Exhibit 10.9
 
FLT (Fine Line Technology) Patent
License Agreement

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This FLT Patent License Agreement (“Agreement”) is entered into as of April 16th
2015 (“Effective Date”) by and between CIT Technology Ltd, a Company registered
in England, including Affiliates, having a place of business at Springstone
House, 27 Dewsbury Road, Ossett, West Yorkshire. England (hereinafter
collectively referred to as “Licensor”) and Uni-Pixel Displays, Inc., a Texas
corporation, including Affiliates, having a place of business at 8708 Technology
Forest Place, Suite 100, The Woodlands, TX 77381, U.S.A. (hereinafter
collectively referred to as “Licensee”) (Licensor and Licensee hereinafter
referred to individually as a “Party”, and collectively as the “Parties”).
 
Recitals
 
Licensee wishes to use the Licensed FLT Patents to commercialize the Licensed
FLT Products, and Licensor wishes to grant Licensee a limited license to do so,
under the terms and conditions set forth herein.
 
NOW, THEREFORE, in consideration of the forgoing and the respective agreements,
covenants, representations and warranties hereinafter set forth and other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged and accepted and intending to be legally bound hereby, the Parties
hereby agree as follows:
 
1.  
Definitions

 
1.1.  
“Affiliate(s)” means any corporation, company, partnership, joint venture, firm
and/or entity which controls, is controlled by, or is under common control with,
a Party.  Such control may be demonstrated by present or future ownership or
control of fifty percent (50%) or more of the shares or other securities
entitled to vote for election of directors (or other managing authority). Any
such corporation, company, partnership, joint venture or other entity shall be
deemed to be an Affiliate of such party only so long as such control or
ownership exists.

 
 

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1.2.  
“Licensable” means that Licensor has the right and ability as of the Effective
Date or during the term of this Agreement to license the respective right to
Licensee under the terms of this Agreement without payment of consideration by,
or other detriment to, Licensor.

 
1.3.  
“Licensed FLT Patents” means (a) the Patents listed in Exhibit A, (b) any
Patents which are owned or Licensable by the Licensor as at the Effective Date
and which are claiming the benefit of, or priority to, any one or more of the
Patents listed in Exhibit A, (c) any Patents which are owned or Licensable by
the Licensor as at the Effective Date and to which any one or more of the
Patents listed in Exhibit A claim priority to, or the benefit of, and (d) any
other Patents owned or Licensable by Licensor or its controlled Affiliates
during the term of this Agreement, to the extent such other Patents are
necessary to make, use, offer for sale, sell, import, or otherwise dispose of
Licensed FLT Products.  Notwithstanding anything to the contrary herein, the
following are not included in the Licensed FLT Patents: (z) any Patents owned by
any future assignee, transferee, or successor of Licensor with respect to this
Agreement, or by any entity with which Licensor undergoes a merger or
acquisition, to the extent such Patents were not acquired from Licensor in
connection with the subject merger.

 
1.4.  
“Licensed FLT Products” means capacitive touch sensors comprising fine lines of
copper metal printed on flexible plastic film.

 
1.5.  
“Net Sales” means the Sales Price, less taxes and actual shipping charges
included in those revenues.

 
1.6.  
“Patents” means any and all patents, patent applications, continuation
applications, continuation-in-part applications, divisional applications,
reissue applications, or any other patents or patent applications in any country
or countries of the world.

 
1.7.  
“Sales Price” means gross revenues, together with any additional value of other
consideration or benefits, recognized from the sale, use, or other disposition
of a Licensed FLT Product.  For sales to related entities (including but not
limited to Affiliates) prior to a sale to final customer, the revenues
recognized from such final customer shall be used.  For sales that are not
simple arms-length transactions (for example, when the Licensed FLT Product is
(a) bartered, given away, leased, used internally, or incorporated into or sold
in combination with other products or (b) combined with other products), the
Sales Price shall be no less than the amount charged for the most similar
products sold in the same volume in arms-length sales.

 
 

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1.8.  
“Secured Note” means a secured promissory note, substantially in the form of
Exhibit C hereto, that may be used to pay Annual Royalties in excess of the
Non-Refundable Prepayment under this Agreement pursuant to Section 3.6 (c):  (a)
having as a maturity date the second anniversary of the date of issue, but in no
event later than thirty (30) calendar days after the end of the Initial Term,
(b) bearing interest at an annual rate equal to 2.0% and (c) being mandatorily
repaid or prepaid if Licensee, at any time after the issuance of the Secured
Note, completes an equity offering resulting in gross proceeds to Licensee in
excess of five million dollars ($5,000,000), in which event repayment or
prepayment of the Secured Note shall occur not later than ten (10) days after
receipt of those gross proceeds.

 
1.9.  
  “Third-Party Manufacturer” means a party undertaking the manufacturing
activity under Licensee’s ‘have made’ rights of Section 2.1.  The Parties agree
there may be more than one Third-Party Manufacturer under the terms of this
Agreement.

 
1.10   “XSense Intellectual Property License Agreement” that certain XSense
Non-Exclusive Intellectual Property License Agreement entered into between Atmel
Corporation and UniPixel Inc. as of the date hereof.
 
1.11   “XSense Patent License Agreement” that certain XSense Non-Exclusive
Patent License Agreement entered into between Atmel Corporation and UniPixel
Inc. as of the date hereof.
 

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2.  
License Grant

 
2.1.  
Grant.  Subject to the terms and conditions of this Agreement, including the
delivery and application of the Non-Refundable Prepayment, Licensor hereby
grants to Licensee a non-sublicensable, worldwide, royalty-bearing license under
the Licensed FLT Patents, to make or have made, use, offer for sale, sell, and
import Licensed FLT Products.

