Exhibit 10.1
PATENT LICENSE AGREEMENT
THIS PATENT LICENSE AGREEMENT (hereinafter "AGREEMENT"), effective as
of March 28, 1999, is made and entered into by and between SI DIAMOND
TECHNOLOGY, INC., a corporation organized and existing under the laws of the
state of Texas, having its principal place of business at 3006 Longhorn
Boulevard, Suite 107, Austin, Texas 78758, United States of America
(hereinafter "SIDT") and ************************************************
**************************************************************************
********* sometimes each referred to hereinafter as a "party" and sometimes
jointly referred to hereinafter as the "parties" to this AGREEMENT.
W I T N E S S E T H:
WHEREAS, SIDT is now the owner of certain existing patents pertaining to
electron field emission display technology and expects to obtain further
patents to such technology -- such existing and further patents being
collectively defined hereinafter as LICENSED PATENTS; and
WHEREAS, ********* is desirous of acquiring a nonexclusive license,
nonassertion and release as hereinafter described under such LICENSED
PATENTS, and SIDT is willing to grant such license, nonassertion and release
to ********* under the terms and conditions set forth in this AGREEMENT.
NOW, THEREFORE, in consideration of the foregoing, the covenants herein
contained, and other good and valuable considerations, the receipt and
adequacy of which are hereby acknowledged, SIDT and ********* agree as
follows:
ARTICLE 1 - DEFINITIONS
In this AGREEMENT, the following capitalized words and phrases shall
have the respective meanings as set forth below:
1.1 "EFFECTIVE DATE" shall mean the date first above written,
subject to full execution hereof by the parties.
1.2 "TERM" shall mean as described in Article 3.1 herein.
1.3 "SUBSIDIARY" shall mean any corporation, company or other entity
as to which a party, now or hereafter at any time during the TERM of this
AGREEMENT:
(a) owns or controls directly or indirectly more than fifty percent
(50%) (by nominal value or number of units) of outstanding stock conferring
the right to vote at general meetings; or
(b) has the right to elect the majority of the board of directors or
its equivalent; or
(c) has the right directly or indirectly to appoint or remove
management;
but such corporation, company or other entity shall be deemed to be a
subsidiary only so long as such ownership or control exists.
1.4 "ELECTRON FIELD EMISSION DISPLAY DEVICE" shall mean ****************
*******************************************************************************
************************************************************************
*****************************************************************************
******************************************************************************
****************************************************************************
********************************************
- 2 -
******************************************************************************
1.5 "EXCLUDED ELECTRON FIELD EMISSION DISPLAY MODULE" shall mean *******
******************************************************************************
- 3 -
******************************************************************************
- 4 -
******************************************************************************
- 5 -
******************************************************************************
1.6 "EXCLUDED PRODUCTS" shall mean an EXCLUDED ELECTRON FIELD EMISSION
DISPLAY MODULE and a matrix array or regularly arrayed EXCLUDED ELECTRON
FIELD EMISSION DISPLAY MODULES.
1.7 "LICENSED PRODUCTS" shall mean (a) all electron filed emitting
display panels; (b) all ELECTRON FILED EMISSION DISPLAY DEVICES; (c) all
products of any form, type or kind having an ELECTRON FIELD EMISSION DISPLAY
DEVICE; (d) all elements, parts, components, subassemblies, subsystems,
modules, units, accessories and software designed for incorporation or use in
or for use with any of the products of foregoing items (a), (b) and (c),
wherein this item (d) includes, without limitation, electron emitting
devices, phosphors, spacers, acceleration electrode, getter, drive circuit,
image interface, control circuit device and electron emitting display panel;
and (e) all replacement parts and service parts for any of the foregoing
items (a), (b), (c) and (d); and (f) all instrumentalities or aggregate of
instrumentalities for use in the manufacture of any of the foregoing items
(a), (b), (c), (d) and (e). The term LICENSED PRODUCTS shall not include the
EXCLUDED PRODUCTS.
