STRATEGIC
PROJECT


MEMORANDUM OF UNDERSTANDING


 


This
Strategic Project Memorandum of Understanding (the “MOU”) is made and entered into this 16th day
of January, 2017, (“Effective Date”) by and between, Uni-Pixel Displays, Inc., a Texas corporation with a principal
place of business at 4699 Old Ironsides Dr., Santa Clara, CA 95054 (“UNXL”), and General Interface Solution
Limited, a Samoa corporation with a principal place of Offshore Chambers, P.O. BOX 217, Apia, Samoa (“GIS”).
UNXL and GIS are sometimes referred to herein individually as “Party” and collectively as the “Parties.”


 


WHEREAS,
the Parties desire to evaluate the possibility to engage in a strategic project regarding the manufacture of XTouch metal mesh
sensors (the “Proposed Project”).


 


1. General.




 


a).
The Proposed Project shall be based on Exhibit A and pertain to the manufacture of XTouch metal mesh sensors.


 


b). Within
[30] days of the signature of this MOU, GIS could conduct an on-site due diligence on a mutually agreed upon list of
technology (including but not limited to IP), manufacturing (including but not limited to capacity, yield and cost),
management and factory in Colorado Springs. UNXL will cooperate in good faith to assist GIS to conduct the due
diligence.


 


c). The
Parties agree to continue the discussion and negotiation of definitive agreements in good faith between the Parties (the
“Agreement”).


 


d). The
term of this MOU is [3] months from the signature of both Parties. During the term, both Parties can mutually agree to
prolong or terminate this MOU. If both Parties sign the Agreement, this MOU is terminated as of the signature date of the
Agreement.


 


2. 
XTouch Sensors.


 


The
Parties desire to negotiate the possibility of a sublicense from UNXL to GIS. The sublicense will provide GIS access to a stable,
low cost supply of XTouch metal mesh sensors. UNXL desires to sublicense the ability to manufacture XTouch metal mesh sensor to
GIS under the following terms.


 


a).
UNXL will sublicense XTouch design and manufacturing to GIS for a three year period (the “License
Period”). The sublicense will allow GIS to manufacture XTouch sensors to be incorporated into touch module products
and/or to be separately sold by GIS to third parties.


 


b).
During the License Period, UNXL will receive a royalty on each sensor unit that GIS manufactures for incorporation into touch
module products and/or to be separately sold to third parties. The royalty will be 20% of sensor manufacturing cost for the
sensors to be incorporated into touch module products and 30% of sensor sales prices for the sensors separately sold to third
parties.


 


2017
– No royalty applied to the first 150,000 sensor units sold to other parties.


 


2018
– No royalty applied to the first 300,000 sensor units sold to other parties.


 


2019
– Royalty applied to any sensor unit.


 


c).
UNXL shall purchase XTouch sensors from GIS in accordance with the terms of Section 3.a.vi. The sensor price to UNXL will be
GIS manufacturing cost plus 20%. GIS will have no royalty obligation to UNXL for the sensors that GIS sells to UNXL. UNXL has
first right of refusal for GIS capacity in amounts to be discussed and agreed to quarterly.


 






     

     

    

 


3.
Technology Project Contributions. To facilitate the Proposed Project, the Parties desire to discuss the possibility to
cooperate in technology aspect and will discuss the following contributions of each Party.


 


a).
UNXL:


 


i).
UNXL will lease to GIS a manufacturing pilot line / limited production line (the “manufacturing line”)
based in UNXL’s facility in Colorado Springs. This manufacturing line will be leased to GIS until the earlier of (x)
the establishment of the separate GIS facility and equipment or (y) expiration of the Agreement.


 


ii).
UNXL to provide employees to work with GIS on XTouch process training and improvements.


 


iii). UNXL
to provide manufacturing training to GIS for manufacturing methods and processes for producing XTouch sensors.


 


iv). UNXL
to provide manufacturing engineering resources to work with GIS to specify next generation manufacturing equipment for GIS.


 


v). UNXL
will appoint an Executive who will have responsibility for monthly meetings with a designated GIS Executive to drive progress
of the initiatives and assure timelines are met, since time is of the essence.


 


vi). UNXL
will be obligated to purchase, at GIS manufacturing cost plus 20%, from GIS the following minimum quantities of XTouch sensors.
Minimum quantities will be contingent on UNXL and GIS agreeing on manufacturing cost. UNXL and GIS will meet on a quarterly basis
to review manufacturing costs.


