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Exhibit 10.18  

        [*****] = Certain
confidential information contained in this document, marked with brackets, has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 

 
 

LOAN AND SECURITY AGREEMENT    
    

DISPLAYTECH, INC.  

   TABLE OF CONTENTS  

	 
	 	 
	 	 
	 	Page

	1	 	ACCOUNTING AND OTHER TERMS	 	1
	

2	
 	
LOAN AND TERMS OF PAYMENT	
 	

1
	 	 	2.1	 	Promise to Pay	 	1
	 	 	2.2	 	Interest Rate, Payments	 	1
	 	 	2.3	 	Fees	 	2
	

3	
 	
CONDITIONS OF LOANS	
 	

2
	 	 	3.1	 	Conditions Precedent to Term Loan	 	2
	

4	
 	
CREATION OF SECURITY INTEREST	
 	

2
	 	 	4.1	 	Grant of Security Interest	 	2
	

5	
 	
REPRESENTATIONS AND WARRANTIES	
 	

3
	 	 	5.1	 	Due Organization and Authorization	 	3
	 	 	5.2	 	Collateral	 	3
	 	 	5.3	 	Litigation	 	3
	 	 	5.4	 	No Material Adverse Change in Financial Statements	 	3
	 	 	5.5	 	Solvency	 	4
	 	 	5.6	 	Regulatory Compliance	 	4
	 	 	5.7	 	Investments in Subsidiaries	 	4
	 	 	5.8	 	Inside Debt	 	4
	 	 	5.9	 	Full Disclosure	 	4
	

6	
 	
AFFIRMATIVE COVENANTS	
 	

4
	 	 	6.1	 	Government Compliance	 	4
	 	 	6.2	 	Financial Statements, Reports, Certificates	 	5
	 	 	6.3	 	Inventory; Returns	 	5
	 	 	6.4	 	Taxes	 	5
	 	 	6.5	 	Insurance	 	5
	 	 	6.6	 	Primary Accounts	 	6
	 	 	6.7	 	Financial Covenants	 	6
	 	 	6.8	 	Subordination of Inside Debt	 	6
	 	 	6.9	 	Registration of Intellectual Property Rights	 	6
	 	 	6.10	 	Further Assurances	 	6
	

7	
 	
NEGATIVE COVENANTS	
 	

6
	 	 	7.1	 	Dispositions	 	6
	 	 	7.2	 	Changes in Business, Ownership, or Locations of Collateral	 	6
	 	 	7.3	 	Mergers or Acquisitions	 	7
	 	 	7.4	 	Indebtedness	 	7
	 	 	7.5	 	Encumbrance	 	7
	 	 	7.6	 	Distributions; Investments	 	7
	 	 	7.7	 	Transactions with Affiliates	 	7
	 	 	7.8	 	Subordinated Debt	 	7
	 	 	7.9	 	Compliance	 	7
	 	 	 	 	 	 	 

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8	
 	
EVENTS OF DEFAULT	
 	

8
	 	 	8.1	 	Payment Default	 	8
	 	 	8.2	 	Covenant Default	 	8
	 	 	8.3	 	Material Adverse Change	 	8
	 	 	8.4	 	Attachment	 	8
	 	 	8.5	 	Insolvency	 	9
	 	 	8.6	 	Other Agreements	 	9
	 	 	8.7	 	Judgments	 	9
	 	 	8.8	 	Misrepresentations	 	9
	 	 	8.9	 	Management Change	 	9
	

9	
 	
BANK'S RIGHTS AND REMEDIES	
 	

9
	 	 	9.1	 	Rights and Remedies	 	9
	 	 	9.2	 	Power of Attorney	 	10
	 	 	9.3	 	Bank Expenses	 	10
	 	 	9.4	 	Bank's Liability for Collateral	 	10
	 	 	9.5	 	Remedies Cumulative	 	10
	 	 	9.6	 	Demand Waiver	 	10
	

10	
 	
NOTICES	
 	

11
	

11	
 	
CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER	
 	

11
	

12	
 	
GENERAL PROVISIONS	
 	

11
	 	 	12.1	 	Successors and Assigns	 	11
	 	 	12.2	 	Indemnification	 	11
	 	 	12.3	 	Time of Essence	 	11
	 	 	12.4	 	Severability of Provision	 	11
	 	 	12.5	 	Amendments in Writing, Integration	 	11
	 	 	12.6	 	Counterparts	 	12
	 	 	12.7	 	Survival	 	12
	 	 	12.8	 	Confidentiality	 	12
	 	 	12.9	 	Attorneys' Fees, Costs and Expenses	 	12
	

13	
 	
DEFINITIONS	
 	

12
	 	 	13.1	 	Definitions	 	12

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        This LOAN AND SECURITY AGREEMENT (the "Agreement") dated as of April 4, 2003, between SILICON VALLEY BANK ("Bank"), whose address
is 4410 Arapahoe Avenue, Suite 200, Boulder, Colorado 80303 (facsimile no. 303-938-0486), and DISPLAYTECH, INC., a Colorado corporation ("Borrower"), whose
address is 2602 Clover Basin Drive, Longmont, Colorado 80503 (facsimile no. 303-772-2193), provides the terms on which Bank will lend to Borrower and Borrower will repay
Bank. The parties agree as follows: 

1 ACCOUNTING AND OTHER TERMS  

        All capitalized terms used herein shall have the meanings set forth in Section 13 of this Agreement. Accounting terms not defined in this Agreement will be
construed following GAAP. Calculations and determinations must be made following GAAP. The term "financial statements" includes the notes and schedules. The terms "including" and "includes" always
mean "including (or includes) without limitation," in this or any Loan Document. 

2 LOAN AND TERMS OF PAYMENT  

2.1   Promise to Pay.  

        Borrower promises to pay Bank the unpaid principal amount of all Credit Extensions and interest on the unpaid principal amount of the Credit Extensions. 

2.1.1 Term Loans.  

        (a)   Bank
will make the Term Loan available to Borrower on the Closing Date as working capital for the purpose of paying off certain current outstanding lease indebtedness
owed to Transamerica Technology Finance Corporation by Borrower (the "Transamerica Indebtedness"). 

        (b)   Borrower
will pay twenty-four (24) equal installments of principal and interest of $30,578.25 on the Term Loan (the "Term Loan Payment"). The first
Term Loan Payment shall be due on the Closing Date. Every other Term Loan Payment is payable on the first day of each month thereafter during the term of the loan. Borrower's final Term Loan Payment
shall be due on the Term Loan Maturity Date, and shall be in an amount necessary to satisfy in full all outstanding Term Loan principal and accrued interest on the Term Loan through such date. The
Term Loan may not be reborrowed once repaid. 

2.2   Interest Rate, Payments.  

2.2.1 As to Term Loans.  

        (a)   Interest
Rate. The Term Loan accrues interest at a per annum rate equal to the Prime Rate as of the Closing Date plus one and one-half percent (1.5%), which
is 5.75%. The interest rate shall be fixed as of the Closing Date. After an Event of Default, Obligations accrue interest at five percent above the rate effective immediately before the Event of
Default. Interest is computed on a 360 day year for the actual number of days elapsed. 

        (b)   Final
Payment. On the Term Loan Maturity Date, Borrower will pay, in addition to the unpaid principal and accrued interest and all other amounts due on such date with
respect to the Term Loan, an amount equal to the Final Payment. 

        (c)   Mandatory
Prepayment Upon an Acceleration. If the Term Loan is accelerated following the occurrence of an Event of Default or otherwise, then Borrower will immediately
pay to Bank (i) all outstanding principal of the Term Loan, (ii) all unpaid accrued interest on the Term Loan through the date of prepayment, (iii) if such prepayment requirement
occurs within twelve months after the Closing Date, an amount equal to 1% of the original principal amount of the Term Loan, (iv) the Final 

1

 

Payment,
and (v) all other Obligations, if any, that shall have become due and payable with respect to this Agreement. 

        (d)   Permitted
Prepayment of Loan. Borrower shall have the option to prepay all, but not less than all, of the Term Loan,  provided Borrower (i) provides written notice to Bank to prepay the Term Loan prior to
such prepayment, and (ii) pays, on the date of the
prepayment (A) all outstanding principal of the Term Loan; (B) all unpaid accrued interest on the Term Loan through the date of the prepayment; (C) if such prepayment occurs
within twelve months after the Closing Date, an amount equal to 1% of the original principal amount of the Term Loan; (D) the Final Payment, and (E) all other Obligations, if any, that
shall have become due and payable hereunder with respect to this Agreement. 

2.2.2 Request to Debit Accounts.  

        Borrower authorizes Bank to debit any of Borrower's deposit accounts including Account Number 3300364560 for principal and interest payments or any amounts
Borrower owes Bank when due. Bank will notify Borrower of all debits that Bank makes against Borrower's accounts. These debits to Borrower's account are not a set-off. 

2.3   Fees.  

        In addition to any other fees due and payable to Bank by Borrower as set forth in this Agreement, Borrower will pay: 

        (a)   Facility
Fee. A fully earned, non-refundable facility fee of $2,500.00 for the Term Loan due on the Closing Date; and 

        (b)   Bank
Expenses. All Bank Expenses (including reasonable attorneys' fees and reasonable expenses) incurred through and after the date of this Agreement, are payable when
due. 

3 CONDITIONS OF LOANS  

3.1   Conditions Precedent to Term Loan.  

        Bank's obligation to make the Term Loan is subject to the condition precedent that it receive the agreements, documents and fees it requires. 

4 CREATION OF SECURITY INTEREST  

4.1   Grant of Security Interest.  

        Borrower grants Bank a continuing security interest in all presently existing and later acquired Collateral to secure all Obligations and performance of each of
Borrower's duties under the Loan Documents. Except for Permitted Liens, any security interest will be a first priority security interest in the Collateral. If this Agreement is terminated, Bank's lien
and security interest in the Collateral will continue until Borrower fully satisfies its Obligations. 

4.1.1 Authorization to File.  

        Borrower authorizes Bank to file financing statements without notice to Borrower, with all appropriate jurisdictions, as Bank deems appropriate, in order to
perfect or protect Bank's interest in the Collateral. 

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5 REPRESENTATIONS AND WARRANTIES  

        Borrower represents and warrants as follows: 

5.1   Due Organization and Authorization.  

        Borrower and each Subsidiary is duly existing and in good standing in its state of incorporation and qualified and licensed to do business in, and in good
standing in, any state in which the conduct of its business or its ownership of property requires that it be qualified, except where the failure to do so could not reasonably be expected to cause a
Material Adverse Change. Borrower has not changed its state of incorporation or its organizational structure or type or any organizational number (if any) assigned by its jurisdiction of
incorporation. 

        The
execution, delivery and performance of the Loan Documents have been duly authorized, and do not conflict with Borrower's formation documents, nor constitute an event of default under
any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which or by which it is bound in which the default could reasonably be expected to cause a Material
Adverse Change. 

5.2   Collateral.  

        Borrower has good title to the Collateral, free of Liens except Permitted Liens or Borrower has Rights to each asset that is Collateral. Borrower has no other
deposit account, other than the deposit accounts described in the Schedule. The Accounts are bona fide, existing obligations, and the service or property has been performed or delivered to the account
debtor or its agent for immediate shipment to and unconditional acceptance by the account debtor. The Collateral is not in the possession of any third party bailee (such as at a warehouse). In the
event that Borrower, after the date hereof, intends to store or otherwise deliver the Collateral to such a bailee, then Borrower will receive the prior written
consent of Bank and such bailee must acknowledge in writing that the bailee is holding such Collateral for the benefit of Bank. Borrower has no notice of any actual or imminent Insolvency Proceeding
of any account debtor whose accounts are an Eligible Account in any Borrowing Base Certificate. All Inventory is in all material respects of good and marketable quality, free from material defects.
Except as set forth in the Schedule, Borrower is the sole owner of the Intellectual Property, except for non-exclusive licenses granted to its customers in the ordinary course of business.
No part of the Intellectual Property has been judged invalid or unenforceable, in whole or in part, and no claim has been made that any part of the Intellectual Property violates the rights of any
third party, except to the extent such claim could not reasonably be expected to cause a Material Adverse Change, and, to the knowledge of Borrower's Responsible Officers, each Patent is valid and
enforceable. 

5.3   Litigation.  

        Except as shown in the Schedule, there are no actions or proceedings pending or, to the knowledge of Borrower's Responsible Officers, threatened by or against
Borrower or any Subsidiary in which a likely adverse decision could reasonably be expected to cause a Material Adverse Change. 

5.4   No Material Adverse Change In Financial Statements.  

        All consolidated financial statements for Borrower, and any Subsidiary, delivered to Bank fairly present in all material respects Borrower's consolidated
financial condition and Borrower's consolidated results of operations. There has not been any material deterioration in Borrower's consolidated financial condition since the date of the most recent
financial statements submitted to Bank. 

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5.5   Solvency.  

        Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as
they mature. 

5.6   Regulatory Compliance.  

        Borrower is not an "investment company" or a company "controlled" by an "investment company" under the Investment Company Act. Borrower is not engaged as one of
its important activities in extending credit for margin stock (under Regulations T and U of the Federal Reserve Board of Governors). To the knowledge of Borrower's Responsible Officers, Borrower has
compiled in all material respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to cause a
Material Adverse Change. None of Borrower's or any Subsidiary's properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower's knowledge, by previous Persons, in
disposing, producing, storing, treating, or transporting any hazardous substance other than legally. Borrower and each Subsidiary has timely filed all required tax returns and paid, or made adequate
provision to pay, all taxes, except those being contested in good faith with adequate reserves under GAAP. Borrower and each Subsidiary has obtained all consents, approvals and authorizations of, made
all declarations or filings with, and given all notices to, all government authorities that are necessary to continue its business as currently conducted, except where the failure to do so could not
reasonably be expected to cause a Material Adverse Change. 

5.7   Investments in Subsidiaries.  

        Borrower does not own any stock, partnership interest or other equity securities except for Permitted Investments. 

5.8   Inside Debt.  

        Except as shown in the Schedule, Borrower presently does not owe any indebetedness to its officers, directors and shareholders. 

5.9   Full Disclosure.  

        No written representation, warranty or other statement of Borrower in any certificate or written statement given to Bank (taken together with all such written
certificates and written statements to Bank) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or
statements not misleading. It being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that
actual results during the period or periods covered by such projections and forecasts may differ from the projected and forecasted results. 

6 AFFIRMATIVE COVENANTS  

        Borrower will do all of the following for so long as Bank has an obligation to lend, or there are outstanding Obligations: 

6.1   Government Compliance.  

        Borrower will maintain its and all Subsidiaries' legal existence and good standing in its jurisdiction of formation and maintain qualification in each
jurisdiction in which the failure to so qualify would reasonably be expected to cause a material adverse effect on Borrower's business or operations. Borrower will comply, and have each Subsidiary
comply, with all laws, ordinances and regulations to 

4

 

which
it is subject, noncompliance with which could have a material adverse effect on Borrower's business or operations or would reasonably be expected to cause a Material Adverse Change. 

6.2   Financial Statements, Reports, Certificates.  

        (a)   Borrower
will deliver to Bank: (i) as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared
consolidated balance sheet and income statement covering Borrower's consolidated operations during the period certified by a Responsible Officer and in a form acceptable to Bank; (ii) as soon
as available, but no later than one hundred twenty (120) days after the last day of Borrower's fiscal year, audited consolidated financial statements prepared under GAAP, consistently applied,
together with an unqualified opinion on the financial statements from an independent certified public accounting firm reasonably acceptable to Bank; (iii) within five days of filing, copies of
all statements, reports and notices made available to Borrower's security holders or to any holders of Subordinated Debt and all reports on Form 10-K, 10-Q and
8-K filed with the Securities and Exchange Commission; (iv) a prompt report of any legal actions pending or threatened against Borrower or any Subsidiary that could result in
damages or costs to Borrower or any Subsidiary of $100,000 or more; (v) budgets, sales projections, operating plans or other financial information Bank reasonably requests; and
(vi) prompt notice of any material change in the composition of the Intellectual Property, including any subsequent ownership right of Borrower in or to any Copyright, Patent or Trademark not
shown in any Schedule of Borrower or knowledge of an event that materially adversely affects the value of the Intellectual Property. 

        (b)   Within
thirty (30) days after the last day of each month, Borrower will deliver to Bank an aged listings of accounts receivable and accounts payable by invoice
date certified by a Responsible Officer and in a form acceptable to Bank. 

        (c)   Within
thirty (30) days after the last day of each month and one hundred twenty (120) days after the last day of Borrower's fiscal year, Borrower will
deliver to Bank with the monthly or annual financial statements a Compliance Certificate signed by a Responsible Officer in the form of  Exhibit B. 

        (d)   Allow
Bank to audit Borrower's Collateral at Borrower's expense. Such audits will be conducted no more often than annually unless an Event of Default has occurred and is
continuing. 

6.3   Inventory; Returns.  

        Borrower will keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower and its account debtors
will follow Borrower's customary practices as they exist at execution of this Agreement. Borrower must promptly notify bank of all returns, recoveries, disputes and claims, that involve more than
$50,000. 

6.4   Taxes.  

        Borrower will make, and cause each Subsidiary to make, timely payment of all federal, state, and local taxes or assessments and will deliver to Bank, on demand,
appropriate certificates attesting to the payment. 

6.5   Insurance.  

        Borrower will keep its business and the Collateral insured for risks and in amounts, as Bank may reasonably request. Insurance policies will be in a form, with
companies, and in amounts that are satisfactory to Bank in Bank's reasonable discretion. All property policies will have a lender's loss payable endorsement showing Bank as an additional loss payee
and provide that the insurer must give Bank at least twenty (20) days notice before canceling its policy. At Bank's request, Borrower will 

5

 

deliver
certified copies of policies and evidence of all premium payments. Proceeds payable under any policy will, at Bank's option, be payable to Bank on account of the Obligations. 

6.6   Primary Accounts.  

        Borrower will maintain its primary depository and operating accounts with Bank. 

6.7   Financial Covenants.  

        Borrower will maintain as of the last day of each month: 

        (a)   Liquidity Coverage. A Liquidity Coverage Ratio of not less than 1.75 to 1.00. 

6.8   Subordination of Inside Debt.  

        All Present and future indebtedness of Borrower to its officers, directors and shareholders, shall, at all times, be Subordinated Debt. 

6.9   Registration of Intellectual Property Rights.  

        Borrower will register with the United States Patent and Trademark Office or the United States Copyright Office its Patents within thirty (30) days of the
date of this Agreement, and, if Borrower's
management determines it is necessary for protection of the Intellectual Property, additional Intellectual Property rights developed or acquired including revisions or additions with any product
before the sale or licensing of the product to any third party. 

        Borrower
will (a) protect, defend and maintain the validity and enforceability of the Intellectual Property and promptly advise Bank in writing of material infringements and
(b) not allow any Intellectual Property to be abandoned, forfeited or dedicated to the public without Bank's written consent. 

6.10 Further Assurances.  

        Borrower will execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank's security interest in the
Collateral or to effect the purposes of this Agreement. 

7 NEGATIVE COVENANTS  

        Borrower will not do any of the following without Bank's prior written consent, which will not be unreasonably withheld, for so long as Bank has an obligation to
lend and there are any outstanding Obligations: 

7.1   Dispositions.  

        Convey, sell, lease, transfer or otherwise dispose of (collectively "Transfer"), or permit any of its Subsidiaries to Transfer, all or any part of its business or
property, including any Intellectual Property as limited by the Negative Pledge Agreement between the parties, except for Transfers (a) of
Inventory in the ordinary course of business; (b) of non-exclusive licenses and similar arrangements for the use of the property of Borrower or its Subsidiaries in the ordinary
course of business; or (c) of worn-out or obsolete Equipment. 

7.2   Changes in Business, Ownership, or Locations of Collateral.  

        Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower or reasonably related thereto or
have a material change in its 

6

 

ownership
of greater than thirty-five percent (35%) (other than by the sale of Borrower's equity securities in a public offering or to venture capital investors so long as Borrower
identifies the venture capital investors prior to the closing of the investment). Borrower will not, without at least thirty (30) days prior written notice, relocate its chief executive office,
change its state of formation (including reincorporation), change its organizational number or name or add any new offices or business locations (such as warehouses) in which Borrower maintains or
stores over $5,000 in Collateral. 

7.3   Mergers or Acquisitions.  

        Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire,
all or substantially all of the capital stock or property of another Person, except where (a) no Event of Default has occurred and is continuing or would result from such action during the term
of this Agreement and (b) such transaction would not result in a decrease of more than ten percent (10%) of Tangible Net Worth  and (c) the
consideration delivered by Borrower does not require the creation of any indebtedness. A Subsidiary may merge or consolidate into
another Subsidiary or into Borrower. 

7.4   Indebtedness.  

        Create, incur, assume, or be liable for any indebtedness, or permit any Subsidiary to do so, other than Permitted indebtedness. 

7.5   Encumbrance.  

        Create, incur, or allow any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its
Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted here, subject to Permitted Liens. 

7.6   Distributions; Investments.  

        Except as set forth in Section 7.3, directly or indirectly acquire or own any Person, or make any investment in any Person, other than Permitted
Investments, or permit any of its Subsidiaries to do so. Other than as required by the terms of the Series E Preferred Stock of the Borrower, pay any dividends or make any distribution or
payment or redeem, retire or purchase any capital stock. 

7.7   Transactions with Affiliates.  

        Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower except for transactions that are in the ordinary
course of Borrower's business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm's length transaction with a nonaffiliated Person. 

7.8   Subordinated Debt.  

        Make or permit any payment on any Subordinated Debt or any indebtedness owed to Hewlett-Packard Company, except under the terms of the Subordinated Debt (not
including any acceleration provisions), or amend any provision in any document relating to the Subordinated Debt without Bank's prior written consent. 

