Exhibit 10.1

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL

PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND

HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.

 

  (1) Cambridge Display Technology Limited

 

  (2) CDT Licensing Limited

 

  (3) Matsushita Electric Industrial Co., Limited

Patent License for LEP Display Device

Dated 7 September 2006

 

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This Agreement is made the 7th day of September 2006 (the “Effective Date”)

Between:

 

(1) Cambridge Display Technology Limited (company number 2672530) whose
registered office is at Building 2020, Cambourne Business Park, Cambridgeshire
CB3 6DW (“CDT”);

 

(2) CDT Licensing Limited (company number 2830058) whose registered office is at
Building 2020, Cambourne Business Park, Cambridgeshire CB3 6DW (“CLL”);

 

(3) Matsushita Electric Industrial Co., Limited whose company seat is at 1006
Kadoma, Kadoma City, Osaka, 571-8501, Japan and its Subsidiary (as defined
herein) (“the Licensee”).

Background:

 

(A) CDT is the owner of inventions relating to electroluminescent polymer
devices, in respect of which CDT has obtained and made applications for patent
protection in various countries.

 

(B) CLL is a wholly owned Subsidiary of CDT that has certain rights to licence
CDT Intellectual Property.

 

(C) The Licensee wishes to acquire a license under CDT’s patents and patent
applications for electronic display devices, and CDT is willing to grant such a
license upon and subject to the terms and conditions set forth in this
agreement.

It is agreed as follows:

 

1 Definitions and Interpretation

 

  1.1 In this Agreement, the following capitalized terms shall have the meanings
set forth herein:

 

“Affiliate”   means any company in which a party directly or indirectly owns or
controls more than 50% in nominal value of the issued equity share capital or
more than 50% of the shares entitled to vote upon election of directors or
persons performing similar functions as well as any company which directly or
indirectly owns or controls more than 50% in nominal value of the issue equity
share capital of a party or more than 50% of the shares entitled to vote upon
election of directors or persons performing similar functions of a party, but

 

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  any such company shall be deemed an Affiliate only for as long as such
controls exists. Notwithstanding the foregoing, for purposes of this Agreement,
Sumation Company Limited is an Affiliate of CDT. “this Agreement”   means this
agreement (including any schedule or annexure attached hereto and referenced
herein); “***”   “***” “Control”   shall have the meaning set forth in clause
7.2; “Display Module”  

means a LEP Device comprising a substrate incorporating where required by device
architecture, electrodes, transport layer, interlayer, electroluminescent
polymer, supporting layers and encapsulants, filters, all of which are inside of
the panel, circuit boards, flexible connectors, together with the electronic
drivers and other on-panel circuitry necessary to effect illumination of the
display device including thin film transistors, polariser where this is attached
to the panel, but expressly excluding ;

 

  “***” “Finished Product”   means any article or device (whether or not in
final form) made by or for the Licensee which incorporates an LEP Device and
additional components; “Group”   means a party and any other company which at
the relevant time is its Affiliate; “Initial Fee”   means the total fee of US$
“***” U.S. Dollars), which shall be payable by the Licensee to CDT by way of the
instalments set out in clause 3.1 of this Agreement; “Intellectual Property”  
means any Patent, copyright, registered design, design right and topography
right or any other form of protection, any right to apply or application for
such protection, and any rights in any secret process, know-how,

 

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  technical reports, designs, confidential information or otherwise or any
associated or similar right or protection and any rights under licenses and
consents in relation to any of the foregoing subsisting at the relevant time in
any jurisdiction, anywhere in the world; “LEP”   means light emitting polymer
material; “LEP Device”   means an electronic device “***” in which light is
generated by a LEP to produce a visible representation, which device is covered
by one or more claims of the Licensed Patents; “License”   means the license
granted pursuant to clause 2; “Licensed Patents”   means all Patents that CDT
Group exclusively owns or jointly owns or shall so own and/or CDT has or shall
have sublicense rights and is generally free to license without any payment to a
third party, filed prior to or after the Effective Date which are related to LEP
Device architecture and/or manufacture and/or driving schemes for such LEP
Devices and in the case of such driving schemes, those which are implemented
directly on the LEP Device panel “***”. A full list of Licensed Patents as at
the date of this Agreement is attached at Schedule 1; “Manufactured Cost”  
means material costs, direct personnel costs, maintenance costs, energy costs,
depreciation, space costs (occupancy), indirect personnel costs, miscellaneous
minor cost items needed for production, factory overhead and any relevant third
party costs related to manufacture (e.g. components, services). For the
avoidance of any doubt, the term “Manufactured Cost” shall not include central
administration costs, research and development costs, machine development and
marketing and sales costs. “Manufactured Costs” shall be calculated at the end
of the first Year in which a royalty is due and owing and thereafter,
recalculated at the end of each Year, the calculation being based on data from
the then-ending year and made in accordance with US GAAP;

 

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“Minimum Royalty “   means in relation to each Year US “***” U.S. dollars);
“Patents”   means patents and patent applications (and patents issuing from or
claiming priority based on the filing date of such applications), including
divisionals, continuations and continuations-in-part of the foregoing patent
applications, results of re-examinations of the foregoing patents, any patents
reissuing on any of the foregoing patents, and any foreign counterparts of the
foregoing patents and patent applications; “Qualifying Sales”   means, in
relation to LEP Devices, sales to at least two unrelated third party customers
accounting for at least 10 % of the Licensee and its Subsidiaries’ output in
respect of quantity of LEP Devices; or one unrelated third party customer
accounting for 5% of such outputs; “Quarter”   means the three months ending on
31 March, 30 June, 30 September and 31 December. The first Quarter of this
Agreement shall be for a period commencing as of the Effective Date and ending
on 31 March, 30 June, 30 September and 31 December, whichever comes first after
the Effective Date. The last Quarter under this Agreement shall end on its
termination or expiry (“Quarterly” shall be construed accordingly); “Half Year”
  means the six months ending on 30 June and 31 December. The first Half Year of
this Agreement shall be for a period commencing as of the Effective Date and
ending on 30 June or 31 December, whichever comes first after the Effective
Date. The last Half Year under this Agreement shall end on its termination or
expiry (“Half Yearly” shall be construed accordingly);