 


1.       2017
– 1 million units


 


2.       2018
– 1.5 million units


 


3.       2019
– 2.0 million units


 


vii). UNXL
to provide 3 months training for GIS personnel on sensor design and manufacturing line operation.


 


viii). After
the term of the lease of the manufacturing line, GIS will have the option to extend the lease agreement of the manufacturing line
for the manufacture of sensors in Colorado Springs for an additional year. The payment will determined at time of lease extension
and payment will not exceed average annual payment of original lease.


 


b). GIS:


 


i). GIS
will make a $6 million investment within one month after the signing of the Agreement.


 


ii). GIS
to provide development and manufacturing engineers to be trained and participate in the project manufacturing and development
activities.


 


iii). GIS
to provide know how and intellectual property for volume production manufacturing improvements and for touch sensor module integration.


 


iv). GIS
will appoint a designated Executive who will have responsibility for monthly meetings with a designated UNXL Executive to drive
progress of the initiatives and assure timelines are met, since time is of the essence.


 






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4. GIS
Operation of Leased Manufacturing Line in Colorado Springs. To facilitate the Proposed Project, the Parties desire to
discuss the possibility for GIS to operate the leased manufacturing line in Colorado Springs in the terms listed
below.


 


a). UNXL
and GIS will provide process technicians for each production operation and will share responsibility for each production operation.


 


b). UNXL
will consider providing production operators at GIS request.


 


c). UNXL
will be responsible for maintenance and repair of leased manufacturing line equipment.


 


d). UNXL
and GIS will jointly operate shared equipment. Production will be allocated based on the mutual agreement between UNXL and GIS,
which will be basically 67% UNXL and 33% GIS.


 


e). Shared
capacity based on a % of available hours. If there is any downtime on shared capacity, then the remaining shared capacity would
be allocated in proportion to the percentage listed in 4(d) above.


 


f). GIS
can independently operate equipment that is not shared, however, with the prior written consent of GIS, UNXL could operate that
process step.


 


g). UNXL
has management responsibility for the overall site.


 


h). GIS
will provide a senior manager to manage GIS personnel, production requirements and management of leased manufacturing line.


 


i). UNXL
management and GIS management will meet daily to review planning and scheduling requirements. Production conflicts will be resolved
using Agreement guidelines.


 


5.
Operating Overview. To facilitate the Proposed Project, the Parties desire to discuss the possibility for GIS to operate
in accordance with the terms listed below.


 


a). Year
1:


 


i). GIS
can utilize the leased manufacturing line to produce XTouch sensors for its internal use.


 


ii). UNXL
and GIS to assign development and manufacturing engineers to the Proposed Project.


 


iii). These
engineering teams to utilize manufacturing line in Colorado Springs to refine XTouch manufacturing methods and cost structure.


 


iv). Engineering
teams to define next generation manufacturing equipment for separate GIS facility.


 


b). Year
2:


 


i). GIS
to have an option to move leased manufacturing line equipment, excluding the shared equipment, to GIS manufacture site.


 


ii). GIS
could choose to leave the leased manufacturing line equipment in UNXL facility in Colorado Springs during the term of lease of
manufacturing line.


 






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6.
Future Advanced Technology Development Project. To facilitate the Proposed Project, the Parties desire


to
discuss the possibility for the Parties to cooperate in future advanced technology development project in the term listed below.


 


a). Both
UNXL and GIS will work in good faith to enter into a separate agreement for advanced technology development targeted primarily
at touch sensor modules for the flexible / foldable display market.


 


b). Considerations
for advanced technology development agreement:


 


i). Sublicense
and royalty agreement would apply to derivative technology developed under a future advanced technology development project.


 


ii). Utilize
XTouch design and manufacturing intellectual property as the basis for advanced technology development to address other touch
market applications for example, but not limited to, laptop market and flexible / foldable display applications.


 


iii). Technology
and intellectual property developed under this advanced technology development agreement will be jointly owned with no obligation
for an accounting.


 


iv). Future
capital requirements needed for Flexible technology development would be equally shared by both Parties. Both Parties must agree
on capital requirements.


 


v). UNXL
to provide XTouch and Diamond Guard material science engineering resources for Diamond Touch product technology development and
for flexible/foldable product technology development.