7.9   Compliance.  

        Become an "investment company" or a company controlled by an "investment company," under the Investment Company Act of 1940 or undertake as one of its important
activities extending credit to 

7

 

purchase
or carry margin stock, or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a
material adverse effect on Borrower's business or operations or would reasonably be expected to cause a Material Adverse Change, or permit any of its Subsidiaries to do so. 

8 EVENTS OF DEFAULT  

        Any one of the following is an event of default ("Event of Default"); 

8.1   Payment Default.  

        If Borrower fails to pay any of the Obligations within three (3) Business Days after their due date, however, during such period no Credit Extensions will
be made; 

8.2   Covenant Default.  

        (a)   If
Borrower fails to perform any obligation under Sections 6.2 or 6.7 or violates any of the covenants contained in Article 7 of this Agreement, or 

        (b)   If
Borrower fails or neglects to perform, keep, or observe any other material term, provision, condition, covenant, or agreement contained in this Agreement, in any of
the Loan Documents, or in any other present or future agreement between Borrower and Bank and as to any default under such other term, provision, condition, covenant or agreement that can be cured,
has failed to cure such default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or
cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional
reasonable period (which shall not in any case exceed thirty (30 days) to attempt to cure such default, and within such reasonable time period the failure to have cured such default shall not
be deemed an Event of Default (provided that no Credit Extensions will be made during such cure period); 

8.3   Material Adverse Change.  

        If there (a) occurs a material adverse change in the general affairs, management, business, operations, or condition (financial or otherwise) of Borrower,
or (b) is a material impairment of the prospect of repayment of any portion of the Obligations; or (c) is a material impairment of the value or priority of Bank's security interests in
the Collateral (the foregoing being defined as a "Material Adverse Change"); 

8.4   Attachment.  

        If any material portion of Borrower's assets is attached, seized, levied on, or comes into possession of a trustee or receiver and the attachment, seizure or levy
is not removed in ten (10) days, or if Borrower is enjoined, restrained, or prevented by court order from conducting a material part of its business or if a judgment or other claim becomes a
Lien on a material portion of Borrower's assets, or if a notice of lien, levy, or assessment is filed against any of Borrower's assets by any government agency and not paid within ten (10) days
after Borrower receives notice. These are not Events of Default if stayed or if a bond is posted pending contest by Borrower (but no Credit Extensions will be made during the cure period); 

8

   8.5   Insolvency.  

        If Borrower becomes insolvent or if Borrower begins an Insolvency Proceeding or an Insolvency Proceeding is begun against Borrower and not dismissed or stayed
within thirty (30) days (but no Credit Extensions will be made before any Insolvency Proceeding is dismissed); 

8.6   Other Agreements.  

        If there is a default in any agreement between Borrower and a third party that gives the third party the right to accelerate any Indebtedness exceeding $100,000
or that could cause a Material Adverse Change; 

8.7   Judgments.  

        If a money judgment(s) in any single judgment of at least $50,000 or in the aggregate of at least $100,000 is rendered against Borrower and is unsatisfied and
unstayed for ten (10) days (but no Credit Extensions will be made before the judgment is stayed or satisfied); 

8.8   Misrepresentations.  

        If Borrower or any Person acting for Borrower makes any material misrepresentation or material misstatement now or later in any warranty or representation in this
Agreement or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document; or 

8.9   Management Change.  

        If the individuals serving as chief executive officer and chief financial officer of Borrower as of the Closing Date cease to hold such positions. 

9 BANK'S RIGHT'S AND REMEDIES  

9.1   Rights and Remedies.  

        When an Event or Default occurs and continues Bank may, without notice or demand, do any or all of the following: 

        (a)   Declare
all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations are immediately due and payable
without any action by Bank); 

        (b)   Stop
advancing money or extending credit for Borrower's benefit under this Agreement or under any other agreement between Borrower and Bank; 

        (c)   Settle
or adjust disputes and claims directly with account debtors for amounts, on terms and in any order that Bank considers advisable; notify any Person owing Borrower
money of Bank's security interest in the funds and verify the amount of the Account. Borrower must collect all payments in trust for Bank and, if requested by Bank, immediately deliver the payments to
Bank in the form received from the account debtor, with proper endorsements for deposit; 

        (d)   Make
any payments and do any acts it considers necessary or reasonable to protect its security interest in the Collateral. Borrower will assemble the Collateral if Bank
requires and make it available as Bank designates. Bank may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or
compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy any of its premises, without
charge, to exercise any of Bank's rights or remedies; 

9

 

        (e)   Apply
to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any amount held by Bank owing to or for the credit or the account of
Borrower; 

        (f)    Ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral; and 

        (g)   Dispose
of the Collateral according to the Code. 

9.2   Power of Attorney.  

        Effective only when an Event of Default occurs and continues, Borrower irrevocably appoints Bank as its lawful attorney to: (a) endorse Borrower's name on
any checks or other forms of payment or security; (b) sign Borrower's name on any invoice or bill of lading for any Account or drafts against account debtors, (c) make, settle, and
adjust all claims under Borrower's insurance policies; (d) settle and adjust disputes and claims about the Accounts directly with account debtors, for amounts and on terms Bank determines
reasonable; and (e) transfer the Collateral into the name of Bank or a third party as the Code permits. Bank may exercise the power of attorney to sign Borrower's name on any documents
necessary to perfect or continue the perfection of any security interest, if Borrower has failed to sign such documents within five days after Bank's request that Borrower do so, regardless of whether
an Event of Default has occurred. Bank's appointment as Borrower's attorney in fact, and all of Bank's rights and powers, coupled with an interest, are irrevocable until all Obligations have been
fully repaid and performed and Bank's obligation to provide Credit Extensions terminates. 

9.3   Bank Expenses.  

        If Borrower fails to pay any amount or furnish any required proof of payment to third persons, Bank may make all or part of the payment or obtain insurance
policies required in Section 6.5, and take any action under the policies Bank deems prudent. Any amounts paid by Bank are Bank Expenses and Immediately due and payable, bearing interest at the
then applicable rate and secured by the Collateral. No payments by Bank are deemed an agreement to make similar payments in the future or Bank's waiver of any Event of Default. 

9.4   Bank's Liability for Collateral.  

        If Bank complies with reasonable banking practices and Section 9-207 of the Code, it is not liable for: (a) the safekeeping of the
Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other
person. Except as provided above, Borrower bears all risk of loss, damage or destruction of the Collateral. 

9.5   Remedies Cumulative.  

        Bank's rights and remedies under this Agreement, the Loan Documents, and all other agreements are cumulative. Bank has all rights and remedies provided under the
Code, by law, or in equity. Bank's exercise of one right or remedy is not an election, and Bank's waiver of any Event of Default is not a continuing waiver. Bank's delay is not a waiver, election, or
acquiescence. No waiver is effective unless signed by Bank and then is only effective for the specific instance and purpose for which it was given. 

9.6   Demand Waiver.  

        Except as specifically provided in Section 9.2, Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any
default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable. 

10

 

10 NOTICES  

        All notices or demands by any party about this Agreement or any other related agreement must be in writing and shall be deemed delivered (a) when
personally delivered, (b) one Business Day after being sent by an overnight delivery service, (c) three Business Days after begin sent by certified mail, postage prepaid, return receipt
requested, or (d) upon confirmation of delivery when sent by telefacsimile, all to the addresses set forth at the beginning of this Agreement. A party may change its notice address by giving
the other party written notice. 

11 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER  

        Colorado law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of the State
and Federal courts in Boulder County, Colorado. 

        BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION,
INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
Initial [ILLEGIBLE]

12 GENERAL PROVISIONS  

12.1 Successors and Assigns.  

        This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not assign this Agreement or any rights under it
without Bank's prior written consent which may be granted or withheld in Bank's discretion. Bank has the right, without the consent of or notice to Borrower, to sell, transfer, negotiate, or grant
participation in all or any part of, or any interest in, Bank's obligations, rights and benefits under this Agreement. 

12.2 Indemnification.  

        Borrower will indemnify, defend and hold harmless Bank and its officers, employees, and agents against: (a) all obligations, demands, claims, and
liabilities asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (b) all losses or Bank Expenses incurred, or paid by Bank from, following, or
consequential to transactions between Bank and Borrower (including reasonable attorneys fees and expenses), except for losses caused by Bank's gross negligence or willful misconduct. 

12.3 Time of Essence.  

        Time is of the essence for the performance of all obligations in this Agreement. 

12.4 Severability of Provision.  

        Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision. 

12.5 Amendments in Writing, Integration.  

        All amendments to this Agreement must be in writing and signed by Borrower and Bank. This Agreement represents the entire agreement about this subject matter, and
supersedes prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations 

11

 

between
the parties about the subject matter of this Agreement merge into this Agreement and the Loan Documents. 

12.6 Counterparts.  

        This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, are an
original, and all taken together, constitute one Agreement. 

12.7 Survival.  

        All covenants, representations and warranties made in this Agreement continue in full force while any Obligations remain outstanding. The obligations of Borrower
in Section 12.2 to indemnify Bank will survive until all statutes of limitations for actions that may be brought against Bank have run. 

12.8 Confidentiality.  

        In handling any confidential information, Bank will exercise the same degree of care that it exercises for its own proprietary information, but disclosure of
information may be made (a) to Bank's subsidiaries or affiliates in connection with their business with Borrower, (b) to prospective transferees or purchasers of any interest in the
loans (provided, however, Bank shall use commercially reasonable efforts in obtaining such prospective transferee or purchasers agreement of the terms of this provision), (c) as required by
law, regulation, subpoena, or other order, (d) as required in connection with Bank's examination or audit and (e) as Bank considers appropriate exercising remedies under this Agreement.
Confidential information does not include information that either: (i) is in the public domain or in Bank's possession when disclosed to Bank, or becomes part of the public domain after
disclosure to Bank; or (ii) is disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the information. 

12.9 Attorneys' Fees, Costs and Expenses.  

        In any action or proceeding between Borrower and Bank arising out of the Loan Documents, the prevailing party will be entitled to recover its reasonable
attorneys' fees and other reasonable costs and expenses incurred, in addition to any other relief to which it may be entitled. 

13 DEFINITIONS  

13.1 Definitions.  

        In this Agreement: 

        "Accounts" are all existing and later arising accounts, contract rights, and other obligations owed Borrower in connection with its sale
or lease of goods (including licensing software and other technology) or provision of services, all credit insurance, guaranties, other security and all merchandise returned or reclaimed by Borrower
and Borrower's Books relating to any of the foregoing, as such definition may be amended from time to time according to the Code. 

        "Affiliate" of a Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by
or is under common control with the Person, and each of that Person's senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person's managers and
members. 

        "Bank Expenses" are all audit fees and expenses and reasonable costs and expenses (including reasonable attorneys' fees and expenses) for
preparing, negotiating, administering, defending and enforcing the Loan Documents (including appeals or Insolvency Proceedings). 

12

 

        "Borrower's Books" are all Borrower's books and records including ledgers, records regarding Borrower's assets or liabilities, the
Collateral, business operations or financial condition and all computer programs or discs or any equipment containing the information. 

        "Business Day" is any day that is not a Saturday, Sunday or a day on which Bank is closed. 

        "Closing Date" is the date of this Agreement. 

        "Code" is the Colorado Uniform Commercial Code, as applicable. 

        "Collateral" is the property described on Exhibit A. 

        "Contingent Obligation" is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any
indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse
by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from
any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in Interest rates,
currency exchange rates or commodity prices; but "Contingent Obligation" does not include endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or
determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good
faith; but the amount may not exceed the maximum of the obligations under the guarantee or other support arrangement. 

        "Copyrights" are all copyright rights, applications or registrations and like protections in each work or authorship or derivative work,
whether published or not (whether or not it is a trade secret) now or later existing, created, acquired or held. 

        "Credit Extension" is the Term Loan or any other extension of credit by Bank for Borrower's benefit. 

        "Current Liabilities" are the aggregate amount of Borrower's Total Liabilities which mature within one (1) year. 

        "Equipment" is all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and
attachments in which Borrower has any interest. 

        "ERISA" is the Employment Retirement Income Security Act of 1974, and its regulations. 

        "Event of Default" is defined in Article 8. 

        "Final Payment" is a payment (in addition to and not a substitution for the regular payments of principal and interest) due on the Term
Loan Maturity Date in an amount equal to the Term Loan Amount multiplied by four percent (4%). 

        "GAAP" is generally accepted accounting principles. 

        "Indebtedness" is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and
other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations and
(d) Contingent Obligations. 

        "Insolvency Proceeding" are proceedings by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or
insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking re-organization, arrangement, or other relief. 

13

 

        "Intellectual Property" is all of Borrower's: 

        (a)   Copyrights,
Trademarks, Patents, and Mask Works including amendments, renewals, extensions, and all licenses or other rights to use and all license fees and royalties
from the use; 

        (b)   Any
trade secrets and any intellectual property rights in computer software and computer software products now or later existing, created, acquired or held; 

        (c)   All
design rights that may be available to Borrower now or later created, acquired or held; 

        (d)   Any
claims for damages (past, present or future) for infringement of any of the rights above, with the right, but not the obligation, to sue and collect damages for use
or infringement of the intellectual property rights above; 

        All
proceeds and products of the foregoing, including all insurance, indemnity or warranty payments. 

        "Inventory" is present and future inventory in which Borrower has any interest, including merchandise, raw materials, parts, supplies,
packing and shipping materials, work in process and finished products intended for sale or lease or to be furnished under a contract of service, of every kind and description now or later owned by or
in the custody or possession, actual or constructive, of Borrower, including inventory temporarily out of its custody or possession or in transit and including returns on any accounts or other
proceeds (including insurance proceeds) from the sale or disposition of any of the foregoing and any documents of title. 

        "Investment" is any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance
or capital contribution to any person. 

        "Lien" is a mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance. 

        "Liquidity Coverage Ratio" is the ratio of (a) unrestricted cash (and equivalents) maintained at Bank  plus sixty percent (60%) of Net Accounts to (b) the
Obligations under this Agreement. 

        "Loan Documents" are, collectively, this Agreement, the Negative Pledge Agreement, any note, or notes executed by Borrower, and any other
present or future agreement between Borrower and/or for the benefit of Bank in connection with this Agreement, all as amended, extended or restated. 

        "Mask Works" are all mask works or similar rights available for the protection of semiconductor chips, now owned or later acquired. 

        "Material Adverse Change" is defined in Section 8.3. 

        "Negative Pledge Agreement" is that certain negative pledge agreement between the parties as of the date hereof. 

        "Net Accounts" are all Accounts less any Accounts funded pursuant to Borrower's Bill of
Exchange Purchase Agreement with Bank. 

        "Obligations" are debts, principal, interest, Bank Expenses and other amounts Borrower owes Bank now or later, including cash management
services, letters of credit and foreign exchange contracts, if any and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to
Bank. 

        "Patents" are patents, patent applications and like protections, including improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same. 

        "Permitted Indebtedness" is: 

        (a)   Borrower's
indebtedness to Bank under this Agreement, any other Loan Document or the Bill of Exchange Purchase Agreement between Borrower and Bank; 

14

 

        (b)   Indebtedness
existing on the Closing Date and shown on the Schedule; 

        (c)   Subordinated
Debt; 

        (d)   Indebtedness
to trade creditors incurred in the ordinary course of business; and 

        (e)   Indebtedness
secured by Permitted Liens. 

        "Permitted Investments" are: 

        (a)   Investments
shown on the Schedule and existing on the Closing Date; and 

        (b)   (i) marketable
direct obligations issued or unconditionally guaranteed by the United States or its agency or any State maturing within 1 year from its
acquisition, (ii) commercial paper maturing no more than 1 year after its creation and having the highest rating from either Standard & Poor's Corporation or Moody's Investors
Service, Inc., and (iii) Bank's certificates of deposit issued maturing no more than 1 year after issue. 

        "Permitted Liens" are: 

        (a)   Liens
existing on the Closing Date and shown on the Schedule or arising under this Agreement or other Loan Documents; 

        (b)   Liens
for taxes, fees, assessments or other government charges or levies, either not delinquent or being contested in good faith and for which Borrower maintains
adequate reserves on its Books; 

        (c)   Purchase
money Liens (i) on Equipment acquired or held by Borrower or its Subsidiaries incurred for financing the acquisition of the Equipment, or
(ii) existing on equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the equipment; 

        (d)   Licenses
or sublicenses granted in the ordinary course of Borrower's business and any interest or title of a licensor or under any license or sublicense; 

        (e)   Leases
or subleases granted in the ordinary course of Borrower's business, including in connection with Borrower's leased premises or leased property; 

        (f)    Liens
incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (c),  but any extension, renewal or replacement Lien must be limited to the property
encumbered by the existing Lien and the principal amount of the
indebtedness may not increase. 

        "Person" is any individual, sole proprietorship, partnership, limited liability company, joint venture, company association, trust,
unincorporated organization, association, corporation, institution, public benefit corporation, film, joint stock company, estate, entity or government agency. 

        "Prime Rate" is Bank's most recently announced "prime rate," even if it is not Bank's lowest rate. 

        "Responsible Officer" is each of the Chief Executive Officer, the President, the Chief Financial Officer and the Controller of Borrower. 

        "Rights", as applied to the Collateral, means Borrower's rights and interests in, and
powers with respect to, that Collateral, whatever the nature of those rights, interests and powers and, in any event, including Borrower's power to transfer rights in such Collateral to Bank. 

        "Schedule" is any schedule attached to this Agreement. 

        "Subordinated Debt" is debt incurred by Borrower subordinated to Borrower's indebtedness owed to Bank and which is reflected in a written
agreement in a manner and form acceptable to Bank and approved by Bank in writing. 

15

 

        "Subsidiary" is for any Person, or any other business entity of which more than 50% of the voting stock or other equity interests is owned
or controlled, directly or indirectly, by the Person or one or more Affiliates of the Person. 

        "Term Loan Maturity Date" is April 1, 2005. 

        "Term Loan" is a loan in the principal amount of $695,004.04. 

        "Term Loan Payment" is defined in Section 2.1.1(b). 

        "Total Liabilities" is on any day, obligations that should, under GAAP, be classified as liabilities on Borrower's consolidated balance
sheet, including all indebtedness, and current portion Subordinated Debt allowed to be paid, but excluding all other Subordinated Debt. 

        "Trademarks" are trademark and servicemark rights, registered or not, applications to register and registrations and like protections, and
the entire goodwill of the business of Assignor connected with the trademarks. 

        "Transamerica Indebtedness" is defined in Section 2.1.1(a). 

        "Transfer" is defined in Section 7.1. 

        This
Loan and Security Agreement is executed by the parties as of the date set forth above: 

	BORROWER:	 	 
	DISPLAYTECH, INC.	 	 
	

By:	
 	

/s/  LLOYD LEWIS      
	
 	

 
	Title:	 	CFO
	 	 
	

BANK:	
 	

 
	

SILICON VALLEY BANK	
 	

 
	

By:	
 	

/s/ [ILLEGIBLE]
	
 	

 
	Title:	 	Vice President
	 	 

16

EXHIBIT A  

        The Collateral consists of all of Borrower's right, title and interest in and to the following whether owned now or hereafter arising and whether Borrower has
rights now or hereafter has rights therein and wherever located: 

        All
goods and equipment now owned or hereafter acquired, including, without limitation, all machinery, fixtures, vehicles (including motor vehicles and trailers), and any interest in any
of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located; 

        All
inventory, now owned or hereafter acquired, including, without limitation, all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and
finished products including such inventory as is temporarily out of Borrower's custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance
proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above; 

        All
contract rights and general intangibles (as such definitions may be amended from time to time according to the Code), now owned or hereafter acquired, including, without limitation,
goodwill, leases, license agreements, franchise agreements, blueprints, drawings, purchase orders, customer lists, route lists, infringements, claims, computer programs, computer discs, computer
tapes, literature, reports, catalogs, design rights, income tax refunds, payments of insurance and rights to payment of any kind; 

        All
now existing and hereafter arising accounts, contract rights, royalties, license rights and all other forms of obligations owing to Borrower arising out of the sale or lease of
goods, the licensing of technology or the rendering of services by Borrower (as such definitions may be amended from time to time according to the Code) whether or not earned by performance, and any
and all credit insurance, insurance (including refund) claims and proceeds, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Borrower; 

        All
documents, cash, deposit accounts, securities, securities entitlements, securities accounts, investment property, financial assets, letters of credit, letter of credit rights,
certificates of deposit, instruments and chattel paper and electronic chattel paper now owned or hereafter acquired and Borrower's Books relating to the foregoing; and 

        All
Borrower's Books relating to the foregoing and any and all claims, rights and interests in any of the above and all substitutions for, additions and accessions to and proceeds
thereof. 

        Notwithstanding
the foregoing, the Collateral does not include any of Borrower's Intellectual Property. 

        Borrower and Bank are parties to that certain Negative Pledge Agreement, whereby Borrower, in connection with Bank's loan or loans to Borrower, has agreed, among
other things, not to sell, transfer, assign, mortgage, pledge, lease grant a security interest in, or encumber any of its Intellectual Property, without Bank's prior written
consent.

EXHIBIT B

COMPLIANCE CERTIFICATE  

	TO:	 	SILICON VALLEY BANK

4410 Arapahoe Ave., Suite 200

Boulder, CO 80303
	

FROM:	
 	

DISPLAYTECH, INC.

2602 Clover Basin Drive

Longmont, CO 80503

        The
undersigned authorized officer of            ("Borrower") certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the
"Agreement"), (i) Borrower is in complete compliance for the period ending            with all required covenants except as noted below and (ii) all representations and warranties in the
Agreement are true and correct in all material respects on this date. Attached are the required documents supporting the certification. The Officer certifies that these are prepared in accordance with
Generally Accepted Accounting Principles (GAAP) consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The Officer acknowledges that no borrowings
may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate
is delivered. 