1.8 "LICENSED PATENTS" shall mean all patents and patent applications
throughout the world, including utility models, design patents and design
registrations, and applications therefor (hereinafter in this AGREEMENT
referred to as "PATENTS"), which are, now or hereafter at any time during the
TERM of this AGREEMENT, owned or controlled or licensable by SIDT and/or any
of its SUBSIDIARIES and have one or more claims which cover or are otherwise
applicable to the LICENSED PRODUCTS or any method or process involved in
- 6 -
the manufacture or use thereof; all parents, divisions, continuations and
continuations in-part of any of said patent applications, whether so related
to said patent applications directly or through one or more intervening
patent applications; all patents issuing on any of the foregoing patent
applications; and all reissues, reexaminations, renewals and extensions of
any of the foregoing patents. LICENSED PATENTS shall include, but shall not be
limited to, the patents and patent applications of the United States and
other countries listed in attached Exhibit A. For the purpose of this
AGREEMENT, the term LICENSED PATENTS shall include all PATENTS, which are,
now or hereafter at any time during the TERM of this AGREEMENT, owned or
controlled or licensable by SIDT and/or any of its SUBSIDIARIES and cover or
are otherwise applicable to the EXCLUDED PRODUCTS or EXCLUDED ELECTRON FIELD
EMISSION DISPLAY MODULE if such PATENTS also cover or are otherwise
applicable to the LICENSED PRODUCTS or any method or process involved in the
manufacture or use thereof.
1.9 "EMPLOYEE AND/OR CO-OWNED PATENTS" shall mean all PATENTS (a) which
are not LICENSED PATENTS and cover or are otherwise applicable to any of (i)
LICENSED PRODUCTS, (ii) both of LICENSED PRODUCTS and EXCLUDED PRODUCTS,
(iii) both of LICENSED PRODUCTS and EXCLUDED FIELD ELECTRON EMISSION DISPLAY
MODULE and (iv) any method or process involved in the manufacture or use of
any of the foregoing and (b) which either (1) claim inventions that are made
solely or jointly with a third party by an employee, officer, agent and/or
consultant of SIDT or any of its SUBSIDIARIES in, or as a result of, the
performance of research, development, technical or other work for or with
SIDT or any its SUBSIDIARIES and a third party. The term EMPLOYEE AND/OR
CO-0WNED PATENTS shall not included PATENTS (a) which are
- 7 -
entitled to an arrestive filing date subsequent to the EFFECTIVE DATE of this
AGREEMENT, and (b) which claim inventions that are made after the EFFECTIVE
DATE of this AGREEMENT jointly by one or more employees of SIDT or any of its
SUBSIDIARIES and a third party in, or as a result of their work in the course
of their employment, and (c) which are co-owned by SIDT and/or its
SUBSIDIARIES and a third party, and (d) under which SIDT and any of its
SUBSIDIARIES do not have the right to grant licenses.
ARTICLE 2 - LICENSE GRANT
NONASSERTION AND RELEASE
2.1 Subject to payment to SIDT of the lump sum amount under Article 4,
SIDT on behalf of itself and its SUBSIDIARIES hereby grants to ********* ****
**************** a fully paid-up, worldwide, royalty-free, irrevocable,
perpetual, nonexclusive license (without the right to sublicense) under the
LICENSED PATENTS to import, make, have made, use, sell, offer for sale, lease
or otherwise dispose of LICENSED PRODUCTS throughout the world and to
practice or have practiced throughout the world any method or process is the
manufacture or use thereof.
