1
EXHIBIT 10
PATENT LICENSE AGREEMENT
THIS AGREEMENT, effective upon execution by the parties hereto, is
entered into by SI Diamond Technology, Inc., a corporation of Texas having its
principal place of business at Austin, Texas (herein called SIDT or "Licensee"),
and Till Keesmann, an individual having an address at Heidelberg, Germany
(herein called "Licensor").
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed as follows:
ARTICLE 1. BACKGROUND OF AGREEMENT
1.00 Licensor represents that it has certain patents pertaining to
carbon nanotubes as cathodes for field emission display in
respect to which it is prepared to grant an exclusive
worldwide license to Licensee.
1.01 Licensee wishes to acquire a worldwide exclusive license under
Licensor's patents pertaining to carbon nanotubes as cathodes
for field emission display in order to market the patents and
share revenues generated by any sublicenses with Licensor.
ARTICLE 2. DEFINITIONS
As used herein, the following terms shall have the meaning set forth
below:
2.00 "Patent" or "Patents" shall mean the following listed patents
and patent applications now owned by Licensor, and any patents
or patent applications filed and/or issuing from the Patents
in any and all countries of the world, including, without
limitation, utility model and design patents, patents of
addition, patents of importation, divisional, continuations,
continuation-in-parts, reissues, reexaminations, renewals and
extensions thereof and the legal equivalents:
U.S. Patent No.: 5,773,921
Titled: FIELD EMISSION CATHODE HAVING AN ELECTRICALLY
CONDUCTING MATERIAL SHAPED OF A NARROW
ROD OR KNIFE EDGE
Filed: 23 August 1996
Issued: 30 June 1998
Inventors: Till Keesmann, Xxxxxx Xxxxxx-Xxxxx
Page 1 of 9
2
PCT Application: PCT/DE95/00221
PCT Publication No.: WO 95/23424
Title: FIELD-EMISSION CATHODE AND METHOD OF
MANUFACTURING IT
PCT Filed: 22 February 1995
Priority: 23 February 1994 (Germany Application P 44 05 768.7)
Anmelder: Keesmann, Till
European Patent No. 0801805
Anmeldetag: February 22, 1995
Prioritat: February 23, 1994
(German Application DE 44 05 768.7)
Veroffentlichungstag: November 3, 1999
Patentinhaber: Till Keesmann
German Patent No.: 59507196
Issued: December 9, 1999
Nationaler Teil des Europapatents No.: 0801805 in Germany
Issued: November 3, 1999
Inhaber: Till Keesmann
Nationaler Teil des Europapatents No.: 0801805 in Great
Britain
Issued: November 3, 1999
Applicant: Till Keesmann
Nationaler Teil des Europapatents No.: 0801805 in France
Issued: November 3, 1999
Applicant: Till Keesmann
2.01 "Effective Date" shall mean the date upon which this License
is signed by all Parties.
ARTICLE 3. LICENSE GRANT
3.00 Sublicense Grant. Licensor agrees to grant and hereby grants
to Licensee an exclusive worldwide right and license to
sublicense Licensor's Patents, the terms and conditions of
which sublicenses shall be subject to the approval of
Licensor, not to be unreasonably withheld and subject to the
provisions and exceptions herein (the "Licensee").
Accordingly, Licensee may sublicense the Patents to any third
party, including any joint venture or other entity with which
Licensee is affiliated. This agreement is for the primary
purpose of selling sublicenses for the patent to third
parties.
3.01 To facilitate mutual agreement on sublicensing terms, the
licensee and licensor will apriori agree on the general
parameters of sublicenses to be negotiated with third parties.
If a sublicense negotiated with a third party is
Page 2 of 9
3
within these parameters, then SIDT will sign the sublicense.
If as a result of negotiations, the parameters of the
sublicense are outside the agreed general parameters, then
SIDT will seek the agreement of Licensor, nor to be
unreasonably withheld.
3.02 Covenant Not to License by Licensor. Licensor covenants not to
license or sublicense Patents other than to Licensee during
the term of this Agreement.
3.03 Licensor warrants that he has all right, title and interest in
the Patents.