Please indicate compliance status by circling Yes/No under "Complies" column.  

	Reporting Covenant
 
	 	Required
	 	Complies

	Monthly financial statements + CC	 	Monthly within 30 days	 	Yes	 	No
	Annual (Audited)	 	FYE within 120 days	 	Yes	 	No
	10-Q, 10-K and 8-K	 	Within 5 days after filing with SEC	 	Yes	 	No
	A/R & A/P Agings	 	Monthly within 30 days	 	Yes	 	No
	A/R Audit	 	Initial and Annually	 	Yes	 	No

	Financial Covenant
 
	 	Required
	 	Actual
	 	Complies

	Maintain on a Monthly Basis:	 	 	 	 	 	 	 	 
	 	Minimum Liquidity Coverage	 	1.75:1.00	 	        :1.00	 	Yes	 	No

Have
there been updates to Borrower's intellectual property?        Yes/No 

        Borrower
only has deposit accounts located at the following institutions: 

Comments Regarding Exceptions: See Attached.  

Sincerely,

DISPLAYTECH,
INC. 

	
 SIGNATURE	 	 
	

 TITLE	
 	

 
	

 DATE	
 	

 

 BANK USE ONLY  

	Received by:	 	 	 	 	 	 
	 	 	
 AUTHORIZED SIGNER

	Date:	 	 	 	 	 	 
	 	 	

	Verified:	 	 	 	 	 	 
	 	 	
 AUTHORIZED SIGNER

	Date:	 	 	 	 	 	 
	 	 	

	

Compliance Status:	
 	

Yes	
 	

No

Schedule to Loan and Security Agreement  

        The exact correct corporate name of Borrower is (attach a copy of the formation documents, e.g., articles, partnership agreement): Displaytech, Inc. 

        Borrower's
State of formation: Colorado 

        Borrower
has operated under only the following other names (if none, so state):

None 

        All
other address at which the Borrower does business are as follows (attach additional sheets if necessary and include all warehouse addresses):

None 

        Borrower
has deposit accounts and/or investment accounts located only at the following institutions: 

Silicon
Valley Bank; Wells Fargo Bank West N.A. ; Community First National Bank; Key Bank

(WILL CLOSE NON-SVB ACCTS SOON) 

        List
Acct. Numbers: 

[*****]

        Liens
existing on the Closing Date and disclosed to and accepted by Bank in writing: 

See
attached 

        Investments
existing on the Closing Date and disclosed to and accepted by Bank in writing: 

Money
Market and Investment Accounts as listed above 

Indebtedness:  

        Indebtedness on the Closing Date and disclosed to and consented to by Bank in writing: 

$10,000,000
principal note to Hewlett Packard

$150,000 note to Cadwalader, Wickersham, and Taft 

        The
following is a list of the Borrower's copyrights (including copyrights of software) which are registered with the United States Copyright Office. (Please include name of the
copyright and registration number and attach a copy of the registration):

None 

        The
following is a list of all software which the Borrower sells, distributes or licenses to others, which is not registered with the
United States Copyright Office. (Please include versions which are not registered:

None 

        The
following is a list of all of the Borrower's patents which are registered with the United States Patent Office. (Please include name of the patent and registration number and attach
a copy of the registration.): 

See
attached 

        The
following is a list of all of the Borrower's patents which are pending with the United States Patent Office. (Please include name of the patent and a copy of the application.): 

See
attached 

        The
following is a list of all of the Borrower's registered trademarks. (Please include name of the trademark and a copy of the registration.): 

See
attached 

        Borrower
is not subject to litigation that would have a material adverse effect on the Borrower's financial condition, except the following (attach additional comments, if needed): 

        Tax
ID Number 84-0986353 

        Organizational
Number, if any: 19871599084 

SCHEDULE 4.12 (a)  

Summary Table  

	Owned and Licensed US Patents	 	63	 	Owned and Licensed US Patent Applications	 	31
	Owned and Licensed Foreign Patents	 	12	 	Owned and Licensed Foreign Patent Applications	 	20
	TOTAL	 	75	 	TOTAL	 	51

Displaytech Owned US Patents  

	Patent No.
 
	 	Title
	 	Issue Date
	 	Expires

	6,426,783	 	Continuously Viewable DC-Field Balanced, Reflective, Ferroelectric Liquid Crystal Image Generator	 	7/30/02	 	2/18/18
	

6,413,448	
 	

Cyclo-hexyl- and Cyclohexynl-substituted Liquid Crystals with Low Birefringence	
 	

7/20/02	
 	

4/26/19
	

6,369,933	
 	

Optical Correlator Having Multiple Active Components Formed on a Single	
 	

4/9/02	
 	

12/18/19
	

6,359,723	
 	

Optics Arrangements Including Light Source Arrangements for an Active Matrix Crystal Image Generator	
 	

3/19/02	
 	

12/12/14
	

6,317,112	
 	

Active Matrix Liquid Crystal Image Generator with Hybrid Writing Scheme	
 	

11/13/01	
 	

12/22/14
	

6,310,664	
 	

Continuously Viewable, DC Field-Balanced, Reflective, Ferroelectric Liquid Crystal Image Generator	
 	

10/30/01	
 	

2/18/18
	

6,247,037	
 	

Optical Correlator Having Multiple Active Components Formed on a Single Integrated Circuit	
 	

6/12/01	
 	

1/28/19
	

6,195,136	
 	

Optics Arrangements Including Light Source Arrangements for an Active Matrix Liquid Crystal Image Generator	
 	

2/27/01	
 	

12/12/14
	

6,144,421	
 	

Continuously Viewable, DC-Field Balanced Reflective, Ferroelectric Liquid Crystal Image Generator	
 	

11/7/00	
 	

2/18/18
	

6,139,771	
 	

Mesogenic Materials with Anomalous Birefringence Dispersion and High Second Order Susceptibility	
 	

10/31/00	
 	

4/4/17
	

6,100,945	
 	

Compensator Arrangements for a Continuously Viewable, DC Field-Balanced, Reflective, Ferroelectric Liquid Crystal Display System	
 	

8/8/00	
 	

2/18/18
	

6,075,577	
 	

Continuously Viewable, DC Field-Balanced, Reflective, Ferroelectric Liquid Crystal Image Generator	
 	

6/13/00	
 	

2/18/18
	

6,038,005	
 	

Optics Arrangements Including Light Source Arrangements for an Active Matrix Liquid Crystal Image Generator	
 	

3/14/00	
 	

12/22/14
	

6,025,890	
 	

Beam Splitter Element including a Beam Splitting Layer and a Polarizing Layer for use in a Light Polarization Modulating Display System	
 	

2/15/00	
 	

2/20/18
	

6,016,173	
 	

Optics Arrangement including a Compensator Cell and Static Wave Plate For a Continuously Viewable, Reflection Mode, Ferroelectric Liquid Crystal Spatial Light Modulating System	
 	

1/18/00	
 	

2/18/18

Restricted and Confidential

	5,900,976	 	Display System including a Polarizing Beam Splitter	 	5/4/99	 	2/20/18
	5,866,036	 	High Tilt Ferroelectric Liquid Crystal Compounds and Compositions	 	2/2/99	 	2/2/16
	5,808,800	 	Optics Arrangements including Light Source Arrangements for an Active Matrix Liquid Crystal Image Generator	 	9/15/98	 	9/15/15
	5,757,348	 	Active Matrix Liquid Crystal Image Generator with Hybrid Writing Scheme	 	5/26/98	 	5/26/15
	5,753,139	 	High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein	 	5/19/98	 	5/19/15
	5,748,164	 	Active Matrix Liquid Crystal Image Generator	 	5/5/98	 	5/5/15
	5,694,147	 	Liquid Crystal Integrated Circuit Display Including an Arrangement for Maintaining the Liquid Crystal at a Controlled Temperature	 	12/2/97	 	4/14/15
	5,626,792	 	High Birefringence Liquid Crystal Compounds	 	5/6/97	 	9/6/14
	5,596,451(1	)	Miniature Image Generator Including Optics Arrangement	 	1/21/97	 	1/30/15
	5,585,036	 	Liquid Crystal Compounds Containing Chiral 2-Halo-2-Methyl Ether and Ester Tails	 	12/17/96	 	12/17/13
	5,552,916	 	Diffractive Light Modulator	 	9/3/96	 	9/3/13
	5,539,555(2	)	High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein	 	7/23/96	 	7/23/13
	5,523,864	 	Analog Liquid Crystal Spatial Light Modulator including an Internal Voltage Booster	 	6/4/96	 	1/26/14
	5,500,748(3	)	Liquid Crystal Spatial Light Modulator Including an Internal Voltage Booster	 	3/19/96	 	1/26/14
	5,457,235	 	Halogenated Diphenyldiacetylene Liquid Crystals	 	10/10/95	 	10/10/12
	5,453,218	 	Liquid Crystal Compounds Containing Chiral 2-Halo-2 Methyl Alkoxy Tails	 	9/26/95	 	9/26/12
	5,422,037	 	Ferroelectric Liquid Crystal Compounds Containing Halogenated Cores and Chiral Haloalkoxy Tail Units	 	6/6/95	 	6/6/12
	5,380,460	 	Ferroelectric Liquid Crystal Compounds Containing Chiral Haloalkoxy Tail Units and Compositions Containing Them	 	1/10/95	 	1/10/12
	RE 34,726	 	Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	 	9/13/94	 	7/14/09
	5,347,378	 	Fast Switching Color Filters for Frame-Sequential Video Using Ferroelectric Liquid Crystal Color-Selective Filters	 	9/13/94	 	9/13/11
	5,271,864	 	Ferroelectric Liquid Crystal Compounds with Cyclohexenyl Cores and Compositions Containing Them	 	12/21/93	 	8/7/12
	5,182,665	 	Diffractive Light Modulator	 	1/26/93	 	9/7/10

Restricted and Confidential

	5,180,520(4	)	Ferroelectric Liquid Crystal Compositions Containing Halogenated Cores and Chiral Halogenated Cores and Chiral Haloalkoxy Tail Units	 	1/19/93	 	1/19/10
	5,178,791	 	Halogenated Diphenyldiacetylene Liquid Crystals	 	1/12/93	 	3/11/11
	5,178,445(5	)	Optically Addressed Spatial Light Modulator	 	1/12/93	 	1/12/10
	5,167,855(4	)	Ferroelectric Liquid Crystal Compositions Chiral Haloalkoxyl Tail Units	 	12/1/92	 	12/1/09
	5,061,814	 	High Tilt Ferroelectric Liquid Crystal Compounds and Compositions	 	10/29/91	 	6/1/09
	5,051,506	 	Ferroelectric Liquid Crystal Compounds Containing Chiral Haloalkoxy Tail Units and Compositions Containing Them	 	9/24/91	 	9/24/08
	4,813,771	 	Electro-Optic Switching Devices Using Ferroelectric Liquid Crystals	 	3/21/89	 	10/15/07
	6,507,330 B1	 	DC-Balanced and Non-DC-Balanced Drive Schemes for Liquid Crystal Devices	 	1/14/03	 	 
	6,525,709	 	Miniature Display Apparatus and Method	 	2/25/03	 	 

	(1)
	jointly
owned by Displaytech, Inc. and Martin Shenker Optical Design, Inc.

	(2)
	jointly
owned by Displaytech, Inc. and Hoechst Aktiengesellschaft (with bilateral restrictions on field of use Based on display size; Displaytech has exclusive right to displays with
an active area of 10 cm. or less in diameter, Hoechst has exclusive right to displays with an active area greater than 10 cm. in diameter)

	(3)
	jointly
owned by Displaytech Inc. and Stephen D. Gaalema

	(4)
	owned
solely by Displaytech Inc.; assignee data on patent cover sheet is incorrect

	(5)
	jointly
owned by Displaytech Inc. and University of Colorado Foundation (assignment not recorded at PTO) 

Restricted and Confidential

Displaytech Owned Foreign Patents  

	Country
 
	 	Patent No.
	 	Title
	 	Issue Date
	 	Expires

	Canada	 	1,299,721	 	Electro-Optic Switching Devices Using Ferroelectric Liquid Crystals	 	4/28/92	 	4/28/09
	

Germany	
 	

69109680	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

5/10/95	
 	

7/22/11
	

Japan	
 	

2868774	
 	

Electro-Optic Switching Devices Using Ferroelectric Liquid Crystals	
 	

12/25/98	
 	

10/14/08
	

Japan	
 	

3124772	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

10/27/00	
 	

7/22/11
	

Korea	
 	

184,242	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

12/17/98	
 	

7/22/11
	

Korea	
 	

261,354	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch FLC Compositions Useful Therein	
 	

4/18/00	
 	

2/6/13
	

Korea	
 	

283,163	
 	

Ferroelectric Liquid Crystal Compounds with Cyclohexenyl Cores and Compositions Containing Them	
 	

12/6/00	
 	

8/6/13
	

Sweden	
 	

0 540 648	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

5/10/95	
 	

7/22/11
	

Sweden	
 	

515 705	
 	

High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch FLC Compositions Useful Therein	
 	

9/24/01	
 	

2/5/13
	

United Kingdom	
 	

0 540 648	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

5/10/95	
 	

7/22/11
	

United Kingdom	
 	

2 263 982	
 	

Ferroelectric Liquid Crystals	
 	

2/28/96	
 	

1/29/13
	

Canada	
 	

2,087,592	
 	

Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units	
 	

4/16/02	
 	

7/22/11

Restricted and Confidential

Displaytech Owned Pending US Patent Applications  

	App. No.
 
	 	Title
	 	Date Filed

	08/953,613	 	Methods and Arrangements for Using an Analog Signal to Provide Gray Scale on a Binary Pixel	 	10/17/97
	09/045,247	 	Active Matrix Liquid Crystal Image Generator	 	3/20/98
	09/313,227	 	RGB Illuminator with Calibration via Single Detector Servo	 	5/17/99
	09/388,249	 	Non-DC-Balanced Drive Scheme for Liquid Crystal Device	 	9/1/99
	[*****]	 	 	 	 
	09/604,524	 	Methods and Arrangements for Improving Contrast in FLC Devices	 	6/27/00
	09/639,500	 	Mesogenic Materials with Anomalous Birefringence Dispersion and High Second Order Susceptibility	 	8/11/00
	09/653,437	 	Ferroelectric Liquid Crystal Devices Using Materials with a deVries Smectic A Phase	 	9/1/00
	09/706,553	 	Efficient Method of Manufacturing Liquid Crystal Devices	 	11/2/00
	09/718,843	 	Multi-State Light Modulator with Non-Zero Response Time and Linear Gray Scale	 	11/22/00
	09/754,033	 	Alkyl Silane Liquid Crystal Compounds 1/3/01	 	 
	09/753,749	 	Liquid Crystal Compounds Having a Silane Tail with a Perfluoroalkyl Terminal Portion	 	1/3/01
	09/754,034	 	Liquid Crystalline Materials Containing Perfluoroalkyl and Alkenyl Tails	 	1/3/01
	09/817,809	 	Subpixellated Reflective Microdisplays	 	3/14/01
	09/809,741	 	DC-Balanced and Non-DC-Balanced Drive Schemes for Liquid Crystal Device	 	3/14/01
	09/809,998	 	Data Scheduling with Banks in Reflective Microdisplays	 	3/14/01
	09/828,295	 	Ferroelectric Liquid Crystal infrared Chopper	 	4/6/01
	09/854,181	 	Partially Fluorinated Liquid Crystal Materials	 	5/11/01
	09/885,862	 	Bookshelf Liquid Crystal Materials and Devices	 	6/20/01
	[*****]	 	 	 	 
	[*****]	 	 	 	 
	[*****]	 	 	 	 
	09/992,097	 	Active Matrix Liquid Crystal Image Generator with Hybrid Writing Scheme	 	11/5/01
	09/989,976	 	Dual Mode Near-Eye and Projection Display System	 	11/20/01
	[*****]	 	 	 	 
	10/067,516	 	Optics Arrangements including Light Source Arrangements for an Active Matrix Liquid Crystal Image Generator	 	2/4/02
	[*****]	 	 	 	 

Restricted and Confidential

Displaytech Owned Pending Foreign Patent Applications  

	Date Filed
 
	 	App. No.
	 	Country
	 	Title

	7/22/91	 	2,087,592	 	Canada	 	Ferroelectric Liquid Crystal Compositions Containing Chiral Haloalkoxy Tail Units
	2/05/93	 	9300375-4	 	China	 	High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein
	2/05/93	 	43 03 335.0	 	Germany	 	High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein
	2/08/93	 	2088934	 	Canada	 	High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein
	2/08/93	 	5-20412	 	Japan	 	High Contrast Distorted Helix Effect Electro-Optic Devices and Tight Ferroelectric Pitch Ferroelectric Liquid Crystal Compositions Useful Therein
	8/04/93	 	5-193688	 	Japan	 	Ferroelectric Liquid Crystal Compounds with Cyclohexenyl Cores and Compositions Containing Them
	12/14/95	 	95943444.0	 	Europe	 	Active Matrix Liquid Crystal Image Generator
	2/17/99	 	2,321,252	 	Canada	 	Image Generating System
	2/17/99	 	99909497.2	 	Europe	 	Image Generating System
	2/17/99	 	2000-532773	 	Japan	 	Image Generating System
	2/17/99	 	01100431.6	 	Hong Kong	 	Image Generating System
	2/17/99	 	10-2000-7008981	 	Korea	 	Image Generating System
	8/29/00	 	PCT/US00/23645	 	PCT	 	Liquid Crystal Operation
	8/31/01	 	PCT/US01/27182	 	PCT	 	Partially Fluorinated Liquid Crystal Materials
	11/20/01	 	PCT/US01/	 	PCT	 	Dual Mode Near-Eye and Projection Display System
	11/21/01	 	PCT/US01/	 	PCT	 	Modulation Algorithm for Light Modulator

Restricted and Confidential

Patents Licensed from Clark and Lagerwell  

	Country
 
	 	Patent No.
	 	Title
	 	Issue Date
	 	Expires

	United States	 	RE 34,942	 	Surface Stabilized Ferroelectric Liquid Crystal Devices with Means for Aligning LC molecules at Omega (Alpha) from Normal to the Means	 	5/16/95	 	6/20/06
	

United States	
 	

RE 34,949	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices	
 	

5/23/95	
 	

9/25/07
	

United States	
 	

RE 34,950	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with Means for Aligning LC Molecules at Omega(alpha) from Normal to the Means	
 	

5/23/95	
 	

3/21/06
	

United States	
 	

RE 34,966	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with LC Molecules Aligned at Angle Omega (Alpha) from Normal to Substrates .	
 	

6/13/95	
 	

1/7/03
	

United States	
 	

RE 34,967	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with Plural Orientation States of Different Colors or Separated by Domain Walls	
 	

6/13/95	
 	

7/13/10
	

United States	
 	

RE 34,973	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with Total Reflection in One State and Transmission in Another State	
 	

6/20/95	
 	

1/28/09
	

United States	
 	

5,555,111	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices with Dielectric Torques Greater Than Ferroelectric Torques	
 	

9/10/96	
 	

3/21/06
	

United States	
 	

5,555,117	
 	

Surface Stabilized Ferroelectric Liquid Crystal Devices	
 	

9/10/96	
 	

9/10/13

Patents Licensed from University Research Corp  

	Patent No.
 
	 	Title
	 	Issue Date
	 	Expires

	5,168,381	 	Smectic Liquid Crystal Devices Using SSFLC and Electroclinic Effect Based Cells	 	12/1/92	 	12/1/09
	5,178,793	 	Ferroelectric Liquid Crystal Compounds and Compositions	 	1/12/93	 	1/12/10
	5,543,078	 	Ferroelectric Liquid Crystals for Nonlinear Optics Applications	 	8/6/96	 	8/6/13
	5,596,434	 	Self-Assembled Monolayers for Liquid Crystal Alignment	 	1/21/97	 	1/21/14
	5,637,256	 	Ferroelectric Liquid Crystals for Nonlinear Optics Applications	 	6/10/97	 	6/10/14
	5,658,493	 	Ferroelectric Liquid Crystals for Nonlinear Optics Applications	 	8/19/97	 	8/19/14

US Patents Licensed from Georgia Tech Research Corp  

	Patent No.
 
	 	Title
	 	Issue Date
	 	Expires

	6,141,072	 	System and Method for Efficient Manufacturing of Liquid Crystal Displays	 	10/31/00	 	4/2/18
	6,469,761	 	System and Method for Efficient Manufacturing of Liquid Crystal Displays	 	10/22/02	 	4/2/18

Restricted and Confidential

US Patent Applications Licensed from Georgia Tech Research Corp  

	App. No.
 
	 	Title
	 	Date Filed

	09/669,180	 	System and Method for Efficient Manufacturing of Liquid Crystal Displays	 	9/25/00

Foreign Patent Applications Licensed from Georgia Tech Research Corp  

	Priority Date
 
	 	App. No.
	 	Country
	 	Title

	4/3/98	 	Not yet Avail	 	Japan	 	System and Method for Efficient Manufacturing of Liquid Crystal Displays
	4/3/98	 	98915254.1	 	Europe	 	System and Method for Efficient Manufacturing of Liquid Crystal Displays
	4/3/98	 	2,285,924	 	Canada	 	System and Method for Efficient Manufacturing of Liquid Crystal Displays
	4/3/98	 	10-1999-7009012	 	S.Korea	 	System and Method for Efficient Manufacturing of Liquid Crystal Displays

US Patents Licensed from Agilent Technologies, Inc.  

	Patent No.
 
	 	Title
	 	Issue Date
	 	Expires

	6,249,269	 	Analog Pixel Driver Circuit for an Electro-Optical Material-Based Display Device	 	6/19/01	 	4/30/18

US Patent Applications Licensed from Agilent Technologies, Inc.  

