BSTC (b) corrections, updates,
upgrades, enhancements, releases, fixes, new versions or other improvements of, modifications to,
and derivative works of, such technology, Proprietary Information and Documentation developed

Confidential

Schedule A-2

 

EXHIBIT 10.25

by BSTC, and (c) the inventions object of the patents issued in China and patent filings made in
China that are identified on Schedule C—Patents and Patent Applications, but only to the extent of
their embodiment in the Product and solely for the purpose of manufacture and sale of the Product
as permitted by this License Agreement. The Technology does not include any technology pertinent
to certain aspects of the manufacturing process retained by STI based on factors including
economics, feasibility and regulatory climate. The Technology does not include any technology the
licensing or transfer of which is prohibited by any United States laws, regulations or governmental
policies. If any technology otherwise licensed hereunder is excluded by reason of such laws,
regulations or policies and not addressed through STI’s retention of aspects of the manufacturing
process, STI will use reasonable efforts to obtain any required United States approval to include
it in the Technology.

“Territory” means The People’s Republic of China, including its Special Administrative Regions of
Hong Kong and Macau, but excluding Taiwan.

Confidential

Schedule A-3

 

EXHIBIT 10.25

Schedule B– Description of Proprietary Information included in the Technology

A. Proprietary Information pertinent to the manufacture of the Product includes information
relative to the following:

1. Facility/factory layout

(a) locations and specifications for areas such as material receiving, inspection, material
storage, assembly, test and shipping

(b) facility specifications such as electrical power requirements, liquid nitrogen plumbing,
chilled water flow rates and clean room class specifications

(c) process flow descriptions using commercially available methodology for production planning
such as Value Stream Mapping and Just In Time methods

2. Purchasing and procurement for precision mechanical and electronic parts

(a) disclosure of known vendors to produce parts and equipment, such as electrical RF connectors,
RF switches, vacuum test equipment, circuit boards, hermitic seals, and precision machining

3. Final assembly and test

(a) final assembly and testing of RF filter assemblies using commercially available electrical
test equipment

(b) routinization of assembly steps so as not to require special methods or techniques such as
screw drivers, torque wrenches, etc.

(c) test equipment including noise figure meter, S-Parameter network analyzer, digital power
meters, personal computers, and Agilent VEE or Lab View and Microsoft SQL software

(d) Electrical testing including RF filter performance, system operating temperatures, and
electrical power consumption at several different temperature conditions found in a typical indoor
controlled environment

4. Cooler assembly

(a) assembly of an enclosed cooler assembly using ultrasonic cleaning equipment, sand blasting,
commercially available vacuum bake oven and epoxy curing ovens, TIG welding equipment, pressure
testing, commercial vacuum leak tester, custom test equipment using commercially available
components, temperature monitor, network analyzer (mechanical frequency tuning), and Lab View and
Microsoft SQL software

5. Micro Enclosure

(a) assembly of a mechanical/electrical assembly using ultrasonic cleaning equipment, mechanical
hardware, Miyachi wire soldering equipment, Kulicke & Saffa (K&S) gold wire ball bonder, and spot
welding

(b) further elements of assembly including RF testing using S-Parameter network analyzer, digital
power meter, personal computer, and Lab View and Microsoft SQL software

6. Dewar

(a) assembly of a mechanical vacuum housing with ultrasonic cleaning, LN2 handling, mechanical
hardware, TIG welding, and commercially available vacuum leak tester.

(b) evacuating during assembly an enclosed housing with custom automated vacuum equipment which
consists of commercial available ON-BOARD cryogenic vacuum pump and a Direct Logic 205 controller
system

(c) RF testing using noise figure meter, S-Parameter network analyzer, digital power meter,
personal computers, and Lab View and Microsoft SQL software

Confidential

Schedule B-1

 

EXHIBIT 10.25

B. Proprietary Information pertinent to the cryogenic cooling technology to cool the filters and
amplifiers in the Product includes information relative to the following:

There are two areas of application of the cryogenic cooling technology in the Product: the cooler
and the Dewar.

The cooler works by moving a piston back and forth with an electro magnet: the piston pushes
helium gas back and forth driving a displacer. The displacer expands cold gas in one spot and
compresses hot gas in another spot, pumping heat away from the cryogenic end. Proprietary
technology is used to ensure that there is no friction as the piston and displacer move back and
forth about sixty times per second. The cryogenic end of the cooler cools the filter and amplifier
to a temperature of -320F, while the heat reject end of the cooler stays just a few degrees above
ambient. Proprietary technology is employed throughout the cooler to enable it to work correctly
over an extended lifetime with a low failure rate.

The Dewar works by reducing the heat flow. The Dewar reduces all the three sources of heat flow:
convection, conduction, and radiation. Convection is eliminated by maintaining a vacuum between
cold and ambient parts. The high vacuum is maintained for years using proprietary technology.
Conduction is reduced using proprietary technology to connect the cold and ambient parts together.
Finally radiation is reduced with the careful choice of features and surfaces, using proprietary
technology.

Confidential

Schedule B-2

 

EXHIBIT 10.25

Schedule C– Patents and Patent Applications

Issued Patents in China

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Patent No	 	Title	 	Inventors	 	Docket	 	Filing Date	 	Serial No	 	Issue Date	 	Description
	ZL01808625.X

	 	Stirling Cycle

Cryocooler with

Optimized Cold End

Design
	 	Hanes
	 	OMM 0164
	 	16-Apr-01
	 	01808625.X
	 	16-Feb-05
	 	STI’s current
cooler design

Pending Patent Applications in China

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Serial No	 	Title	 	Docket	 	Inventors	 	Filing Date	 	Status	 	Description
	3804170.7

	 	Method and
Apparatus for
Minimizing
Intermodulation
With an Asymmetric
Resonator
	 	MNG 0056
	 	Ye
	 	19-Feb-03
	 	published	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	3805589.9

	 	Resonator and
Coupling Method and
Apparatus for a
Microstrip Filter
	 	MNG 0057
	 	Ye
	 	10-Mar-03
	 	published	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	200480036124.X

	 	Cryocooler Cold-end
Assembly Apparatus
and Method
	 	MNG 0063
	 	O’Baid, Hanes
	 	23-Jun-06
	 	published
	 	deep drawn housing
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	200480035702.8

	 	Growth of In-situ
Thin Films by
Reactive
Evaporation
	 	OMM 0349
	 	Moeckly, Ruby
	 	08-May-06
	 	published
	 	RCE
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	20058004737

	 	RF-Properties-Optimized Compositions of
(RE)Ba2Cu3O7-d Thin
Film
Superconductors
	 	OMM 0365
	 	Moeckly, Willemsen,

Peng, Gilantsev
	 	23-Jun-07
	 	pending
	 	substitution
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	PCT/US2005/042867

	 	Systems and Methods
for Tuning Filters
	 	WAK 0004
	 	Tsuzuki, Hernandez,

Willemsen
	 	30-Jul-07
	 	pending
	 	our “omnibus”
tuning application

Confidential

Schedule C-1

 

EXHIBIT 10.25

Schedule D– Description of Licensed Trademarks

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Trademark	 	Serial No.	 	 	Filing Date	 	 	Registration Date	 	 	Country

Schedule E- Training Plan

Confidential

Schedule D-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]