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                                                                      EXHIBIT 10


                            PATENT LICENSE AGREEMENT


         THIS AGREEMENT, effective upon execution by the parties hereto, is
entered into by SI Diamond Technology, Inc., a corporation of Texas having its
principal place of business at Austin, Texas (herein called SIDT or "Licensee"),
and Till Keesmann, an individual having an address at Heidelberg, Germany
(herein called "Licensor").

         NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed as follows:

ARTICLE 1.        BACKGROUND OF AGREEMENT

         1.00     Licensor represents that it has certain patents pertaining to
                  carbon nanotubes as cathodes for field emission display in
                  respect to which it is prepared to grant an exclusive
                  worldwide license to Licensee.

         1.01     Licensee wishes to acquire a worldwide exclusive license under
                  Licensor's patents pertaining to carbon nanotubes as cathodes
                  for field emission display in order to market the patents and
                  share revenues generated by any sublicenses with Licensor.

ARTICLE 2.        DEFINITIONS

         As used herein, the following terms shall have the meaning set forth
below:

         2.00     "Patent" or "Patents" shall mean the following listed patents
                  and patent applications now owned by Licensor, and any patents
                  or patent applications filed and/or issuing from the Patents
                  in any and all countries of the world, including, without
                  limitation, utility model and design patents, patents of
                  addition, patents of importation, divisional, continuations,
                  continuation-in-parts, reissues, reexaminations, renewals and
                  extensions thereof and the legal equivalents:

                  U.S. Patent No.: 5,773,921
                  Titled:  FIELD EMISSION CATHODE HAVING AN ELECTRICALLY
                           CONDUCTING  MATERIAL SHAPED OF A NARROW
                           ROD OR KNIFE EDGE
                  Filed:   23 August 1996
                  Issued:  30 June 1998
                  Inventors:  Till Keesmann, Hubert Grosse-Wilde


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                  PCT Application: PCT/DE95/00221
                  PCT Publication No.: WO 95/23424
                  Title: FIELD-EMISSION CATHODE AND METHOD OF
                         MANUFACTURING IT
                  PCT Filed: 22 February 1995
                  Priority: 23 February 1994 (Germany Application P 44 05 768.7)
                  Anmelder: Keesmann, Till

                  European Patent No. 0801805
                  Anmeldetag: February 22, 1995
                  Prioritat: February 23, 1994
                  (German Application DE 44 05 768.7)
                  Veroffentlichungstag: November 3, 1999
                  Patentinhaber: Till Keesmann

                  German Patent No.: 59507196
                  Issued: December 9, 1999
                  Nationaler Teil des Europapatents No.: 0801805 in Germany
                  Issued: November 3, 1999
                  Inhaber: Till Keesmann

                  Nationaler Teil des Europapatents No.: 0801805 in Great
                  Britain
                  Issued: November 3, 1999
                  Applicant: Till Keesmann

                  Nationaler Teil des Europapatents No.: 0801805 in France
                  Issued: November 3, 1999
                  Applicant: Till Keesmann

         2.01     "Effective Date" shall mean the date upon which this License
                  is signed by all Parties.

ARTICLE 3.        LICENSE GRANT

         3.00     Sublicense Grant. Licensor agrees to grant and hereby grants
                  to Licensee an exclusive worldwide right and license to
                  sublicense Licensor's Patents, the terms and conditions of
                  which sublicenses shall be subject to the approval of
                  Licensor, not to be unreasonably withheld and subject to the
                  provisions and exceptions herein (the "Licensee").
                  Accordingly, Licensee may sublicense the Patents to any third
                  party, including any joint venture or other entity with which
                  Licensee is affiliated. This agreement is for the primary
                  purpose of selling sublicenses for the patent to third
                  parties.