	Title
 

	Electro-Optical Material-Based Display Device Having Analog Pixel Drivers
	[*****]
	[*****]

Displaytech Owned Trademark Registrations and Applications  

        BRIGHTEYESTM

                Pending in the US 

        CHRONOCOLOR®

                Registered in the US 

        DISPLAYTECH®

                Registered in the US and Japan 

                Pending in Europe 

        DESIGN—Stylized
Displaytech Red Block

                Registered in the US 

        FLCD®

                Registered in the US 

        LIGHTCASTER©

                Registered in the US, Europe, Japan and Korea 

Restricted and Confidential

        LIGHTMONKEYTM

                Pending in the US 

        LIGHTVIEWTM

                Pending in the US 

        MYLIGHTTM

                Pending in the US 

        WE
MAKE LIGHT WORKTM

                Pending in the US 

Restricted
and Confidential 

QuickLinks

LOAN AND SECURITY AGREEMENTQuickLinks
 -- Click here to rapidly navigate through this document
  

Exhibit 10.22  

        [*****] = Certain
confidential information contained in this document, marked with brackets, has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 

 
 

MANUFACTURING AGREEMENT    
    

        This agreement ("Agreement") is dated December 10, 1998, and is entered into by and between Displaytech, Inc., a corporation organized and existing
under the laws of the State of Colorado in the United States of America, with its principal place of business located at 2602 Clover Basin Drive, Longmont, CO 80503 U.S.A. ("DT"), and Miyota
Co., Ltd., established and existing under the laws of Japan, with its registered office located at 4107-5 Miyota-machi, Kitasaku-gun, Nagano-ken,
389-0294 Japan ("MYT"; along with DT a "Party", and together the "Parties"). 

RECITALS  

        WHEREAS, DT possesses technology intellectual property rights and know-how related to certain
micro-display devices using ferroelectric liquid crystals ("FLCs"); and 

        WHEREAS, MYT possesses know-how and expertise related to the mass manufacture of various types of micro-electronic devices;
and 

        WHEREAS, DT and MYT desire to enter into an agreement with respect to the performance by MYT of certain manufacturing services in relation
to certain micro-display products using FLCs that are based on or incorporate or include DT's technology intellectual property rights or
know-how, or both, which performance of MYT manufacturing services is for, upon the order of or on behalf of DT without regard to what the identity of the customer, assembler (if any),
packager (if any) or user thereof is or may be; 

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

1.     DEFINITIONS.  

As
used in this Agreement, the following terms shall have the meanings set forth below: 

	1.1
	"Products" shall mean all FLC micro-display glass on silicon and glass on glass devices which are based on or incorporate or include
DT's technology intellectual property rights or know-how, or both.

	1.2
	"Finished Products" shall mean Products that are completely processed and tested, and ready for shipment to the customer or other
person designated as the recipient thereof in the order pursuant to which such Finished Products have been manufactured by MYT.

	1.3
	"Semi-Finished Products" shall mean Products that are partially processed, meaning that they shall have been completed
through the FOL and MOL processes, but not the EOL processes.

	1.4
	"FOL" (Front of Line) shall mean all manufacturing processes required to produce good wafer to glass or glass to glass assembly of a
Product or Products. The assembly will be properly spaced and glue lines in place. The assembly will be ready for MOL processing.

	1.5
	"MOL" (Middle of Line) shall mean the processes required to properly singulate, fill, seal and test the silicon to glass, and the glass
to glass assembly of a Product or Products so that each such Product is ready for EOL processing. 

1

 
	1.6
	"EOL" (End of Line) shall mean the final processes in the production of a Product or Products, each of which Products shall include all
packaging and final testing thereof.

	1.7
	"Manual" shall, when used with respect to an operation in the manufacturing process (whether FOL, MOL or EOL), mean an operation
performed solely by an operator who is a natural person, with no automation provided or associated therewith.

	1.8
	"Yield" shall, when used with respect to a specified part or Product, mean the number of good parts or Product of the type specified
versus the number of total parts or Products of the type specified produced by a process during a defined time period, and shall be determined by the following formula: 

	Y	 	=	 	GP

TP
	

Where Y	
 	

=	
 	

Yield in or for the time period in question
	

GP	
 	

=	
 	

the number (measured in units) of good parts or Products of the specified type produced in such time period by MYT
	

TP	
 	

=	
 	

the number (measured in the same units) of total parts or Products of such specified type produced in such time period by MYT

And
"good" means a part or Product that is produced by MYT under this Agreement and that meets or exceeds the quality control standards therefor that are herein or hereinafter specified by the Parties
with respect thereto 

	1.9
	"Yield Rates" shall, when used with respect to a specified part or Product, mean the average Yield with respect to such part or
Product, computed over many days or weeks of production, the number of such days or weeks to be mutually agreed to from time to time, on a reasonable basis, by the Parties.

	1.10
	"Qualify" or "Qualification", or words of like purport, shall, as related to a
manufacturing facility or a manufacturing process, mean that such manufacturing facility or such particular manufacturing process has been released to volume manufacturing by the Parties with respect
to a specified Product because such Product has been produced at such facility or pursuant to such process with predictable Yields that are acceptable to the Parties and has passed all tests required
by the Parties to determine that the Product specification is being met within the quality control standards therefor that are herein or hereinafter specified by the Parties with respect thereto. 

2.     DESIGN AND MANUFACTURE OF PRODUCTS.  

        2.1    Manufacture of Products.    DT and MYT agrees that MYT will manufacture Products for,
upon the order of or on behalf of DT upon the written request or notification of DT, subject to the terms and conditions hereof, during the term of this Agreement and any renewal thereof. 

        2.2    Products Covered by Agreement.    This Agreement governs all Products, whether
currently existing or subsequently developed during the term of this Agreement, or any renewal thereof. 

        2.3    Design of Products.    DT will be responsible for the design and development of the
Products. Each type of Product, such as, but not limited to, quarter VGA ("QVGA"), shall be identified and described in detail and listed in a schedule attached hereto as  Schedule 2.3, Product Description. Types of Product subsequently developed shall be added to Schedule 2.3 after specifications and
drawings have been developed for such Products. DT shall have the responsibility for developing such Product 

2

 

specifications
and drawings. The design of each Product will be in accordance with DT's Product specifications, which will include, among other things, product reliability, for quality control
purposes, and will be set forth in drawings, or in other written or computer aided design data, and delivered to MYT. MYT agrees to use the Product design only for manufacturing Products. If MYT
believes Product can be manufactured more efficiently or for less cost by changing DT's Product design, MYT agrees to inform DT of such changes and such changes will be incorporated in the Product
design upon DT's written consent. 

        2.4    Manufacturing Processes for Products.    Displaytech will be responsible for the
development of manufacturing processes for the Products, whether such processes are implemented in DT's existing facilities in Longmont, Colorado, or in MYT's existing facilities in Nagano, Japan. As
provided below, MYT agrees to collaborate with DT toward the development and refinement of manufacturing processes for the Products, particularly in connection with the design and installation of
manufacturing facilities in Longmont, Colorado. DT will document its manufacturing processes and know-how and include it in a schedule attached hereto as  Schedule 2.4, Process Procedure Documentation. Such documentation will include specifications for each process, a process flow chart and certain
standards, such as, but not limited to, assembly, environmental and safety standards. All manufacturing processes and know-how subsequently developed during the term of this Agreement or
any renewal period, whether by DT or MYT, will be documented and added to Schedule 2.4. DT will furnish such documentation to MYT, free of charge, for the sole purpose of enabling MYT to
manufacture Product. MYT agrees that, if it determines that Product can be manufactured more efficiently or for less cost by changing, adding to or deleting from any of DT's manufacturing processes,
it will inform DT, and such changes will be incorporated into DT's manufacturing processes upon DT's written consent. 

        2.5    Process or Design Changes.    

        2.5.1    By DT.    DT may change Product design, Product specification or Product
manufacturing process requirements at any time upon thirty (30) days written notice to MYT, and MYT agrees to implement each such change on a reasonable, timely basis. If either Party believes
that any such change significantly affects manufacturing equipment requirements, the manufacturing processing fee, the Product price, or the delivery or quality performance of a Product, then that
Party will prepare and deliver to the other Party a written analysis of such impact. No change will be implemented until MYT and DT have discussed the proposed change, (including where applicable,
such written analysis). If any change required by DT hereunder results in agreed upon documented increased costs to MYT, then MYT will be able to recover such costs through increased depreciation
charges (over a five (5) year period) to the price of the related Finished Product, or by some other means agreed upon by DT and MYT; provided, however, that if any such change results in a
decrease in the manufacturing cost of the
related Finished Products, then DT and MYT shall share such decrease equally. No change in the manufacturing processing fee or Product price will be made as a result of such DT change, unless agreed
to by DT and MYT after completion of such review. The provisions of this paragraph shall be subject to the provisions of paragraph 2.5.3 of this Agreement. 

        2.5.2    By MYT.    If MYT wishes to change a manufacturing process in Nagano, then MYT will
discuss such proposed change with DT and request its approval. If DT approves the change, then DT's responsibility for the process will include such modification. If either Party believes that any
change to the manufacturing process proposed by MYT significantly affects the manufacturing processing fee, the Product price, or the delivery or quality performance of a Product, then that Party will
prepare and deliver to the other Party a written analysis of such impact. No change will be implemented until MYT and DT have discussed the proposed change (including, where applicable, such written
analysis). No change in the manufacturing processing fee or Product price will be made as a result of such DT change, unless agreed to by DT and MYT after completion of such review. If any change
recommended by MYT and accepted by DT hereunder results in 

3

 

agreed
upon documented increased costs to MYT, then MYT will be able to recover such costs through increased depreciation charges (over a five (5) year period) to the price of related Finished
Product, or by some other means agreed upon by DT and MYT; provided, however, that if any such change results in a decrease in the manufacturing cost of related Finished Products, then DT and MYT
shall share such decrease equally. The provisions of this paragraph shall be subject to the provisions of paragraph 2.5.3 of this Agreement. 

        2.5.3    Emergencies.    In the case where an emergency change to a manufacturing process
needs to be made, whether in Longmont or in Nagano, the Parties will confer and use their best efforts to complete the change within seven (7) days of the discovery of the need. 

        2.6    MYT Responsibility for Manufacture of Products.    MYT agrees that, subject to the
terms and conditions hereof, and purchase orders issued by or on behalf of DT, it will manufacture all Product in accordance with the applicable Product design, will meet all Product specifications
contained in Schedule 2.3 attached hereto, and will act in accordance with the process procedures contained in Schedule 2.4 attached hereto. 

3.     MYT PRIVATE LABEL PRODUCTS  

        3.1    Applications.    DT agrees to sell Finished Product to Miyota for camcorder viewfinder,
wristwatch-type information terminals, and professional TV broadcast camera viewfinder applications ("Private Label Products" or "PLPs"). Subject to the prior written agreement of Nissho
Electronics Co. ("Nissho"), DT's exclusive distributor of Products in Japan, DT agrees that it will sell Finished Product only to MYT in Japan for such PLPs. If Nissho consents to MYT's exclusivity
for PLPs, then MYT will agree to make minimum annual purchases of Finished Products for such PLPs to maintain such exclusivity, which minimum requirements shall be set forth in  Schedule 3.1, Minimum Annual Volume
Requirements for PLP Exclusivity hereto. 

        3.2    Product Forecasts.    MYT agrees to provide nine (9) month rolling forecasts of
its projected sales of Private Label Products to DT to enable DT to provide MYT with a similar nine (9) month forecast of its manufacturing needs. Orders for PLPs will be processed in
accordance with the ordering process for other Products as described below. 

        3.3    Price of Private Label Products.    The price for the Finished Products for PLPs sold
by DT to MYT will be determined in accordance with a formula which will take into account such factors as [*****]. Such formula will be included in a schedule which is attached
to this Agreement as Schedule 3.2, Pricing Formula for Finished Products for Private Label Products. 

        3.4    Capacity Constraints.    MYT acknowledges and agrees that in the event its capacity to
manufacture Products becomes constrained, with the result that MYT cannot fill all of DT's Product orders: 1) up to forty percent (40%) of its available manufacturing capacity must be used to
manufacture Products ordered by or on behalf of DT [*****], and 2) DT may otherwise allocate the remaining MYT manufacturing capacity among DT's other customers,
including MYT, in any manner determined solely in the discretion of DT. 

4.     INSTALLATION OF MANUFACTURING FACILITIES.  

        4.1    Timetable.    DT and MYT agree to collaborate fully and to use their best efforts to
cause the installation of complete manufacturing facilities for the Products in DT's existing plant in Longmont, Colorado, and in MYT's existing plant in Nagano Prefecture, Japan in accordance with
the timetable attached hereto as Schedule 4.1, Timeline for Installation of Manufacturing Facilities, and as described below. 

        4.2    DT's Longmont Plant.    DT agrees that during the period from January 1999
through April 1999 it will design, install, debug and Qualify FOL, MOL and EOL manufacturing processes at 

4

 

its
plant in Longmont, Colorado. MYT agrees to undertake reasonable efforts, under the circumstances, at its expense, to work with DT in designing, installing, debugging and Qualifying the FOL, MOL
and EOL manufacturing processes in Longmont. It is expected that MYT's work and assistance to DT in designing and installing the Longmont FOL, MOL and EOL manufacturing processes will provide MYT with
valuable information and experience in regard to designing FOL, MOL and EOL manufacturing processes in Nagano, Japan. The goal for DT's Longmont manufacturing facility is for a Manual, dependable, and
stable manufacturing process. The Parties acknowledge that the Longmont FOL, MOL and EOL manufacturing processes may not have high Yield Rates, and that such processes may not be replicated at MYT's
manufacturing facility in Nagano, Japan. 

        4.3    Cost of Longmont Plant.    DT shall bear the entire cost of the equipment, tooling and
materials used for the installation and operation of the FOL, MOL and EOL manufacturing processes at its Longmont plant. DT shall own all such equipment, materials and tooling, as well as the design
of the manufacturing process. DT will be responsible for the cost of operation of its Longmont facility. 

        4.4    Operation of Longmont Plant.    The target date for completing Qualification and
beginning full scale operation of the Longmont FOL, MOL and EOL manufacturing processes is May 1, 1999. It is expected that by such date DT will begin full scale production of
Semi-Finished Products. The Semi-Finished Products will be shipped to MYT's plant in Nagano for EOL processing, as described below. DT will be responsible for Yield and quality
of the Semi-Finished Products assembled at its Longmont plant. 

        4.5    MYT's EOL Manufacturing Process in Nagano.    MYT agrees that during the period of
January through April 1999 it will design, install, and debug an EOL manufacturing process for Products at its existing facility in Nagano, Japan, which has an initial capacity as set forth in
Section 4.6. DT agrees to work with MYT in designing, installing, debugging, and Qualifying MYT's EOL manufacturing processes in Nagano, and the expenses incurred by DT in Nagano shall be borne
solely by DT. 

        4.6    Capacity of EOL Manufacturing Processes.    The initial capacity of the manufacturing
line for the EOL manufacturing process will be determined prior to ordering long lead time equipment for the EOL process, and shall be based on the highest monthly total in DT's initial nine
(9) month Product demand forecast as provided in Section 5.3 below, plus twenty percent (20%). 

        4.7    Cost of Nagano EOL Manufacturing Process.    MYT shall bear the entire cost of the
equipment, tooling and materials used for the installation of the EOL manufacturing process for Products at its Nagano
plant. MYT shall own all such equipment, materials and tooling. MYT will be responsible for all costs of operation of its EOL manufacturing process at its Nagano facility. 

        4.8    Qualification and Operation of Nagano EOL Manufacturing Processes.    The target date
for having MYT's EOL manufacturing process capable of initial production is May 1, 1999. Completion of Qualification and full scale production of MYT's EOL manufacturing process is expected to
be no later than July 1, 1999. MYT will notify DT of the time MYT believes the EOL manufacturing process is ready for Qualification, and DT, after receipt of such notice, will conduct an
inspection of the manufacturing line as a condition to Qualification. MYT will be responsible for compliance with the standards set forth in this Agreement with respect to the Yield and quality of the
Finished Products it produces from its EOL manufacturing process. 

        4.9    MYT's FOL and MOL Manufacturing Processes in Nagano.    MYT agrees that during the
period of January through July 1, 1999, based in part on its experience working with DT to design and install a manufacturing line at Longmont for FOL and MOL manufacturing processes, it will
work with DT to design a manufacturing line for FOL and MOL manufacturing processes at MYT's plant in Nagano, Japan. Such manufacturing line will be based in part on the technology and
know-how developed by DT with MYT's help for the Longmont FOL and MOL manufacturing processes. 

5

 

Beginning
February 1, 1999 MYT agrees to discuss with DT at least monthly MYT's assessment of the design and operation of the FOL and MOL manufacturing processes to be installed at DT's
Longmont facility in relation to use of the same or a similar design at MYT's facility in Nagano. By July 1, 1999 MYT agrees to make a decision as to whether or not to order long lead time
equipment for the Nagano FOL manufacturing process based on MYT's and DT's assessment of the Longmont FOL process. In assessing the Longmont FOL process MYT and DT will take into consideration the
stability of the process as related to current Yield, and the stability of the process as related to the trend in Yields. If MYT and DT agree that the Longmont FOL process is not yet stable enough to
predict commercially viable Yields, and that more work is needed on the Longmont FOL process, then they agree to use their best efforts until August 31, 1999 to improve such process. If, on
August 31, 1999, the Parties cannot agree that the Longmont FOL process is stable enough to predict commercially viable Yields, and MYT decides not to order long lead time equipment for its
Nagano plant, then either Party may terminate this Agreement as it relates to MYT performing FOL and MOL manufacturing processes for DT in Nagano, by giving the other Party thirty (30) days
written notice of such termination. If either Party gives such notice of termination, then MYT agrees that it will continue to perform EOL manufacturing services for DT's Products in Nagano; provided,
however, because DT would have to seek another manufacturer to perform MYT's FOL and MOL operations, DT's obligations hereunder related to using MYT exclusively to manufacture Products, and its
obligation to sell Private Label Products exclusively to MYT, shall also be terminated. If the Parties agree that MYT should order the long lead time equipment for the FOL Manufacturing process in
Nagano, then during the period October 1, 1999 through March 1, 2000 MYT agrees to complete installation of and debug its manufacturing line for FOL and MOL manufacturing processes, and
to complete Qualification of such line by March 31, 2000, with full scale production beginning April 1, 2000. MYT will notify DT of the date MYT believes the FOL and MOL manufacturing
processes are ready for Qualification, and DT, after receipt of such notice, will conduct an inspection of the manufacturing line as a condition to Qualification. MYT will have responsibility for
compliance with the standards set forth in this Agreement with respect to Yield and quality of Products produced at its Nagano facility. 

        4.10    Capacity of FOL and MOL Manufacturing Processes.    The initial capacity of the
manufacturing line for the FOL and MOL manufacturing process will be determined prior to ordering long lead time equipment for the FOL and MOL manufacturing processes, and shall be based on the
highest monthly total of DT's most recent (prior to the order time) nine (9) month Product demand forecast as provided in Section 6.2 below, plus twenty percent (20%). 

        4.11    Changes to Capacity.    If, as a result of DT's Product demand forecasts and purchase
orders, DT and MYT, after discussion, agree that the manufacturing line at Nagano, or any part thereof, should be changed to increase its capacity, then DT will give MYT written notice that the change
needs to be made, and MYT will make the change within six (6) months of the date of the written notice by adding capital equipment at its expense. If DT's Product demand forecasts indicate that
DT's Product demand will exceed the capacity of the manufacturing line at Nagano, but that such forecasts will not require the addition of capital equipment, DT and MYT will discuss alternative
methods of meeting capacity demand, such as 1) increasing workers' hours (overtime), 2) adding workers, 3) adding shifts, or 4) streamlining the manufacturing process.
After discussion, the Parties will agree (and each Party agrees not to unreasonably withhold its agreement) on which alternative or alternatives should be undertaken, and MYT will thereafter use its
best efforts to implement such alternative(s) as quickly as possible, but in no event longer than one (1) month for alternative 1), and two (2) months for alternatives 2) through
4) after the date of agreement of the Parties. 

5.     INITIAL MANUFACTURING SERVICES.  

        5.1    EOL Manufacturing Services at MYT's Nagano Plant.    The initial manufacturing services
performed by MYT for DT will consist of EOL processing in Nagano of Semi-Finished Products 

6

 

supplied
by DT from its Longmont plant. MYT will perform such EOL processing in order to produce Finished Products for delivery to DT or, at DT's direction, to its customers. 

        5.2    Forecasts and Orders.    

        5.2.1    Forecasts.    As soon as reasonably possible after execution of this Agreement by the
Parties, and to the extent it is able to do so, DT will furnish to MYT a written, non-binding forecast of the quantity and type of each Product DT expects to sell to its customers over the
next nine (9) months. This forecast will be updated monthly thereafter on or before the fifth day of such month. After DT
and MYT have established the Product ordering procedures in accordance with Section 5.2.2 below, and at a time in 1999 to be determined by the Parties, DT will issue an irrevocable purchase
order to MYT for Product listed in the forecast in accordance with the Product ordering procedures agreed upon by the Parties.. 