 

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“Relevant Rate”   means the rates set out below in respect of the net sales
achieved in each Year:   Annual sales (per Year) $m   Royalty Rate   “***”  
“***”   “***”   “***”   “***”   “***”   “***”   “***”   “***”   “***” “Reduced
Royalty Year”   means the period commencing on the date the Licensee first “***”
under this Agreement and ending 12 months thereafter. The second Reduced Royalty
Year shall be the period of 12 months immediately following the expiry of the
first Reduced Royalty Year; “Service Parts”   means any devices, parts, or
components comprising or contained in LEP Devices or Finished Products that are
covered by one or more claims of the Licensed Patents and that are made,
manufactured, sold, offered for sale, or used by or on behalf of the Licensee
for the purpose of maintaining, servicing, repairing, or replacing LEP Devices
or Finished Products for which a royalty already has been paid by the Licensee
to CDT hereunder; “Subsidiary”   means a corporation in which more than fifty
percent (50%) of the shares entitled to vote for the election of directors is
owned or controlled, directly or indirectly by a party hereto, as long as such
ownership or control exists, but with respect to Licensee, Subsidiary
specifically excludes “***”. “Technical Information”   means and includes all
inventions, processes, engineering and manufacturing skills and other technical
information necessary for Licensee to develop and manufacture the LEP Devices,
whether patented or patentable or not which are (1) recorded by CDT in writing
or

 

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  in electronic format and (2) are presently owned by and generally known to CDT
as at the date hereof, including, without limitation:   Technical and
engineering data, calculations and information;   Design data, calculations and
information;   Specifications, drawings, sketches, photographs;   Details of
layout of the works, including details and specification of machinery;   All
other forms of recorded information, technique and design in making of jigs,
tools, dies, patterns and moulds, as set forth in Schedule 2 ; “Transferred”  
means sold, rented, leased or otherwise disposed of (“Transfer” shall be
construed accordingly); “Year”   means the twelve (12) months ending on 31
December of each calendar year. The first Year of this Agreement shall be for a
period commencing as of the Effective Date and ending on 31 December 2006.
(“Yearly” shall be construed accordingly).

 

  1.2 Also in this Agreement, unless the context otherwise requires:

 

  (a) words in the singular include the plural and vice versa and words in one
gender include any other gender;

 

  (b) a reference to a statute or statutory provision includes any statute or
statutory provision which modifies, consolidates, re-enacts or supersedes it;

 

  (c) a reference to clauses and schedules is to clauses of and schedules to
this Agreement and references to sub-clauses and paragraphs are references to
sub-clauses and paragraphs of the clause or schedule in which they appear;

 

  (d) the table of contents and headings are for convenience only and shall not
affect the interpretation of this Agreement.

 

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2 Grant of License and Technical Support

 

  2.1 CDT grants to the Licensee, and the Licensee accepts, a non-exclusive,
non-tranferable and worldwide license under the Licensed Patents upon and
subject to the provisions of this Agreement:

 

  (a) to make or manufacture LEP Devices (but not LEP);

 

  (b) to incorporate the LEP Devices into Finished Products;

 

  (c) to design, develop, use, sell, offer for sale, distribute, import, export,
Transfer and otherwise deal in the LEP Devices and Finished Products in any and
all countries of the world; and

 

  (d) to have LEP Devices (but not LEP) made or manufactured for the Licensee,
in whole or in part by a sub-contractor, provided that the Licensee:

 

  (i) notify CDT in writing of the identity of such sub-contractor;

 

  (ii) “***”

 

  (iii) obtain from such sub-contractor a binding written undertaking in favour
of CDT obliging the sub-contractor :

 

  •   not to use the Licensed Patents for any purpose other than sub-contract
manufacturing LEP Devices for the Licensee under this Agreement;

 

  •   not to further sub-contract and/or sub-license the manufacture of LEP
Devices;

 

  •   to agree to adhere to and strictly observe the terms of this Agreement as
if it were a party to this Agreement;

 

  •   to keep confidential the Licensed Patents and all information and/or any
material disclosed by the Licensee to the sub-contractor in connection with the
manufacture of LEP Devices; and

 

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  •   to permit CDT to inspect its records and books of account in terms
equivalent to those set forth in clause 6 below.

 

  (iv) be responsible for all acts or omissions of the sub-contractor as if such
acts or omissions were its own.

 

     For the avoidance of doubt, the assembly of a Display Module using a panel
manufactured by the Licensee or its sub contractor and other necessary
components shall not of itself comprise subcontracting for the purposes of this
clause.

 

  2.2 CDT grants to the Licensee, and the Licensee accepts, a non-exclusive,
non-tranferable, royalty-free, and worldwide license under the Licensed Patents
to make, have made, design, develop, use, sell, offer for sale, distribute,
import, export, Transfer and otherwise deal in Service Parts and to incorporate
such Service Parts into Finished Products in any and all countries of the world
during the Term of this Agreement and for a period of “***”. The terms of this
clause 2.2 shall survive termination of this Agreement.

