PURCHASE AGREEMENT
This Agreement made and entered into as of October 22, 1998 by and between
Advanced Optics Electronics, Inc., a Nevada corporation having its principal
place of business at 0000 Xxxxxxxxxx Xxxxxx Xxxxxxxxx, Xxxxxxxxxxx, XX 00000
("ADOT") as Seller and Wang REDACTED, a Hong Kong corporation having its North
American office Wang REDACTED, as buyer.
WHEREAS, ADOT is in the process of manufacturing products for electronic
outdoor flat panel displays ("the Products" and/or "the Units"), and is the sole
owner of certain proprietary rights relating to such Products including, but not
limited to all rights relating to United States Patent Number 5198920 and United
States Patent Pending Number 8298422, therefore it is agreed:
A. That ADOT will utilize its REDACTED
Advanced Optics Electronics, Inc. shall provide a high density
electro-optic light valve array with reduced operating voltages
compatible with or to exceed current commercially available silicon
large scale integration technology and display circuitry for use with
REDACTED displays.
Advanced Optics Electronics, Inc. shall provide a high density
electro-optic light valve array with minimized electrode line widths
and maximized light transmission capabilities and provide a
manufacturing process capable of producing electro-optic light valve
arrays with densities of up to REDACTED pixels per square inch.
B. That such reduction is an important inducement and benefit to Buyers
and to significantly reduce Buyer's cost of operations of the
Products.
C. That Wang desires that ADOT build, test, and install two large scale
electronic flat panel moving color image display boards, hereinafter
referred to as Units A and B capable of being viewed by interstate
motorists at a distance of no less than one hundred and fifty feet by
employing the above referenced developments by ADOT to minimize
operating voltages that will be required by Buyer to employ in its
operation of the Products.
D. Due to the confidential nature of technical processes and systems
described in this Agreement and matters of confidential concern to
Buyer in its industry; Buyer and Seller jointly agree not to disclose
the terms and conditions herein unless to a U.S. domestic bank for
financing of all or a portion of the purchase herein. When this
Agreement is completed disclosure may be made.
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E. In the event that any part of this Agreement is breached or violated,
Buyer then shall have the option terminate this Agreement. In the
event this Agreement is terminated all unused funds shall be remitted
to the Buyer including interest at seven (7%) per cent per annum.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
ADOT and Wang agree as follows:
1. Product Description
(a) Two large scale outdoor flat panel displays Units Size REDACTED
(b) Employment of ADOT's Patented Spatial Light Modulator (SLM)
optical light valve and all other Patents pending or applied for
held by ADOT related to flat panel displays.
(c) Levels of Achievement Required
Pixel Density: minimum REDACTED
Framing Rate: minimum REDACTED
Contrast Ratio: minimum REDACTED
2. Installation Per Unit Display.
(a) Delivery allowance REDACTED
(b) Erection/site Preparation Allowance REDACTED
(c) Computer interface Allowance REDACTED
(d) All sites are to have reasonable access, at ground level or not
more than 30' of elevation.
3. Price.
(a) $ REDACTED for first Display unit "A"
(b) $ REDACTED or second Display unit "B"
4. Verification Unit A.
(a) Phase I - Draw Unit A. A New Mexico based partner of a mutually
acceptable accounting firm will verify the serial number of the
designated board for REDACTED. Said verification must indicate
that said board is under construction. At this point ADOT shall
receive payment via check or Letter of Credit for $ REDACTED to
be applied on the purchase of the first Display Unit.
(b) Phase II - Draw Unit A. Upon verification by a New Mexico based
partner of a mutually acceptable accounting firm that the Levels
of Achievement required herein have been demonstrated, ADOT shall
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receive additional payment via check or Letter of Credit for $
REDACTED to be applied on the purchase of the first Display Unit.