        5.2.2    Orders.    The Parties agree to cooperate and work diligently to establish ordering
procedures for the Products manufactured hereunder, which procedures shall be set forth in a schedule which is attached hereto as Schedule 5.2, Product Ordering
Procedures. The Parties anticipate there may be distinct ordering procedures for the three separate manufacturing phases provided for hereunder: (i) where DT performs
FOL and MOL manufacturing processing in Longmont and MYT performs EOL manufacturing processing in Nagano, (ii) where MYT has Qualified its FOL and MOL manufacturing processes in Nagano, but DT
supplies Semi Finished Products and/or materials and component parts to MYT from it Longmont plant, and (iii) where MYT purchases materials and component parts directly from suppliers. Such
procedures shall be based on and coordinated with DT's and MYT's contract obligations to its materials and component parts suppliers, the lead times for such materials and component parts, and the
lead time requirements of DT's customers. Product orders will also be based on the forecasts set forth in Section 5.2.1 above, and the Parties expect that such orders will be made on a weekly
basis. Each Party agrees to keep each other informed of the status of its orders for materials and component parts for the Products, particularly orders for silicon wafers. All suppliers to MYT must
be approved in advance in writing by DT. Any purchase order issued in accordance with the Product ordering procedures will state lead times for the Product type, quantity, delivery date or dates,
delivery instructions and price per unit of the Finished Product ordered. Notwithstanding Section 5.3 following, MYT will be bound by the provisions of the purchase order issued by DT,
regardless of whether MYT acknowledges or otherwise signs the purchase order, unless MYT reasonably objects to such provision in writing. 

        5.3    Acceptance and Acknowledgement.    MYT will accept each purchase order issued by DT
within seven (7) days of issuance (unless such purchase order exceeds by more than twenty five percent (25%) the number of units of the covered Product as set forth in the forecast for the
applicable time period), and will acknowledge in writing the receipt and acceptance of each such purchase order, and will confirm delivery dates for quantities of Finished products that are the
subject of the purchase order. If the quantity of Product ordered for any month exceeds the forecasted number of units for that Product for such month by more than twenty five percent (25%), then the
Parties agree to discuss supply of such excess number of units. In any event, MYT will acknowledge and accept DT's purchase order for the maximum quantity of Product authorized, that is, one hundred
twenty five percent (125%) of the forecasted amount. In the event of any discrepancy between (1) the provisions set forth in this Agreement and (2) any purchase order, purchase order
confirmation or acknowledgement, invoice, or other communication between the Parties relating to a purchase order, the provisions of this Agreement shall prevail. 

        5.4    Supply of Semi-Finished Product by DT.    DT agrees to timely supply
sufficient quantities and types of Semi-Finished Products to MYT to enable MYT to process and timely deliver the quantities and types of Finished Products ordered by DT. A complete list of
the materials and component parts 

7

 

for
each type of Semi-Finished Product that is necessary for the assembly of Finished Products ordered by DT is or will be set forth in a schedule which is attached hereto as  Schedule 5.4, Materials and Component
Parts. The Semi-Finished Products shall be processed, inspected and electrically tested at DT's
Longmont factory before being shipped to MYT. 

        5.5    Cost of Semi-Finished Products.    DT shall not charge MYT for the
Semi-Finished Products shipped for EOL processing by MYT. DT shall be responsible for all costs related to shipping the Semi-Finished Products to MYT's Nagano plant, including
shipping, insurance, and any import or export duties applicable to shipment of the Semi-Finished Products to MYT. MYT agrees to notify DT of any necessary taxes, and import or export
duties which are applicable to shipment of the Semi-Finished Products to MYT. 

        5.6    Other Terms.    All other terms related to full scale manufacturing services, as set
forth below, shall apply to the initial EOL manufacturing services provided by MYT under this Article 5. 

6.     FULL SCALE MANUFACTURING SERVICES  

        6.1    FOL, MOL and EOL Manufacturing Services at MYT's Nagano Plant.    After MYT has
installed, debugged and Qualified a manufacturing line for FOL and MOL manufacturing processes in Nagano, MYT will perform substantially all of DT's high volume manufacturing of Products, and will do
so from its plant in Nagano, including FOL, MOL and EOL. 

        6.2    Forecasts, Orders Acceptance and Acknowledgement.    The procedures for forecasts,
orders, acceptance and acknowledgement established and contained in Sections 5.2 and 5.3 above shall apply to and be continued with respect to MYT's full scale manufacturing operations. 

        6.3    Product Fluctuation.    

        6.3.1    Rapid Increase in Product Demand.    In the event that DT's Product forecasts and
orders increase by one hundred percent (100%) or more within any six (6) month period, the Parties agree to meet to discuss courses of action to accommodate such increase. The Parties will
consider and agree (and each Party will not unreasonably withhold its agreement) on any of those actions described in Section 4.11 hereof. 

        6.3.2    Rapid Decreases in Product Demand.    In the event that DT's Product forecasts and
orders over any six month period indicate that the actual or projected purchases of Product by DT will fall below the agreed upon minimum Product purchase, as set forth in Section 9.1 hereof,
then the Parties will meet to discuss and agree (and each Party will not unreasonably withhold its agreement) upon a course of action to remedy shortfalls in purchase, including, but not limited to,
increasing Product sales or orders by DT, or increasing the per unit price of Product, in order to amortize on schedule the cost of the manufacturing equipment installed by MYT for the DT
manufacturing line 

8

   
        6.4    Supply and Purchase of Semi-Finished Product for Full Scale
Manufacturing.    After MYT's manufacturing line for FOL, MOL and EOL is Qualified for full scale production, DT agrees to supply MYT with Semi-Finished
Products and the materials and component parts listed in Schedule 5.4, free of charge, for a period of three (3) months from the date of Qualification, and to enable MYT to produce
Finished Products to meet DT's orders. After such initial three (3) month period, DT agrees to supply the materials and component parts listed in Schedule 5.4 to MYT free of charge for
an additional three (3) month period. Thereafter, except for the supply of FLCs from DT, MYT shall purchase all materials and parts necessary to produce Finished Products directly from the
vendors and suppliers of such materials and parts. DT agrees to supply FLC materials to MYT free of charge during the term of this Agreement and any renewal period thereof for the Production of
Finished products to DT. DT agrees that after the three (3) month period for supplying Semi-Finished Products to MYT as stated above, it will restrict the capacity of its Longmont
plant to twenty (20) wafers per day per shift. 

        6.5    Finished Products.    All Finished Products produced by MYT will conform to the Product
specifications for the Products ordered, as set forth in Schedule 2.3, Product Description, and the warranties, and quality standards agreed upon by the Parties for the Finished Products
ordered, as set forth herein. 

        6.6    Final Quality Control Inspection and Testing of Finished Products.    MYT agrees to
conduct final quality control inspection and testing of all Finished Products in accordance with testing and acceptance criteria listed on Schedule 6.6, Quality and
Acceptance Tests, attached hereto, before releasing them to DT or DT's customers. 

        6.7    Delivery.    MYT agrees to deliver the quantities of Finished Product ordered to DT or
its customers, as may be designated by DT, on the delivery dates specified in the purchase order. MYT will strive for one hundred percent (100%) on time delivery of the Finished Products, defined as
receipt of the Finished Products by DT specified carrier on or before the delivery date specified in the purchase order. MYT agrees to promptly notify DT in the event delivery of the Finished Products
is delayed for any reason, and to use its best efforts to correct such delay 

        6.8    Shipment Terms, Title and Risk of Loss.    The Finished Products shall be shipped from
MYT's Nagano plant FOB Nagano (as defined in the 1990 INCO Terms, except that the term is not limited to sea or inland waterway transport). Title and risk of loss for a Finished Product passes to DT
when MYT delivers the Finished Product to the carrier for shipment to DT or its designated customer. If DT's customer for Finished Products is MYT, then title and risk of loss for a Finished Product
passes first to DT upon completion of the manufacturing processes for such Product, then to MYT upon receipt by DT of written notice of completion of the Product by MYT. 

        6.9    Warranty.    MYT warrants to DT that each Finished Product shall be manufactured in
accordance with the provisions of Section 2.6 hereof, and shall be free from defects in workmanship and materials for a period of one (1) year from the date of delivery to DT or its
designated customer, and will be free and clear of all liens, encumbrances, and other claims against title at the time of delivery. The foregoing warranty shall not apply to (i) DT consigned or
supplied materials and Semi-Finished Products, (ii) any Finished Product that is abused, damaged, altered or misused by DT, any DT customer, or any carrier into whose possession the
Finished Product has been delivered. 

        6.10    Non-Conforming Finished Products.    DT's remedy for any breach of the
Warranty set forth in Section 6.9 shall be, at DT's election, repair or replacement of the Finished product by MYT, or refund of the price paid for the such non-conforming Finished
Product. 

        6.11    Quality.    MYT shall maintain an acceptable documented quality system (such as an ISO
9002 certified quality program or equivalent) at its Nagano plant. MYT shall make available for DT 

9

 

review,
quality programs and supporting documentation. MYT programs shall include, but not be limited to, processes, and implementing and corrective action. 

7.     PRICE AND PAYMENT.  

        7.1    Price.    The price payable by DT to MYT for manufacture of the Products shall be
denominated in U.S. dollars and calculated in accordance with a formula to be determined and agreed to by the Parties (which agreement shall not be unreasonably withheld by either Party) and shall be
set forth in a schedule attached hereto as Schedule 7.1, Price. The formula shall take into consideration [*****]. Upon
the request of either Party, the Price for any given Product or Finished Product shall be reviewed at six (6) month intervals or on any written notice of at least one hundred eighty
(180) days. 

        7.2    Payment.    Payment by DT to MYT for Finished Products shall be due upon receipt of
payment by DT for the Finished Products from its customers, but in no event more than thirty (30) days after DT's receipt of such Finished Products (in accordance with the terms of this
Agreement, such receipt being deemed to have occurred when such Finished Products are receipted by DT, its customer or such other person as shall be designated as the proper recipient thereof in
connection with the purchase order pursuant to which such Finished Products were manufactured), and shall be calculated in accordance with the applicable provisions of this Agreement (taking into
account all adjustments effected pursuant
to any provision of this Agreement, including, but not limited to, any of the provisions of Section 8 hereof) and shall be made in U.S. dollars by an acceptable letter of credit established two
(2) weeks prior to date of delivery with a bank reasonably satisfactory to MYT. Such letter of credit shall remain open until drawn on by MYT. If the yen/US dollar exchange rate fluctuates at a
rate equal to or less than ten percent over any successive six (6) month period during this Agreement, then the payments due under this Agreement for such period shall be made based on the
average exchange rate over such six (6) month period. If the exchange rate fluctuates more than ten percent (10%) over any successive six (6) month period during this Agreement, then the
Parties agree to renegotiate the exchange rate and shall agree to the exchange rate to be used for payments under this Agreement, which agreement shall not be unreasonably withheld by either Party. 

8.     YIELD AND PRICING.  

        8.1    Yield of MYT EOL Manufacturing Process.    MYT will price the Finished Product on which
it performs EOL processing based on Yield Rates of [*****]. The agreed upon price for such Finished Products will be firm unless Yield Rates [*****]. In
such event, the Parties will meet to determine the cause of the decrease in Yield, and depending on such cause, the price may be changed by agreement of the Parties, which agreement shall not be
unreasonably withheld by either Party. The provisions of this Section 8.1 shall become void and of no further force or effect at the time MYT's manufacturing line for FOL and MOL manufacturing
processes is Qualified. 

        8.2    Yield as a Factor in Pricing Full Scale Manufacturing Product.    The Parties recognize
that Yield Rates could impact the cost of manufacturing Finished Products, and each agrees to discuss the effects of Yield in regard to pricing Finished Products. To the extent reasonable, each of the
Parties agrees to take Yield into consideration in the pricing formula established in Schedule 7.1. 

        8.3    Yield Rates Information Exchange and Meetings.    Each of the Parties agrees to have an
open exchange of information regarding Yield, and agrees to meet with the other Party, at least monthly, by telephone conference call or otherwise to discuss Yield. MYT agrees to provide information
regarding Yield Rates daily to DT by electronic means. 

10

 

9.     MINIMUM ORDERS.  

        9.1    Minimum Commitment.    During the period from July 1, 1999 to June 30,
2001 DT commits to purchase a minimum of three hundred fifty thousand (350,000) units of QVGA Products, or any Products which have a higher list price than QVGA Products manufactured by MYT. 

10.   EXCLUSIVE AGREEMENT.  

        10.1    DT.    DT agrees that with the exception of manufacturing Product on its own
manufacturing line at Longmont, Colorado, in accordance with the terms of this Agreement, DT will not manufacture or have a third party manufacture Products during the term of this Agreement or any
renewal thereof, unless MYT fails to install a manufacturing line for FOL and MOL manufacturing processes in Nagano, as described in Section 4.9 above, and unless MYT experiences a problem at
its Nagano plant so that MYT fails to meet DT's Product volume, price and quality requirements as set forth herein, and fails to cure such problem within a reasonable period of time. 

        10.2    MYT.    MYT agrees that it will use the manufacturing equipment it installs in Nagano
to manufacture Products in accordance with this Agreement only for the manufacture of Products and Finished Products, and no others. 

11.   INTELLECTUAL PROPERTY.  

        11.1    Intellectual Property Rights.    The term "Intellectual Property Rights" shall mean: 

        a)    Rights
in all U.S., Japanese, and foreign letters patent, applications for letters patent (including any reissue, re-examination, division, continuation,
continuation-in-part or provisional applications), patents of addition, invention certificates, industrial designs, industrial models, and utility models; 

        b)    Rights
in copyrights, rights of authorship, or any other literary property rights; 

        c)     Rights
under the Semiconductor protection Act or equivalent U.S., Japanese or foreign law; 

        d)    Rights
in trade secrets and know-how, including any equivalent rights that arise under common law, state law, federal law and the laws of Japan and foreign
countries, whether or not patentable, copyrightable, protectable by trademark or protectable under the Semiconductor Protection Act or equivalent U.S., Japanese or foreign protection. 

        11.2    Ownership of Intellectual Property Rights.    MYT agrees that all Intellectual
Property Rights that are applicable to or used in connection with the FOL, MOL and EOL manufacturing processes used or available to manufacture Products or Finished Products, in whole or part, whether
in Longmont, Colorado, or Nagano, Japan, and whether currently in existence or coming into being in the future ("DT IP Rights"), are and shall be owned by DT, either solely, or jointly with MYT, if
developed by MYT. 

        11.3    Use of Intellectual Property Rights.    Except as provided below in this
Section 11.3, MYT agrees that it will use DT IP Rights only to manufacture Products or Finished Products for or upon the order or on behalf of DT. MYT further agrees that it will not, at any
time, whether during the term of this Agreement or any renewal thereof, or afterwards, use DT IP Rights to manufacture products which are competitive with Products or Finished Products or any other DT
product or part. DT agrees that if MYT develops any Intellectual Property Right which is used in DT's FOL, MOL or EOL manufacturing processes, whether in Longmont, Colorado, or Nagano, Japan, MYT may
use such Intellectual Property Right in its other manufacturing lines to manufacture other products, so long as such other products are not competitive with any DT products, Product or Finished
Product. 

11

 

        11.4    Manufacturing Equipment.    If MYT owns or develops any Intellectual Property Right
which is used to make any piece of equipment that is used in the FOL, MOL and EOL manufacturing processes, whether in Longmont, Colorado, or Nagano, Japan, MYT agrees that it will not refuse to build
or sell such piece of equipment to DT if DT requests to purchase it or have it purchased. DT agrees that MYT may use such piece of equipment in other manufacturing lines for other products, so long as
such other products are not competitive to DT's products, Products or Finished Products. 

12.   CONFIDENTIALITY.  

        12.1    Confidential Information.    During the term and in the course of performing this
Agreement each Party may disclose information to the other concerning its business, technology, products, manufacturing, marketing, sales, and financial operations which is proprietary and
confidential to that Party (the "Discloser" or "Disclosing Party"). Such information may be disclosed in writing, orally or visually to the other Party (the "Recipient"). All information which is
marked confidential, if it is disclosed in writing or tangible form, or is designated as confidential at the time it is disclosed visually or orally and is thereafter identified and summarized in a
written memorandum which is delivered to the Recipient within thirty days of the date of the disclosure, shall be considered "Confidential Information" of the Disclosing Party. "Confidential
Information" shall not include information which: 

        (a)   was
known by the Recipient prior to receipt from Discloser; 

        (b)   is
or becomes a matter of public knowledge or known in the trade through no fault of Recipient; 

        (c)   is
rightfully received by Recipient from a third party without a duty of confidentiality to the third party; 

        (d)   is
independently developed by or for Recipient by individuals not having knowledge of or access to Confidential Information; 

        (e)   is
required to be disclosed by operation of law; or 

        (d)   is
disclosed by Recipient with Discloser's prior written permission. 

        12.2    Maintaining Confidence.    Recipient agrees that it will not disclose Confidential
Information to any third party without the Discloser's prior written consent. Recipient shall use Confidential Information only for the purpose of performing its obligations under this Agreement.
Recipient shall preserve and protect the confidentiality of the Confidential Information using the same degree of care, which shall be not less than a reasonable degree of care, which it uses to
protect its own Confidential Information. 

        12.3    Employees.    Each Party represents and warrants to the other that all of its
employees who perform work under this Agreement will protect the confidentiality of the other Party's Confidential Information with the same degree of care that they protect their own employer's
Confidential Information, and will use the Confidential Information only for the purpose of performing this Agreement. 

        12.4    Period of Confidentiality.    The obligation to protect Confidential Information shall
continue for a period of three years after expiration or termination of this Agreement. Upon expiration or termination of this Agreement, the provisions of this Article 12 shall survive and
remain in full force. 

        12.5    Confidential Disclosure Agreement Dated June 15, 1998.    The Parties
acknowledge and agree that upon execution hereof, this Agreement shall supersede that certain Confidential Disclosure Agreement ("CDA") between them dated June 15, 1998, and that all
Confidential Information disclosed under said CDA shall be treated as Confidential Information under this Agreement. 

12

 

13.   REPRESENTATIONS.  

        13.1    Representations of DT.    DT represents to MYT as follows: 

        13.1.1    Authority; Binding Effect.    DT represents that it is a corporation duly organized
and existing under the laws of the State of Colorado in the U.S.A.; that it has the corporate power and authority to execute, deliver, and perform this Agreement and the transactions contemplated
hereby and the execution and delivery of this Agreement have been duly authorized by DT; the execution, delivery, and performance of this Agreement and the consummation of the transactions
contemplated hereby do not and will not violate or conflict with any provision of DT's Certificate of Incorporation or Bylaws or, to the best knowledge of the individuals signing this Agreement, any
agreement, instrument, law or regulation to which DT is a party or by which DT is bound; no governmental or other approval or authorization of this Agreement or the acts or transactions contemplated
hereby is required by law or otherwise in order to make this Agreement binding upon DT; and this Agreement, and all other instruments required hereby to be executed and delivered to MYT by DT are, or
when delivered to MYT in accordance herewith, will be, legal, valid and binding instruments of DT enforceable in accordance with its terms. 

        13.1.2    Patents and Trademarks.    (a) DT owns all patents, rights to patents, patent
applications, trademarks and trade names necessary for it to satisfy the conditions of its performance hereunder (the "Patents and Trademarks") in Japan and any other country to which MYT exports the
Product on behalf of DT; (b) the issued Patents and Trademarks are subsisting and have not been adjudged invalid or unenforceable, in whole or in part, and there is no litigation or proceeding
pending concerning the validity or enforceability of the issued Patents and Trademarks; (c) to the best of DT's knowledge, each of the issued Patents and Trademarks is valid and enforceable;
(d) to the best of DT's knowledge, there is no infringement by others of the issued Patents and Trademarks; and (e) no claim has been made that
the use of any of the Patents and Trademarks does or may violate the rights of any third person, and to the best of DT's knowledge the use of the Patents and Trademarks does not infringe upon the
patent or trademark rights of any third party. 

        13.2    Representations of MYT.    MYT represents to DT as follows: 

        13.2.1    Authority; Binding Effect.    MYT represents that it is a corporation duly organized
and existing under the laws of Japan, that it has the corporate power and authority to execute, deliver, and perform this Agreement and the transactions contemplated hereby and the execution and
delivery of this Agreement have been duly authorized by MYT; the execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby do not and will not
violate or conflict with any provision of MYT's Certificate of Incorporation or Bylaws or, to the best knowledge of the individuals signing this Agreement, any agreement, instrument, law or regulation
to which MYT is a party or by which MYT is bound; no governmental or other approval or authorization of this Agreement or the acts or transactions contemplated hereby is required by law or otherwise
in order to make this Agreement binding upon MYT; and this Agreement, and all other instruments required hereby to be executed and delivered to DT by MYT are, or when delivered to DT in accordance
herewith, will be, legal, valid and binding instruments of MYT enforceable in accordance with its terms. 

        13.2.2    Patents and Trademarks.    (a) MYT owns all patents, rights to patents,
patent applications, trademarks and trade names necessary for it to satisfy the conditions of its performance hereunder (the "Patents and Trademarks"); (b) the issued Patents and Trademarks are
subsisting and have not been adjudged invalid or unenforceable, in whole or in part, and there is no litigation or proceeding pending concerning the validity or enforceability of the issued Patents
and Trademarks; (c) to the best of MYT's knowledge, each of the issued Patents and Trademarks is valid and enforceable; (d) to the best of MYT's knowledge, there is no infringement by
others of 

13

 

the
issued Patents and Trademarks; and (e) no claim has been made that the use of any of the Patents and Trademarks does or may violate the rights of any third person, and to the best of MYT's
knowledge the use of the Patents and Trademarks does not infringe upon the patent or trademark rights of any third party. 

14.   INDEMNIFICATION.  

        14.1    DT Indemnification of MYT.    DT shall indemnify and hold harmless MYT and its
officers, directors, shareholders, agents, and employees (collectively "MYT") from and against any and all liability,
damage, loss, cost, or expense (including reasonable attorneys' fees and disbursements) resulting from any third party claim made, investigation, product recall, or legal proceeding (individually and
collectively, a "Proceeding") brought against MYT or to which MYT is subject to the extent such Proceeding arises or is alleged to arise as a result of (i) DT's negligence or willful
misconduct; (ii) DT's breach of any of its representations or warranties set forth herein; (iii) DT's material breach of any of the other terms of this Agreement, or (iv) is
otherwise caused by or arises or is alleged to arise out of the DT's Product design or specification. Upon being notified of any such Proceeding, MYT shall promptly notify DT in writing thereof and
shall permit DT, at the sole cost and expense to DT, to defend and control the defense of such Proceeding. MYT shall have the right to participate in the defense of such Proceeding at its own expense
to the extent MYT's interest may be affected in such Proceeding. 