 

  2.3 If the Licensee wishes to extend the definition of LEP Device to include
displays with no restriction “***”, CDT will enter into good faith discussions
in relation to such extension provided always that the additional initial fee in
such event shall not exceed US$ “***” U.S. Dollars) and the royalty rate shall
be no less favourable than that applicable to other Comparable Licences. In
addition if the Licensee wishes to extend the scope of the license to devices
other than LEP Device, CDT will enter into good faith discussions to such
extension provided that if such scope is an imaging application or a lighting
application, “***”.

 

  2.4 Within ninety (90) days after the Effective Date, CDT shall furnish to
Licensee the Technical Information listed in Phase I of Schedule 2. In addition,
CDT shall render to Licensee the training services as set out below and
described in Phase II of Schedule 2, without charge to Licensee, in order to
assist the Licensee more effectively to implement the Technical Information, The
provision of such training services shall be on the following conditions :

 

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  (a) “***”

 

  (b) “***”

 

  (c) “***”

 

  (d) “***”

 

  2.5 CDT shall:

 

  (a) provide reasonable assistance to Licensee in obtaining access to any third
party Intellectual Property that is necessary to practise the Licensed Patents
and Technical Information. CDT shall not be obliged to make any payments to any
party in discharge of its obligation under this clause

 

  (b) Upon reasonable request in writing from Licensee, and from time to time
notify Licensee of any third party Intellectual Property that CDT reasonably
believes is necessary to practise the Licensed Patents and Technical Information
and of which the Vice President of Legal & Intellectual Property is aware, but
without any warranty that such information is accurate or complete.

 

3 Financial Provisions

 

  3.1 In consideration of the rights and licenses granted to the Licensee and
the technical support provided by CDT under this Agreement, the Licensee hereby
agrees to pay to CDT, except as provided in this clause, as follows:

 

  (a) to CLL, the first instalment of the Initial Fee”***” within thirty
(30) days of the full execution of this Agreement; the second instalment of the
Initial Fee “***” on1 April, 2007 and the third instalment of the Initial Fee
“***” on 1 December, 2008 provided in each case that CDT has provided the
Licensee with a valid invoice in respect of such payments. If on the dates
specified in this clause 3.1 (a), the Licensee shall not have received
notification from the Japanese tax authorities that the necessary documents
provided by CDT are acceptable to the tax authorities, the dates for payment
shall be extended for the period expiring 10 days after such notification has
been received by the tax authorities PROVIDED ALWAYS that payment shall never be
delayed for more than 90 days from the payment dates specified above.

 

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  (b) to CDT, royalties at the Relevant Rates in respect of the Net Sales Value
of all Display Modules Transferred by or for the Licensee pursuant to the terms
of this Agreement.

 

     A worked example of the operation of the Relevant Rate and the Reduced
Royalty Year is shown in Schedule 3.

 

  3.2 For the purposes of this Agreement and subject to clause 3.3, the “Net
Sales Value” of any Display Module means:

 

  (a) where sales are made of Display Module, the price charged under those
sales, calculated as the actual price invoiced to the customer less:

 

  (i) any turnover tax, value added tax or other sales tax; and

 

  (ii) any packaging, packing, freight, warehousing, carriage and insurance
charges;

 

     to the extent that any of the same are included in the invoice price, and
after deduction of any allowances for lost or damaged merchandise or returns,
and any discounts or rebates granted to the customer on account of the quantity
purchased or promptness of payment;

 

  (b) where any given Display Module is incorporated into any Finished Product
and a Display Module of the same specification as that incorporated into the
said Finished Product has also been sold in quantities sufficient to be termed
Qualifying Sales during the same Half Year, the Net Sales Value of such Display
Module means the price charged (on a per unit basis) for the relevant Display
Module (calculated in accordance with paragraph (a) above);

 

  (c) where any given Display Module is incorporated into any Finished Product
and that a Display Module of the same specification as that incorporated into
the said Finished Product has not been sold at any time during the same Half
Year has been sold, but not in quantities sufficient to be termed Qualifying
Sales, the Net Sales Value of such Display Module means the price charged (on a
per unit basis) for the Display Module (calculated in accordance with paragraph
(a) above) which CDT and the Licensee agree is comparable. The parties shall

 

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     provide necessary information to each other for the purposes of determining
the Net Sales Value of a comparable Display Module and shall use best efforts to
agree on the Net Sales Value of the comparable Display Module.

 

     Where any Display Module or Finished Product is sold or otherwise disposed
of other than on arm’s length terms, then for the purposes of clause 3.2 the
price concerned shall be adjusted to the price that which would have been
charged on the first subsequent arm’s length sale calculated (in either case) in
accordance with clause 3.2(a) or (b) above. This shall include where the price
of any Display Module or Finished Product is adjusted for any customer or
associate company in exchange for commitments from that customer or associate
company to purchase any other goods or services from the Licensee.

 

  3.3 A Transfer will be deemed to have occurred, and payments due hereunder for
such sale shall accrue, when invoiced or shipped to a third party, whichever
occurs first.

 

  3.4 The royalties payable pursuant to clause 3.1(b) shall be paid within
thirty (30) days after each Half Year during the period of this Agreement or
within ten (10) days after receiving notification from the Japanese tax
authorities that the necessary documents provided by CDT are acceptable to the
tax authorities, whichever shall be later PROVIDED ALWAYS that payment shall
never be delayed for more than 90 days from the end of the relevant Half Year
for which payment is due. The Licensee shall submit to CDT a written report in
such detail as CDT reasonably requires showing:

 

  (a) the quantity of all Display Modules and Finished Products Transferred by
the Licensee during that Half Year in respect of which royalties are payable to
CDT;

 

  (b) the Net Sales Value of such Display Modules;

 

  (c) the amount of the royalties payable pursuant to clause 3.1 in respect
thereof; and

 

  (d) the Licensee’s separate calculation of the Net Sales Value of Display
Modules which have been sold otherwise than on arm’s length terms.