         3.01     To facilitate mutual agreement on sublicensing terms, the
                  licensee and licensor will apriori agree on the general
                  parameters of sublicenses to be negotiated with third parties.
                  If a sublicense negotiated with a third party is


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                  within these parameters, then SIDT will sign the sublicense.
                  If as a result of negotiations, the parameters of the
                  sublicense are outside the agreed general parameters, then
                  SIDT will seek the agreement of Licensor, nor to be
                  unreasonably withheld.

         3.02     Covenant Not to License by Licensor. Licensor covenants not to
                  license or sublicense Patents other than to Licensee during
                  the term of this Agreement.

         3.03     Licensor warrants that he has all right, title and interest in
                  the Patents.

         3.04     Assignments. Each and all of the terms and conditions under
                  this License, particularly with respect to sublicensing and
                  assignments, shall be binding upon, and inure to the benefit
                  of, the successors and assignees of the Parties; however,
                  Licensor shall have right of first refusal with respect to any
                  offer received by a third party to succeed Licensee or
                  otherwise obtain assignment of the License Agreement from
                  Licensee, whether such offer is specifically directed to the
                  License Agreement or part of a purchase offer for all or some
                  of the assets of Licensee. In the event that Licensee receives
                  such a purchase offer, Licensor shall have the right to
                  provide Licensee with a matching or better offer which
                  Licensee shall be obligated to accept, in accordance with the
                  following procedure:

                           i)       Licensee shall provide to Licensor a written
                                    notice of such purchase offer which shall
                                    include a complete description of the terms
                                    of the purchase offer and a statement, made
                                    in good faith, that Licensee is prepared to
                                    accept such offer.

                           ii)      Licensor shall have 15 days from the date it
                                    receives the purchase offer notice to give
                                    Licensee written notice of the terms of its
                                    competing offer, which must match or better
                                    the purchase offer.

                           iii)     If Licensor gives such notice, per ii,
                                    Licensee shall be obligated to transfer the
                                    License Agreement to Licensor according to
                                    the terms of Licensor's competing offer.

         3.05     Responsibilities of Licensee. Licensee covenants that it will
                  undertake (1) to support Licensor in maintaining and
                  strengthening the Patents; (2) to actively market the
                  Licensor's Patents; and (3) to identify those infringing on
                  the Licensor's Patents and to use commercially reasonable
                  efforts to seek remedies for infringements.

ARTICLE 4.        REGISTRATION OF THE LICENSE

         4.00     As sole licensing agent for the Patents, Licensee shall be
                  entitled to register notice of this License at the United
                  States Patent and Trademark Office and


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                  any other foreign patent office if such registration is
                  permissible under the law of the applicable country or
                  countries.

 ARTICLE 5.       PROSECUTION AND MAINTENANCE OF PATENTS AND PATENT APPLICATIONS

         5.00     Subject to the approval of Licensor, not to be unreasonably
                  withheld, Licensee shall have a right, at Licensee's expense,
                  to file, prosecute, and maintain all of the Patents that are
                  subject of this License and shall have the right to determine
                  whether or not, and where to file a patent application, to
                  abandon the prosecution of any patent or patent application,
                  or to discontinue the maintenance of any patent or patent
                  applications.

         5.01     Licensee has the right to evaluate the Patents for reissue and
                  shall file and prosecute reissues, interferences, oppositions,
                  and reexaminations at Licensee's expenses upon Licensor's
                  approval, not to be unreasonably withheld. The Licensor, upon
                  consultation with Licensee, will complete the U.S. reissue
                  process which was commenced in February, 2000, with the costs,
                  attorney fees, and expenses incurred after the Effective Date
                  hereof to be paid by Licensee, which payment will be pursuant
                  to paragraph 6.04.

         5.02     Licensor is to provide Licensee and/or its representative with
                  appropriate Powers of Attorney to prosecute said patent
                  applications and reissue(s), as needed.