5. Verification Unit B.
(a) Phase I - Draw Unit B. A New Mexico based partner of a mutually
acceptable accounting firm will verify the serial number of the
designated board for Wang. Said verification must indicate that
said board is under construction. At this point ADOT shall
receive payment via check or Letter of Credit for $ REDACTED to
be applied on the purchase of the first Display Unit.
(b) Phase II - Draw Unit B. Upon verification by a New Mexico based
partner of a mutually acceptable accounting firm that the Levels
of Achievement required herein have been demonstrated, ADOT shall
receive additional payment via check or Letter of Credit for $
REDACTED to be applied on the purchased of the first Display
Unit.
6. Payment Upon Completion of Unit A.
(a) Upon delivery to the designated installation site and field
testing of electronic display lighted circuitry, ADOT shall
receive additional payment via check or Letter of Credit for $
REDACTED.
(b) The balance shall be payable as follows:
$ REDACTED within 5 business days after installation and testing
is complete.
(c) $ REDACTED within 60 days thereafter.
7. Payment Upon Completion of Unit B.
(a) Upon delivery to the designated installation site and field
testing of electronic display lighted circuitry ADOT shall
receive additional payment via check or Letter of Credit for $
REDACTED
(b) The balance shall be payable as follows:
$ REDACTED within 5 business days after installation and testing
is complete.
(c) $ REDACTED within 60 days thereafter
8. Buyer Inspection Units A and B.
(a) ADOT shall pay the costs for up to two representatives of Wang to
travel (including lodging) business class, to ADOT's assembly
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factory in order to observe testing procedures in an outdoor
venue of each board ordered herein.
(b) After two boards have been successfully delivered and installed,
ADOT shall have no further obligation to pay for travel costs of
representatives of Wang.
9. Delivery Times.
(a) ADOT shall be required to deliver the initial flat panel display,
Unit A, no later than August 31, 1999, or at the time that ADOT
has commenced limited or full production of flat panel displays,
whichever shall occur first.
(b) ADOT shall be required to deliver the second flat panel display,
Unit B, no later than February 15, 2000.
10. Territory Provision. ADOT agrees that it shall not sell directly or
allow the indirect sale of any large scale outdoor flat panel
display(s) to any other third party customer/user, licensee or agent
located within REDACTED of either location identified herein of Wang
wherein said display will be to promote directly or indirectly any
retail product which is sold or displayed by Wang. This Agreement to
restrict shall be valid for two years after completion of installation
by ADOT of the initial display for Wang and is offered by ADOT as an
inducement to Wang.
11. Product Testing. Upon notification by ADOT to Wang of the completion
of the initial assembly and testing of the Product by or under the
direction of ADOT, any Acceptance Test shall be performed at a
mutually designated location in the presence of representatives of
Wang. If the Acceptance Test is successfully completed, Wang will
complete the agreed upon payment schedule. If the Acceptance Test is
not successfully completed, ADOT shall use its best efforts to make
the necessary corrections to the Product within thirty days of receipt
of Wang's notice of nonacceptance, at which time the Acceptance Tests
shall again be conducted. The Acceptance Test may be repeated until it
is successfully completed as provided herein.
12. Obligations of ADOT under this Agreement during Construction Period.
(a) Progress Reports and Meetings. During the construction period at
such times and in such manner or format as Wang shall reasonably
request, ADOT shall submit to Wang reports summarizing ADOT's
progress on the construction of the Panel.
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(b) Maintenance. During the development period, ADOT shall provide at
Wang's expense, up to two (2) liaison persons and such training
and instruction as is reasonably necessary to provide Wang with
sufficient technical understanding of the Product and its
operation and use.
13. Representations Warranties and Covenants of ADOT.
(a) ADOT represents, warrants and covenants as follows:
(i) It is duly organized, validly existing as a Nevada
corporation and has full legal right, power and authority
to enter into, execute and perform its obligations under
this Agreement, which constitutes the legal, valid and
binding obligation of ADOT, enforceable in accordance with
its terms.