 

     In each Quarter where a Half Yearly report is not due pursuant to clause
3.4, the Licensee agrees to provide an estimate of the figures required by
clauses 3.4(a) to (d) inclusive, within thirty (30) days of the end such
Quarter.

 

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     No more than a single royalty payment shall be due on any Display Module.
No royalty shall be due for any Service Parts made, manufactured, sold, offered
for sale, or used by or on behalf of the Licensee pursuant to the license
granted under clause 2.2. All royalties or other sums payable under this
Agreement shall be paid in U.S. Dollars, and where the underlying price in
respect of which any royalty is so payable is stated in a currency other than
U.S. Dollars, it shall be converted into U.S. Dollars by reference to the
average of the relevant daily buying and selling rates of CitiBank, New York for
the currency in question over the Half Year in question.

 

  3.5 All sums payable pursuant to this Agreement are exclusive of any value
added tax or other applicable sales taxes which may be chargeable in relation to
such supplies.

 

     All sums payable pursuant to this Agreement shall be paid without any
deductions for or on account of tax unless such deduction is required by law. In
circumstances where such deduction is required by law the Licensee shall
co-operate with CDT in completing any procedural formalities necessary for the
Licensee to obtain authorisation to make such payment with the minimum tax
deduction permissible pursuant to the terms of an applicable double tax treaty.
The Licensee acknowledges that United Kingdom Value Added Tax will be payable on
the value of any training services which are physically delivered in the United
Kingdom pursuant to clause 2.4. CDT will provide reasonable assistance to the
Licensee to reclaim from the United Kingdom tax authorities any Value Added Tax
on training which is paid by the Licensee.

 

  3.6 If the Licensee makes any default in payment of the royalties and other
sums due hereunder the amount due shall bear interest, both before and after any
judgement, at the rate of 1 per centum (1%) above LIBOR from time to time from
that date or the last day of that period (as relevant) until payment of that
amount is made to CDT.

 

  3.7 If any question or matter arises under clause 3 as to the calculation or
determination of Net Sales Value insofar as it depends on the price or “arm’s
length price” of any Display Modules, either party may refer the matter to an
agreed independent major international firm of chartered accountants for
determination and such firm shall act as expert.

 

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     The parties shall use all reasonable endeavours to enable the expert to
decide the matter as soon as reasonably practicable and in any event within
three (3) months of their appointment.

 

     The costs of such appointment shall be borne by the parties in equal
shares. The parties shall make available to the expert all such information and
documents as he reasonably requires for the purpose of making his determination.
The determination of the expert shall be final and binding on both parties.

 

  3.8 Subject to Clause 3.9, in the event that the royalties payable for a Year
are less than the Minimum Royalty, the Licensee shall pay to CDT the Minimum
Royalty within sixty (60) days of the end of each Year.

 

  3.9 “***”

 

  3.10 “***”

 

  3.11 CDT agrees to permit legal counsel appointed by the Licensee, to have
access during ordinary business hours “***”, and other related documents as may
be necessary, to determine, the correctness of any report or payment made under
this Agreement.

 

  3.12 Nothing in this clause shall oblige CDT to breach obligations of
confidentiality owed to third parties or to seek waivers of such obligations and
where CDT is so prevented from disclosing information or documents confidential
to third parties, such information and documentation shall be reviewed solely by
legal counsel appointed as set out above to act on behalf of Licensee. Such
legal counsel shall execute a confidentiality agreement which is reasonably
satisfactory to all parties prior to active participation in the review which
shall amongst other matters require the legal counsel to confine his
communications to Licensee concerning the contents of the confidential
information solely to a statement as to whether or not the licence under review
is “***” (without giving reasons);

 

4 Intellectual Property and Proceedings

 

  4.1 The Licensee shall promptly inform CDT:

 

  (a) of any claim made or threatened against the Licensee by any third party
that the exercise by the Licensee of any rights granted under this Agreement
constitutes an infringement of any Intellectual Property or other rights of any
other person; or

 

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  (b) of any actual, threatened or suspected infringement of any Licensed
Patent.

 

  4.2 CDT shall be under no obligation to enforce any Licensed Patents and any
such enforcement shall be within CDT’s sole and absolute discretion.

 

  4.3 Upon the Licensee’s request, CDT shall record the license(s) granted
pursuant to this Agreement with any and all patent offices wherefrom any of the
Licensed Patents issued. The Licensee shall use reasonable efforts to assist CDT
in recording such license(s).

 

5 Release and Warranties

 

  5.1 CDT (on behalf of itself and its predecessors, successors, assigns,
directors, employees, and officers) hereby fully, finally, irrevocably,
unconditionally, and forever releases, acquits, and discharges the Licensee and
its Subsidiaries, distributors and customers (direct or indirect), including end
users, from any claim, cause of action, responsibility, liability, charge,
damage, and claim (known or unknown) relating to or in connection with the
Licensed Patents and/or the Licensed Products.

 

  5.2 CDT represents, warrants, and covenants that:

 

  (a) it is the owner of the entire right, title and interest in and to the
Licensed Patents and is duly authorized and entitled to grant the License and
rights set forth in this Agreement without the approval, consultation, or
involvement in any manner of any person or entity;

 

  (b) as of the Effective Date, there are no outstanding assignments, grants,
licenses, encumbrances, obligations or agreements, either written, oral or
implied, of or on inconsistent wit this Agreement;

 

  (c) no “Event of Default” has occurred, as that term is defined in CDT’s
Reimbursement Agreement with IPIFS Guarantee Corp.; and

 

  (d) any conditional assignments of the Licensed Patents to IPIFS Guarantee
Corp. have been validly and effectively cancelled and/or terminated and are of
no force or effect.