3.04 Assignments. Each and all of the terms and conditions under
this License, particularly with respect to sublicensing and
assignments, shall be binding upon, and inure to the benefit
of, the successors and assignees of the Parties; however,
Licensor shall have right of first refusal with respect to any
offer received by a third party to succeed Licensee or
otherwise obtain assignment of the License Agreement from
Licensee, whether such offer is specifically directed to the
License Agreement or part of a purchase offer for all or some
of the assets of Licensee. In the event that Licensee receives
such a purchase offer, Licensor shall have the right to
provide Licensee with a matching or better offer which
Licensee shall be obligated to accept, in accordance with the
following procedure:
i) Licensee shall provide to Licensor a written
notice of such purchase offer which shall
include a complete description of the terms
of the purchase offer and a statement, made
in good faith, that Licensee is prepared to
accept such offer.
ii) Licensor shall have 15 days from the date it
receives the purchase offer notice to give
Licensee written notice of the terms of its
competing offer, which must match or better
the purchase offer.
iii) If Licensor gives such notice, per ii,
Licensee shall be obligated to transfer the
License Agreement to Licensor according to
the terms of Licensor's competing offer.
3.05 Responsibilities of Licensee. Licensee covenants that it will
undertake (1) to support Licensor in maintaining and
strengthening the Patents; (2) to actively market the
Licensor's Patents; and (3) to identify those infringing on
the Licensor's Patents and to use commercially reasonable
efforts to seek remedies for infringements.
ARTICLE 4. REGISTRATION OF THE LICENSE
4.00 As sole licensing agent for the Patents, Licensee shall be
entitled to register notice of this License at the United
States Patent and Trademark Office and
Page 3 of 9
4
any other foreign patent office if such registration is
permissible under the law of the applicable country or
countries.
ARTICLE 5. PROSECUTION AND MAINTENANCE OF PATENTS AND PATENT APPLICATIONS
5.00 Subject to the approval of Licensor, not to be unreasonably
withheld, Licensee shall have a right, at Licensee's expense,
to file, prosecute, and maintain all of the Patents that are
subject of this License and shall have the right to determine
whether or not, and where to file a patent application, to
abandon the prosecution of any patent or patent application,
or to discontinue the maintenance of any patent or patent
applications.
5.01 Licensee has the right to evaluate the Patents for reissue and
shall file and prosecute reissues, interferences, oppositions,
and reexaminations at Licensee's expenses upon Licensor's
approval, not to be unreasonably withheld. The Licensor, upon
consultation with Licensee, will complete the U.S. reissue
process which was commenced in February, 2000, with the costs,
attorney fees, and expenses incurred after the Effective Date
hereof to be paid by Licensee, which payment will be pursuant
to paragraph 6.04.
5.02 Licensor is to provide Licensee and/or its representative with
appropriate Powers of Attorney to prosecute said patent
applications and reissue(s), as needed.
ARTICLE 6. ROYALTIES
6.00 Licensee shall, as a license fee, pay to Licensor, shortly
after the Effective Date, $250,000 U.S. dollars, which will be
realized by the sale of SIDT common stock issued to Licensor,
such stock able to be sold by Licensor after the registration
of such SIDT common stock becomes effective. Licensee shall
give Licensor immediate notice when the registration becomes
effective. The number of shares of such stock is to be
determined by dividing $250,000 by the market price of SIDT's
common stock. The market price will be determined by taking
the average closing price of SIDT's common stock, as quoted on
the NASDAQ OTC Bulletin Board System, for the five trading
days preceding the date the registration statement covering
the shares issued in connection with this Agreement is
declared effective. If Licensor sells any of these shares in
the five trading day period beginning the day after the
registration statement covering these shares is declared
effective, and the net proceeds from the sale of those shares
are less than the market price (as defined above) times the
number of shares sold, Licensee agrees to issue additional
shares of common stock, or an equivalent amount of cash, to
make up the shortfall. To determine if any additional payment
is due under this Agreement, all calculations will be made on
an aggregate basis. If shares are sold at prices both above
and
Page 4 of 9
5
below the market price as defined above, total net proceeds
will be compared with the total number of shares times the
market value as defined above. Licensor accepts all market
risk on all shares still held at the end of the five day
trading period beginning after the registration statement is
declared effective. If a portion of the shares are sold, all
calculations will be made on a pro-rata basis. For example, if
one-half of the shares received by Licensor are sold during
the five day trading period, Licensee will make up the
shortfall, if any, on the shares sold as compared to one-half
of the expected market value. Licensor will bear the market
risk for the remaining one-half of the shares that were not
sold, regardless of the market price of the SIDT common stock
at the end of the five day trading period. If Licensor does
not receive the licensee fee in accordance with this paragraph
within 90 days after the Effective Date, Licensor may
terminate this License upon written notice to Licensee.