2.2 The license grant in paragraph 2.1 herein shall extend to all of
******************************** suppliers, distributors, dealers, agents,
customers and users (whether direct or indirect) with respect to all LICENSED
PRODUCTS which, in whole or in part, are imported, made, have made, used,
sold, offered for sale, leased or otherwise disposed of by or for *********
*************************** throughout the world.
2.3 Subject to payment to SIDT of the lump sum amount under Article 4, as
to all LICENSED PRODUCTS which, in whole or in part, are imported, made, have
made, used, sold,
- 8 -
offered for sale, leased or otherwise disposed of by or for *********
******************************************** SIDT on behalf of itself and its
SUBSIDIARIES hereby forever releases and discharges worldwide *********
************************************ and their respective distributors,
dealers, agents, customers and users (whether direct or indirect) from any
and all claims which they may now have or which may arise hereafter for
alleged infringement, either direct, inducement and/or contributory, of any
of the LICENSED PATENTS, and SIDT and its SUBSIDIARIES each hereby forever
agrees worldwide not to assert any of the LICENSED PATENTS and forever agrees
worldwide not to institute or continue any administrative proceeding or
judicial action for infringement, either direct, inducement and/or
contributory, based on any of the LICENSED PATENTS, against *********
****************************, and their respective distributors, dealers,
agents, customers and users (whether direct or indirect).
ARTICLE 3 - TERM
3.1 This AGREEMENT shall commence as of the EFFECTIVE DATE and shall
continue in full force and effect until expiration of the last to expire of
the LICENSED PATENTS, except that the license, nonassertion and release
granted in Article 2 herein and Articles 6 and 7 hereof are perpetual and
shall survive termination of this AGREEMENT.
ARTICLE 4 - PAYMENT
4.1 In full and complete consideration for the license, nonassertion and
release granted in Article 2 and the indemnification under Article 7 herein,
agrees to pay SIDT a one time lump sum of Five Million Five Hundred
Fifty-five Thousand Five Hundred Fifty-five U.S. Dollars and Fifty-five U.S.
Cents (US$5,555,555.55) within fifteen (15)
- 9 -
days following ********* receipt of the duplicate originals or this agreement
duly executed by SIDT. This lump sum shall be paid by wire transfer to the
following bank account of SIDT.
Bank: Chase Bank Texas
PO Box 3558
Houston, Texas 77232-3063
ABA Routing Number: 113000609
Account Number: 001-00053751
Account Name: SI Diamond Technology, Inc.
3006 Longhorn Boulevard, Suite 107
Austin, Texas 78758
4.2 All taxes imposed as a result of the existence or performance of
this AGREEMENT shall be borne and paid by the party required to do so by
applicable law. *******************************************************
ARTICLE 5 - WARRANTIES AND DISCLAIMERS
5.1 SIDT makes the following warranties:
(a) SIDT and/or its SUBSIDIARIES own the entire right, title and
interest in and to the LICENSED PATENTS and the inventions disclosed and
claimed therein;
(b) SIDT has the right to enter into this AGREEMENT with ********* on
its own behalf and on behalf of its SUBSIDIARIES;
(c) there are no liens, conveyances, mortgages, assignments,
encumbrances or agreements which would prevent or impair the full and
complete exercise of the license, nonassertion and release granted by SIDT
and its SUBSIDIARIES under this AGREEMENT;
(d) SIDT and its SUBSIDIARIES have not entered into and shall not enter
into any agreements which would
- 10 -
interfere with the license, nonassertion and release granted under this
AGREEMENT;
(e) as to inventions that are made by an employee, officer, agent and/or
consultant of SIDT or any of its SUBSIDIARIES and cover or are otherwise
applicable to LICENSED PRODUCTS or any method or process involved in the
manufacture or use thereof, SIDT and its SUBSIDIARIES shall devote their best
efforts so that such inventions and patent applications and patents therefor
will be qualified as LICENSED PATENTS;
(f) SIDT will provide ********* from time to time as ********* may
request, and in any event at the end of each calendar year during the TERM of
this AGREEMENT, with a latest list of all patents and patent applications
throughout the would, including utility models, design patents and design
registrations, and applications therefor, which meet the definition on the
LICENSED PATENTS and promptly answer to any question from ********* relating
to the LICENSED PATENTS; and
(g) all the PATENTS (1) which have one or more claims that cover or are
otherwise applicable to any of (i) LICENSED PRODUCTS, (ii) both of LICENSED
PRODUCTS and EXCLUDED PRODUCTS, (iii) both of LICENSED PRODUCTS and EXCLUDED
ELECTRON FIELD EMISSION DISPLAY MODULE and (iv) any method or process
involved in the manufacture or use any of the foregoing items (i) through
(iii), and (2) which are entitled to an effective filing date on or prior to
the EFFECTIVE DATE of this AGREEMENT, and (3) which either describe or
disclose inventions made solely by one or more employees, officers, agents
and/or consultants of SIDT or any of its SUBSIDIARIES in, or as a result of,
the performance of research, development, technical or other work for or with
SIDT or any of its SUBSIDIARIES, or describe or disclose inventions made
jointly by one or more employees, officers, agents and/or consultants of SIDT
or any of its SUBSIDIARIES and a third party or its one or more employees in,
or as a
- 11 -
result of, the performance of research, development, technical or other work
for or with SIDT or any of its SUBSIDIARIES or are so-owned with a third
party, are licensed and granted ********************************** to in
this AGREEMENT as the LICENSED PATENTS defined in paragraph 1.8 hereof.
