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                                                                    EXHIBIT 10.2


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                                    FORM OF

                         INTELLECTUAL PROPERTY AGREEMENT




                                 BY AND BETWEEN



                              BRILLIAN CORPORATION


                                       AND

                            THREE-FIVE SYSTEMS, INC.



                                   DATED AS OF




                            __________________, 2003



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                         INTELLECTUAL PROPERTY AGREEMENT

         THIS AGREEMENT (the "Agreement") is entered into effective as of
____________, 2003 (the "Effective Date"), by and between THREE-FIVE SYSTEMS,
INC, a Delaware corporation having a place of business at 1600 North Desert
Drive, Tempe, Arizona ("TFS") and BRILLIAN CORPORATION. a Delaware corporation
having a place of business at 1600 North Desert Drive, Tempe, Arizona ("TFS")
(each, a "Party"; together, the "Parties").

         WHEREAS, TFS is engaged in the business of designing, developing,
manufacturing, marketing, selling and distributing certain types of displays and
other devices and associated components;

         WHEREAS, BRILLIAN has acquired intellectual property rights in the
field of designing, developing, manufacturing, marketing, selling and
distributing displays, including microdisplays, light valves, and associated
components;

         WHEREAS, TFS wishes to acquire a license to various rights in
BRILLIAN's intellectual property portfolio;

         WHEREAS, the Parties wish to set forth the terms and conditions under
which BRILLIAN will transfer such rights to TFS; and

         WHEREAS, the Parties wish to set forth their respective rights in the
technology.

         NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto hereby agree as follows:

                                    ARTICLE 1
                          CONSTRUCTION AND DEFINITIONS

SECTION 1.1. CONSTRUCTION.

         (a) All references in this Agreement to "Articles" and "Sections" refer
to the articles and sections of this Agreement.

         (b) As used in this Agreement, neutral pronouns and any variations
thereof shall be deemed to include the feminine and masculine and all terms used
in the singular shall be deemed to include the plural, and vice versa, as the
context may require.

         (c) The words "hereof," "herein" and "hereunder" and other words of
similar import refer to this Agreement as a whole, as the same may from time to
time be amended or supplemented, and not to any subdivision contained in this
Agreement.


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         (d) The words "including" when used herein is not intended to be
exclusive and means "including, without limitation."

SECTION 1.2. DEFINITIONS. As used herein:


         (a)      "Affiliate" means any TFS subsidiary, division or related
                  party or an entity that TFS owns or controls at least a 50% of
                  the ownership in.

                  "Bankruptcy Event" means any of the following events or
                  circumstances with respect to a Party: (I) such Party ceases
                  conducting its business in the normal course; (ii) becomes
                  insolvent or becomes unable to meet its obligations as they
                  become due; (iii) makes a general assignment for the benefit
                  of its creditors; (iv) petitions, applies for, or suffers or
                  permits with or without its consent the appointment of a
                  custodian, receiver, trustee in bankruptcy or similar officer
                  for all or any substantial part of its business or assets; or
                  (v) avails itself or becomes subject to any proceeding under
                  the U.S. Bankruptcy Code or any similar state, federal or
                  foreign statute relating to bankruptcy, insolvency,
                  reorganization, receivership, arrangement, adjustment of
                  debts, dissolution or liquidation, which proceeding is not
                  dismissed within sixth (60) days of commencement thereof.


         (b)      "Broad Cross-Licenses" means licenses to granted to a third
                  party relating to a multiple technologies covered by multiple
                  Intellectual Property Rights in exchange for licenses from the
                  third party of a similar scope and nature.

         (c)      "Confidential Information" means any information (i) disclosed
                  by one party (the "Disclosing Party") to the other (the
                  "Receiving Party"), which, if in written, graphic,
                  machine-readable or other tangible form is marked as
                  "Confidential" or "Proprietary," or which, if disclosed orally
                  or by demonstration, is identified at the time of initial
                  disclosure as confidential and reduced to writing and marked
                  "Confidential" within thirty (30) days of such disclosure; or
                  (ii) which is otherwise deemed to be confidential by the terms
                  of this Agreement.

         (a)      "Derivative Work" means the meaning ascribed to it under the
                  United States Copyright Law, Title 17 U.S.C. Sec. 101, et.
                  seq.

         (b)      "Enhancement" means any improvement, upgrade, new version of,
                  enhancement to, fix, extension to, or add-on module compatible
                  or interoperable with, or any Derivative Work of, any
                  Technology, including any computer software or hardware.

         (d)      "Patents" means those patents, patent applications, and
                  disclosures listed in Exhibit 1.2.(f), and shall include any
                  U.S., international or foreign patent or any application
                  therefor corresponding or related to any of the items listed
                  in Exhibit 1.2.(f) and any


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                  and all reissues, divisions, continuations, CPAs, renewals,
                  extensions and continuations-in-part thereof.