        14.2    Indemnification by MYT.    MYT shall indemnify and hold harmless DT and its officers,
directors, shareholders, agents, employees (collectively, "DT") from and against any and all liability, damage, loss, cost, or expense (including reasonable attorneys' fees and disbursements)
resulting from any third party claim made, investigation, product recall, or legal proceeding (individually and collectively, a "Proceeding") brought against DT or to which DT is subject to the extent
such Proceeding arises or is alleged to arise as a result of (i) MYT's negligence or willful misconduct; (ii) MYT's breach of any of its representations or warranties set forth herein;
or (iii) MYT's material breach of any of the other terms of this Agreement. Upon being notified of any such claim, investigation or legal proceeding, DT shall promptly notify MYT in writing
thereof and shall permit MYT at its sole cost and expense to defend and control the defense of such claim or legal proceeding. DT shall have the right to participate in the defense of such claim or
legal proceeding at its own expense to the extent that DT's interests may be affected in such Proceeding. 

15.   TERM.  

        15.1    Initial Term and Renewal.    The initial term of this Agreement is five
(5) years. The Agreement will automatically renew for an indefinite period thereafter, unless either Party provides written notice to the other Party of its intention not to renew the Agreement
at least eighteen (18) months prior to the expiration date of the initial term of the Agreement. During the renewal term of the Agreement, either of the Parties will have the right to terminate
the Agreement by providing written notice to the other Party eighteen (18) months prior to the date of termination. 

16.   TERMINATION.  

        16.1    Termination by Non-Breaching Party.    This Agreement may be terminated by
a Party in the event the other Party breaches a material term or condition of the Agreement. Except for a breach of a Party's Intellectual Property Rights, in order to terminate the Agreement for
breach, a Party must first give written notice of the breach to the other Party, describing the breach in detail, and request that executives of both Parties meet or confer by telephone conference to
resolve the breach amicably. If the Parties cannot resolve the breach in this manner within thirty (30) days of the written notice, then a Party can request that the matter be resolved by
mediation, to be held in Hawaii, USA at the East/West Center at the University of Hawaii. If the Parties cannot resolve the breach by mediation within 

14

 

thirty
days of the date mediation is requested, then a Party may request that the matter be resolved by arbitration to be held in Colorado pursuant to the rules of the American Arbitration
Association. If the arbitrator rules that the Agreement has been breached, then the Agreement shall be terminated twelve (12) months after the date of the arbitrator's ruling. During such
twelve (12) month period the Parties shall continue to perform their obligations under the Agreement in good faith. 

        16.2    Termination for Breach of Intellectual Property Rights.    A Party may immediately
seek injunctive relief in the U.S. District Court for the District of Colorado against the other Party for breach of the first Party's Intellectual Property Rights, and each Party hereby agrees to the
jurisdiction, and to be subject to the process, of such Court. 

        16.3    Effect of Termination.    In the event that this Agreement is terminated in accordance
with the provisions of this Article 16, then upon such termination date, or within a reasonable period of time thereafter, DT agrees to purchase and take delivery of, and MYT agrees to sell and
deliver to DT or as directed by DT all capital equipment and tooling it has purchased for use in or in connection with MYT's manufacturing line in Nagano for production of Products which (i) is
custom made by MYT for use with FLC devices, or (ii) directly handles FLC materials (both of which classifications are hereinafter referred to as "Buyout Equipment and Tooling"). After
receiving delivery of the Buyout Equipment and Tooling DT agrees to pay MYT the price therefor, which is that part of the original cost of the Buyout Equipment and Tooling that remains undepreciated
(as the term "depreciation" is used in Section 7.1 hereof) at the time of termination. The Parties agree that they will jointly classify all equipment and tooling purchased for use in MYT's
manufacturing line in Nagano for Products at the time it is purchased as either Buyout Equipment and Tooling or general purpose equipment and tooling ("General Purpose Equipment and Tooling"), with
respect to which DT has no buyout obligation. 

17.   GENERAL TERMS.  

        17.1    Governing Law.    This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the United States and the State of Colorado without giving effect to the principles of choice of law of such state. 

        17.2    Headings.    The headings of the Articles, Sections and paragraphs of this Agreement
are intended solely for convenience and shall not be deemed to constitute part of this Agreement or to affect the construction or interpretation hereof. 

        17.3    Severability.    In the event that a court of competent jurisdiction holds that
particular provisions or requirements of this Agreement are in violation of any law of the United States or any state thereof, such provisions or requirements shall not be enforced except to the
extent they are not in violation of any such law, and all other provisions and requirements of this Agreement shall remain in full force and effect. 

        17.4    Force Majeure.    Any delay in the performance of any of the duties or obligations of
either Party hereto (except the payment of money owed) shall not be considered a breach of this Agreement and the time required for performance shall be extended for a period equal to the period of
such delay, provided that such delay has been caused by or is the result of any acts of God; acts of the public enemy; insurrections; war; riots, embargoes, labor disputes, including strikes,
lockouts, job actions, or boycotts; fires; explosions; floods; shortages of material or energy; delay in transportation; any orders, actions or regulations of any governmental or regulatory authority
that will prohibit either Party from ordering or furnishing their respective products or performing any other aspect of their respective obligations under this Agreement; or other unforeseeable causes
beyond the control and without the fault or negligence of the Party so affected. The Party so affected shall give prompt notice to the other Party of such cause, and shall take whatever reasonable
steps are necessary to relieve the effect of such cause as rapidly as possible. 

15

 

        17.5    Notices.    All notices hereunder, other than day-to-day
communications, shall be in writing and delivered (i) personally, (ii) by registered or certified mail, postage prepaid; (iii) by overnight courier service, or (iv) by
facsimile, confirmed promptly by one of the foregoing delivery methods, to the following addresses of the respective Parties; 

	If to DT, individual copies to:	 	With a copy to:
	

Displaytech, Inc.

Attn: Haviland Wright

Chief Executive Officer

2602 Clover Basin Drive

Longmont, CO 80503-7603

Phone: (303) 772-2191

Fax: (303) 772-2193	
 	

Displaytech, Inc.

Attn: George E. Clough

General Counsel & Secretary

2602 Clover Basin Drive

Longmont, CO 80503-7603

Phone: (303) 772-2191

Fax: (303) 772-2193
	

If to MYT, individual copies to:	
 	

With a copy to:
	

Miyota Co., Ltd.

Attn: Yoritake Oya

4107-5 Miyota-machi

Kitisaku-gun

Nagano-ken

389-0294 Japan

Phone: 81 0267 (32) 3331

Fax: 81 0267 (32) 6327	
 	

Toshihiko Ide

4107-5 Miyota-machi

Kitisaku-gun

Nagano-ken

389-0294 Japan

81 0267 (32) 3331

81 0267 (32) 3520

Notices
shall be effective: (a) upon receipt if personally delivered or delivered by confirmed facsimile; (b) on the fifth business day following the date of mailing, if mailed; and
(c) upon receipt, if sent by overnight courier service. A Party may change its address listed above by notice to the other Party. 

        17.6    Waiver; Modification of Agreement.    No waiver or modification or amendment of any of
the terms of this Agreement, including its Schedules, shall be valid unless in writing and signed by authorized
representatives of both Parties hereto. Failure by either Party to enforce any rights under this Agreement shall not be construed as a waiver of such rights nor shall a waiver by either Party in one
or more instances be construed as constituting a continuing waiver or as a waiver in other instances. 

        17.7    Entire Agreement.    This Agreement constitutes the entire agreement between the
Parties concerning the subject matter hereof and supersedes all written or oral prior agreements or understandings with respect thereto. No course of dealing or usage of trade shall be used to modify
the terms hereof except as expressly set forth otherwise herein. 

        17.8    Assignment.    Except for the sale or transfer by DT of all or substantially all of
the its business, or DT's merger into another company, this Agreement shall not be assigned by either Party without the prior written consent of the other Party, which consent shall not be
unreasonably delayed or withheld. Any assignment to which consent is given shall be binding upon, inure to the benefit of, and be enforceable by, the assignee and any successors in interest of the
assignee. 

        17.9    Remedies.    In addition to the right to terminate this Agreement upon the breach or
default of a Party, the other Party shall be entitled to any other remedies to which it may be entitled at law or in equity including, but not limited to, monetary damages. 

16

 

18.   SCHEDULES ATTACHED.  

        18.1    Incorporation of Schedules and Terms.    All Schedules attached to the Agreement shall
be deemed a part of this Agreement and incorporated herein. Terms that are defined in this Agreement, and used in any Schedule, have the same meaning in the Schedule as in this Agreement. The Parties
acknowledge that on the effective date of this Agreement not all of the Schedules listed below have been completed. Each Party agrees, however, to use diligent, good faith efforts to complete the
contents of all such Schedules within sixty (60) days of the effective date of this Agreement. If the parties fail to complete all such Schedules by the sixtieth day after the effective date of
this Agreement, and the Parties have not agreed on an extension of such time period, then either Party may terminate this agreement on thirty (30) days written notice to the other Party. 

        18.2    List of Schedules.    The following Schedules are hereby made a part of this
Agreement: 

Schedule 2.3    Product Description

Schedule 2.4    Process Procedure Documentation

Schedule 3.1    Minimum Annual Volume Requirements for PLP Exclusivity

Schedule 3.2    Pricing Formula for Finished Products for Private Label Products

Schedule 4.1    Timeline for Installation of Manufacturing Facilities

Schedule 5.2    Product Ordering Procedures

Schedule 5.4    Materials and Component Parts

Schedule 6.6    Quality and Acceptance Tests

Schedule 7.1    Price  

 19.   COOPERATION OF PARTIES.  

        19.1    Future Circumstances.    The Parties have set forth in this Agreement their mutual
understanding and commitments regarding the development, manufacture and sale of the Products. The Parties further understand that they will cooperate and negotiate in good faith with each other in
order to resolve any future differences and to agree upon adjustments or modifications hereto which may be needed due to future circumstances, and to otherwise act to promote a long term relationship
regarding the Products and any future business dealings between the Parties. 

        IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written. 

	MIYOTA CO., LTD.	 	DISPLAYTECH, INC.
	

By:	
 	

/s/  EIJI KAWAKAMI      
	
 	

By:	
 	

/s/  HAVILAND WRIGHT      

	

Name:	
 	

Eiji Kawakami
	
 	

Name:	
 	

Haviland Wright

	

Title:	
 	
President
	
 	

Title:	
 	
CEO

17

SCHEDULE 2.3  

 (Attached to and Part of the

Manufacturing Agreement

Between

Miyota Co., Ltd. and Displaytech, Inc.

Dated December 10, 1998)  

 PRODUCT DESCRIPTION

Date: February 5, 1999 

        The
Products subject to and manufactured under the Manufacturing Agreement are set forth in the following document, which is incorporated into and made a part of the Manufacturing
Agreement by reference thereto: 

	1.	 	Product:	 	QVGA Display Panel Product—"Palermo"
	 	 	Document Title:	 	QVGA "Palermo" Product Description
	 	 	Document No.:	 	REMF-04001
	 	 	Document Date:	 	February 5, 1999

        Any
Product developed by DT subsequent the date hereof that is to be manufactured under the Manufacturing Agreement will be added to this Schedule. 

	MIYOTA CO., LTD.	 	DISPLAYTECH, INC.
	

By:	
 	

/s/  YORITAKE OYA      
	
 	

By:	
 	

/s/  HAVILAND WRIGHT      

	

Name:	
 	

Yoritake Oya
	
 	

Name:	
 	

Haviland Wright

[LETTERHEAD] 

QVGA "PALERMO" PRODUCT DESCRIPTION

REMF-04001

DATE: 2/5/99 

ATTACHED DOCUMENTS WITHIN:  

	DOCUMENT NO./TITLE
 
	 	REVISION
	 	DATE

	Product Description Definition	 	Preliminary	 	01/99
	Wire Bond Diagram	 	Preliminary	 	01/99
	Die Attach Diagram	 	Preliminary	 	01/99
	LED Diagram	 	Preliminary	 	01/99
	Flex "A" Drawing	 	Preliminary	 	01/99
	Lid Photograph	 	Preliminary	 	01/99
	Stiffener Drawing—4027005	 	B	 	01/15/99
	Silicon Substrate Material Specification and Drawing—2325003	 	Preliminary	 	01/28/99

DISPLAYTECH SIGNATURE AND DATE  

	 
	 	 

	Project Leader:	 	/s/ [ILLEGIBLE] 2/2/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/2/99

MIYOTA SIGNATURE AND DATE  

	 
	 	 

	Process Engineer Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/5/99

Schedule 2.4  

 (Attached to and Part of the

Manufacturing Agreement

Between

Miyota Co., Ltd. and Displaytech, Inc.

Dated December 10, 1998)  

 Process Procedure Documentation

Dated: February 5, 1999 

        The
manufacturing processes developed by DT which are used to manufacture Products under the Manufacturing Agreement are set forth in the following document, which is incorporated into
and made a part of the Manufacturing Agreement by reference thereto: 

	1.	 	Document Title:	 	Manufacturing Processes
	 	 	Document No.:	 	REMF-04002
	 	 	Document Date:	 	February 5, 1999

        All
manufacturing processes and know-how subsequently developed during the term of the Manufacturing Agreement or any renewal period, whether by DT or MYT, will be documented
and added to Schedule 2.4. 

	MIYOTA CO., LTD.	 	DISPLAYTECH, INC.
	

By:	
 	

/s/  YORITAKE OYA      
	
 	

By:	
 	

/s/  HAVILAND WRIGHT      

	Name:	 	Yoritake Oya
	 	Name:	 	Haviland Wright

[LETTERHEAD]

MANUFACTURING PROCESSES

REFM-04002

DATE: 2/5/99 

ATTACHED DOCUMENTS WITHIN:  

	DOCUMENT NO./TITLE
 
	 	REVISION
	 	DATE

	BASIC CLEANROOM SPECIFICATIONS	 	ORIGINAL	 	01/99
	BASIC CLEANROOM SPECIFICATIONS FOR DI WATER	 	ORIGINAL	 	01/99
	MANUFACTURING PROCESS FLOW CHART	 	ORIGINAL	 	01/99
	REMF-03000 MANUFACTURING PROCESS MANUAL	 	ORIGINAL	 	01/99
	CONF-01000 ENGINEERING CHANGE ORDER PROCEDURE	 	ORIGINAL	 	01/99

	MATERIAL SPECIFICATIONS

PART NUMBER/TITLE
 
	 	REVISION
	 	DATE

	2300001 PERIMETER SEAL	 	ORIGINAL	 	01/99
	2300002 END SEAL	 	ORIGINAL	 	01/99
	2300003 SPACER BALL	 	ORIGINAL	 	01/99
	2300005 8086 FLC	 	ORIGINAL	 	01/99
	2300007 POLYIMIDE	 	ORIGINAL	 	01/99
	2300009 DIE ATTACH EPOXY	 	ORIGINAL	 	01/99
	2300011 BOND WIRE	 	ORIGINAL	 	01/99
	2300012 SILVER EPOXY	 	ORIGINAL	 	01/99
	2300013 DIE/WAFER HANDLING FILM	 	ORIGINAL	 	01/99
	2300014 BUFFING CLOTH	 	ORIGINAL	 	01/99
	2321004 SUBSTRATE, GLASS, 8", LOW R ITO, BBAR	 	ORIGINAL	 	01/99

DISPLAYTECH SIGNATURE AND DATE  

	 
	 	 

	Project Leader:	 	/s/ [ILLEGIBLE] 2/2/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/2/99

MIYOTA SIGNATURE AND DATE  

	 
	 	 

	Process Engineer Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/5/99

Schedule 3.1  

 (Attached to and Part of the

Manufacturing Agreement

Between

Miyota Co., Ltd. and Displaytech, Inc.

Dated December 10, 1998)  

 Minimum Annual Volume Requirements for PLP Exclusivity

Dated: February 5, 1999 

        The
Parties acknowledge that as of the date of this Schedule no minimum annual volume requirement for Private Label Products has been established. Such requirement will be established
and incorporated in this Schedule at such time as the Parties commence negotiations for the sale of any Private Label Product to MYT. 

	MIYOTA CO., LTD.	 	DISPLAYTECH, INC.
	

By:	
 	

/s/  YORITAKE OYA      
	
 	

By:	
 	

/s/  HAVILAND WRIGHT      

	Name:	 	Yoritake Oya
	 	Name:	 	Haviland Wright

Schedule 3.2  

 (Attached to and Part of the

Manufacturing Agreement

Between

Miyota Co., Ltd. and Displaytech, Inc.

Dated December 10, 1998)  

 Pricing Formula for Finished Products for Private Label Products

Date: February 5, 1999 

        The
Parties acknowledge that as of the date of this Schedule MYT has not yet ordered any Finished Products for PLPs; therefore, no pricing formula has been established. A pricing formula
will be established after an agreement has been concluded, but prior to the time MYT orders Finished Products from DT. 

	MIYOTA CO., LTD.	 	DISPLAYTECH, INC.
	

By:	
 	

/s/  YORITAKE OYA      
	
 	

By:	
 	

/s/  HAVILAND WRIGHT      

	Name:	 	Yoritake Oya
	 	Name:	 	Haviland Wright

Schedule 4.1  

 (Attached to and Part of the

Manufacturing Agreement

Between

Miyota Co., Ltd. and Displaytech, Inc.

Dated December 10, 1998)  

 Timeline for Installation of Manufacturing Facilities

Date: February 5, 1999 

        The
timeline for installation of the manufacturing facilities to be used to manufacture Products under the Manufacturing Agreement is set forth in the following document, which is
incorporated into and made a part of the Manufacturing Agreement by reference thereto: 

	1.	 	Document Title:	 	Installation of Manufacturing Facilities
	 	 	Document No.:	 	REFM-04005
	 	 	Document Date:	 	February 5, 1999

	MIYOTA CO., LTD.	 	DISPLAYTECH, INC.
	

By:	
 	

/s/  YORITAKE OYA      
	
 	

By:	
 	

/s/  HAVILAND WRIGHT      

	Name:	 	Yoritake Oya
	 	Name:	 	Haviland Wright

[LETTERHEAD] 

INSTALLATION OF MANUFACTURING

FACILITIES

REFM-04005

DATE: 2/5/99 

ATTACHED DOCUMENTS WITHIN:  

	DOCUMENT NO./TITLE
 
	 	REVISION
	 	DATE

	MASTER PLAN FOR DT AND MYT INSTALLATION	 	ORIGINAL	 	01/99
	MIYOTA MANUFACTURING TIMELINE	 	ORIGINAL	 	01/99
	MIYOTA EQUIPMENT INVESTMENT PLAN AND TIMELINE	 	ORIGINAL	 	01/99
	TESTER CAPITAL EQUIPMENT AND INSTALLATION TIMELINE	 	ORIGINAL	 	01/99
	WINK PROGRAM SCHEDULE	 	ORIGINAL	 	01/99
	REFLECTIVE MICRODISPLAY TESTER SPECIFICATION	 	ORIGINAL	 	01/99

DISPLAYTECH SIGNATURE AND DATE  

	 
	 	 

	Project Leader:	 	/s/ [ILLEGIBLE] 2/2/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/2/99

MIYOTA SIGNATURE AND DATE  

	 
	 	 

	Process Engineer Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/5/99

Schedule 5.2  

 (Attached to and Part of the

Manufacturing Agreement

Between

Miyota Co., Ltd. and Displaytech, Inc.

Dated December 10, 1998)  

 Product Ordering Procedures

Date: February 5, 1999 

        The
procedures for ordering Products manufactured under the Manufacturing Agreement are set forth in the following document, which is incorporated into and made a part of the
Manufacturing Agreement by reference thereto: 

	1.	 	Document Title:	 	Product Ordering Procedure
	 	 	Document No.:	 	REFM04006
	 	 	Document Date	 	February 5, 1999

	MIYOTA CO., LTD.	 	DISPLAYTECH, INC.
	

By:	
 	

/s/  YORITAKE OYA      
	
 	

By:	
 	

/s/  HAVILAND WRIGHT      

	Name:	 	Yoritake Oya
	 	Name:	 	Haviland Wright

[LETTERHEAD]

PRODUCT ORDERING PROCEDURE

REFM-04006

DATE: 2/5/99 

ATTACHED DOCUMENTS WITHIN:  

	DOCUMENT NO./TITLE
 
	 	REVISION
	 	DATE

	PRODUCT ORDERING PROCEDURE	 	ORIGINAL	 	01/99

DISPLAYTECH SIGNATURE AND DATE  

	 
	 	 

	Project Leader:	 	/s/ [ILLEGIBLE] 2/2/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/2/99

MIYOTA SIGNATURE AND DATE  

	 
	 	 

	Process Engineer Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/5/99

Schedule 5.4  

 (Attached to and Part of the

Manufacturing Agreement

Between

Miyota Co., Ltd. and Displaytech, Inc.

Dated December 10, 1998)  

 Materials and Component Parts

Date: February 5, 1999 

        The
materials and component parts necessary to produce the Products manufactured under the Manufacturing Agreement are set forth in the following document, which is incorporated into and
made a part of the Manufacturing Agreement by reference thereto: 

	1.	 	Document Title:	 	Materials and Component Parts
	 	 	Document No.:	 	REFM04007
	 	 	Document Date	 	February 5, 1999

	MIYOTA CO., LTD.	 	DISPLAYTECH, INC.
	

