nano_8k-ex1001.htm


     

    Exhibit 10.1

     

    
 

    SETTLEMENT
AGREEMENT

     

    This
Settlement Agreement (“Agreement”) is made as of
this 18th day of June, 2008, by and between NANO-PROPRIETARY, INC., a
Texas corporation, having its principal place of business at 3006 Longhorn
Boulevard, Suite 107, Austin, Texas 78758, USA (“NPI”), and Till Keesmann, a German
citizen with his principal place of business at Bahnhofstraβe 53a, 69115
Heidelberg, Germany (“Keesmann”).

    RECITALS:

    WHEREAS,
NPI possesses a worldwide exclusive license to patents pertaining to carbon
nanotubes as cathodes for field emission display under an agreement with
Keesmann executed on May 26, 2000 (the “Keesmann License
Agreement”);

    WHEREAS, Keesmann  purported
to terminate the Keesmann License Agreement on or about March 22, 2006, and
February 15, 2007;

    WHEREAS,
NPI commenced Civil Action No. 06-C-2689, as amended, against Keesmann in the
United States District Court for the Northern District of Illinois alleging
declaratory judgment, breach of contract, conversion, aiding and abetting
conversion, conspiracy to commit conversion, misappropriation, aiding and
abetting misappropriation, conspiracy to commit misappropriation, federal Lanham
Act violations, tortious interference with a prospective economic relationship,
aiding and abetting tortious interference with a prospective economic
relationship, and conspiracy to tortiously interfere with a prospective economic
relationship (the “Illinois
Litigation”);

    WHEREAS, NPI denies all claims made by
Keesmann in the Illinois Litigation, including that Keesmann has validly
terminated the Keesmann License Agreement;

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    WHEREAS,
Keesmann denies liability for all claims asserted against him in the
Illinois Litigation;

    WHEREAS,
NPI and Keesmann desire to resolve amicably, without admitting wrongdoing or
liability, any and all claims and causes of action related to performance under
the Keesmann License Agreement as of the date of this Agreement, asserted in the
Illinois Litigation, and related to the conduct of the Illinois Litigation, and
seek amicably to resolve their differences that have given rise to this
controversy and to avoid future controversies between themselves;

    NOW,
THEREFORE, in consideration of mutual covenants, agreements and understandings
hereinafter contained, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the Parties agree as
follows:

    1.           Costs.  Each
Party shall bear its own attorney fees and costs incurred in the Illinois
Litigation.

    2.           Dismissal.  Within
seven (7) days of the execution of this Agreement, the Parties shall file a
stipulation with the District Court providing that all of NPI’s claims against
Keesmann in the Illinois Litigation be dismissed with prejudice; and that
all of Keesmann’s claims of termination of the Keesmann License Agreement be
withdrawn with prejudice.

    3.           Release by NPI.  Subject
to Keesmann’s timely and satisfactory performance of all of his obligations
under this Agreement, NPI, and each of its parent companies, subsidiaries,
successors, affiliates, and predecessors, and each of their partners, officers,
directors, shareholders, agents, servants, employees, representatives,
successors and assigns (“NPI
Parties”) shall hereby release, relinquish, waive, covenant not to sue,
and discharge Keesmann from any and all claims, suits, damages, and/or causes of
action, whether at law, equity, or otherwise: (a) related to Keesmann’s
performance under the Keesmann License Agreement as of the date of this
Agreement, (b) asserted against Keesmann in the Illinois Litigation,
and (c) related to the conduct of the Illinois Litigation.


    
      
         


      

      
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    4.           Release by Keesmann.  Subject
to NPI’s timely and satisfactory performance of all of its obligations under
this Agreement, Keesmann, and each of his successors, affiliates, and
predecessors, and each of their partners, officers, directors, shareholders,
agents, servants, employees, representatives, successors and assigns (“Keesmann Parties”) hereby releases,
relinquishes, waives, covenants not to sue, and discharges NPI from any
claims, suits, damages, and/or causes of action, whether at law, equity, or
otherwise: (a) related to NPI’s performance under the Keesmann License Agreement
as of the date of this Agreement, (b) asserted against NPI in the
Illinois Litigation, including any basis for termination of the Keesmann
License Agreement, and (c) related to the conduct of the Illinois
Litigation.

