Exhibit 10.72.1


 


MEMORANDUM


 


Mitsui
Chemicals, Inc. (“Mitsui”) and Southwall
Technologies, Inc. (“Southwall”) hereby confirm certain issues,
which were agreed upon during the July 14, 2000 meeting at Palo Alto by
representatives from Mitsui and Southwall in connection with the License
Agreement dated December 28, 1990 (“License Agreement”).


 


1.             license
Agreement


 


A.                                   Definition


 


(i)                                     The parties
shall confirm the definition of “Products” (i.e. transparent conductive sputter
coated thin films including Altair films and sputtercoated flexible circuit
base materials including Etch-A-Flex) by specifically mentioning XIR films and
AR films.


 


(ii)                                  The parties
shall confirm the definition of “Device” by specifically mentioning certain
applications such as, but without limitation to, the following: Cathode Ray
Tube (CRT), Liquid Crystal Display (LCD), Plasma Display Panel (PDP),
Electroluminescence Display (ELD), Field Emission Display (FED).


 


B.                                     XIR


 


(i)                                     Mitsui shall
have exclusive rights to XIR for Device in Japan and Taiwan.


 


(ii)                                  Notwithstanding
the foregoing, Southwall may sell XIR under existing agreements to Teijin
and/or Bridgestone until February 9, 2001. Thereafter, Mitsui shall in
principal succeed sales of XIR for Device to Teijin and/or Bridgestone, but continuation
of such sales shall be ultimately decided by Mitsui in good faith.


 


C.                                     New AR


 


(i)                                     The parties
shall confirm the new AR film manufactured by Southwall using AC Mid-frequency
Dual Planar Magnetron Technology (“New AR”), in order to distinguish from the
AR to which Mitsui has exclusive rights to in Japan and Taiwan under the
License Agreement.


 


(ii)                                  Southwall may
sell New AR film for Device applications to any companies in Japan and Taiwan.


 


 


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2.                                       Toll
Manufacture


 


A.                                   Mitsui will ask
Southwall to toll manufacture XIR and related products in quantities to be
separately agreed by the parties and at most favored customer prices.


 


B.                                     For such XIR
and related products, which are toll manufactured by Southwall for Mitsui, the
minimum royalty which Mitsui must pay Southwall under the License Agreement
shall be reduced in accordance with the following formula:


 


Adjusted Minimum Royalty = A–(BxC)


 


	
  Where:

  
	
  A

  	
  =

  	
  Minimum annual royalty
  payable by Mitsui under the License Agreement to maintain exclusivity.

  
	
  B

  	
  =

  	
  Percentage credit of 5%
  effective until March 31, 2001, and 3% from April 1, 2001.

  
	
  C

  	
  =

  	
  Mitsui purchase amount of
  toll manufactured products from Southwall in a given calendar year.

  
	
   

  	
   

  	
   

  



 


 


3.                                       Mitsui and
Southwall shall effectuate their understanding outlined in this Memorandum
through a new license agreement and a toll manufacture agreement (collectively
“New Agreements”) to be executed as soon as possible.


 


4.                                       The parties
agree to be bound by the terms of this Memorandum until such time as the New
Agreements have been executed.


 


5.                                       This Memorandum
and its contents are subject to the confidentiality restrictions set forth in
the parties' jointly executed letter dated March 2, 1999.


 


Subject to final execution of the New
Agreements, the parties hereby acknowledge that this Memorandum fairly
represents their understanding and to evidence such, shall enter their
respective signatures below.


 


	
  Mitsui Chemicals, Inc.

  	
   

  	
  Southwall Technologies,
  Inc.

  
	
   

  	
   

  	
   

  
	
  /s/ Razuyoshi Isogaya

  	
   

  	
  /s/ Thomas G. Hood

  
	
  Razuyoshi Isogaya

  Managing Director

  Group Executive

  Engineered Materials Group

  	
   

  	
  Thomas G. Hood

  President and CEO

  
	
   

  	
   

  	
   

  
	
  Date: August 2, 2000

  	
   

  	
  Date: August 10, 2000

  
	
   

  	
   

  	
   

  



 


 


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