By:	
 	

/s/  YORITAKE OYA      
	
 	

By:	
 	

/s/  HAVILAND WRIGHT      

	Name:	 	Yoritake Oya
	 	Name:	 	Haviland Wright

[LETTERHEAD] 

MATERIALS AND COMPONENT PARTS

REFM-04007

DATE: 2/5/99 

ATTACHED DOCUMENTS WITHIN:  

	DOCUMENT NO./TITLE
 
	 	REVISION
	 	DATE

	QVGA BILL OF MATERIALS	 	ORIGINAL	 	01/99

DISPLAYTECH SIGNATURE AND DATE  

	 
	 	 

	Project Leader:	 	/s/ [ILLEGIBLE] 2/2/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/2/99

MIYOTA SIGNATURE AND DATE  

	 
	 	 

	Process Engineer Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/5/99

Schedule 6.6  

 (Attached to and Part of the

Manufacturing Agreement

Between

Miyota Co., Ltd. and Displaytech, Inc.

Dated December 10, 1998)  

 Quality and Acceptance Tests

Date: February 5, 1999 

        The
quality and acceptance tests for the Products manufactured under the Manufacturing Agreement are set forth in the following document, which is incorporated into and made a part of
the Manufacturing Agreement by reference thereto: 

	1.	 	Document Title:	 	Quality and Acceptance Test
	 	 	Document No.:	 	REFM04008
	 	 	Document Date	 	February 5, 1999

	MIYOTA CO., LTD.	 	DISPLAYTECH, INC.
	

By:	
 	

/s/  YORITAKE OYA      
	
 	

By:	
 	

/s/  HAVILAND WRIGHT      

	Name:	 	Yoritake Oya
	 	Name:	 	Haviland Wright

[LETTERHEAD] 

QUALITY AND ACCEPTANCE TEST

REFM-04008

DATE: 2/5/99 

ATTACHED DOCUMENTS WITHIN:  

	DOCUMENT NO./TITLE
 
	 	REVISION
	 	DATE

	STANDARD VISUAL ACCEPTANCE CRITERIA	 	ORIGINAL	 	01/99
	QASR-02600 LCQC	 	1	 	10/98
	QASR-03100 FILL INSPECTION	 	2	 	05/98
	QASR-03300 PHYSICAL QC	 	4	 	11/98
	QASR-03500 PANEL QA	 	ORIGINAL	 	01/99

DISPLAYTECH SIGNATURE AND DATE  

	 
	 	 

	Project Leader:	 	/s/ [ILLEGIBLE] 2/2/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/2/99

MIYOTA SIGNATURE AND DATE  

	 
	 	 

	Process Engineer Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/5/99

Schedule 7.1  

 (Attached to and Part of the

Manufacturing Agreement

Between

Miyota Co., Ltd. and Displaytech, Inc.

Dated December 10, 1998)  

 Price

Date: February 5, 1999 

        The
formula(s) for determining the price for the Products manufactured under the Manufacturing Agreement is (are) set forth in the following document, which is incorporated into and made
a part of the Manufacturing Agreement by reference thereto: 

	1.	 	Document Title:	 	Price
	 	 	Document No.:	 	REFM04009
	 	 	Document Date	 	February 5, 1999

	MIYOTA CO., LTD.	 	DISPLAYTECH, INC.
	

By:	
 	

/s/  YORITAKE OYA      
	
 	

By:	
 	

/s/  HAVILAND WRIGHT      

	Name:	 	Yoritake Oya
	 	Name:	 	Haviland Wright

[LETTERHEAD]

PRICE

REFM-04009

DATE: 2/5/99 

ATTACHED DOCUMENTS WITHIN:  

	DOCUMENT NO./TITLE
 
	 	REVISION
	 	DATE

	PRICE DEFINITION	 	Original	 	01/99
	DISPLAYTECH PRICE FORMULA	 	Original	 	01/99
	MIYOTA PRICE FORMULA	 	Original	 	01/99
	DEPRECIATION FORMULA	 	Original	 	01/99

DISPLAYTECH SIGNATURE AND DATE  

	 
	 	 

	Project Leader:	 	/s/ [ILLEGIBLE] 2/2/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/2/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/2/99

MIYOTA SIGNATURE AND DATE  

	 
	 	 

	Process Engineer Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Manufacturing Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	Quality Manager:	 	/s/ [ILLEGIBLE] 2/5/99

	VP Operations:	 	/s/ [ILLEGIBLE] 2/5/99

  

 
 

AMENDMENT
  NO. 1    
    

        This agreement ("Amendment") dated Mar. 25, 1999, is entered into by and between Displaytech, Inc., a corporation organized and existing under the
laws of the State of Colorado in the United States of America, with its principal place of business located at 2602 Clover Basin Drive, Longmont, CO 80503 U.S.A. ("DT"), and Miyota Co., Ltd.,
established and existing under the laws of Japan, with its registered office located at 4107-5 Miyota-machi, Kitasaku-gun, Nagano-ken, 389-0294 Japan
("MYT" along with DT a "Party", and together the "Parties"). This Amendment amends that certain Manufacturing Agreement dated December 10, 1999 entered into by the Parties as follows: 

	1.
	Third "Whereas" Clause.    Page 1, lines 4 and 5. The phrase "... which
performance of MYT manufacturing services is for, upon the order of or on behalf of DT..," is changed to "... which performance of MYT manufacturing services is for or upon the order of DT.... "

	2.
	Section 2.1.    Page 3, lines 1 and 2. The phrase "...MYT will
manufacture Products for, upon the order of or on behalf of DT..," is changed to "... MYT will manufacture Products for or upon the order of DT.... "

	3.
	Section 2.4.    Page 3, line 2. The word "development" is deleted and
replaced with the word "design".

	4.
	Section 2.6.    Page 4, line 2. The words "on behalf of" are deleted.

	5.
	Section 3.4.    Page 5, line 4. The words "or on behalf of" are
deleted.

	6.
	Section 6.8.    Page 11. Section 6.8 is deleted in its entirety
and replaced with the following section:

	6.8
	Shipment Terms, Title and Risk of Loss.    Finished Products delivered outside Japan shall be shipped from MYT's Nagano plant
[*****]. Payment of the price for the Finished Products shall be as provided in Section 7.2 hereof. Shipment of Finished Products sold and delivered inside Japan will be
[*****].

	7.
	Section 11.3.    Page 14, lines 3. The words "or on behalf" are
deleted.

	8.
	Section 13.1.2.    Page 16, line 4. The words "on behalf of DT" are
deleted. 

Except
as modified hereby, the Agreement shall remain in full force and effect. The Parties agree that the changes set forth in this Amendment will be implemented by replacing the affected pages in
the Agreement with new pages that incorporate the changes. 

        IN
WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above. 

	
MIYOTA CO., LTD.	
 	
DISPLAYTECH, INC.
	

By:	

/s/  YORITAKE OYA      
	
 	

By:	

/s/  HAVILAND WRIGHT      

	

Name:	

Yoritake Oya
	
 	

Name:	

Haviland Wright

	

Title:	
Managing Director
	
 	

Title:	
C.E.O.

1

  

 
 

AMENDMENT
  NO. 2    
    

        This agreement ("Amendment") dated July 24, 2001 is entered into by and between Displaytech, Inc., a corporation organized and existing under the laws of
the State of Colorado in the United States of America, with its principal place of business located at 2602 Clover Basin Drive, Longmont, CO 80503 U.S.A. ("DT"), and Miyota Co., Ltd.,
established and existing under the laws of Japan, with its registered office located at 4107-5 Miyota-machi, Kitasaku-gun, Nagano-ken, 389-0294 Japan
("MYT" along with DT a "Party", and together the "Parties"). This Amendment amends that certain Manufacturing Agreement between the Parties dated December 10, 1998, as amended by Amendment
No. 1 dated March 25, 1999, as follows: 

        1.    Article 15, Term.    Section 15.1, Initial Term
and Renewal, is hereby amended to read in its entirety as follows: 

        15.1    Initial Term and Renewal.    The initial term of this Agreement is eight
(8) years. The Agreement will automatically renew for an indefinite period thereafter, unless either Party provides written notice to the other Party of its intention not to renew the Agreement
at least eighteen (18) months prior to the expiration date of the initial term of the Agreement. During the renewal term of the Agreement, either of the Parties will have the right to terminate
the Agreement by providing written notice to the other Party eighteen (18) months prior to the date of termination. 

        Except
as amended hereby, all other terms and conditions of the Agreement shall remain in full force and effect. 

        IN
WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above. 

	MIYOTA CO., LTD.	 	DISPLAYTECH, INC.
	

By:	
 	

/s/  YUZO MAEKAWA      
	
 	

By:	
 	

/s/  HAVILAND WRIGHT      

	Name:	 	Yuzo Maekawa
	 	Name:	 	Haviland Wright

	Title:	 	President
	 	Title:	 	Chairman and CEO

1

 
 

AMENDMENT
  NO. 3    
    

        THIS AMENDMENT NO. 3 (this "Amendment"), dated March 17, 2003, is entered into by and between Displaytech, Inc., a corporation organized and existing under
the laws of the State of Colorado in the United States of America, with its principal place of business located at 2602 Clover Basin Drive, Longmont, CO 80503 U.S.A. ("DT"), and Miyota
Co., Ltd., established and existing under the laws of Japan, with its registered office located at 4107-5 Miyota-machi, Kitasaku-gun, Nagano-ken,
389-0294 Japan ("MYT" along with DT a "Party," and together the "Parties"). 

        This
Amendment amends that certain Manufacturing Agreement between the Parties dated December 10, 1998, as amended by Amendment No. 1 dated March 25, 1999, and
Amendment No. 2 dated July 24, 2001 (the "Original Agreement"), as follows: 

        1.    Definitions.    The following definitions shall be added to Section 1 of the Original Agreement: 

        "Affiliate" of a Party means any entity or person which directly or indirectly controls, is controlled by, or is under common control with
such Party. 

        "HP" means Hewlett-Packard Company, a Delaware corporation. 

        "Line" means all areas of MYT's manufacturing facilities that are used by MYT to manufacture the Products. 

        2.    Design and Manufacture of Products.    Section 2 of the Original Agreement shall be amended as follows: 

        (a)   Section 2.4
shall be deleted in its entirety and the following shall inserted in lieu thereof 

Manufacturing Processes for Products. DT will be responsible for the design of manufacturing processes for the Products, whether such processes are
implemented in DT's facilities in Longmont, Colorado, or
in MYT's facilities in Nagano, Japan. As provided below, MYT agrees to collaborate with DT toward the development and refinement of manufacturing processes for the Products. DT will document all
material information related to its manufacturing processes and include such information in a schedule attached hereto as Schedule 2.4, Process Procedure
Documentation. Such documentation will include specifications for each process, a process flow chart and certain standards, such as, but not limited to, assembly, environmental
and safety standards. All material information related to the manufacturing process subsequently developed during the term of this Agreement or any renewal period, whether by DT or MYT, will be
documented and added to Schedule 2.4. DT will furnish such documentation to MYT, free of charge, for the sole purpose of enabling MYT to
manufacture the Products under the terms of this Agreement. MYT agrees that, if it determines that the Products can be manufactured more efficiently or for less cost by changing, adding to or deleting
from any of DT's manufacturing processes, it will (1) perform reasonable testing on the proposed modified process prior to implementation; (2) notify DT of the proposed modified process
prior to implementation; (3) supply DT with statistical information demonstrating process efficacy and reliability; (4) unless otherwise agreed to by the Parties, execute all necessary
assignments and other documentation necessary to assign the Intellectual Property associated with such modified process in accordance with Section 11; and (5) create appropriate
documentation of the proposed modified manufacturing process and deliver it to DT. Notwithstanding the foregoing, MYT shall direct and complete the manufacture of the Products under this Agreement in
a safe, useful and workmanlike manner, in compliance with good engineering practices, and shall comply with all applicable laws, rules, ordinances, regulations and the like, including but not limited
to those related to safety, health, environmental and employee matters. 

        (b)   Sections
2.5.2 and 2.5.3 shall be deleted in their entirety. 

 

        3.    Covenants relating to HP.    A new Section 6.12 shall be added to the Original Agreement as follows: 

        6.12    Covenants Relating to HP.    

        6.12.1    Obligations to HP.    HP and DT have an agreement relating to the sale of the
Products for use in digital still cameras ("DSCs"). Pursuant to such agreement, DT has agreed to supply MYT with sufficient FLC materials to support HP's forecast for the purchase of Finished Products
through calendar year 2004. In furtherance of the foregoing, DT will train MYT on the process used to store such FLC materials. MYT hereby agrees to hold such FLC materials in trust for DT and HP and
use such FLC materials solely for the manufacturing of Products ordered by HP. In addition, at the request of HP, MYT hereby agrees to sell Products for use in DSCs directly to HP under the terms and
conditions set forth on Schedule 6.12, HP Pricing, as amended from time to time, to HP as a second source of supply. 

        6.12.2    Audit Rights.    HP or any person designated by HP (other than direct competitors of
MYT) shall have the right to visit MYT's manufacturing facilities and the Line during normal business hours and to inspect MYT's operation relating to the manufacture of Finished Products for use in
DSCs being sold to HP only. HP or its authorized representatives shall have the right to inspect all incoming materials, inventory and Finished Products for conformity to the Product specifications
and quality standards (as all of such relate to the manufacture of Finished Products for use in DSCs being sold to HP only); provided that such inspection shall not unreasonably disrupt MYT's
operations; and provided further that HP or any person designated by HP agrees that it will keep in confidence any information it comes to know in the course of the inspection and will not use such
information for any purpose other than the inspection and the possible recommendation to MYT of a corrective action. Any such inspections prior to delivery of any Finished Products to HP shall not
constitute final acceptance by DT or HP. MYT agrees to implement within a reasonable time all mutually agreed corrective action recommended by HP or its representatives to MYT. 

        6.12.3    Pricing.    To the extent that HP uses MYT as a second source of supply, MYT agrees
to maintain the same supply volume to HP as committed to DT for the sale of Finished Products to HP at the then current price in effect at the time of any order of such Products by HP in accordance
with Section 6.12.1 when DT is unable to supply to HP. If DT is able to supply to HP, and HP requests Miyota to sell directly to HP, then Miyota will charge HP [*****]. 

        6.12.4    Agreement with HP.    MYT agrees to use its best efforts to negotiate an agreement
with HP confirming MYT's responsibilities as a second source of supply contemplated under this Section 6.12. 

        4.     Section 17
of the Original Agreement shall be amended as follows: 

        (a)   Section 17.8
shall be deleted in its entirety and the following shall be inserted in lieu thereof: 

        17.8    Assignment.    Except for the sale or transfer by DT of all or substantially all of
its assets, a sale of a majority ownership in DT's capital stock, DT's merger into another company, or any assignment by DT of all or part of this Agreement to an Affiliate, this Agreement shall not
be assigned (by contract, operation of law or change of control) by either Party without the prior written consent of the other Party, which consent shall not be unreasonably delayed or withheld. Any
assignment to which consent is given shall be binding upon, inure to the benefit of, and be enforceable by and against, the assignee and any successors and assigns of the assignee. DT agrees to give
MYT reasonable notice of the sale 

2

 

or
transfer by DT of all or substantially all of its assets, a sale of a majority ownership in DT's capital stock, DT's merger into another company or any assignment to an Affiliate of DT; however,
failure to give such notice shall not prevent DT from consummating such sale, transfer or merger. 

        (b)   A
new Section 17.10 shall be added as follows: 

        17.10    Governing Language.    The Parties acknowledge and agree that this Agreement has been
entered into in the English language, which language shall govern in all respects. Any translation of this Agreement shall be for convenience only and shall not be binding upon the Parties. All
written communications between the Parties shall be in English, including, but not limited to, written communications relating to changes or modifications in the manufacturing processes for the
Products as contemplated under Section 2.4 of this Agreement. 

        5.    Schedules.    Schedule 6.12, HP Pricing (which Schedule
is attached hereto) shall be attached to the Original Agreement. 

        6.    Amendment No. 4.    The Parties hereby agree to use best efforts to negotiate a definitive Amendment
No. 4 to the Original Agreement by March 30, 2003. Amendment No. 4 will address (i) the use of MYT's manufacturing facilities for third parties, (ii) licenses and
assignments of certain intellectual property necessary to permit such activities and to protect the Parties in the event of bankruptcy and other circumstances, and (iii) additional amendments
that are necessary to clarify the Original Agreement, to comply with certain legal requirements, to update the Schedules and to enable DT to make certain certifications relating to government grants. 

        7.    Conflict.    If any conflict should arise between the terms and provisions of this Amendment and the Original
Agreement, this Amendment shall govern. 

        8.    No Other Amendments.    Except as amended hereby, the Original Agreement shall remain in full force and effect
in accordance with its original terms. 

        9.    Counterparts.    This Amendment may be executed in counterparts, each of which shall constitute an original and
all of which, when taken together, shall constitute one and the same document. Executed counterparts sent by facsimile or by other means of transmission shall be effective as originals. 

[The remainder of this page is intentionally left blank.]

3

        IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above. 

	MIYOTA CO., LTD.	 	DISPLAYTECH, INC.
	

By:	
 	

/s/  YUZO MAEKAWA      
 Name: Yuzo Maekawa

Title: President	
 	

By:	
 	

/s/  RICHARD BARTON      
 Name: Richard Barton

Title: CEO

[Signature
Page to Amendment No. 3] 

Schedule 2.4  

 Process Procedure Documentation  

[*****] 

Schedule 6.12  

 HP Pricing  

[*****]

 
 

AMENDMENT
  NO. 4    
    

        THIS AMENDMENT NO. 4 (this "Amendment"), dated April 24, 2003, is entered into by and between Displaytech, Inc., a corporation organized and
existing under the laws of the State of Colorado in the United States of America, with its principal place of business located at 2602 Clover Basin Drive, Longmont, CO 80503 U.S.A. ("DT"), and Miyota
Co., Ltd., established and existing under the laws of Japan, with its registered office located at 4107-5 Miyota-machi, Kitasaku-gun, Nagano-ken,
389-0294 Japan ("MYT" along with DT a "Party," and together the "Parties"). 

        This
Amendment amends that certain Manufacturing Agreement between the Parties dated December 10, 1998, as amended by Amendment No. 1 dated March 25, 1999, Amendment
No. 2 dated July 24, 2001, and Amendment No. 3 dated March 13, 2003 (the "Original Agreement"), as follows: 

        1.    Definitions.    

        (a)   The
following definitions shall be added to Section 1 of the Original Agreement: 

        "Competitive Products" means (i) any FLC based glass-on-silicon or glass-on-glass
device and (ii) any viewfinder which is manufactured using FOL or MOL processes. Notwithstanding the foregoing, certain FLC based glass-on-glass devices which are
manufactured not using FOL or MOL may be excluded from the Competitive Products upon written consent of DT. Schedule 1.C, Competitive Products sets forth the Competitive Products identified as
of the date of this Agreement. 

        "DT Intellectual Property" means all Intellectual Property, other than the Joint Intellectual Property, whether developed by or on behalf
of (including subcontractors) MYT and/or DT or licensed by DT: (1) related to the Products, or any portion thereof, (including without limitation the design, manufacture or operation of the
Products), the FLCs, the Line, FOL, MOL, IAL, IA, EAL, EA or EOL; (2) arising as a result of or in the course of this Agreement, (3) all Intellectual Property provided to MYT by DT, and
(4) all modifications, derivative works, bug fixes, updates, upgrades and other improvements thereto. 

        "EA" means the engine assembly, which is described as follows: the engine assembly mounts the output from the IAL in a housing that
includes imaging optics. 

        "EAL" means the manufacturing process used to assemble the EA. 

        "IA" means the illuminator assembly, which is attached to the output from the EOL (cell packaged on flex circuit or printed circuit
board). The illuminator assembly contains the LED and a front light. 

        "IAL" means the manufacturing process used to assemble the IA including the testing of the viewfinder module for quality. 

        "Intellectual Property" means: (1) all knowledge and information, in whatever form or medium that may or may not be generally
known, that gives to one the ability to produce or market something that one otherwise would not have known how to produce or market with the same accuracy or precision, including without limitation,
techniques, concepts, ideas, algorithms, processes, procedures, improvements, discoveries, inventions and invention disclosure (whether patentable, unpatentable or reduced to practice); business,
engineering and other plans; formulae, designs, masks, data, databases, writings and works of authorship regardless whether such is protected; all information in any form relating to the design,
manufacture, production, operation, maintenance and utilization of any product; computer programs, including object codes and source codes; standard work procedures; bills of material; vendor
information; parts, jig, fixture, tool and component lists; equipment information; test procedures; and operations, maintenance, user and service manuals and catalog data; (2) original works of
authorship in any tangible medium of expression; and (3) any and all intellectual property rights known or hereafter arising or recognized in any jurisdiction in the world (regardless of
whether such rights are registered or unregistered) 

 

relating
the foregoing, including without limitation: (a) mask works rights (including, not limited to any rights arising under the United States Semiconductor Protection Act);
(b) rights associated with works of authorship throughout the universe, including, but not limited to, copyrights and moral rights; (c) trademark, trade name or similar rights;
(d) trade secret rights; (e) patent, invention, design, any other industrial rights; (f) all other intellectual property rights (of every kind and nature throughout the universe
and however designated) whether arising by operation of law, contract, license, or otherwise; (g) all disclosures, applications, registrations, renewals, extensions, continuations, divisions,
or reissues hereof now or hereafter in force (including any rights in any of the foregoing); and (h) the right to bring suit (under any of the foregoing rights) for monetary, injunctive or
other relief against any past, present or future infringer. 

        "Joint Intellectual Property" means all Intellectual Property developed solely by or on behalf of MYT relating solely to the Line, FOL,
MOL, IAL, IA, EAL, EA or EOL and/or the Products and all modifications, derivative works, bug fixes, updates, upgrades and other improvements thereto. 