(ii) It is the sole owner or otherwise has all rights to the
patents, patent applications, trademarks, technology and
know-how which are the subjects of this Agreement and such
rights are not subject to any encumbrance, lien or claim of
ownership by any third party.
(iii) All of the patents, patent applications and the trademarks
which are the subject of this Agreement are valid and
enforceable in all material respects.
(iv) ADOT is aware of no fact which puts in question the
validity or enforceability of any of the patents, patent
applications or the trademarks, nor does or will the use of
the patents, patent applications, trademarks, technology or
know-how infringe upon the patents, trademarks or
proprietary property of anyone else.
(v) To the best of ADOT's knowledge no third party is engaged in
any activity which would constitute a misappropriation of
any of the subject matter of this Agreement.
14. Technical Services of ADOT. During the term of this Agreement up to
Wang's Acceptance at Wang's expense, ADOT agrees to provide such
reasonable technical assistance including training, testing, specific
consultations, and other technological support services as may be
reasonably required by Wang to enable Wang to use the display in a
productive manner.
15. Definition of Improvements. For purposes of this Agreement the term
"Improvements" shall mean all modifications, revisions, upgrades, new
technology, new models, or other improvements to the Product, know-how
or
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technology which are incorporated into or relate to the Product or any
part thereof, or the commercial applications presently utilizing the
Product, as well as all processes, machines, manufacturers or
composition of matter which ADOT of any affiliate may conceive,
develop, acquire or otherwise obtain rights to during the term of this
Agreement which relate to the Product or any of its parts or the
commercial applications presently utilizing such Product. ADOT further
agrees that:
1. The flat panel displays will include a REDACTED
2. REDACTED.
3. REDACTED.
4. REDACTED.
5. REDACTED.
6. REDACTED.
7. REDACTED.
8. REDACTED.
16. Confidentiality.
(a) Agreement not to Disclose. The parties hereby agree that they
will not publish, disclose to any third party (except to their
own employees or technical consultants to the extent necessary to
permit them to perform their obligations hereunder), or otherwise
use for their own benefit a copy of this Agreement or any
technical or confidential information, know-how or other
proprietary information of the other party heretofore or
hereafter disclosed to them pursuant to this Agreement without
the prior written approval of such other party. The parties shall
not disclose any technical information, know-how or other
proprietary information of the other party to any of their
employees or consultants pursuant hereto unless such employees or
consultants have entered into a non-disclosure Agreement
satisfactory to the other party. No customer or distributor shall
be furnished with any technical or confidential information,
know-how, or other proprietary information of ADOT or Wang and
until such customer or distributor has agreed in writing to keep
such information confidential. The provisions of the Section
shall not apply to information which (i) was at the time of
disclosure to the other party a part of the public domain by
publication or otherwise, (ii) was already
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properly and lawfully in the possession of the other party at the
time it was received, (iii) was lawfully received by the other
party without restriction from a third party, or (iv) is required
by law to be disclosed (but only to the extnet of such required
disclosure). The provisions of the Section shall survive any
expiration or termination of this Agreement.
(b) Equitable Relief. The parties hereto acknowledge and agree that
any breach of the terms of this Section would cause irreparable
harm to the injured party, and agree that the injured party shall
be entitled, in addition to whatever remedies shall be available
at law, to injunctive relief or other equitable remedies with
respect to any such breach.
17. Assignability. This Agreement shall no be assignable by either Wang or
ADOT, except that each of Wang and ADOT shall have the right at any
time to assign, in connection with its merger or consolidation or the
sale of substantially all of its assets utilized in the business to
which this Agreement relates, any or all of the rights and interest
herein granted, without the necessity of obtaining the consent of the
other party, to the surviving or purchasing entity who shall expressly
assume and agree to perform all of the obligations of said party
pursuant hereto.