 
2.2.  
“Have Made” rights.  The “have made” rights of Section 2.1 are subject to the
following requirements:

 
(a)  
Licensee and/or its Affiliates owns and/or has the right to use the entire
design of the Licensed FLT Product;

 
(b)  
Licensee and/or its Affiliates remains at all times personally responsible, on
behalf of the Third-Party Manufacturer, for compliance with all terms and
conditions of this Agreement (for example and without limitation, those relating
to confidentiality, recordkeeping, and auditing); and

 
(c)  
All activities with respect to manufacturing and distributing Licensed FLT
Products hereunder are conducted exclusively for the benefit of Licensee and/or
its Affiliates and not for any third party (including, without limitation,
Third-Party Manufacturer or its customers).

 
2.3.  
The license of Section 2.1 above is non-assignable and non-transferrable, except
as permitted under Section 6.3 below.

 
2.4.  
Limitations.  The Parties acknowledge and agree that nothing contained in this
Agreement shall be construed as:

 
(a)  
Conferring any right upon Licensee to bring or prosecute actions or suits
against third parties for infringement of the Licensed FLT Patents or any other
right;

 
(b)  
Conferring on Licensee any right to use in advertising, publicity or otherwise
any Licensor trademark, trade name or names, or any contraction, abbreviation or
simulation thereof;

 

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(c)  
An obligation upon Licensor to furnish any technical information or know-how to
Licensee except as specifically provided herein; or

 
(d)  
Conferring upon Licensee or any third party (whether by implication, operation
of law, estoppel or otherwise) any right or license not expressly granted by
Licensor under this Agreement.

 
2.5.  
Licensor Patent Ownership.  As between Licensor and Licensee, Licensor or its
Affiliates shall own all right, title and interest in and to the Licensed FLT
Patents.

 
2.6.  
Licensee Patents Rights.  Licensee shall own all rights to Patents developed
solely by the Licensee.

 
2.7.  
Additional Licenses.  Licensor shall not enter into a license agreement for the
Licensed FLT Patents in connection with the Licensed FLT Products that is
effective prior to the second anniversary of the Effective Date, provided that
the foregoing prohibition shall not prevent negotiations regarding, or execution
of, a license agreement for the Licensed FLT Patents so long as the license that
is the subject of that agreement does not become effective prior to the second
anniversary of the Effective Date.

 
3.  
Consideration

 
3.1.  
Consideration.  In consideration of the license rights granted herein, Licensee
agrees to pay Licensor an Annual Royalty, as set forth below, for the term of
this agreement.

 
3.2.  
Annual Royalty.

 
(a)  
“Royalty Periods” shall be one-year periods defined by the anniversaries of the
Effective Date, with the first Royalty Period commencing on the Effective
Date.  The Annual Royalty for each Royalty Period is due within forty-five (45)
calendar days of the end of that Royalty Period.

 
(b)  
The “Annual Royalty” for each Royalty Period shall be the greater of:

 

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1.  
one million, six hundred and fifty thousand dollars ($1,650,000), or

 
2.  
the product of (x) the total Net Sales for Licensed FLT Products, multiplied by
(y) the Royalty Rate.  The Royalty Rate equals (a) one and sixty-seven
hundredths percent (1.67%) during the Initial Term and any Renewal Term.

provided, however, that clause (1) of this Section 3.7(b) shall not apply during
any Renewal Term, and the Annual Royalty during any Renewal Term shall be equal
to the amount determined pursuant to Section 3.7(b)(2) without reference to
Section 3.7(b)(1).
 
Payment of the Annual Royalty shall be made in a manner, and subject to, the
provisions of this Section 3, including Section 3.7.
 
3.3.  
“Non-Refundable Prepayment” means a non-refundable, non-returnable prepayment of
minimum Annual Royalty fees payable under this Agreement by Licensee to
Licensor, in the form of four million six hundred sixty six thousand six hundred
sixty seven dollars ($4,666,667.00) in cash.  The Non-Refundable Prepayment is
due on the Effective date.

 
3.4.  
Maximum Cumulative Annual Royalties during the Renewal Term.  If the Agreement
is renewed pursuant to Section 5.2, the amount of cumulative Annual Royalties
payable during the Renewal Term (without cumulation of payments made during the
Initial Term) shall not exceed eight million, two hundred and fifty thousand
dollars ($8,250,000) (“Maximum Amount”).  For avoidance of doubt, after Licensee
has paid the Maximum Amount, no further Annual Royalties shall be due, and
Licensee’s obligation to provide Annual Royalty statements pursuant to Section
3.7 shall terminate.

 
3.5.  
The maximum Cumulative Royalties payable by Uni-pixel under the term of this
License and under the Renewal term, together, shall be capped at thirty million
dollars ($ 30,000,000)

 

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3.6.  
Annual Royalty Statements.  Licensee shall submit to Licensor Annual Royalty
statements covering each Royalty Period, within forty-five (45) calendar days of
the end of that Royalty Period.  Such statements shall contain at least the
information and certification set forth on Exhibit B.

 
3.7.  
Payment Terms.

 
(a)  
Licensee shall pay Licensor all amounts in U.S. dollars, except as expressly
permitted by Section 3.7(c).  Any amount not actually received by Licensor
within thirty (30) calendar days from being due shall be subject to interest at
the rate of 1% per month, in addition to any other recourse Licensor may have.