5.2 ********* warrants and represents that it has the right to enter
into this AGREEMENT on its behalf **********************************.
5.3 Nothing contained in this AGREEMENT shall be construed as a grant,
expressly or impliedly, or any license, nonassertion, release or otherwise by
****************************** to SIDT or its SUBSIDIARIES under any patent,
patent application, trademark, tradeenter, copyright, knowhow, or any other
intellectual property right owned or controlled in whole or in part, by
**********************************.
5.4 Nothing herein contained shall be construed as an admission by
********************************** that they have infringed any of the
LICENSED PATENTS or that any of the LICENSED PATENTS are valid and/or
enforceable.
5.5 Nothing in this AGREEMENT shall be construed as conferring an
obligation upon SIDT to file any patent application, or to secure any patent
or patent right or to maintain any patent in force or to bring or prosecute
any action or suit against third parties for infringement; provided, however,
that when SIDT or any of its SUBSIDIARIES wishes to abandon or cease the
maintenance of any LICENSED PATENT, SIDT shall promptly give notice to
********* in that effect and confirm with ********* its intention as is the
disposition of such LICENSED PATENT and when ********* so wishes, SIDT or its
SUBSIDIARIES shall assign and transfer such LICENSED PATENT to *********.
- 12 -
5.6 Nothing in this AGREEMENT shall be construed as a representation or
warranty by SIDT or its SUBSIDIARIES with respect to the validity and/or
enforceability of the LICENSED PATENTS, or that the LICENSED PRODUCTS are
free of claims of infringement of the intellectual property rights of third
parties.
5.7 EXCEPT AS SPECIFICALLY PROVIDED HEREIN, NEITHER PARTY MAKES ANY
REPRESENTATION OR WARRANT OF ANY KIND, EXPRESS OR IMPLIED (INCLUDING BUT NOT
LIMITED TO A WARRANT OF MERCHANTABILITY OF FITNESS FOR A PARTICULAR PURPOSE).
ARTICLE 6 - LIMITATIONS
6.1 No party shall assign or otherwise transfer this AGREEMENT and the
rights or obligations under this AGREEMENT without prior written consent of
the other party, except a party may assign or otherwise transfer this
AGREEMENT and the rights or obligations under this AGREEMENT without prior
written consent of the other party to any corporation, company or other
entity succeeding to the entire business and assets (including research,
development, manufacture and sales) of such party and its SUBSIDIARIES in
ELECTRON FILED MISSION DISPLAY DEVICE, provided the assigning or transferring
party shall have such corporaties, company or other entity execute and
deliver to the other party an instrument in writing agreeing to be bound by
the provision of this AGREEMENT.
6.2 Notwithstanding SIDT's assignment or transfer of this AGREEMENT to
any corporation, company or other entity as permitted in paragraph 6.1
herein, SIDT and its SUBSIDIARIES shall remain liable under this AGREEMENT
with respect to any PATENTS which fall in the definition of
- 13 -
LICENSED PATENTS and are thereafter at any time during the TERM of this
AGREEMENT owned or controlled or licensable by SIDT and/or its SUBSIDIARIES,
and the provisions of this AGREEMENT (including the license, nonassertion
and release of Article 2 and the indemnification under Article 7) shall apply
with respect to such PATENTS.