         (e)      "Intellectual Property Rights" means all rights of a Person
                  in, to, or arising out of: (i) any U.S., international or
                  foreign patent or any application therefor and any and all
                  reissues, divisions, continuations, renewals, extensions and
                  continuations-in-part thereof; (ii) inventions (whether
                  patentable or not in any country), invention disclosures,
                  improvements, trade secrets, proprietary information,
                  know-how, technology and technical data; (iii) copyrights,
                  copyright registrations, mask works, mask work registrations,
                  and applications thereof in the U.S. or any foreign country,
                  and all other rights corresponding thereto throughout the
                  world; and (iv) any other proprietary rights in Technology
                  anywhere in the world.

         (f)      "BRILLIAN Technology" means Technology defined by the items
                  listed in Exhibit 1.2.(f) and Exhibit 2.1.(a).

         (g)      "Object Code" means computer software in binary, executable
                  form.

         (h)      "Person" means any legal person or entity, including any
                  individual, corporation, partnership, joint venture,
                  association, joint stock company, trust, unincorporated
                  association, limited liability corporation, governmental
                  entity, or other person or entity of similar nature.

         (c)      "Reserved Field" means the business of direct, magnified,
                  and/or projection-based selectively reflective liquid crystal
                  on silicon light valves comprising packaged silicon backplanes
                  with associated liquid crystal cells, including but not
                  limited to developing, manufacturing, marketing, licensing,
                  selling or distributing to, or for use in or by, the
                  microdisplay and/or light valve industry or any other business
                  involved in microdisplays and/or light valves, including: (i)
                  silicon backplanes, (ii) microdisplays and/or light valve
                  related devices, such as driver circuitry, light sources, or
                  other such devices, and (iii) any product that competes with
                  or may be used as a substitute for a microdisplay and/or a
                  light valve.

         (i)      "Software" means any and all computer software and code,
                  including, but not limited to, assemblers, compilers, Source
                  Code, Object Code, data (including image and sound data),
                  design tools, user interfaces, templates, menus, buttons and
                  icons.

         (j)      "Source Code" means computer software in human-readable form,
                  including high-level language program listings, flowcharts,
                  schematics, and logic diagrams.

         (k)      "Technology" means all technology, including all know-how,
                  show-how, techniques, design rules, trade secrets, inventions
                  (whether or not patented or patentable), algorithms, routines,
                  Software, files, databases, works of authorship, processes,


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                  devices, hardware, photo masks, semiconductor topographies,
                  integrated circuit design, and Verilog model and tooling.


                                    ARTICLE 2
             GRANT OF LICENSE AND INTELLECTUAL PROPERTY PRESERVATION

SECTION 2.1. GRANT OF LICENSE.

         (a) BRILLIAN hereby grants to TFS, an perpetual, non-exclusive,
worldwide, non-terminable, fully paid, royalty-free, irrevocable, right and
license under and to any and all Intellectual Property Rights associated with
the Technology including those rights contained in the Patents. BRILLIAN further
hereby grants to TFS the perpetual, non-exclusive, worldwide, non-terminable,
fully paid, royalty-free, irrevocable, right and license under and to any and
all Intellectual Property Rights associated with the Technology identified in
Exhibit 2.1.(a), including the rights to practice, make, have made, use, sell,
offer to sell, import, have imported, modify, market, distribute, and to
otherwise exploit (by any means and in any medium now known or later invented)
any and all Technology, products, and services covered by such Intellectual
Property Rights.

         (b) BRILLIAN hereby grants to TFS a nonexclusive, worldwide, perpetual,
non-terminable, fully paid, royalty-free, irrevocable, right and license under
and to all of BRILLIAN's Intellectual Property Rights in and to any Technology
owned or controlled by BRILLIAN, to practice, make, have made, use, sell, offer
to sell, import, have imported, modify, market, reproduce in copies, distribute,
display publicly, perform publicly, make derivative works from, adapt or
translate and to otherwise exploit (by any means and in any medium now known or
later invented) any and all such Technology and the associated Intellectual
Property Rights not used in the Reserved Field. This nonexclusive license shall
include all Intellectual Property in any processes, machines, manufactures, or
compositions of matter, or any Enhancements, adaptations or Derivative Works,
associated with the Technology owned or otherwise controlled by BRILLIAN as of
the Effective Date, for use or other exploitation not in the Reserved Field.

         (c) All of the rights licensed to TFS above are not assignable or
sub-licensable without the express written consent of BRILLIAN, however, TFS may
assign or sublicense its rights under this agreement to any Affiliate and may
grant Broad Cross-Licenses to any Intellectual Property Rights and other
Technologies to third parties in conjunction with its conventional Broad
Cross-Licensing practices within TFS' industry.