 


vi). GIS
to provide know how and intellectual property for XTouch sensor technology integration into flexible / foldable display applications
(limited on UNXL metal mesh technology application).


 


vii). Both
UNXL and GIS to provide manufacturing engineering resources to support technology development plan.


 


7.
Relationship of the Parties. This MOU does not create, and shall not constitute, give effect to, or otherwise imply
an employment relationship, joint venture, partnership or formal business affiliation of any kind between the Parties.
Each Party shall act as an independent contractor with respect to the Proposed Project and not as an agent of the other,
and neither Party shall have the authority to bind the other Party in any manner without the prior written consent of the
other Party.


 


8.
Modifications. No amendment, modification, alteration or addition whatsoever shall be made to this MOU, except by means
of written agreement executed by an authorized representative of each Party.


 


9.
Assignment. Neither this MOU, nor any of the rights or obligations set forth herein, shall be assigned or otherwise
transferred by either Party in whole or in part to a third party without the prior written consent of the other Party, except
that such Party may do so without consent of the other Party in the event of a merger, acquisition or sale of all or
substantially all of its assets, provided that the acquiring party provides in writing its assent to the terms of this
MOU.


 


10. Publicity. With
prior written notification to GIS, UNXL may publicly disclose the existence of this MOU, including to the extent required by
any applicable law, regulation or order of any court or governmental instrumentality.


 


11.
Confidentiality: 


 


a). Confidential
Information shall mean information, data or materials (tangible or intangible) provided, disclosed, or otherwise made available
between the Parties, which may include without limitation, trade secrets, technical know-hows, inventions, technologies, production
processes, code or analysis code, charts, designs, specifications, costs, pricing, purchase orders, delivery notices, forecasts,
sales, marketing (including plan and strategy), business opportunities, personnel information, research and development information,
customer information and financial information, which is subject to a duty of confidentiality. Either Party may only disclose
Confidential Information to directors, employees, consultant of itself and of its affiliates. Either Party is liable for the confidentiality
of the Confidential Information it has learned or received from the other party and shall not disclose the other party’s
Confidential Information to any third party without the disclosing party’s written consent, which breach shall subject the
breaching party to bear all the damages and losses so incurred by the other party.


 






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b). Neither
party shall be liable for disclosing any Confidential Information if:


 


i). It
was public knowledge at the time of disclosure or thereafter becomes public knowledge through no fault of the recipient party;


 


ii). It
is independently developed by the recipient arty through its own verifiable activities without the use of disclosing party’s
Confidential Information;


 


iii). It
is rightfully obtained from a third party having no obligations of confidentiality to the disclosing party; or


 


iv). Disclosure
is required by applicable law or regulation and (i) the disclosing party is informed by the receiving party prior to disclosure;
and (ii) is given the possibility to seek an injunction or other protective order regarding the Confidential Information disclosed.


 


12. Miscellaneous.


 


a). The
captions contained in this MOU are for convenience and reference only and do not define, limit, extend or describe the scope of
this MOU or the intent of any provision thereof.


 


b). This
MOU shall be deemed to have been drafted by each Party hereto, and neither Party may urge otherwise.


 


12.
Counterparts. This MOU may be executed in counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same.


 


Signature
Page Follows


 






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IN
WITNESS WHEREOF, both Parties have caused this MOU to be affirmed and executed by its duly authorized representative to be
effective as of the Effective Date, and each represents and warrants to the other that it is legally free to enter into this MOU.


 


	UNI-PIXEL
    DISPLAYS, INC.	 
	 	 
	By:	 Jeff A. Hawthorne  	 
	 	 	 
	Signature: 	/s/
    Jeff A. Hawthorne	 
	Its: 	Chief Executive Officer	 
	 	 
	GENERAL
    INTERFACE SOLUTION (GIS)	 
	 	 
	By: 	HY Chou  	 
	 	 	 
	Signature: 	/s/
    HY Chou	 
	Its:	 Chief Executive Officer	 



 






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Exhibit
A.


 


Assumptions:



 


1) Manufacturing assets leased to GIS – Will support 1,643,000 meters / year.




 


a.
1/3 base coating system


 


b.
3 Expose systems


 


c.
1 plating line


 


d.
1 Hybrid metal line


 


e.
40% Flexo system – DG coating


 


f.
3 Test systems


 


g.
1/3 Liner system


 



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