 
(b)  
On or prior to the Effective Date, Licensee shall deliver the Non-Refundable
Prepayment to Licensor by wire transfer in immediately available funds to an
account of Licensor designated in writing by Licensor to Licensee.  The
Non-Refundable Prepayment shall be applied first against any Annual Royalty
payments due to Licensor until the entire Non-Refundable Prepayment has been
fully used and credited by Licensor against Annual Royalty payment obligations
of Licensee hereunder, and only after the full use, crediting and exhaustion of
the entire Non-Refundable Prepayment shall Licensee be permitted, pursuant to
Section 3.7(c), to issue Secured Notes as payment for any Annual Royalties owed
by Licensee.  On the first business day of each Royalty Period during the
Initial Term, Licensor shall, without further action or consent of the Licensee,
use, apply and credit to the extent not previously used, applied or credited,
the Non-Refundable Prepayment against the Annual Royalties for the applicable
Royalty Period.  An amount equal to one million six hundred and fifty thousand
dollars ($1,650,000) shall be used, applied and credited on the Effective Date.

 
(c)  
After Licensor has fully applied and credited the full Non-Refundable Prepayment
against Annual Royalty payments due by Licensee hereunder, Licensee may,
thereafter, elect during the Initial Term, if, but only if, its cash balances,
as of the quarter end immediately prior to the date for the Royalty Period to
which an unpaid Annual Royalty relates, was less than thirty million dollars
($30,000,000), to pay its Annual Royalties by delivering Secured Note(s) to
Licensor.

 

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(d)  
In no event shall any amount paid hereunder by Licensee (or applied or credited
for its benefit) be returnable or refundable (whether in whole or in part) to it
for any reason, including, without limitation, in the event of (i) any
abandonment, determination not to enforce, transfer (subject, in the case of any
transfer, to the rights of Licensee hereunder), or other disposition by Licensor
of any Licensed FLT Patents, (ii) cancellation by a court of final jurisdiction
of any Licensed FLT Patents, (iii) final invalidation or modification of claims
(whether in whole or in part), by any competent authority, of any Licensed FLT
Patents,  (iv) termination or expiration of this Agreement specifically
including without limitation for the reasons set forth in Section 5.3(c), or (v)
Licensee Net Sales below the threshold necessary for the Non-Refundable
Prepayment to be fully used, applied or credited.

 
(e)  
Licensee shall make all its payments under this Agreement without any tax
deduction, unless a tax deduction is required by law.  Tax deduction could be a
deduction or withholding for or on account of tax from a payment under this
agreement.

 
3.8.  
Recordkeeping and Audits.  Licensee shall maintain complete and accurate records
as reasonably required for the Licensor to assess and verify (a) compliance with
this Agreement, and (b) the correct computation of Annual Royalties, and shall
maintain such records for a period of two (2) years following the date of the
last Annual Royalty that the records pertain to.  These records shall be open to
inspection during regular business hours of Licensee by an independent auditor
retained by Licensor.  The auditor will (x) enter into a non-disclosure
agreement with Licensee in a form reasonably acceptable to both the auditor and
Licensee, and (y) only be entitled to report to Licensor the details of any
discrepancy, recordkeeping issue, or other problem(s), as well as the identity
of, and the auditor’s best estimate as to the number of any Licensed FLT
Products that were not correctly reported, together with the total Sales Price
of such Licensed FLT Products.  Audits shall be conducted upon reasonable notice
to Licensee, no more than every twelve months, except in the event that an
auditor has reported that Licensee is not substantially in compliance with its
reporting or payment obligations, in which case Licensor may conduct quarterly
audits.  All audits shall be at Licensor’s cost, unless the audit fails to
confirm that Licensee has paid at least 95% of all amounts due under this
Agreement, in which case Licensee shall bear the cost.

 

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4.  
Representations and Limitation of Liability

 
4.1.  
Each Party (“Warranting Party”) hereby represents and warrants to the other
Party as follows:

 
(a)  
It has all necessary power and authority to execute and deliver this Agreement
and to perform its obligations hereunder and to consummate the transactions
contemplated hereby;

 
(b)  
The execution and delivery of this Agreement by the Warranting Party and the
consummation by the Warranting Party of the transactions contemplated hereby
have been duly and validly authorized by all necessary action and no other
proceedings on the part of such Warranting Party are necessary to authorize this
Agreement or to consummate the transactions so contemplated; and

 
(c)  
This Agreement has been duly and validly executed and delivered by the
Warranting Party and, assuming the due authorization, execution and delivery by
the other Party, constitutes a legal, valid and binding obligation of such
Warranting Party enforceable against such Warranting Party in accordance with
its terms.

 
4.2.  
Neither Licensor, its Affiliates, nor persons acting on their behalf make any
representations, or extend any warranties, either express or implied, with
respect to the validity or enforceability of the Licensed FLT Patents. Licensor
shall have no obligation to maintain, assert, or enforce any of the Licensed FLT
Patents, and shall have the sole discretion to start, continue or abandon the
maintenance or prosecution of its Patent rights.

 

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4.3.  
In no event shall either Party be liable under this Agreement for any indirect,
special or consequential damages including, but not limited to, lost profits or
demands against the other Party by any person, or other commercial loss.

 
4.4.  
Nothing in this Agreement will be construed as:

 
(a)  
an obligation of the Licensor to furnish any manufacturing or technical
information or technical assistance, or

 
(b)  
conferring a right to use in advertising, publicity, or otherwise any trademark
or name of Licensor; or

 
(c)  
granting by implication, estoppel, or otherwise, any licenses or rights under
patents of Licensor other than the Licensed FLT Patents.