SECTION 2.2. PRESERVATION OF INTELLECTUAL PROPERTY RIGHTS. If BRILLIAN shall
abandon any patent or patent application relating directly and primarily to the
BRILLIAN Technology or if BRILLIAN declines to file a patent application
regarding an invention disclosure relating directly and primarily to the
BRILLIAN Technology, BRILLIAN shall provide at least thirty business days prior
written notice thereof to TFS of BRILLIAN's decision. TFS may elect to maintain
or pursue the subject patent or patent applications at TFS's expense, in which
event BRILLIAN shall transfer to TFS all of BRILLIAN's right, title and interest
to the subject patent, patent application, or invention disclosure pursuant to a
written agreement reasonably acceptable to the parties, which


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agreement shall include among other things (i) the agreement of TFS to pay
BRILLIAN's reasonable costs in making the assignment, and (ii) a license back
from TFS to BRILLIAN to the subject patent that has issued or that may issue.


                                    ARTICLE 3
                            CONFIDENTIAL INFORMATION

SECTION 3.1. CONFIDENTIAL INFORMATION EXCLUSIONS. Notwithstanding the provisions
of Section 1.2.(c), Confidential Information shall exclude information that the
Receiving Party can demonstrate: (i) was independently developed by the
Receiving Party without any use of the Disclosing Party's Confidential
Information or by the Receiving Party's employees or other agents (or
independent contractors hired by the Receiving Party) who have not been exposed
to the Disclosing Party's Confidential Information; (ii) becomes known to the
Receiving Party, without restriction, from a source other than the Disclosing
Party without breach of this Agreement and that had a right to disclose it;
(iii) was in the public domain at the time it was disclosed or becomes in the
public domain through no act or omission of the Receiving Party; (iv) was
rightfully known to the Receiving Party, without restriction, at the time of
disclosure; or (v) is disclosed pursuant the order or requirement of a court,
administrative agency, or other governmental body; provided, however, that the
Receiving Party shall provide prompt notice thereof to the Disclosing Party and
shall use its best efforts to obtain a protective order or otherwise prevent
public disclosure of such information.

SECTION 3.2. CONFIDENTIALITY OBLIGATION. The Receiving Party shall treat as
confidential all of the Disclosing Party's Confidential Information and shall
not use such Confidential Information except as expressly permitted under this
Agreement. Without limiting the foregoing, the Receiving Party shall use at
least the same degree of care which it uses to prevent the disclosure of its own
confidential information of like importance, but in no event with less than
reasonable care, to prevent the disclosure of the Disclosing Party's
Confidential Information.

SECTION 3.3. CONFIDENTIALITY OF AGREEMENT. (a) Each Party agrees that the terms
and conditions, but not the existence, of this Agreement shall be treated as the
other's Confidential Information and that no reference to the terms and
conditions of this Agreement or to activities pertaining thereto can be made in
any form of public or commercial advertising without the prior written consent
of the other Party; provided, however, that each party may disclose the terms
and conditions of this Agreement: (i) as required by any court or other
governmental body; (ii) as otherwise required by law; (iii) to legal counsel of
the parties; (iv) in connection with the requirements of a securities filing;
(v) in confidence, to accountants, banks, and financing sources and their
advisors; (vi) in confidence, in connection with the enforcement of this
Agreement or rights under this Agreement; or (vii) in confidence, in connection
with a merger or acquisition or proposed merger or acquisition, or the like.

         (b) If a Receiving Party believes that it will be compelled by a court
or other authority to disclose Confidential Information of the Disclosing Party,
it shall give the Disclosing Party prompt notice so that the Disclosing Party
may take steps to oppose such disclosure.


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                                    ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES

SECTION 4.1. GENERAL WARRANTY. Each party hereby represents and warrants to the
other that (i) such party has the right, power and authority to enter into this
Agreement and to fully perform all its obligations hereunder; and (ii) the
making of this Agreement does not violate in any material respect any material
agreement existing between such party and any third party.

SECTION 4.2. OWNERSHIP WARRANTIES. BRILLIAN hereby represents and warrants to
TFS that:

         (a) The BRILLIAN Technology was originally created by BRILLIAN's
employees acting within the scope of their employment or otherwise validly
acquired by BRILLIAN;

         (b) To the best of its knowledge as of the date of this Agreement, the
BRILLIAN Technology contains no Technology owned, authored, misappropriated, or
created by, or exclusively licensed to, any third party;


SECTION 4.3. DISCLOSURE WARRANTIES. To the best knowledge of BRILLIAN's
management team this Agreement contains no untrue statement of a material fact
or omits a material fact necessary to make the statements contained herein, in
light of the circumstances in which they were made, not misleading, and there is
no fact known by BRILLIAN's management team which has not been disclosed to TFS
that materially affects adversely or could reasonably be anticipated to
materially affect adversely the Technology and/or Intellectual Property Rights
subject to this Agreement.