6.3 SIDT and its SUBSIDIARIES shall not assign or transfer, or grant any
right under the LICENSED PATENTS unless, prior to such assignment or
transfer, or grant, SIDT or its SUBSIDIARIES notifies the assigned,
transferee or grantee of the license, nonassertion and release granted to
********** ********* ********** under the LICENSED PATENTS in this AGREEMENT,
and such assignment or transfer, or grant is expressly made subject to such
license, nonassertion and release granted to ********** **************. SIDT
and its SUBSIDIARIES shall have such assignee or licensee of any such
LICENSED PATENTS execute and deliver to ********* an instrument in writing
agreeing to the license, nonassertion and release granted to **********
****** ***** under such LICENSED PATENTS in this AGREEMENT.
6.4 This AGREEMENT constitutes the entire understanding and agreement of
the parties pertaining to the matters set forth herein, and supersedes all
prior agreements, proposals, understandings, negotiations and discussions of
the parties regarding the subject matter thereof.
6.5 No amendment, supplement, modification or waiver of this AGREEMENT
shall be binding unless executed in writing by authorized representatives of
both parties.
- 14 -
6.6 This AGREEMENT shall be executed in duplicate, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.
6.7 All notices which may be or are required to be given under this
AGREEMENT shall be in writing and shall be deemed given ten (10) days after
posting by registered or certified air mail, postage prepaid, addressed to
the addresses specified below or such changed address as the addressee shall
be specifically provided by notice given in conformity with this paragraph.
Notice to SIDT shall be addressed as follows:
Dr. Zvi Yaniv
President
SI Diamond Technology, Inc.
3006 Longhorn Blvd., Suite 107
Austin, Texas 78750 U.S.A.
Notice to ********* shall be addressed as follows:
************* ***************
************* ***************
************* ***************
************* ***************
************* ***************
************* ***************
6.8 This AGREEMENT shall be construed by and interpreted in accordance
with the laws of the state of New York, United States of America, exclusive
of its choice of law provisions. All questions concerning the construction or
effect of patent applications and patents shall be decided in accordance with
the laws of the country in which the particular patent application or patent
concerned has been filed or granted, as the case may be.
- 15 -
ARTICLE 7 -- INDEMNIFICATION
7.1 SIDT on behalf of itself and its SUBSIDIARIES hereby indemnifies ****
***** ***** for each of the following:
(a) all payments made to any third party for any license granted to
******* by said third party under one or more of the EMPLOYEE AND/OR CO-OWNED
PATENTS; and
(b) all damages awarded against ********* in any legal action for
infringement of one or more of the EMPLOYEE AND/OR CO-OWNED PATENTS.
7.2 ******************** shall give SIDT ninety (90) days advance written
notice prior to taking action for a claim for indemnification under paragraph
7.1 herein.
ARTICLE 8 -- CONFIDENTIALITY
8.1 SIDT, **************, employees, officers and directors shall keep
the terms of this AGREEMENT confidential except;
(a) with the prior written consent of the other party; or
(b) as may be required under law for the legal enactment or performance
of the terms and conditions of this AGREEMENT; or
(c) as otherwise may be required by law or as may be ordained by a court
or competent jurisdiction or other governmental or quasi governmental
authority.
- 16 -
8.2 In no event shall the provisions of paragraph 8.2 herein be construed
to prevent either party from referring only to the existence of this
AGREEMENT.
8.3 **********************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
IN WITNESS WHEREOF, this AGREEMENT has been duly executed by the parties
to be effective as of the effective DATE.
SI DIAMOND TECHNOLOGY, INC. ************* ****
By: /s/ Marc W. Eller By: /s/ *********
----------------------- -------------------------
Title: CHAIRMAN & CEO Title: *********
-------------------- ----------------------
- 17 -