ARTICLE 6.        ROYALTIES

         6.00     Licensee shall, as a license fee, pay to Licensor, shortly
                  after the Effective Date, $250,000 U.S. dollars, which will be
                  realized by the sale of SIDT common stock issued to Licensor,
                  such stock able to be sold by Licensor after the registration
                  of such SIDT common stock becomes effective. Licensee shall
                  give Licensor immediate notice when the registration becomes
                  effective. The number of shares of such stock is to be
                  determined by dividing $250,000 by the market price of SIDT's
                  common stock. The market price will be determined by taking
                  the average closing price of SIDT's common stock, as quoted on
                  the NASDAQ OTC Bulletin Board System, for the five trading
                  days preceding the date the registration statement covering
                  the shares issued in connection with this Agreement is
                  declared effective. If Licensor sells any of these shares in
                  the five trading day period beginning the day after the
                  registration statement covering these shares is declared
                  effective, and the net proceeds from the sale of those shares
                  are less than the market price (as defined above) times the
                  number of shares sold, Licensee agrees to issue additional
                  shares of common stock, or an equivalent amount of cash, to
                  make up the shortfall. To determine if any additional payment
                  is due under this Agreement, all calculations will be made on
                  an aggregate basis. If shares are sold at prices both above
                  and


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                  below the market price as defined above, total net proceeds
                  will be compared with the total number of shares times the
                  market value as defined above. Licensor accepts all market
                  risk on all shares still held at the end of the five day
                  trading period beginning after the registration statement is
                  declared effective. If a portion of the shares are sold, all
                  calculations will be made on a pro-rata basis. For example, if
                  one-half of the shares received by Licensor are sold during
                  the five day trading period, Licensee will make up the
                  shortfall, if any, on the shares sold as compared to one-half
                  of the expected market value. Licensor will bear the market
                  risk for the remaining one-half of the shares that were not
                  sold, regardless of the market price of the SIDT common stock
                  at the end of the five day trading period. If Licensor does
                  not receive the licensee fee in accordance with this paragraph
                  within 90 days after the Effective Date, Licensor may
                  terminate this License upon written notice to Licensee.

         6.01     Royalty Sharing. Subject to paragraph 6.04, the Parties shall
                  share equally any Royalty Fees received as a result of a
                  sublicensing of any of Patents. If this agreement is
                  terminated under the provisions of section 6.02(a) or 6.02(b),
                  future royalty payments under sublicenses sold under this
                  agreement will be shared equally by the parties. Royalty Fees
                  owing to Licensor shall be paid to Licensor within two (2)
                  weeks after the close of each calendar quarter in which such
                  Royalty Fees were received by Licensee.

         6.02     Performance Hurdle Payments. Licensee shall pay to Licensor
                  Royalty Fees as stated in paragraph 6.01, but in no event
                  shall Royalty Fees be less than the following:

                  6.02(a)  At two (2) years from the Effective Date an aggregate
                           of U.S. $500,000, cash. Failure to make payment of
                           $500,000 results in this License being terminated.

                  6.02(b)  At four (4) years from the Effective Date an
                           aggregate of U.S. $1,000,000, cash. Failure to make
                           payment of $1,000,000 results in this License being
                           terminated.

                  6.02(c)  Upon payment of an aggregate of $1,000,000 within
                           four years of the Effective Date of this License, no
                           further performance hurdle payments are required and
                           the other provisions of the License are perpetual.

         6.03     Royalty Collections. Licensee shall be the sole agent for
                  collection of all Royalty Fees under this License.

         6.04     Royalty Sharing. All Royalty Fees collected by Licensee under
                  this License shall be reduced by expenses up to $50,000
                  annually Licenses incurs for (i) the collection or monitoring
                  of Royalty Fees, (ii) the marketing or


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                  sublicensing of the Patents, and (iii) the prosecution and
                  maintenance of any Patents and patent applications under
                  Article 5. Expenses in excess of $50,000 annually will be
                  borne by the Licensee alone.