 

  5.3 The Licensee represents and warrants that it has the right to enter into
this Agreement with CDT;

 

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6 Accounts

 

  6.1 The Licensee shall keep true and detailed accounts and records sufficient
to show all information required for the calculation of all royalties and other
sums due and payable under this Agreement for five (5) years after the end of
the particular period for which the record was made.

 

  6.2 CDT shall be entitled until two (2) years after the due date of the last
royalty statement under this Agreement to have audited, subject to the
conditions hereunder, such records during normal business hours by an
independent certified public accountant selected by CDT and acceptable to the
Licensee for the sole purpose of verifying the royalty accrued as herein
provided. The Licensee may, at its option, require such independent certified
public accountant to enter into a non-disclosure agreement prior to any
disclosure hereunder.

 

  6.3 Audits under clause 6.2 shall be carried out at CDT’s expense. However, if
the audit proves that the Licensee’s accounting of royalties was deficient by
more than 5% (five percent) of the amount actually due, the cost of such audit
shall be borne by the Licensee.

 

  6.4 The provisions of this clause shall remain in full force and effect and
survive termination of this Agreement.

 

7 Duration and Termination

 

  7.1 The provisions of this Agreement and the licenses granted hereunder,
having come into force on the date of full execution by the parties, shall
(subject to the following provisions of this clause) continue in force until the
last of the Licensed Patents has expired and/or ceased to be in force, unless
earlier terminated in accordance with the provisions of this Agreement (the
“Term “).

 

  7.2 Termination by CDT. CDT may terminate this Agreement upon thirty (30) days
written notice to the Licensee if:

 

  (a) any royalties or other sums payable to CDT hereunder are in arrears for
over 120 (one hundred twenty) days;

 

  (b) the Licensee fails to pay the Initial Fee;

 

  (c) the Licensee, without prior written notice to CDT, sells, assigns or
otherwise parts with that part of its business relating to the exploitation of
the Licensed Patents;

 

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  (d) control (as defined for the purposes of Section 416, Income and
Corporation Taxes Act 1988) (“Control”) of the Licensee, without prior written
notice to CDT, is transferred to any person or persons other than the person or
persons in control of the Licensee as of the date of this Agreement, other than
pursuant to clause 12.2;

 

  (e) the Licensee does or causes or permits to be done any act which contests
or challenges the validity or scope of any of the Licensed Patents, or the
ownership by CDT thereof, provided, however, that termination by CDT pursuant to
this subsection (e) shall only be with respect to the contested or challenged
Licensed Patent(s), and shall not affect in any way the continuation of this
Agreement with respect to any remaining Licensed Patents.

 

  7.3 Termination by the Licensee. The Licensee may terminate this Agreement at
any time, without cause, upon twelve (12) month written notice to CDT. In such
event, the Licensee shall not pay to CDT the Minimum Royalty for the Year of
termination. All instalment payments pursuant to clause 3.1 shall continue to be
paid notwithstanding termination pursuant to this clause 7.3. Any Minimum
Royalty due within the period of twelve (12) months following the service of any
notice pursuant to this clause shall not be payable by the Licensee.

 

  7.4 Either party may forthwith terminate this Agreement upon thirty (30) days
written notice to the other if:

 

  (a) the other party has committed any breach of any of its obligations under
this Agreement (other than as a result of the circumstances set forth in clause
11) and (in the case of a breach which is capable of remedy) has failed to
remedy the same within the period of thirty (30) days after receipt of written
notice giving full particulars of the breach and requiring it to be remedied; or

 

  (b) an encumbrancer takes possession, or a receiver is appointed, of any of
the property or assets of the other party;

 

  (c) the other party becomes subject to an administrative order or makes any
voluntary arrangement with its creditors (within the meaning of the Insolvency
Act 1986) or anything analogous to the foregoing under the law of any other
jurisdiction occurs in relation to that other party;

 

17

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  (d) the other party goes into liquidation (except for the purposes of
amalgamation or reconstruction and in such manner that the company resulting
therefrom effectively agrees to be bound by or assume the obligations imposed on
that other party under this Agreement);

 

     or any analogous event to the foregoing under the law of any jurisdiction
occurs in relation to the other party.

 

  7.5 For the purposes of clause 7.4(a), a breach shall be considered capable of
remedy if the party in breach can comply with the provision in question in all
respects other than as to the time of performance (provided that time of
performance is not of the essence).

 

  7.6 For the avoidance of doubt, the rights to terminate this Agreement given
by this clause 7 shall not prejudice any other right or remedy of either party
in respect of the breach concerned (if any) or any other breach.

 

8 Effects of Termination

 

  8.1 Subject to the terms of this Agreement, in the event of a termination of
this Agreement :

 

  (a) the Licensee shall cease to use, either directly or indirectly, the
Licensed Patents (unless and to the extent expired);

 

  (b) the Licensee shall consent to the cancellation of any formal license
granted to it, or of any recordal of it in any register, in relation to any of
the Licensed Patents;

 

  (c) subject to the provisions of this clause and clause 7.3, and except with
respect to any accrued rights, neither party shall be under any further
obligation to the other, including without limitation the Licensee’s obligation
to pay any royalty or other amount to CDT;

 

  (d) the provisions of clauses 7 and 10 shall continue in full force and effect
in accordance with their terms, notwithstanding termination of this Agreement
for any reason; and

 

  (e) all obligations of either party under this Agreement which are expressly
or by implication intended to survive termination shall continue in full force
and effect thereafter.