6.01 Royalty Sharing. Subject to paragraph 6.04, the Parties shall
share equally any Royalty Fees received as a result of a
sublicensing of any of Patents. If this agreement is
terminated under the provisions of section 6.02(a) or 6.02(b),
future royalty payments under sublicenses sold under this
agreement will be shared equally by the parties. Royalty Fees
owing to Licensor shall be paid to Licensor within two (2)
weeks after the close of each calendar quarter in which such
Royalty Fees were received by Licensee.
6.02 Performance Hurdle Payments. Licensee shall pay to Licensor
Royalty Fees as stated in paragraph 6.01, but in no event
shall Royalty Fees be less than the following:
6.02(a) At two (2) years from the Effective Date an aggregate
of U.S. $500,000, cash. Failure to make payment of
$500,000 results in this License being terminated.
6.02(b) At four (4) years from the Effective Date an
aggregate of U.S. $1,000,000, cash. Failure to make
payment of $1,000,000 results in this License being
terminated.
6.02(c) Upon payment of an aggregate of $1,000,000 within
four years of the Effective Date of this License, no
further performance hurdle payments are required and
the other provisions of the License are perpetual.
6.03 Royalty Collections. Licensee shall be the sole agent for
collection of all Royalty Fees under this License.
6.04 Royalty Sharing. All Royalty Fees collected by Licensee under
this License shall be reduced by expenses up to $50,000
annually Licenses incurs for (i) the collection or monitoring
of Royalty Fees, (ii) the marketing or
Page 5 of 9
6
sublicensing of the Patents, and (iii) the prosecution and
maintenance of any Patents and patent applications under
Article 5. Expenses in excess of $50,000 annually will be
borne by the Licensee alone.
6.05 Use of Patent by Licensee. If the Licensee makes uses or sells
products covered by the patent, the Licensee agrees to pay to
the Licensor royalties at one-half the normal royalty paid by
third parties, or if no normal royalty has been established,
then Licensee will pay royalties at a rate to be negotiated by
Licensor or Licensee. It is the intention of the parties that
the royalty will be one-half a normal royalty.
ARTICLE 7. TERMINATION
7.00 This License shall terminate upon the execution of the last to
expire of the Patents included herein, or upon the abandonment
of the last to be abandoned of any patent applications
included herein, whichever is later, unless the agreement is
sooner terminated.
7.01 Licensee may terminate this License at any time upon sixty
(60) days written notice in advance to Licensor.
7.02 Upon termination of this License, all rights revert to
Licensor. Licensor shall be named as a permitted successor to
Licensee in all sublicenses, such that in the event this
License is terminated, the previously executed sublicenses may
continue. Licensee shall continue to be the sale agent for
collection of all Royalty Fees payable as the result of
outstanding sublicenses and shall continue to royalty share,
pursuant to sections 6.01, 6.03 and 6.04.
7.03 If either Party shall be in default of any obligation
hereunder, or shall be adjudged bankrupt, or become insolvent,
or make an assignment for the benefit of creditors, or be
placed in the hands of a receiver or a trustee in bankruptcy,
the other Party may terminate this Agreement by giving sixty
(60) days' notice by Registered mail to the other Party,
specifying the basis for termination. If within sixty (60)
days after the receipt of such notice, the Party receiving
notice shall remedy the condition forming the basis for
termination, such notice shall cease to be operative, and this
Agreement shall continue in full force.
ARTICLE 8. PATENT MAINTENANCE
8.00 Licensor shall be responsible for payment of maintenance fees
on any Patents on which this License is based.
8.01 If Licensor determines that the maintenance of any Patent or
legal equivalent thereof is not commercially feasible, it
shall diligently notify Licensee, and
Page 6 of 9
7
Licensee may at its expense, pay such fees or sums required to
maintain such Patent and Licensor shall cooperate in
maintaining such Patent as paid by Licensee. The Parties agree
that to the extent Licensee has incurred such expenses under
this Section, Licensee may at its option set off such expenses
(to the extent not otherwise reimbursed by the filing Party)
against any royalties due Licensor under this Agreement.
ARTICLE 9. ENFORCEMENT OF PATENTS
9.00 Notice of Infringement. The Parties shall promptly notify one
another in writing of any alleged infringement of the Patents
of which they become aware.