         6.05     Use of Patent by Licensee. If the Licensee makes uses or sells
                  products covered by the patent, the Licensee agrees to pay to
                  the Licensor royalties at one-half the normal royalty paid by
                  third parties, or if no normal royalty has been established,
                  then Licensee will pay royalties at a rate to be negotiated by
                  Licensor or Licensee. It is the intention of the parties that
                  the royalty will be one-half a normal royalty.

ARTICLE 7.        TERMINATION

         7.00     This License shall terminate upon the execution of the last to
                  expire of the Patents included herein, or upon the abandonment
                  of the last to be abandoned of any patent applications
                  included herein, whichever is later, unless the agreement is
                  sooner terminated.

         7.01     Licensee may terminate this License at any time upon sixty
                  (60) days written notice in advance to Licensor.

         7.02     Upon termination of this License, all rights revert to
                  Licensor. Licensor shall be named as a permitted successor to
                  Licensee in all sublicenses, such that in the event this
                  License is terminated, the previously executed sublicenses may
                  continue. Licensee shall continue to be the sale agent for
                  collection of all Royalty Fees payable as the result of
                  outstanding sublicenses and shall continue to royalty share,
                  pursuant to sections 6.01, 6.03 and 6.04.

         7.03     If either Party shall be in default of any obligation
                  hereunder, or shall be adjudged bankrupt, or become insolvent,
                  or make an assignment for the benefit of creditors, or be
                  placed in the hands of a receiver or a trustee in bankruptcy,
                  the other Party may terminate this Agreement by giving sixty
                  (60) days' notice by Registered mail to the other Party,
                  specifying the basis for termination. If within sixty (60)
                  days after the receipt of such notice, the Party receiving
                  notice shall remedy the condition forming the basis for
                  termination, such notice shall cease to be operative, and this
                  Agreement shall continue in full force.

ARTICLE 8.        PATENT MAINTENANCE

         8.00     Licensor shall be responsible for payment of maintenance fees
                  on any Patents on which this License is based.

         8.01     If Licensor determines that the maintenance of any Patent or
                  legal equivalent thereof is not commercially feasible, it
                  shall diligently notify Licensee, and


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                  Licensee may at its expense, pay such fees or sums required to
                  maintain such Patent and Licensor shall cooperate in
                  maintaining such Patent as paid by Licensee. The Parties agree
                  that to the extent Licensee has incurred such expenses under
                  this Section, Licensee may at its option set off such expenses
                  (to the extent not otherwise reimbursed by the filing Party)
                  against any royalties due Licensor under this Agreement.

ARTICLE 9.        ENFORCEMENT OF PATENTS

         9.00     Notice of Infringement. The Parties shall promptly notify one
                  another in writing of any alleged infringement of the Patents
                  of which they become aware.

         9.01     Cooperation. Licensee shall have the first right to institute
                  suit for infringement(s) of the Patents so long as this
                  License remains exclusive. Licensor agrees to join as a party
                  plaintiff in any such lawsuit initiated by Licensee, if
                  requested by Licensee, with all costs, attorney fees, and
                  expenses to be paid by Licensee. However, if Licensee does not
                  institute suit for infringement(s) within ninety (90) days of
                  receipt of written notice from Licensor of Licensor's desire
                  to being suit for infringement in its own name and on its own
                  behalf, then Licensor may, at its own expense, bring suit or
                  take any other appropriate action.

         9.02     Commencement of Legal Action. Licensee, as sole licensing
                  agent for the Patents, shall have the right, but not the
                  obligation, to institute legal action concerning alleged
                  infringement of the Patents, with or without the consent of
                  Licensor.

         9.03     If this Agreement is terminated at the time of suit, the sole
                  right to institute suit for infringement and to recover
                  damages shall rest with Licensor.

         9.04     Joinder. If a Party refuses to join a legal action concerning
                  alleged infringement of the Patents, the Party instituting the
                  legal action may bring the legal action in the name of the
                  other Party and may name the other Party a party plaintiff or
                  otherwise appropriate participant in such legal action.