 

18

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9 Confidentiality

 

  9.1 Neither party shall, at any time during the Term or within three (3) years
from the date of any termination of this Agreement, disclose to any other
person, or use for any purpose except as contemplated by this Agreement, either
the terms of this Agreement or any information concerning this Agreement or
which has been disclosed by either party to the other under or in connection
with this Agreement, and each party shall use its best endeavours to keep that
information confidential (whether it is marked as such or not), except as
provided by clause 9.2.

 

  9.2 The terms of this Agreement and any information which is disclosed by
either party to the other under this Agreement may be:

 

  (a) confidentially disclosed by either party to:

 

  (i) any governmental or other authority or regulatory body; or

 

  (ii) any other person, to the extent required by law; or

 

  (iii) the Commission under the Securities Act and the Securities Exchange Act
of 1934, (as amended, and the rules and regulations of the Commission
promulgated thereunder), where such disclosures are reasonably considered
advisable by law,

 

     subject in each case to the disclosing party first obtaining and providing
the other party with written assurance and undertaking from the disclosing
party, as nearly as practicable in the terms of this clause, to keep the
information confidential to the extent permitted by law and to use it only for
the purposes for which the disclosure is made;

 

  (b) confidentially disclosed by either party to:

 

  (i) any actual or potential legitimate sub-licensee, customer or supplier of
that party, or any person carrying out research or development on its behalf; or

 

  (ii) any employee of that party or any other member of CDT’s Group or Licensee
(as appropriate) or of any of the persons mentioned in sub-clause (b)(i) above,

 

19

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     to the extent necessary for the purposes of the manufacture and sale of,
and any other dealings in, the LEP Devices or Finished Products, subject in each
case to the disclosing party first obtaining and providing the other party with
a copy of a written undertaking from the person in question, as nearly as
practicable in the terms of this clause, to keep the information confidential
and to use it only for the purposes for which the disclosure is made;

 

  (c) used by either party for any purpose, or disclosed by either party to any
other person, to the extent only that any part of the information in question is
at the date of this Agreement or at any time after that date through no fault of
that party becomes public knowledge, provided that in doing so that party does
not disclose any part of the information in question which is not public
knowledge;

 

  (d) disclosed (i) by CDT to the employees, agents, attorneys, or consultants
of CDT, or (ii) by the Licensee to the employees, agents, attorneys, or
consultants of the Licensee, in either case for the purposes of exercising,
performing, or enforcing a party’s rights and obligations under this Agreement
or for the purpose of understanding actual or potential rights and obligations
under this Agreement or as part of the due diligence review of the party or
Group.

 

10 “***”

 

  10.1 “***”

 

  10.2 This Agreement and the License shall survive any change of Control of
CDT. Any successor or purchaser of CDT shall assume in writing all rights and
obligations under this Agreement.

 

  10.3 All rights and licenses granted by CDT to the Licensee are, and shall
otherwise be deemed to be, for the purpose of Section 365(n) of the United
States Bankruptcy Code, as amended (the “Bankruptcy Code”), licenses of rights
to “intellectual property” as defined under Section 101(60) of the Bankruptcy
Code. The parties hereto agree that the Licensee, as a licensee of such rights
under this Agreement, shall retain and may fully exercise all of its rights and
elections under the Bankruptcy Code. The parties hereto further agree that, in
the event that any proceeding shall be instituted by or against CDT seeking to
adjudicate it as

 

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20

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     bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, or composition of it or its debts under any
law relating to bankruptcy, insolvency, or reorganization or relief of debtors,
or seeking an entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its property
or it shall take any action to authorize any of the foregoing actions (each a
“Proceeding”), the Licensee shall have the right to retain and enforce its
rights under this Agreement

 

  10.4 CDT will give MEI thirty (30) days prior written notice of the execution
of any conditional assignment of any of its Licensed Patents.

 

11 Force Majeure

 

  11.1 Neither party shall be deemed to be in breach of this Agreement, or
otherwise be liable to the other, by reason of any delay in performance or
non-performance of any of its obligations under this Agreement to the extent
that such delay or non-performance is due to any cause beyond its reasonable
control including but not limited to any strike, lockout or other form of
industrial action (an “Event of Force Majeure”).

 

  11.2 The party affected by the Event of Force Majeure shall immediately give
the other party written notification of the nature and extent of the Event of
Force Majeure and the parties shall enter into bona fide discussions with a view
to alleviating its effects or to agreeing upon such alternative arrangements as
may be fair and reasonable.

 

12 Nature of Agreement

 

  12.1 Either party shall be entitled to perform any of the obligations
undertaken by it and to exercise any rights granted to it under this Agreement
through any member of its Group, provided that any act or omission of any such
member of either party’s Group shall, for all the purposes of this Agreement, be
deemed to be the act or omission of such party.

 

  12.2 Either party may transfer all or any part of both the benefit and burden
of this Agreement by way of assignment or novation to any Affiliate.

 

  12.3 The license shall survive any change of control of CDT. Any successor or
purchaser of CDT shall assume in writing all obligations under the license

 

21

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  12.4 Neither this Agreement nor any of the rights and powers created herein
may be assigned, in whole or in part, by either party hereto without the prior
written consent of the other party, except that either party may transfer both
the benefit and burden of this Agreement by way of a novation to any purchaser
or other successor in title (whether by way of a flotation, initial public
offering, reorganisation, amalgamation or otherwise) of all or substantially all
of its business.