18. Relationship of Parties. It is expressly agreed that the relationship
hereby established is solely that of manufacturer and consumer. It
being understood that Wang is acting for it own account and that it
has no authority to make, assume or create any representation,
warranty, Agreement, guarantee, claim or settlement on behalf of ADOT
with respect to the Products or otherwise.
19. Force Majeure. Neither party shall be responsible for any failure to
comply with the terms of this Agreement due to force majeure or acts
of God, including, but not limited to, fire, storm, flood, earthquake,
explosion, accident, acts of the public enemy, war, riot, rebellion,
insurrection, sabotage, epidemic, quarantine, restrictions, labor
disputes, transportation embargoes, failures or delays in
transportation or the mails, failures or delays of suppliers or
subcontractors, acts of any government, whether national, state,
local, foreign or otherwise, or any agency thereof, or judicial
action.
20. Notices. Any notice required or permitted to be given hereunder shall
be in writing and shall be deemed to be properly given when sent by
registered or certified mail, return receipt, requested, addressed as
follows:
If to ADOT:
Advanced Optics Electronics, Inc.
0000 Xxxxxxxxxx Xxxxxx XX
Xxxxxxxxxxx, XX 00000
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If to Wang:
REDACTED
21. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of each State where final installation is to
be completed.
22. Waivers; Amendments. No waiver of any rights hereunder by either party
shall operate as a waiver of any other rights, or of the same right
with respect to any subsequent occasion for its exercise, or of any
right to damages. No waiver by either party of any breach of the
Agreement shall be held to constitute a waiver of any other breach or
a continuation of the same breach. All remedies provided by this
Agreement are in addition to all other remedies provided by law. This
Agreement may not be amended except by a writing signed by each of the
parties hereto.
23. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the permitted successors and assigns of the
parties hereto.
24. Severability. If any condition of the Agreement should be determined
to be unenforceable or illegal, it shall be deemed severable from the
other provisions hereof, which shall remain valid and enforceable. In
the event that the relative benefits, liabilities and obligations of
either party to the Agreement, as compared to those of the other party
hereto, are significantly increased or reduced by the action of any
judicial or administrative authority, the parties agree to enter into
immediate good faith negotiations to amend this Agreement in a manner
which will fulfill the original intention of the parties in a legal
manner. This Agreement shall remain in full force and effect during
the course of such negotiations and thereafter until validly amended.
25. Counterparts. This Agreement may be executed in three or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
26. Prior Understandings. This Agreement represents the complete Agreement
of the parties with respect to the transactions contemplated hereby
and supersedes all prior Agreements and understandings.
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27. Headings. Headings in this Agreement are included for reference only
and shall have no effect upon the construction or interpretation of
any part of this Agreement.
28. Arbitration. Any disAgreements arising out of the provisions of the
Agreement will be decided in New York City, New York, in accordance
with the Rules of the American Arbitration Association. Each party
will appoint an arbitrator, and the two thus selected will designate a
third. If either of the parties fails to appoint its arbitrator within
sixty (60) days after receipt of notice of the appointment, by the
other, of its arbitrator, or if the arbitrators fail to appoint a
third, then the American Arbitration Association will have the power,
on the request of either party, to make the appointments which have
not been made as contemplated above. The arbitration will be held as
promptly as possible at such time and place as the arbitrators may
determine. The decision of the majority of the arbitrators will be
final and binding upon the parties hereto, and the expense of the
arbitration will be shared equally by the parties. Judgement upon the
award may be entered in any court having jurisdiction, or application
may be made to such court for a judicial acceptance of the award and
an order of endorsement as the case may be.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized and have caused their
respective corporate seals to be affixed hereto as the date first above written.
(Corporate Seal) Advanced Optics Electronics, Inc.
A Nevada corporation
By: /s/ Xxxxxx X. Xxxxxx
------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
(Corporate Seal) Wang REDACTED
By: /s/ X. X. Xxxx
-------------------------
Name: X. X. Xxxx
Title: President
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