 
4.5.  
ALL LICENSED FLT PATENTS, INFORMATION, MATERIALS OR SERVICES FURNISHED UNDER OR
WITH THIS AGREEMENT (“DELIVERABLES”) ARE PROVIDED ON AN “AS IS” BASIS. NEITHER
LICENSOR, ITS AFFILIATES, NOR PERSONS ACTING ON THEIR BEHALF MAKE ANY
REPRESENTATIONS, OR EXTEND ANY WARRANTIES, EITHER EXPRESS OR IMPLIED: (a) WITH
RESPECT TO THE MERCHANTABILITY, ACCURACY, COMPLETENESS, FITNESS FOR USE OR
USEFULNESS OF ANY DELIVERABLES; (b) THAT THE DELIVERABLES WILL NOT RESULT IN
INJURY OR DAMAGE WHEN USED FOR ANY PURPOSE; (c) THAT THE DELIVERABLES WILL
ACCOMPLISH THE INTENDED RESULTS OR ARE SAFE FOR ANY PURPOSE, INCLUDING THE
INTENDED OR PARTICULAR PURPOSE; OR (d) WITH RESPECT TO USE, OR DISPOSITION BY
LICENSEE OR ITS VENDEES OR OTHER TRANSFEREES OF LICENSED FLT PRODUCTS
INCORPORATING OR MADE BY USE OF (x) PATENTS LICENSED UNDER THIS AGREEMENT OR
(y) INFORMATION, IF ANY, FURNISHED UNDER THE AGREEMENT.  FURTHERMORE, LICENSOR
HEREBY SPECIFICALLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, FOR
ANY LICENSED FLT PRODUCTS RESULTING FROM LICENSOR’S GRANT OF LICENSE
HEREUNDER.  LICENSEE WILL MAKE NO WARRANTY, EXPRESS OR IMPLIED, ON BEHALF OF
LICENSOR.

 
 

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4.6.  
NEITHER LICENSOR, ITS AFFILIATES, NOR PERSONS ACTING ON THEIR BEHALF MAKE ANY
REPRESENTATIONS, OR EXTEND ANY WARRANTIES, EITHER EXPRESS OR IMPLIED, THAT THE
COMMERCIALIZATION OF LICENSED FLT PRODUCTS USING THE LICENSED FLT PATENTS WILL
NOT INFRINGE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, AND LICENSOR HEREBY
ADVISES LICENSEE THAT SUCH COMMERCIALIZATION IS BELIEVED TO REQUIRE A LICENSE OF
RIGHTS FROM Atmel.

 
4.7.  
EXCEPT AS EXPRESSLY STATED IN THIS ARTICLE 4 (REPRESENTATIONS AND LIMITATION OF
LIABILITY), EACH PARTY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS,
STATUTORY OR IMPLIED, WITH RESPECT TO THE LICENSED FLT PRODUCTS AND LICENSED FLT
PATENTS, OR OTHERWISE ARISING OUT OF THIS AGREEMENT, INCLUDING ANY IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT.  THE LIMITATIONS OF LIABILITY HEREIN SHALL APPLY TO ANY
DAMAGES, HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY, WHETHER
DERIVED FROM CONTRACT, TORT (INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE), OR ANY
OTHER LEGAL THEORY, EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES AND REGARDLESS OF WHETHER THE LIMITED REMEDIES UNDER THIS AGREEMENT FAIL
OF THEIR ESSENTIAL PURPOSE.

 
5.  
Term and Termination

 
5.1.  
Term.  This Agreement commences on the Effective Date, and, unless earlier
terminated or extended by mutual agreement of the Parties or as expressly
provided herein shall have an initial term that expires on the fifth anniversary
of the Effective Date (“Initial Term”).

 
5.2.  
Renewal Term.  The Agreement may be renewed upon written notice from Licensee to
Licensor at least forty-five (45) calendar days before the end of the Initial
Term, for an additional term of ten (10) years (“Renewal Term”).  Unless so
renewed, this Agreement will expire at the end of the Initial Term. Provided,
however, that this Agreement shall automatically renew in the event UniPixel
exercises its right to renew either the XSense Intellectual Property License
Agreement and/or the XSense Patent License Agreement or any Agreements amending
or replacing such Agreements or any similar Agreement.

 

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5.3.  
Termination.  This Agreement may be terminated, at any time prior to its
expiration, as follows:

 
(a)  
upon mutual written agreement of the Parties;

 
(b)  
by either Party with immediate effect upon written notice if the other Party has
materially breached any of its obligations under this Agreement and either:  (i)
the breach is incapable of remedy, or (ii) the other Party has failed to remedy
the breach within sixty (60) calendar days after receiving written notice of
such breach;

 
(c)  
by either Party with immediate effect upon written notice if the other Party
becomes bankrupt, insolvent, subject to an order for liquidation,
administration, winding-up or dissolution, or makes an assignment for the
benefit of creditors; and

 
(d)  
by Licensor with immediate effect upon written notice if Licensee fails to make
any payment of the Annual Royalty within (10) days after such payment is due.

 
(e)  
 as otherwise specifically provided in this Agreement.

The fees due, payable, or paid under this Agreement as of its expiration or
termination shall not be eligible for any credit, pro-ration, or refund on
account of such expiration or termination.
 
5.4.  
Effects of Termination; Survival.

 
(a)  
Upon termination of this Agreement, all rights and licenses granted to Licensee
by Licensor hereunder shall terminate immediately, and Licensee shall
immediately discontinue any use of the Licensed FLT Patents.