    5.           Covenants.  The
Parties represent, warrant, and covenant that they shall not engage in, nor
permit third parties to engage in on their behalf, any additional measures
against each other related to the Illinois Litigation, except for any reasonable
measures taken to enforce this Agreement.

    6.           Scope of
Agreement.  The application and scope of this Agreement is
worldwide.

    7.           Entire
Agreement.  This Agreement constitutes the entire agreement of
the Parties hereto and supersedes all prior negotiations, understanding and
agreements whether written or oral related to the subject matter
hereof.  This Agreement is entered into and executed without reliance
upon any promise, warranty or representation by any Party or any representative
of any Party hereto, other than those expressly contained
herein.  This Agreement shall not be interpreted or construed against
the drafter.  Each Party has carefully read this Agreement, has been
advised of its meaning and consequences by its respective counsel, and executes
this Agreement of its own free will.


    
      
         


      

      
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    8.           Non-Disparagement.  The
Parties hereto agree that they and their agents and attorneys will not make any
voluntary statements, written or verbal, or cause or encourage others to make
such statements relating to the facts that formed the basis of the Illinois
Litigation, which defame or disparage the personal or business reputation,
practices, or conduct of the other Parties hereto.

    9.           Confidentiality.  Each
Party hereto shall keep the terms of this Agreement strictly
confidential.  No Party shall make any disclosure of the terms of this
Agreement except such disclosure as may be required by law in response to a
validly issued subpoena, incident to obtaining judicial enforcement of the terms
of this Agreement, or required in filings with the Securities and Exchange
Commission or foreign equivalent thereof, which may include describing or
providing portions of this Agreement, or the Agreement in its entirety, to such
regulatory bodies. It is anticipated that NPI shall be required to file a copy
of this Agreement with the U.S. Securities and Exchange Commission.

    10.            Dispute
Resolution and
Applicable Law.  All disputes pertaining to this Agreement
shall be decided by arbitration in accordance with the Rules of Arbitration of
the International Chamber of Commerce.  The arbitral awards shall be
final and binding on both Parties.  In such event, (i) the arbitral
tribunal shall consist of three arbitrators, one of whom will be selected by
each Party and the third of whom will be selected by mutual agreement of the
Parties, failing which the third will be appointed by the two arbitrators
selected by the Parties pursuant to the Rules of Arbitration of the
International Chamber of Commerce; (ii) the place of arbitration shall be in
Zurich, Switzerland, (iii) the language used in the arbitral proceedings and all
submissions and pleadings filed shall be English; and (iv) the arbitral tribunal
will provide a written explanation in English of the decision and specify the
basis for any damage award and the types of damages awarded.  Subject
to the foregoing provisions requiring arbitration of disputes to take place in
Zurich, Switzerland, this Agreement and any dispute arising under it shall be
governed by, construed, and interpreted in accordance with the laws of the State
of Illinois, United States of America, without regard to its conflict of laws
and/or choice of law principles.


    
      
         


      

      
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    11.           Modification.  No
modification, amendment, or waiver of any of the provisions contained in this
Agreement, or any future representation, promise, or condition in connection
with the subject matter of this Agreement, shall be binding upon any Party to
this Agreement unless made in writing and signed by such Party or by a duly
authorized officer or agent of such Party.

    12.           Relationship of
Parties.  Neither Party shall be, nor represent itself to be,
the joint venturer, franchiser, franchisee, partner, broker, employee, servant,
agent or representative of the other Party for any purpose.  Neither
Party shall have the authority to make any representations or incur any
obligations on behalf of the other Party and neither Party shall be responsible
for the acts or omissions of the Party, except as expressly provided herein or
in the Keesmann License Agreement.