         9.05     Damages. Monies recovered by settlement or judgment are to be
                  split one-half to each Party after costs and expenses are
                  deducted.

         9.06     Neither Party may settle with an infringer without the prior
                  approval of the other Party if such settlement would affect
                  the rights of the other Party under the Patents.


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ARTICLE 10.       RECORDS

         10.00    Licensee shall keep accurate records of all operations
                  affecting payments hereunder, and shall permit Licensor or its
                  duly authorized agent to inspect all such records and to make
                  copies of or extracts from such records during regular
                  business hours throughout the term of this Agreement and for a
                  reasonable period of not less than three (3) years thereafter.
                  Licensee shall report to Licensor information about all
                  important incidents concerning the Patents. Also, any
                  agreements with sub-licensees and the related correspondence
                  is to be made available to the Licensor. Reports and
                  settlement of accounts are to be made quarterly within two
                  weeks after the calendar quarter.

ARTICLE 11.       SEVERABILITY

         11.00    The Parties agree that if any part, term, or provision of this
                  Agreement shall be found illegal or in conflict with any valid
                  controlling law, the validity of the remaining provisions
                  shall not be affected thereby.

         11.01    In the event the legality of any provision of this Agreement
                  is brought into question because of a decision by a court of
                  competent jurisdiction, either Party, by written notice to the
                  other Party, may revise the provision in question or may
                  delete it entirely so as to comply with the decision of said
                  court.

ARTICLE 12.       WAIVER, INTEGRATION, ALTERATION

         12.00    The waiver of a breach hereunder may be effected only by a
                  writing signed by the waiving party and shall not constitute a
                  waiver of any other breach.

         12.01    This Agreement represents the entire understanding between the
                  Parties, and supersedes all other agreements, express or
                  implied, between the Parties concerning the Patents.

         12.02    A provision of this Agreement may be altered only by a writing
                  signed by both parties, except as provided in paragraphs 11.00
                  and 11.01.

ARTICLE 13.       APPLICABLE LAW

         13.00    This Agreement shall be construed in accordance with the
                  substantive laws of the State of Illinois of the United States
                  of America and venue shall lie exclusively in the federal
                  courts residing in Chicago, Illinois.

ARTICLE 14.       NOTICES UNDER THE AGREEMENT

         14.00    For the purpose of all written communications and notices
                  between the Parties, their addresses shall be:


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                  Licensor:       Till Keesmann
                                  Bahnhotatrasse 53a
                                  D-69115 Heidelberg
                                  Germany

                  Licensee:       Dr. Zvi Yaniv
                                  3006 Longhorn Boulevard, Suite 107
                                  Austin, TX  78758

or any other addresses of which either party shall notify the other party in
writing.

         IN WITNESS WHEREOF the Parties have caused this Agreement to be
executed by their duly authorized officers on the respective dates and at the
respective places hereinafter set forth.

                                  TILL KEESMANN

                                  By:          /s/ Till Keesmann
                                       --------------------------------------
                                  Name:       Till Keesmann
                                       --------------------------------------
                                  Date:        26 May 2000
                                       --------------------------------------
                                  Signed at:   Heidelberg
                                            ---------------------------------


                                  By:          /s/ Hubert Gross-Wilde
                                       --------------------------------------
                                  Name:        Hubert Gross-Wilde
                                       --------------------------------------
                                  Date:        26 Mai 2000
                                       --------------------------------------
                                  Signed at:   Neuakischon
                                            ---------------------------------


                                  SI DIAMOND TECHNOLOGY, INC.

                                  By:           /s/ Marc W. Eller
                                       --------------------------------------
                                  Name:         Marc W. Eller
                                       --------------------------------------
                                  Date:         5/26/00
                                       --------------------------------------
                                  Signed at:   Dallas, Texas
                                            ---------------------------------



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