 
(b)  
The following shall survive any expiration or termination of this Agreement:

 

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1.  
Any provision of this Agreement expressly stated to survive;

 
2.  
Any obligation to pay fees or royalties  that have accrued under this Agreement
and are or would have become payable with the passage of time;

 
3.  
Article 1 (Definitions);

 
4.  
Article 3 (Consideration),

 
5.  
Article 4 (Representations and Limitation of Liability),

 
6.  
Article 6 (General provisions); and

 
7.  
Exhibits relating to the forgoing.

 
6.  
General Provisions

 
6.1.  
Notices.  Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted hereunder shall be in writing and
shall be deemed given (a) on the date established by the sender as having been
delivered personally, (b) on the date delivered by a private courier as
established by the sender by evidence obtained from the courier, (c) on the date
sent by facsimile, with confirmation of transmission, if sent during normal
business hours of the recipient, if not, then on the next business day, or (d)
on the fifth day after the date mailed, by certified or registered mail, return
receipt requested, postage prepaid.  Such communications, to be valid, must be
addressed as follows:

 
If to Licensee, to:

8708 Technology Forest Place, Suite 100
The Woodlands, TX 77381
Attn: Jeff Hawthorne
Facsimile: (281) 825-4599
 

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If to Licensor, to:

CIT Technology Ltd
Springstone House
27 Dewsbury Road
Ossett
West Yorkshire
WF5 9LR
Attn: Legal Department
Facsimile: +44 1924 283226
email: legal@carclo-plc.com
or to such other address or to the attention of such Person or Persons as the
recipient party has specified by prior written notice to the sending party (or
in the case of counsel, to such other readily ascertainable business address as
such counsel may hereafter maintain).  If more than one method for sending
notice as set forth above is used, the earliest notice date established as set
forth above shall control.
 
6.2.  
Amendments and Waivers.

 
(a)  
Any provision of this Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and is signed, in the case of an amendment, by
each party to this Agreement, or in the case of a waiver, by the party against
whom the waiver is to be effective.

 
(b)  
No failure or delay by any party in exercising any right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.

 
(c)  
To the maximum extent permitted by Law, (i) no waiver that may be given by a
party shall be applicable except in the specific instance for which it was given
and (ii) no notice to or demand on one party shall be deemed to be a waiver of
any obligation of such party or the right of the party giving such notice or
demand to take further action without notice or demand.

 
6.3.  
Assignment.  This Agreement may not be assigned by either party hereto without
the prior written consent of the other party; provided, however, that each party
may assign without the consent of the other party (but with notice to the other
party) in connection with a Change of Control Transaction of such
party.  Subject to the foregoing, all of the terms and provisions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective executors, heirs, personal representatives, successors and
assigns.  For purposes of this Agreement, “Change of Control Transaction” shall
mean any of the following events: (i) the consummation by Uni-Pixel, Inc. or CIT
Technology Ltd, as the case may be, of a merger or consolidation of such company
with any other corporation, other than a merger or consolidation that would
result in the voting securities of Uni-Pixel, Inc. or CIT Technology Ltd, as
applicable, outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of Uni-Pixel, Inc. or CIT Technology Ltd,
as applicable, or such surviving entity outstanding immediately after such
merger or consolidation; (ii) the consummation of the sale or disposition by
Uni-Pixel, Inc. or CIT Technology Ltd, as the case may be, of all or
substantially all of such company’s assets; (iii) any “person” (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of Uni-Pixel, Inc. or CIT Technology
Ltd, as applicable, representing more than fifty percent (50%) of the total
voting power represented by such company’s then outstanding voting securities.

 

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6.4.  
Governing law.  This Agreement and the Exhibits hereto shall be governed by and
interpreted and enforced in accordance with the laws of the State of California,
without giving effect to any choice of law or conflict of laws rules or
provisions (whether of the State of California or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of California.

 
6.5.  
Consent to Jurisdiction.  Each party irrevocably submits to the exclusive
jurisdiction of (a) the State of California, County of Santa Clara, and (b) the
United States District Court for the Northern District of California, for the
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated hereby.  Each party agrees to commence any such
action, suit or proceeding either in the  United States District Court for
the  Northern District of California, or if such suit, action or other
proceeding may not be brought in such court for jurisdictional reasons, in
the  courts of the  State of California located in the County of Santa
Clara.  Each party further agrees that service of any process, summons, notice
or document by U.S. registered mail to such party’s respective address set forth
above shall be effective service of process for any action, suit or proceeding
in the courts of the State of California located in the County of Santa Clara
with respect to any matters to which it has submitted to jurisdiction in this
Section 6.5.  Each party irrevocably and unconditionally waives any objection to
the laying of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby in (x) the courts of the State
of California, County of Santa Clara, or (y) the United States District Court
for the Northern District of California, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.  EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF.

 

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CIT-UniPixel PLA
 
6.6.  
Confidentiality.

 
(a)  
“Confidential Information” means nonpublic information disclosed by a party
(“Disclosing Party”) to the other party (“Receiving Party”) under this
Agreement, including the terms, and contents, of this Agreement.  Confidential
Information may include, but is not limited to, discussions taking place under
this Agreement, specifications, designs, process information, technical data,
marketing plans, business plans, customer names, product roadmaps, pricing,
prototypes, toolkits, software, and/or intellectual property.

 

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CIT-UniPixel PLA
 
(b)  
For a period of two (2) years from the date of disclosure of any Confidential
Information, the Receiving Party shall (i) use the Disclosing Party’s
Confidential Information only for internal evaluation limited to the  purpose
for which the Confidential Information was disclosed, (ii) protect the
Disclosing Party's Confidential Information in the same manner and with the same
degree of care, but not less than a reasonable degree of care, with which it
protects its own confidential information, (iii) not disclose Confidential
Information to any unaffiliated third party other than the Receiving Party’s
advisors (including legal, accounting and banking) and representatives who have
a direct “need to know” the Confidential Information for purposes hereof, and
(iv) not reverse engineer, de-compile or disassemble any Confidential
Information.