9.01 Cooperation. Licensee shall have the first right to institute
suit for infringement(s) of the Patents so long as this
License remains exclusive. Licensor agrees to join as a party
plaintiff in any such lawsuit initiated by Licensee, if
requested by Licensee, with all costs, attorney fees, and
expenses to be paid by Licensee. However, if Licensee does not
institute suit for infringement(s) within ninety (90) days of
receipt of written notice from Licensor of Licensor's desire
to being suit for infringement in its own name and on its own
behalf, then Licensor may, at its own expense, bring suit or
take any other appropriate action.
9.02 Commencement of Legal Action. Licensee, as sole licensing
agent for the Patents, shall have the right, but not the
obligation, to institute legal action concerning alleged
infringement of the Patents, with or without the consent of
Licensor.
9.03 If this Agreement is terminated at the time of suit, the sole
right to institute suit for infringement and to recover
damages shall rest with Licensor.
9.04 Joinder. If a Party refuses to join a legal action concerning
alleged infringement of the Patents, the Party instituting the
legal action may bring the legal action in the name of the
other Party and may name the other Party a party plaintiff or
otherwise appropriate participant in such legal action.
9.05 Damages. Monies recovered by settlement or judgment are to be
split one-half to each Party after costs and expenses are
deducted.
9.06 Neither Party may settle with an infringer without the prior
approval of the other Party if such settlement would affect
the rights of the other Party under the Patents.
Page 7 of 9
8
ARTICLE 10. RECORDS
10.00 Licensee shall keep accurate records of all operations
affecting payments hereunder, and shall permit Licensor or its
duly authorized agent to inspect all such records and to make
copies of or extracts from such records during regular
business hours throughout the term of this Agreement and for a
reasonable period of not less than three (3) years thereafter.
Licensee shall report to Licensor information about all
important incidents concerning the Patents. Also, any
agreements with sub-licensees and the related correspondence
is to be made available to the Licensor. Reports and
settlement of accounts are to be made quarterly within two
weeks after the calendar quarter.
ARTICLE 11. SEVERABILITY
11.00 The Parties agree that if any part, term, or provision of this
Agreement shall be found illegal or in conflict with any valid
controlling law, the validity of the remaining provisions
shall not be affected thereby.
11.01 In the event the legality of any provision of this Agreement
is brought into question because of a decision by a court of
competent jurisdiction, either Party, by written notice to the
other Party, may revise the provision in question or may
delete it entirely so as to comply with the decision of said
court.
ARTICLE 12. WAIVER, INTEGRATION, ALTERATION
12.00 The waiver of a breach hereunder may be effected only by a
writing signed by the waiving party and shall not constitute a
waiver of any other breach.
12.01 This Agreement represents the entire understanding between the
Parties, and supersedes all other agreements, express or
implied, between the Parties concerning the Patents.
12.02 A provision of this Agreement may be altered only by a writing
signed by both parties, except as provided in paragraphs 11.00
and 11.01.
ARTICLE 13. APPLICABLE LAW
13.00 This Agreement shall be construed in accordance with the
substantive laws of the State of Illinois of the United States
of America and venue shall lie exclusively in the federal
courts residing in Chicago, Illinois.
ARTICLE 14. NOTICES UNDER THE AGREEMENT
14.00 For the purpose of all written communications and notices
between the Parties, their addresses shall be:
Page 8 of 9
9
Licensor: Till Keesmann
Xxxxxxxxxxxxxx 00x
X-00000 Xxxxxxxxxx
Xxxxxxx
Licensee: Xx. Xxx Xxxxx
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
or any other addresses of which either party shall notify the other party in
writing.
IN WITNESS WHEREOF the Parties have caused this Agreement to be
executed by their duly authorized officers on the respective dates and at the
respective places hereinafter set forth.
TILL KEESMANN
By: /s/ Till Keesmann
--------------------------------------
Name: Till Keesmann
--------------------------------------
Date: 26 May 2000
--------------------------------------
Signed at: Heidelberg
---------------------------------
By: /s/ Xxxxxx Xxxxx-Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx-Xxxxx
--------------------------------------
Date: 26 Mai 2000
--------------------------------------
Signed at: Neuakischon
---------------------------------
SI DIAMOND TECHNOLOGY, INC.
By: /s/ Xxxx X. Xxxxx
--------------------------------------
Name: Xxxx X. Xxxxx
--------------------------------------
Date: 5/26/00
--------------------------------------
Signed at: Dallas, Texas
---------------------------------
Page 9 of 9