    13.           Severability.  If
any provision of this Agreement shall be held by any court of competent
jurisdiction to be illegal, void or unenforceable, such provision shall be of no
force and effect, but the illegality or unenforceability of such provision shall
not have an effect upon and shall not impact the enforceability of any other
provision of this Agreement.  Furthermore, in lieu of the illegal,
invalid or unenforceable provision, there will be added automatically as part of
this Agreement a provision as similar in its terms to the illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.


    
      
         


      

      
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    14.           No Prior Assignments.  Except
for the “Sales contract concerning shares in license revenue
receivables” executed between Keesmann and JK Patentportfolio
GmbH & Co. Lima KG, dated June 3, 2005, the “Sales contract
concerning shares in license revenue receivables” executed between Keesmann
and NPV Nano Patent GmbH & Co. KG, dated September 7, 2005, the
contract executed between Keesmann and CNT Patent GmbH & Co. KG, dated 21
July, 2006, and the Agreement executed between NPI and IP Verwertungs
GmbH dated February 29, 2008, the Parties represent and warrant that they
have not assigned or transferred any portion of the claims released under this
Agreement to any other person, firm, corporation, or other entity, and that no
other person, firm, corporation, or other entity has any lien or interest in any
such claims.  Each Party will indemnify the other Party and defend and hold them
harmless from and against any liability, loss, cost, and expense whatsoever
(including, without limitation, attorneys’ fees and costs) incurred as a direct
or indirect result of any breach of this section of this Agreement.

    15.           Notices.  Any
notice provided for under this Agreement shall be in writing and shall be
delivered by personal delivery or certified United States mail, return receipt
requested, or by facsimile, telegram, or cable addressed to the Parties at the
following addresses:

     

    
      	
              If to
      NPI:

            	
              Nano-Proprietary,
      Inc. 

              3006
      Longhorn Boulevard

              Suite
      107 Austin, Texas 78758

              USA

              Attn:  Douglas
      Baker Fax:  (512)
339-5021

            


    

    


    
      	
              With a copy
      to:

            	
              David
      J. Ervin, Esq.

              Kelley
      Drye & Warren LLP 

              3050
      K Street, N Suite 400

              Washington,
      DC  20007

              USA

              Fax:  (202)
      342-8451

            


    

    


    
      	
              If to
      Keesmann:

            	
              Till
      Keesmann

              Bahnhofstraβe
      53a 

              69115
      Heidelberg 

              Germany

              Fax:
      011-49-6221-60-22-20

            


    

    



    
      
         


      

      
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    Each
Party may, by notice to the other Party, change its address or contact
information hereunder by delivering notice of the change as set forth
above.

    16.           Counterparts and
Facsimile.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.  A facsimile
signature will be deemed to be an original signature.

    17.           Further
Assurances.  Each Party agrees to execute and deliver any and
all additional documents and instruments, and take all other actions, which may
be necessary to give effect to this Agreement and the transactions contemplated
hereby.

    18.           Authority.  Each
Party represents and warrants that it is duly authorized to enter into this
Agreement.

     

     

     

     

     

    
 

    
      
         


      

      
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    IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by
their duly authorized officers or representatives.

     

    
      	
              NANO-PROPRIETARY,
      INC.:

            	
              TILL
      KEESMANN:

            
	 
      	 
      
	
              /s/
      Thomas F.
      Bijou                                 
      

            	
              /s/
      Till
      Keesmann                         
      

            
	
              Thomas
      F. Bijou (Chairman & CEO)

            	
               Till
      Keesmann

            
	 
      	 
      
	 
      	 
      
	
              Dallas,
      Texas

              June 18,2008

            	
              

                Heidelberg
      Germany

                June
      18, 2008

              

            
	
              (City,
      Date)

            	
              (City,
      Date)

            


    

    


    
 

     

     

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