 
(c)  
This Section 6.6 imposes no obligation on the Receiving Party with respect to
information that (i) was rightfully in the Receiving Party’s possession before
receipt from the Disclosing Party without any obligation of confidentiality,
(ii) is, or subsequently becomes, legally and publicly available through no
fault of the Receiving Party, (iii) is rightfully received by the Receiving
Party from a third party without any obligation of confidentiality, (iv) is
disclosed by the Disclosing Party to a third party without any obligation of
confidentiality, or (v) is independently developed by the Receiving Party
without use of the Confidential Information.  Further, the Receiving Party may
disclose Confidential Information pursuant to a valid order issued by a court or
government agency, provided that the Receiving Party provides the Disclosing
Party (x) prior written notice of such obligation, and (y) the opportunity to
oppose such disclosure. Each party understands that the other may currently be
developing, or in the future may develop, information internally, or receiving
information from other parties, that may be similar to Confidential Information
provided by the Disclosing Party hereunder.  Nothing herein will prohibit a
party from developing products, concepts, systems or technologies, or having
products, concepts, systems or technologies made or developed for it, that
compete with, or are similar to, the Disclosing Party’s products, concepts,
systems or technologies or the products, concepts, systems or technologies
embodied within any Confidential Information, provided that in doing so, the
party seeking to develop such products, concepts, systems or technologies does
not use or disclose any Confidential Information received from a Disclosing
Party in violation of this Section 6.6.  Neither party shall have any obligation
to limit or restrict the assignment of persons in receipt of Confidential
Information from other responsibilities or tasks that any such person may have,
subject, in all cases, to compliance with the terms hereof.

 

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CIT-UniPixel PLA
 
(d)  
Other than as specifically set forth in this Agreement, title or the right to
possess Confidential Information, as between the parties, will remain in the
Disclosing Party. No license under any trademark, patent or copyright is either
granted or implied by the disclosure of Confidential Information hereunder.

 
(e)  
The parties agree to comply with all applicable United States and foreign export
laws and regulations with respect to the Confidential Information. Licensee also
acknowledges that trading by a person in possession of material, non-public
information regarding a public company, such as Licensor, in the United States
may be prohibited by law, and that Confidential Information delivered under this
Agreement may be deemed to constitute material, non-public information affecting
Licensor.

 
(f)  
Each party acknowledges that monetary remedies may be inadequate to protect
Confidential Information and that injunctive relief, in addition to other
available remedies, may be appropriate to protect such Confidential Information.

 

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CIT-UniPixel PLA
 
6.7.  
Counterparts.  This Agreement may be executed in any number of counterparts, and
any party hereto may execute any such counterpart, each of which when executed
and delivered shall be deemed to be an original and all of which counterparts
taken together shall constitute but one and the same instrument.  Execution of
this Agreement or any other documents pursuant to this Agreement by facsimile or
other electronic copy of a signature shall be deemed to be, and shall have the
same effect as, execution by original signature. This Agreement shall become
effective when each party hereto shall have received a counterpart hereof signed
by the other party hereto.

 
6.8.  
Entire Agreement.  This Agreement and the Exhibits hereto set forth the entire
understanding of the parties hereto with respect to the license.  All Exhibits
referred to herein are intended to be and hereby are specifically made a part of
this Agreement.  Any and all previous agreements and understandings between or
among the parties regarding the subject matter hereof, whether written or oral,
are superseded by this Agreement.

 
6.9.  
Captions.  All captions contained in this Agreement are for convenience of
reference only, do not form a part of this Agreement and shall not affect in any
way the meaning or interpretation of this Agreement.

 
6.10.  
Severability.  Any provision of this Agreement that is invalid or unenforceable
in any jurisdiction shall be ineffective to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
provisions hereof, and any such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

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CIT-UniPixel PLA
 
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date(s) set
forth below:

 
CIT Technology Ltd
 
 
/s/ C. Malley
 
Uni-Pixel Displays, Inc.
 
 
/s/ Jeff Hawthorne
Authorized signature
 
Chris Malley
 
Authorized signature
 
Jeff Hawthorne
Printed name
 
Director
 
Printed name
 
Chief Executive Officer
Title
 
April 16, 2015
 
Title
 
April 16, 2015
Date
 
Date

 

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Exhibit A:    CIT Patents Relating to FLT Production
 
CIT REF.
TITLE
STATUS
CTRY
FILING DATE
APPL'N NO.
PUB NO.
PATENT NO.
P/CIT0004/CN
Formation of Solid Layers on Substrates
Granted
CN
Dec 3, 2004
200480035925.4
1898413
ZL200480035925.4
P/CIT0004/EP
Formation of Solid Layers on Substrates
Pending
EP
April 18, 2006
04805916.6
1689909
 
P/CIT0004/JP
Formation of Solid Layers on Substrates
Granted
JP
June 5, 2006
2006-542017
2007-520369
4881161
P/CIT0004/KR
Formation of Solid Layers on Substrates
Granted
KR
July 5, 2006
10-2006-7013540
2006-0129247
10-1178334
P/CIT0004/US
Formation of Solid Layers on Substrates
Granted
US
Dec 3, 2004
11/002,646
2005/0153078A1
8435603
P/CIT0004.1/US
Formation of Solid Layers on Substrates
Granted
US
Oct 15, 2012
13/652,090
2013/0040154
8,519,048
P/CIT0004.1/JP
Formation of Solid Layers on Substrates
Granted
JP
Aug 10, 2011
2011-157663
2011-251534
5504216
P\CIT0015/GB
Improvements in or Relating to Photopatterning
Pending
GB
Mar 18, 2011
1104581.2
2489042
 
P\CIT017/GB
Improvements in and relating to transparent electrical or electronic components
Pending
GB
Apr 14, 2011
1106309.6
2489974
 
P\CIT0015/CN
 Photopatternable structure containing substrate with two-side photoresist
coatings
Pending
CN
Feb 27, 2012
201280013523.9
103502890
 
P\CIT0015/EP
Photopatternable structure containing substrate with two-side photoresist
coatings
Pending
EP
Aug 9, 2013
12706905.2
2686735
 
P\CIT0015/JP
Photo-patternable structure
Pending
JP
Sept 9, 2013
2013-558497
2014-512568
 