                                    ARTICLE 5
                                   INDEMNITIES

SECTION 5.1. INTELLECTUAL PROPERTY INDEMNITY.

         (a) BRILLIAN shall indemnify and hold TFS and its employees, directors,
distributors, agents, customers, licensees, successors and assigns harmless from
and against all out-of-pocket cost, liability, loss, damage, expense or judgment
resulting from, arising out of, or in connection with (i) any breach of any
warranty made by BRILLIAN hereunder, including pursuant to Article 5, and (ii)
any claim, action or proceeding, in a court or otherwise (a "Claim") alleging
that the BRILLIAN Technology or any portion or version thereof or any
exploitation of the foregoing infringes or misappropriates any third party's
Intellectual Property Rights. BRILLIAN shall settle or defend, at BRILLIAN's
option, all Claims at BRILLIAN's sole cost and expense.

SECTION 5.2. LIMITATION. BRILLIAN shall have no obligation with respect to any
Claim pursuant to Section 5.1 unless (i) the BRILLIAN is promptly notified of
such Claim, (ii) BRILLIAN has sole control of the defense and settlement of such
Claim, (iii) TFS provides BRILLIAN with reasonable assistance, at BRILLIAN's
expense, in BRILLIAN'S defense and settlement of such Claim.


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                                   ARTICLE 6
                             LIABILITY LIMITATIONS

SECTION 6.1. EXCLUSION OF DAMAGES. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCT
LIABILITY, OR OTHERWISE, AND WHETHER OR NOT TFS HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE.

SECTION 6.2. FAILURE OF ESSENTIAL PURPOSE. The limitations specified in this
Article 6 shall survive and apply even if any limited remedy specified in this
Agreement is found to have failed of its essential purpose.

                                    ARTICLE 7
                                  MISCELLANEOUS

SECTION 7.1. BRILLIAN BANKRUPTCY. (a) All rights and licenses granted to TFS
under or pursuant to this Agreement are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the United States Bankruptcy Code, licenses to
rights of "intellectual property" as defined thereunder. Notwithstanding any
provision contained herein to the contrary, if BRILLIAN is under any proceeding
under the Bankruptcy Code and the trustee in bankruptcy of BRILLIAN, or
BRILLIAN, as a debtor in possession, rightfully elects to reject this Agreement,
TFS may, pursuant to 11 U.S.C. Section 365(n)(1) and (2), retain any and all of
TFS's rights hereunder, to the maximum extent permitted by law, subject to the
payments specified herein.

         (b) If a Bankruptcy Event occurs with respect to BRILLIAN, TFS shall
forthwith be entitled to a complete duplicate of (or complete access to, as
appropriate) any intellectual property licensed hereunder, and all embodiments
of such intellectual property including the Source Code thereof, and the same,
if not already in TFS's possession, shall be promptly delivered to TFS upon
TFS's written request (I) upon any such Bankruptcy Event, unless BRILLIAN elects
to continue to perform all of its obligations under this Agreement; or (ii) if
not delivered under (I) above, upon rejection of this Agreement by or on behalf
of BRILLIAN, TFS shall have the sublicensable right to fully exploit in any
manner all such intellectual property and to perform any and all of BRILLIAN's
obligations hereunder.

         (c) In addition to the foregoing, if a Bankruptcy Event occurs with
respect to BRILLIAN, TFS shall have the right, but not the obligation, to
purchase all of BRILLIAN's right, title and interest in and to the BRILLIAN
Technology at the then fair market value of such Technology as determined by an
independent appraiser agreed upon by the Parties or other method consistent with
applicable law.

SECTION 7.2. INDEPENDENT CONTRACTORS. The parties hereto are independent
contractors. Nothing contained herein or done pursuant to this Agreement shall
constitute either party the agent of the


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other party for any purpose or in any sense whatsoever, or constitute the
parties as partners or joint venturers.

SECTION 7.3. ASSIGNMENT. Neither party may assign or otherwise transfer its
rights or obligations under this Agreement without the prior written consent of
the other Party, or except as allowed under this Agreement.

SECTION 7.4. ENTIRE AGREEMENT AND AMENDMENT. This Agreement sets forth the
entire agreement and understanding between the Parties as to the subject matter
of this Agreement and merges all prior discussion between them, and neither of
the parties shall be bound by any modification of this Agreement, other than as
expressly provided in this Agreement or as set forth on or subsequent to the
date hereof in writing and signed by a duly authorized representative of the
party to be bound thereby. No oral explanation or oral information by either
party hereto shall alter the meaning or interpretation of this Agreement.


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Brillian Corporation:                          Three-Five Systems, Inc.:


By:                                            By:
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Title:                                         Title:
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Date:                                          Date:
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