 

  12.5 Prior to any assignment of the Licensed Patents (whether by sale,
transfer, change of control, or otherwise), CDT shall (a) inform the Licensee of
the contemplated assignment, including the identity of the intended assignee,
and (b) inform the potential assignee(s) of the existence of the license
agreement in a signed writing copied to the Licensee. All license rights and
covenants contained herein shall run with the Licensed Patents and shall be
binding on any successors in interest or assigns thereof. Any rights in the
Licensed Patents granted to any third party after the date of this Agreement,
whether by sale, license, assignment, or other instrument, shall be subject to
the rights granted to the Licensee.

 

  12.6 Nothing in this Agreement shall create, or be deemed to create, a
partnership, or the relationship of principal and agent, between the parties to
this Agreement.

 

  12.7 Each party to this Agreement warrants to the other that:

 

  (a) it has the authority to enter into this Agreement; and

 

  (b) the execution of, and the performance of its obligations under, this
Agreement require no governmental or other approvals or, if required, such
approvals have been obtained.

 

  12.8 Neither party shall be liable to the other party for any indirect or
consequential losses, damages, costs or expenses incurred by reason of any duty
at common law or under any statute, or any representation (other than fraudulent
misrepresentation), or any term hereof, whether express or implied by statute,
collaterally or otherwise, nor for any loss of profit, business, goodwill,
anticipated savings or contracts, however the same may arise and whether
occasioned by the negligence, breach of contract or otherwise of the other
party, its servants or agents or otherwise, which arises out of or in connection
with this Agreement or its use.

 

  12.9 The Licensee hereby agrees to indemnify and keep indemnified CDT, its
servants and agents from and against all actions, claims, costs and demands
which may be brought or made against CDT

 

22

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     and all losses, damages, costs and expenses of any kind suffered by CDT of
whatever nature and howsoever arising whether in negligence or otherwise in
connection with any LEP Device manufactured by or on behalf of the Licensee.

 

  12.10 CDT and CLL hereby agrees to indemnify and keep indemnified the
Licensee, its servants and agents from and against all actions, claims, costs
and demands which may be brought or made against the Licensee and all losses,
damages, costs and expenses of any kind suffered by the Licensee arising in
negligence or resulting from any breach of this Agreement by CDT.

 

  12.11 To the extent permitted by law, the maximum limit of either party’s
liability under or in connection with this Agreement, whether in contract, tort,
negligence, breach of statutory duty or otherwise shall be such sum as equals
the greater of “***”.

 

  12.12 The parties to this Agreement acknowledge that they have entered into
this Agreement in reliance only upon the representations, warranties and
promises specifically contained or incorporated in this Agreement and, save as
expressly set out in this Agreement, neither party shall have any liability in
respect of any other representation, warranty or promise made prior to the date
of this Agreement unless it was made fraudulently.

 

13 Governing Law and Jurisdiction

 

  13.1 This Agreement shall be governed by and construed in accordance with
English law

 

  13.2 Each of the parties irrevocably submits for all purposes in connection
with this Agreement to the exclusive jurisdiction of the courts of England

 

  13.3 All disputes arising in connection with this Agreement in the first
instance be referred to “***”. The said representatives of the parties shall use
best efforts to resolve such dispute to the mutual satisfaction of the parties.
If the said representatives are unable to resolve the dispute amicably, the
dispute shall be finally settled in accordance with clause 13.4.

 

  13.4 Subject to clause 13.3, any disputes arising out of or in connection with
this Agreement shall be referred to and determined by arbitration in London by a
single arbitrator whose identity shall be agreed between the parties or, in
default of such agreement, shall be appointed by the President of the Law

 

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23

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     Society, such arbitration to be in accordance with and subject to the
provisions of the Arbitration Act 1996 (and any later enactments thereof) or any
statutory modification or re-enactment of it. The language of the arbitration
shall be English. The decision of the arbitrator shall be final and binding upon
the parties.

 

  13.5 Unless expressly provided in this Agreement, no term of this Agreement is
enforceable by any person who is not a party to it.

 

14 Notices

 

  14.1 Any notice to a party under this Agreement shall be in writing signed by
or on behalf of the party giving it and shall, unless delivered to a party
personally, be left at, or sent by prepaid first class post, prepaid recorded
delivery, or facsimile to the address of the party as set out on page 1 of this
Agreement or as otherwise notified in writing from time to time in accordance
with this clause 14.1.

 

  14.2 Except as referred to in sub-clause 14.3, a notice shall be deemed to
have been served:

 

  (a) at the time of delivery if delivered personally;

 

  (b) ninety-six (96) hours after posting; or

 

  (c) two (2) hours after transmission if served by facsimile on a business day
prior to 15:00 hours (local time) or in any other case at 10:00 hours (local
time) on the business day after the date of despatch.

 

  14.3 If the deemed time of service is not during normal business hours in the
country of receipt, the notice shall be deemed served at or, in the case of
faxes, two (2) hours after the opening of business on the next business day of
that country.

 

  14.4 The deemed service provisions set out in sub-clause 14.2 do not apply to:

 

  (a) a notice served by post, if it is returned to the sender as undelivered or
if there is a national or local suspension, curtailment or disruption of postal
services which affects the collection of the notice or is such that the notice
cannot reasonably be expected to be delivered within ninety-six (96) hours after
posting; and

 

  (b) a notice served by facsimile, if, before the time at which the notice
would otherwise be deemed to have been served, the receiving party informs the
sending party that

 

24

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     the notice has been received in a form which is unclear in any material
respect, and, if it informs the sending party by telephone, it also despatches a
confirmatory facsimile as to this fact within two (2) hours of receipt (as
contemplated by clause 14.2(c)).