P\CIT0015/KR
Photopatternable structure containing substrate with two-side photoresist
coatings
Pending
KR
Sept 27, 3013
10-2013-7025602
10-2014-0018271
 
P\CIT0015/PH
Photopatternable structure containing substrate with two-side photoresist
coatings
Pending
PH
Feb 27, 2012
1-2013-501945
   

 

CIT and UniPixel Confidential

 
 

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CIT REF.
TITLE
STATUS
CTRY
FILING DATE
APPL'N NO.
PUB NO.
PATENT NO.
P\CIT0015/US
Photopatterning
Pending
US
Feb 27, 2012
14/004,716
2014/0004320
 
P\CIT0016/GB
Improvements in or Relating to Photopatterning
Pending
GB
Feb 27, 2012
1203344.5
2499663
 
P\CIT017/CN
Improvements in and relating to transparent components
Pending
CN
Apr 12, 2012
201280014349.X
103503586
 
P\CIT017/EP
Improvements in and relating to transparent components
Pending
EP
Aug 9, 2013
12716551.2
2698045
 
P\CIT017/JP
Improvements in and relating to transparent electrical or electronic components
Pending
JP
Oct 18, 2012
2014-504391
2014-522546
 
P\CIT017/KR
Improvements in and relating to transparent components
Pending
KR
Oct 30, 2013
10-2013-7028747
10-2014-0024878
 
P\CIT017/PH
Improvements in and relating to transparent components
Pending
PH
Apr 12, 2012
1-2013-501972
   
P\CIT017/US
Transparent Components
Granted
US
Apr 12, 2012
14/005,034
2014/0000945
8980531
P\CIT016/CN
Protective coatings for photo-resists that are separately applied with different
solvents but removed together using same solvent
Pending
CN
Jan 16, 2013
01380008928.8
104246613
 
P\CIT016/EP
Method of Processing a Photosensitive Structure
Pending
EP
Aug 12, 2014
13700947.8
2820479
 
P\CIT016/KR
Method of Processing a Photosensitive Structure
Pending
KR
Aug 8, 2014
10-2014-7022281
10-2014-0139484
 
P\CIT016/US
Method of Processing a Photosensitive Structure
Pending
US
Aug 12, 2014
14/378,173
2015/0056552
 
P\CIT017/US
Transparent Components
Pending
US
Feb 25, 2015
14/631,254
   

 

   

 
 

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Exhibit B:  Annual Royalty Statement

 
Annual Royalty computation
 
For activity during [First – Fifth] Royalty Period
[start date – end date]
 
Net Sales of all Licensed FLT Products
[1]  USD ___
[During the Initial Term only]
Royalty computation:  multiply amount in [1] by 0.0167.
[2]  USD __
Annual Royalty Amount:  the greater of:
(a) one million, six hundred and fifty thousand, U.S. dollars ($1,650,000 USD),
or
(b) the amount in [2]
[3]  USD ___
Application of unused Non-Refundable Prepayment credited against Annual Royalty
[4]  USD
Remaining Amount of Annual Royalty due after Application of Non-Refundable
Prepayment:  subtract amount in [4] from amount in [3]
 

 
[During the Renewal Term only (if the Agreement is renewed)]
 
Royalty computation:  multiply amount in [1] by 0.0167.
[2]  USD __
Cumulative Annual Royalty amount during the Renewal Term
 

 
List of part/model numbers that were included in the determination of the amount
in [1] above.
 

CIT and UniPixel Confidential

 
 

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Exhibit C to CIT-UniPixel
 
EXHIBIT C : SECURED PROMISSORY NOTE

$[_______] [_____]
 
FOR VALUE RECEIVED, the undersigned, UNI-PIXEL DISPLAYS, INC., a Texas
corporation(“UPDI”), hereby promises to pay to the order of CIT TECHNOLOGY
LIMITED, a company registered in England (“CIT”), in lawful money of the United
States of America and in immediately available funds, the principal amount
of[________], on or before the earlier of (i) the second (2nd) anniversary of
the date hereof, (ii) ten (10) days after receipt of gross proceeds from the
sale of equity and/or debt securities of UPDI or any affiliate of UPDI after the
date hereof pursuant to which UPDI or any affiliate of UPDI receives gross
proceeds of no less than Five Million Dollars ($5,000,000) or (iii) thirty (30)
calendar days after the Initial Term as defined in the Patent License Agreement
(as defined below) (such earlier date, the “Maturity Date”), to pay the Annual
Royalty in excess of the Non-Refundable Prepayment, as provided in the Patent
License Agreement, dated as of April ___, 2015, between UPDI and CIT (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Patent License Agreement”; capitalized terms used and not defined
herein shall have the meanings given to such terms in the Patent License
Agreement).
 
Interest shall accrue on the unpaid principal amount at a rate equal to two
percent (2%) per annum compounded semi-annually (the “Interest Rate”).  Interest
shall be paid in arrears semi-annually, commencing with the six-month
anniversary of the date hereof.
 
The aggregate unpaid principal amount of this Secured Promissory Note (this
“Note”), all accrued and unpaid interest and all other amounts payable under
this Note shall be due and payable on the Maturity Date.  UPDI shall have the
right to prepay this note, in whole or in part, at any time without penalty.
 