 

  14.5 In proving service it will be sufficient to prove:

 

  (a) in the case of personal service, that it was handed to the party or
delivered to or left in an appropriate place for receipt of letters at its
address;

 

  (b) in the case of a letter sent by post, that the letter was properly
addressed, stamped and posted; or

 

  (c) in the case of facsimile, that it was properly addressed and despatched to
the number of the party.

 

  14.6 A party shall not attempt to prevent or delay the service on it of a
notice connected with this Agreement.

 

15 Further assurance

 

   After this Agreement has been signed by both parties, each party shall
execute such documents and take such steps as the other party may reasonably
require to fulfil the provisions of and to give to each party the full benefit
of this Agreement.

 

16 Waiver

 

  16.1 The rights, powers and remedies conferred on any party by this Agreement
and remedies available to any party to this Agreement are cumulative and are
additional to any right, power or remedy which it may have under general law,
this Agreement or otherwise.

 

  16.2 Any party to this Agreement may, in whole or in part, release, compound,
compromise, waive or postpone, in its absolute discretion, any liability owed to
it or right granted to it in this Agreement by any other party or parties
without in any way prejudicing or affecting its rights in respect of that or any
other liability or right not so released, compounded, compromised, waived or
postponed.

 

  16.3 No single or partial exercise, or failure or delay in exercising any
right, power or remedy by any party to this Agreement shall constitute a waiver
by that party of, or impair or preclude any further exercise of, that or any
right, power or remedy arising under this Agreement or otherwise.

 

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17 Exclusion of Certain Warranties

 

  17.1 Subject to the provisions of clauses 5 and 12.5, CDT does not give and
nothing contained in this Agreement shall be construed as:

 

  (a) a warranty or representation as to the validity or scope of any of the
Licensed Patents ;

 

  (b) a warranty or representation that any patent applications licensed
hereunder will proceed to grant;

 

  (c) a warranty or representation as to the volume, quality or performance of
LEP Devices which may be manufactured through the use of the Licensed Patents;

 

  (d) a warranty or representation that the Licensed Patents and/or LEP Devices
can be freely exploited by the Licensee and that any manufacture, sale, use,
marketing or other disposition of LEP Devices as contemplated hereunder will be
free from infringement of any Intellectual Property of third parties;

 

  (e) conferring by implication, estoppel or otherwise, upon the Licensee any
license or other right under any Patent or other Intellectual Property except
for the licenses and rights expressly granted hereunder; or

 

  (f) a representation or warranty as to the efficacy or usefulness of the
Licensed Patents or that they will produce LEP Devices of satisfactory quality
or fit for the purpose for which the intended.

 

18 Severance

 

   To the extent that any provision of this Agreement is found by any court or
competent authority to be invalid, unlawful or unenforceable in any
jurisdiction, that provision shall be deemed not to be a part of this Agreement,
it shall not affect the enforceability of the remainder of this Agreement nor
shall it affect the validity, lawfulness or enforceability of that provision in
any other jurisdiction.

 

19 Announcements

 

   Either party shall not make any announcement without other party’s prior
written consent. The text of such announcement shall be agreed by the parties
and it shall not be made public until such agreement is reached. For the
avoidance of doubt and notwithstanding the foregoing, this clause 19 shall not
apply to the extent the announcement is required or reasonably considered
advisable in connection with reports filed with

 

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   governmental authorities in Japan and the US Commission under the Securities
Act and the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder. Where such announcement is
reasonably required, the parties will request confidential treatment to the
extent permissible.

 

20 Non-Solicitation

 

   The Licensee may not at any time during this Agreement or for a period of
twelve (12) months from the expiry or termination of this Agreement engage,
employ or utilise in any capacity, the services of or introduce to another
employer either temporarily or permanently, directly or indirectly any person
employed by CDT or any member of CDT’s Group . If the Licensee breaches this
clause, it shall pay to CDT a sum equivalent to the new annual starting salary
and benefits of the person concerned, and CDT shall not be entitled to, and
hereby expressly waives, any further recovery, including injunctive relief,
monetary damages, or other relief, for such breach.

 

21 Entire Agreement

 

   This Agreement sets out the entire agreement and understanding between the
parties in respect of the subject matter of this Agreement and it may not be
amended and/or modified except by an instrument in writing signed by the duly
authorised representatives of the parties.

 

   This Agreement has been fully executed on the date appearing at the head of
page 1.

 

27

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Signed by

   )      

for and on behalf of

   )   

/s/ David Fyfe

  

Cambridge Display Technology

   )      

Limited

   )      

in the presence of:

   )      

 

Signature of witness:  

/s/ Dawn Savidge

Name: Dawn Savidge,

Address: One Independent Drive, stc 115, Jackonsville, FL 32202

Occupation : Administrative Assistant

 

Signed by

   )      

for and on behalf of

   )   

/s/ Stephen Chandler

  

CDT Licensing Limited

   )      

in the presence of:

   )      

Signature of witness:  

/s/ Jessica Smith

Name: Jessica Smith

Address: 6 Rae’s Yard, Bury St. Edmunds, IP33 3EY

Occupation: Executive Assistant

 

Signed by

   )      

for and on behalf of

   )   

/s/ Susumu Koike

  

Matsushita Electric Industrial Co., Ltd

   )      

in the presence of:

   )      

 

Signature of witness:  

/s/ Takeshi Uenoyama

Name: Takeshi Uenoyama

Address: 4-1-1-601 Kusauchi Hanshowari, Kyotanabe, Kyoto 6100311 Japan

Occupation: Director

 

28

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Schedule 1

The Patents

“***”

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29

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Schedule 2

Technical Information

“***”

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30

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Schedule 3

Worked Example of the operation of the Reduced Royalty Rate

“***”

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*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION

 

31