This Note is the Secured Note referred to in the Patent License Agreement.  As
security for UPDI’s obligation under this Note, UPDI hereby grants to CIT a
security interest in the Purchased Assets, as defined in the Purchase and Sale
Agreement between UPDI and Atmel, dated as April ___, 2015 (the “Purchase
Agreement”) and all accounts receivable subsequently arising from UPDI’s
manufacture and sale of XSense Touch Sensors (the “Purchase Agreement”) and all
proceeds therefrom.  CIT acknowledges that the liens granted pursuant to this
Note are expressly subject and subordinate to the liens granted in favor of
Hudson Bay Master Fund Ltd. as Collateral Agent for the Buyers party to that
certain Securities Purchase Agreement dated as of April ____, 2015,
(collectively, the “First Lienholders”) under that certain Pledge and Security
Agreement by and between Uni-Pixel, Inc. and Uni-Pixel Displays, Inc. in favor
of Hudson Bay Master Fund Ltd., in its capacity as Collateral Agent for the
Buyers party to the Securities Purchase Agreement dated as of April ___, 2015
(the “First Lien”) and the foreclosure of any collateral granted herein is
subject to the right of the First Lienholders to exercise and enforce the rights
granted under the First Lien.
 
UPDI shall pay all costs of collection, including, without limitation,
reasonable attorneys’ fees and legal expenses if this Note is not paid when due,
whether or not legal proceedings are commenced.  CIT, in its discretion, may
file one or more financing statements, naming UPDI as a debtor and CIT as
secured party and indicating the collateral specified in this Note.
 
 

CIT and UniPixel Confidential

 
 

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Exhibit C to CIT-UniPixel
 
The following shall constitute events of default under this Note:  (1) UPDI
files a voluntary petition, or UPDI consents to or fails to vacate within thirty
days an involuntary petition, under any bankruptcy, insolvency or similar law,
or UPDI admits in writing its inability to pay its debts generally as they
mature, or UPDI makes a general assignment for the benefit of its or any of its
creditors; (2) an order, judgment, or decree is entered adjudicating UPDI
bankrupt, insolvent or similar status or a petition seeking reorganization or
appointing a receiver, trustee, judicial manager, or liquidator of all or a
substantial part of UPDI's assets is approved; or (3) UPDI fails to make any
required payment within five (5) business days after such payment is due and
payable.  Subject to the subordination provisions herein, upon the occurrence of
an event of default set forth under clause (1) or (2) of this paragraph, the
principal balance outstanding under this Note, as well as any interest thereon,
shall automatically mature and be due and payable immediately, without
presentment, demand, diligence, protest, notice of acceleration, or other notice
of any kind, all of which UPDI hereby expressly waives.  Upon the occurrence of
an event of default set forth under clause (3) of this paragraph, UPDI shall pay
to CIT on demand interest on such unpaid amount (to the extent permitted by
applicable law) for the period from the date such amount was due until such
amount shall have been paid in full at the Interest Rate plus 3.00% per annum,
and CIT shall have the right, upon notice to UPDI, to accelerate the principal
balance outstanding under this Note, as well as any interest thereon, whereupon
such amounts shall mature and be due and payable immediately, without
presentment, demand, diligence, protest, notice of acceleration, or other notice
of any kind, all of which UPDI hereby expressly waives.  These remedies are not
intended to be exclusive of any other right or remedy available hereunder or at
law or in equity.
 
UPDI hereby waives demand, diligence, presentment, protest and notice of every
kind, and warrants to the holder that all action and approvals required for the
execution and delivery hereof as a legal, valid and binding obligation of the
undersigned, enforceable in accordance with the terms hereof, have been duly
taken and obtained.
 
Any term, covenant, agreement or condition of this Note may be amended or waived
if such amendment or waiver is in writing and is signed by UPDI and CIT.  No
failure or delay by CIT in exercising any right hereunder shall operate as a
waiver thereof or of any other right nor shall any single or partial exercise of
any such right preclude any other further exercise thereof or of any other
right.  A waiver or consent given hereunder shall be effective only if in
writing and in the specific instance and for the specific purpose for which
given.
 
In addition to any rights and remedies of CIT provided by law, CIT shall have
the right, without prior notice to UPDI, any such notice being expressly waived
by UPDI to the extent permitted by applicable law, upon the occurrence and
during the continuance of a default or an event of default, to set-off and apply
against the principal balance outstanding under this Note and any accrued
interest thereon, whether matured or unmatured, owed by UPDI to CIT, any amount
owing from CIT to UPDI.  The aforesaid right of set-off may be exercised by CIT
against UPDI or against any trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, receiver or execution, judgment or
attachment creditor of UPDI or against anyone else claiming through or against
UPDI or such trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by CIT prior to the occurrence of a default or an event of
default.  CIT agrees promptly to notify UPDI after any such set-off and
application made by CIT, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
 

CIT and UniPixel Confidential

 
 

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Exhibit C to CIT-UniPixel
 
THIS NOTE SHALL BE GOVERNED BY AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH
THE LAW OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW
RULES OR PROVISIONS THEREOF (WHETHER OF THE STATE OF CALIFORNIA OR ANY OTHER
JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE OF CALIFORNIA.
 
This Note may be assigned or transferred by CIT to any person. UPDI may not
assign or transfer this Note or any of its rights hereunder without the prior
written consent of CIT transfer (and any such attempted assignment or transfer
shall be void).  This Note shall inure to the benefit of, and be binding upon,
the parties and their permitted assigns.
 

 
[Signature Page Follows]
 
 

CIT and UniPixel Confidential

 
 

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Exhibit C to CIT-UniPixel
 
 
IN WITNESS WHEREOF, UPDI has caused this Secured Promissory Note to be signed by
its duly authorized officer as of the date first above written.
 
UNI-PIXEL DISPLAYS, INC.
 

 

 
By:                                                      
 
Name:                                                      
 
Title:                                                      
 

 

 

 
CERTIFICATION:
 
I represent, warrant, and certify that to the best of my knowledge the
information contained in this statement (including any attachments) is complete
and accurate.
 

     
Authorized signature for Licensee
 
Date signed
     
Printed name
 
Title

 

CIT and UniPixel Confidential

 
 

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