        "MYT Intellectual Property" means any Intellectual Property: (1) developed by or for MYT prior to this Agreement or
(2) developed by or for MYT during the term of this Agreement that is not based on or related to the DT Intellectual Property. 

        "Restricted Patents" means all non-published information and Japanese patent rights relating to the following United States
patents and patent applications including any continuation, continuation-in-part, divisional, reissue and renewal: 

5,808,800

6,025,890

6,038,005

6,195,136

6,359,723

Serial No. 10/067516 

        (b)   The
definition of "Products" under Section 1.1 of the Original Agreement shall be deleted in its entirety and the following shall be inserted in lieu thereof: 

        "Products" shall mean all FLC micro-display glass-on-silicon and glass-on-glass devices
which are based on or incorporate or include DT Intellectual Property and all other products, if such products and devices are agreed to be incorporated into this Agreement by MYT and DT, manufactured
by or for MYT for or on behalf of DT, from time to time. For purposes of clarification, this Agreement shall not apply to any products or devices that are not manufactured by or for MYT. 

        2.    Use of Manufacturing Facilities.    A new Section 2.7 shall be added to the Original Agreement as
follows: 

        2.7    Use of Manufacturing Facilities.    

        2.7.1    Use of Manufacturing Facilities.    

        (a)   Except
as expressly permitted in Sections 2.7.1(b) and 6.12, MYT agrees not to use the Line or any DT intellectual Property for any purpose except for the manufacture of
the Products and, subject to Sections 2.7.1(c) and 11.1.3, the PLPs. 

        (b)   Subject
to the limitations set forth in Section 2.7.1(c) subject to Sections 3.4, 4.11, 6, 10 and 11, MYT may use the Line and its other manufacturing facilities
to manufacture products for or on behalf of third parties; provided that, MYT shall notify DT in writing of the names of such third parties and the types of products manufactured 

2

 

for
or on behalf of such third parties twice a year; by the end of June and December every year. 

        (c)   Unless
otherwise agreed to by the Parties and subject Section 11, during the term of this Agreement and for a period of two years thereafter, MYT agrees not to
use the Line, the DT Intellectual Property or its other manufacturing facilities to manufacture any Competitive Product nor shall MYT or any of its Affiliates participate, directly or indirectly, in
the design, manufacture or sale of any Competitive Product. In the event MYT is manufacturing a product or device designed to perform substantially similar function as, or be a substitute or
replacement for, the Products, DT and MYT shall discuss in good faith whether MYT should continue to manufacture and sell such product or device, provided however that, in any event, subject always to
Section 2.7.3, MYT may manufacture and sell such product unless and until DT and MYT reach an agreement that MYT cease to manufacture and sell such product or device (in which case MYT may
continue to manufacture and sell such product or device until the expiration of the then current term of the applicable manufacturing agreement, or as the Parties otherwise agree) or until the
expiration of the then current term of the applicable manufacturing agreement. MYT covenants and agrees not to enter into any agreement with a third party for the manufacture of any product or device
(regardless of whether it is a Competitive Product) requiring the use of the Line or any DT Intellectual Property for a term of more than three (3) years and covenants and agrees not to enter
into any contract or agreement in conflict with the provisions of this Agreement. The scope and effect of the covenants contained in this Section 2.7.1(c) shall be as broad as may be permitted
pursuant to the provisions of applicable law. To the extent that the language of this subsection may restrict competition to a greater extent than that permitted by applicable law, it shall be
effective only to the extent permitted by applicable law. 

        2.7.2    Royalty; Line Access Fee.    In return for the license granted in
Section 11.1, MYT shall pay to DT a royalty [*****] (payable in U.S. dollars) of all gross revenue (as determined in accordance with generally acceptable accounting
principles in the United States, consistently applied), recognized by MYT as a result of using FOL or MOL or any DT Intellectual Property in the manufacture or sales of non-FLC
micro-display products (except the Products), which are manufactured using FOL or MOL. In the event that MYT manufactures products or devices using FOL or MOL pursuant to an agreement, understanding
or arrangement ("Arrangement") (such as, among other things an arrangement involving a division of profits or special rebates or allowances) with an Affiliate or with any third party with which MYT or
any Affiliate of MYT has such an Arrangement and which Arrangement results in extending to such Affiliate or third party lower prices, fees or rates than those charged to DT or other concerns buying
similar products in similar amounts and under similar conditions, then the royalties to be paid hereunder with respect to
such products or devices shall be based on the gross sales price at which the purchaser of such products or devices so resells such products or devices. 

        For
purposes of this Section 2.7.2, "gross revenue" shall not include the following: (i) sales, use and/or other taxes or duties actually paid, (ii) normal and
customary rebates, and cash and trade discounts, actually taken, (iii) cost of any shipping packages and packing, (iv) insurance costs and transportation charges, (v) import
and/or export duties actually paid, and (vi) amounts allowed credited due to return, all of such items set forth in subsections (i)-(vi) shall itemized, to the extent applicable, on
MYT's written report to DT under Section 2.7.2(a). 

        (a)   Within
30 days of the end of each calendar quarter following any use of the Line or any DT Intellectual Property pursuant to the license in Section 11.1,
MYT shall 

3

 

furnish
DT with a written report setting forth the revenue it recognized from the use of the Line or any DT Intellectual Property by third parties during the previous period and the computation of the
royalties payable with respect thereto. Each report shall be accompanied by the amount due (in U.S. dollars) for that period, if any. 

        (b)   MYT
shall keep accurate records in sufficient detail to enable royalties payable to DT hereunder to be determined and it shall permit such records to be inspected once
per calendar quarter upon written notice by DT, during reasonable business hours, by DT, a certified public accountant or firm of certified public accountants appointed by DT, or any other advisor of
DT, at DT's expense, to the extent necessary to verify the amount of royalties payable hereunder to DT. 

        (c)   All
royalties or other amounts called for by this Agreement shall be made without deduction for taxes, assessments, or other charges of any kind which may be imposed on
the Parties by the government of the Japan or any other government or political subdivision of any government, and such taxes, assessments, or other charges shall be the responsibility of and paid by
MYT. Notwithstanding the foregoing, any income or other tax that MYT is required to withhold on behalf of DT with respect to the royalties owed pursuant to this Agreement shall be deducted by MYT from
the royalties prior to remittance. Within 60 days after each payment of royalties to DT, MYT shall furnish to DT evidence of any such taxes withheld. 

        (d)   The
United States currency payments under this Agreement shall be determined on the basis of the Official Rate of Exchange, as quoted by the Wall
Street Journal, New York, New York, U.S.A., on the date (or closest preceding business day) that such payment is due; provided that, if such exchange rate is not quoted in the  Wall Street Journal,
 the closing transfer buying rates quoted by Citibank, N.A. in New York, New York, U.S.A., shall be employed in effecting such
conversion. 

        2.7.3    Capacity.    MYT acknowledges and agrees that its manufacturing activities on behalf
of third parties [*****], shall not interrupt or in any way interfere with its capacity to manufacture Products to fulfill the requirements of DT and HP as set forth herein. DT
shall be entitled to priority for manufacturing capacity to manufacture Products, including Products for PLPs, to fulfill the requirements of DT and HP before MYT or any other customer of MYT. In the
event that MYT is unable to fulfill DT's and HP's requirements for the Products as set forth herein for any 60-day period, DT, at its option, may require MYT to cease manufacturing
operations on behalf of MYT or any of its other customers (including all manufacturing relating to the PLP) and DT may, at its option, secure other means to fulfill its volume requirements. 

        3.    Access to Manufacturing Facilities.    A new Section 2.8 shall be added to the Original Agreement as
follows: 

        2.8    Access to Manufacturing Facilities.    

        2.8.1    DT's Access.    DT or any person designated by DT (other than direct competitors of
MYT) shall have the right to visit MYT's manufacturing facilities and the Line during normal business hours and to inspect MYT's operation relating to the performance of its obligations hereunder. DT
or its authorized representatives shall have the right to inspect all incoming materials, inventory, Finished Products for conformity to the Product specifications and quality standards provided that
such inspection shall not unreasonably disrupt MYT's operations. Any such inspections and/or payments prior to delivery of any Finished Products shall not constitute final acceptance by DT. MYT agrees
to implement within a reasonable time all mutually agreed corrective action recommended by DT or its representative to MYT. 

4

 

In
addition, MYT agrees to grant DT reasonable access to the reports, records and other documents relating to the manufacture of the Products, including copies of all inspection and other reports by
governmental regulatory agencies. 

        2.8.2    Third Part Access.    During the term of this Agreement, MYT may grant access to the
Line to a third party for or on behalf of which MYT manufactures products using the Line, provided that the confidentiality obligations of MYT under Section 12 shall be in full force and effect
and provided further that, prior to such third party's access, MYT shall require that such third party execute a confidentiality agreement no less restrictive than the confidentiality obligations set
forth in Section 12. Notwithstanding the foregoing, MYT shall not permit any third party that sells, manufactures, distributes or otherwise markets any Competitive Product (as further detailed
on Schedule 1.C, Competitive Products) access to the Line and for all purposes of this Agreement
and any confidentiality agreement entered into with third parties, all information relating to the Line and the Products, whether disclosed orally or in writing, shall be deemed to be Confidential
Information. 

        4.    Finished Products.    The following shall be inserted after the last sentence in Section 6.5 of the
Original Agreement: 

MYT
will use its best efforts to manufacture and sell to DT all quantities of the Product ordered by DT and HP in accordance with the Product order schedule. If the requested quantities of the
Products are not met due to down time on the Line, use of the Line or other manufacturing facilities for third parties or itself or any failures under MYT's control and responsibility, MYT will take
measures, at its cost, to make up the shortages. If shortages are due in any way to conditions solely caused by DT, DT will provide direction on whether and how to make up the shortage and will be
responsible for any associated incremental cost. 

        5.    Price.    The following shall be inserted after the last sentence in Section 7.1 of the Original
Agreement: 

        MYT
agrees that overhead costs paid by DT shall not [*****]. MYT further agrees that deductions shall be made to the cost of the Products
[*****]. MYT covenants and agrees that the prices, rates, charges or fees used in the determination of its manufacturing costs for the price of the Products in accordance with
Section 7.1 are not less favorable than those currently and in the future extended to other customers, or to MYT's Affiliates, for similar manufacturing activities and quantities. DT shall
automatically have the benefit of any lower prices, rates, charges or fees provided to MYT's other customers, or to its Affiliates (based on sales volumes similar to or more than that of MYT's other
customers and Affiliates), using the Line and its manufacturing facilities in accordance with Section 2.7.1. MYT agrees to use best efforts to purchase materials from vendors and suppliers who
can supply materials for MYT's manufacturing activities on behalf of DT and on behalf of itself, its Affiliates or third parties, in order to provide additional cost savings to DT as a result of
higher volume discounts. The prices charged to DT by MYT for such materials shall be not less favorable than the prices charged by MYT to third parties or its Affiliates for such materials where
volumes are similar to MYT's customers' or its Affiliates' volumes. 

5

   
        6.    Exclusive Agreement.    Section 10 of the Original Agreement shall be amended as follows: 

        (a)   Section 10.1
shall be deleted in its entirety and the following shall be inserted in lieu thereof: 

        10.1    DT.    Except as expressly permitted in Sections 2.7 and 3.1 and except for
manufacturing Products on its own manufacturing line in Longmont, Colorado, DT will not manufacture or have a third party manufacture Products during the term of this Agreement or any renewal thereof.
Notwithstanding the foregoing, in the event of a breach or default by MYT under this Agreement that remains uncured for a period of 60 days after notice thereof from DT or if DT elects to seek
a second source of supply or to find a new distributor under Sections 2.7 and 3.1, at DT's option, and in addition to all of DT's other rights and remedies hereunder, this Agreement shall become
non-exclusive with respect to DT's obligations to MYT only and DT may manufacture and sell any Products (including the PLPs) itself or through any third party (and all minimum purchase
requirements under Section 9 shall terminate) and DT may supply FLC materials to any third party to manufacture the Products; provided, however, MYT shall continue to be bound by all of the
terms and conditions of this Agreement. To the extent that DT elects to use a second source of supply under this Section 10.1 and so long as this Agreement has not expired or been terminated, if MYT
cures any breach or default after the 60 cure period set forth above (provided, however, this clause shall not create any additional cure rights for a breach or default by MYT) and MYT is able to
fulfill DT's pricing, capacity, quality and other requirements under the terms of this Agreement by the third anniversary date of DT's election to contract with a second source of supply and to
maintain a non-exclusive relationship with MYT, then DT shall agree to convert this Agreement back to an exclusive manufacturing relationship for the remainder of the term of this
Agreement. 

        (b)   Section
10.2 shall be deleted in its entirety and the following shall be inserted in lieu thereof: 

        10.2    MYT.    Except as expressly permitted in Section 2.7 and subject to the terms
and conditions of Section 2.7, MYT agrees that it will use the manufacturing equipment it installs in Nagano to manufacture Products in accordance with this Agreement only for the manufacture
of Products and Finished Products, and no others. 

        7.    Intellectual Property Rights.    Sections 11.1, 11.2, and 11.3 of the Original Agreement are hereby deleted in
their entirety and the following is hereby inserted in lieu thereof together with new Sections 11.5, 11.6, and 11.7: 

        11.1    DT Intellectual Property.    

        11.1.1    Ownership.    Except for the limited licenses explicitly granted in this
Section 11.1, DT retains all right, title and interest in and to the DT intellectual Property. To the extent MYT has or acquires any right, title or interest in or to the DT Intellectual
Property, MYT hereby irrevocably transfers and assigns all such right, title or interest to DT. To the extent MYT retains any rights in or to the DT Intellectual Property that, as a matter of law,
cannot be transferred or assigned to DT, including without limitation any moral rights (collectively, "DT Retained Rights"), MYT hereby unconditionally and irrevocably waives the enforcement of such
DT Retained Rights, and all claims and causes of action of any kind against DT with respect thereto, and agrees, at DT's request and expense, to consent to and join in any action to enforce such DT
Retained Rights on DT's behalf. MYT shall, during the term of this Agreement and at any time thereafter, execute any documents and take such other actions as deemed necessary (at DT's cost and
expense) by DT to protect and convey the rights of DT 

6

 

in
and to the DT Intellectual Property. MYT shall not subject any DT Intellectual Property (or any portions thereof) to any security interest, lien or other encumbrance. 

        11.1.2    License to Manufacture on Behalf of DT.    DT hereby grants to MYT a limited,
non-transferable, royalty-free, non-exclusive license to use and modify (solely with respect to the DT Intellectual Property relating to manufacturing processes)
the DT Intellectual Property for the sole purpose of manufacturing the Products on behalf of DT [*****] using the Line only, subject to the terms and conditions of this
Agreement. MYT shall not have any right to sublicense its rights under this Section 11.1.2. 

        11.1.3    License to Use DT Intellectual Property for PLPs.    DT hereby grants to MYT a
limited, non-transferable, non-exclusive license to use the DT Intellectual Property to sell, offer to sell and import the PLPs under the terms of this Agreement. In addition,
DT hereby grants to MYT a limited, non-transferable, non-exclusive license to make PLPs under the Restricted Patents under the terms of this Agreement. MYT shall not have any right to
sublicense its rights under this Section 11.1.3. 

        11.1.4    License to Manufacture on Behalf of MYT or Third Parties.    Subject to the
limitations set forth in Section 2.7, DT hereby grants to MYT a limited, royalty-bearing (with respect to the use of the FOL and MOL only), non-transferable,
non-exclusive license to use the DT Intellectual Property, solely as the DT Intellectual Property relates to the operation of the Line and not with respect to any of the Products, to
manufacture products or other devices on behalf of itself and/or for third parties. MYT shall not have any right to sublicense its rights under this Section 11.1.4. 

        11.2    MYT Intellectual Property.    

        11.2.1    Ownership.    Except for the limited license explicitly granted in
Section 11.2.2, MYT retains all right, title and interest in and to the MYT Intellectual Property. To the extent DT has or acquires any right, title or interest in or to the MYT Intellectual
Property, DT hereby irrevocably transfers and assigns all such right, title or interest to MYT. To the extent DT retains any rights in or to the MYT Intellectual Property that, as a matter of law,
cannot be transferred or assigned to MYT, including without limitation any moral rights (collectively, "MYT Retained Rights"), DT hereby unconditionally and irrevocably waives the enforcement of such
MYT Retained Rights, and all claims and causes of action of any kind against MYT with respect thereto, and agrees, at MYT's request and expense, to consent to and join in any action to enforce such
MYT Retained Rights on MYT's behalf. DT shall, during the term of this Agreement and at any time thereafter, execute any documents and take such other actions as deemed necessary by MYT (at MYT's cost
and expense) to protect and convey the rights of MYT in and to the MYT Intellectual Property. 

        11.2.2    License.    To the extent MYT incorporates any MYT Intellectual Property into
(a) any manufacturing process for the Products (b) in the Products or (c) otherwise uses the MYT Intellectual Property in connection with this Agreement, MYT hereby grants DT and
its Affiliates a transferable, worldwide, irrevocable, perpetual, unlimited, royalty-free, fully-paid license, with the right to sublicense through multiple tiers of
sublicensees, to use the MYT Intellectual Property to use, modify, make, import, sell, and offer to sell any product or device that incorporates such MYT Intellectual Property or any improvements made
by DT thereto. 

        11.3    Restrictions.    

        11.3.1    DT Intellectual Property.    Except as permitted under Section 11.1, MYT and
its Affiliates shall not, and shall not permit or encourage any third party to: (a) modify, adapt, alter, translate, port or create derivative works of or from the DT Intellectual Property;
(b) sublicense, distribute, sell, lease, rent, loan, or otherwise transfer the DT Intellectual 

7

 

Property;
(c) reverse engineer, decompile, disassemble, or otherwise attempt to derive the formula for or any other proprietary information or trade secrets from the DT Intellectual Property;
(d) remove, alter, or obscure any proprietary notices (including, without limitation, any copyright or trademark notices) of DT or its licensors and suppliers from the DT Intellectual Property;
or (e) otherwise use, reproduce, display or copy the DT Intellectual Property. Some of the foregoing restrictions may not apply to MYT under the particular laws of the jurisdiction which MYT
operates, in which case such restrictions shall not apply to the extent prohibited by or in conflict with such applicable law. Except as expressly provided in Section 11.1 or as otherwise
agreed to by the Parties, DT grants no rights or licenses to MYT, by implication, estoppel, or otherwise, in or to the DT Intellectual Property including, but not limited to, the right to make or sell
any Product outside of Japan or the right to have any Product or PLP made by a third party. All rights not expressly granted to MYT hereunder are reserved by DT. 

        11.3.2    MYT Intellectual Property.    Except as permitted under Section 11.2, DT and
its Affiliates shall not, and shall not permit or encourage any third party to: (a) modify, adapt, alter, translate, port or create derivative works of or from the MYT Intellectual Property;
(b) sublicense, distribute, sell, lease, rent, loan, or otherwise transfer the MYT Intellectual Property; (c) reverse engineer, decompile, disassemble, or otherwise attempt to derive the
source code for or any other proprietary information or trade secrets from the MYT Intellectual Property; (d) remove, alter, or obscure any proprietary notices (including, without limitation,
any copyright or trademark notices) of MYT or its licensors and suppliers from the MYT Intellectual Property; or (e) otherwise use, reproduce, display or copy the MYT Intellectual Property.
Some of the foregoing restrictions may not apply to DT under the particular laws of the jurisdiction which DT operates, in which case such restrictions shall not apply to the extent prohibited by or
in conflict with such applicable law. Except as provided in Section 11.2 above, MYT grants no rights or licenses to DT, by implication, estoppel, or otherwise, in or to the MYT Intellectual
Property. All rights not expressly granted to DT hereunder are reserved by MYT. 

        11.5    Joint Intellectual Property.    Any and all Joint Intellectual Property shall be
subject to the following provisions: 

        11.5.1    Ownership.    

        (a)   Subject
to the terms and conditions of this Agreement, all Joint Intellectual Property shall be owned jointly and equally by MYT and DT. Each Party hereby acknowledges
and agrees that, except as otherwise set forth expressly below, the Parties each own an equal undivided interest in and to any and all Joint Intellectual Property, subject to the rights and
obligations set forth herein. 

        (b)   To
the extent either Party has or acquires any greater right, title or interest in or to the Joint Intellectual Property than the other Party, the Party having such
greater interest hereby assigns, to the other Party, such rights as necessary to effectuate the joint ownership set forth in Section 11.5.1.(a). 

        (c)   Patent
applications covering Joint Intellectual Property and patents issuing thereon, applications for copyright registration for any Joint Intellectual Property, and
any and all extensions, divisions, renewals, reissues and continuations of any and each of the foregoing will be filed and prosecuted by counsel selected by DT and MYT and maintained jointly and
equally by DT and MYT, and both Parties will bear fifty percent (50%) of all costs and expenses of and shall cooperate with each other with respect to applying for, prosecuting, filing, obtaining,
maintaining, renewing and continuing such patents and copyrights for all Joint Intellectual Property. In the event one Party discontinues funding any of such costs or 

8

 

expenses
with respect to Joint Intellectual Property, that Party shall lose the rights granted under this Section 11.5 for that portion of the Joint Intellectual Property until such time that
it reimburses the other Party for those costs the non-paying Party did not share equally. In such an event, the other Party may undertake to acquire such patent or copyright with respect
to the Joint Intellectual Property at its sole expense and shall have full control over the prosecution, registration and maintenance thereof (as the case may be), in which case the
non-paying Party will have no rights in such Joint Intellectual Property and shall not be entitled to any share of any profits, royalties or other amounts attributable to such Joint
Intellectual Property. In connection with obtaining and maintaining patent or copyright protection for any invention that may be related to Joint Intellectual Property, regardless of which Party has
ownership rights, the Parties shall cooperate with each other, during and subsequent to the term of this Agreement, by executing and delivering all documents reasonably necessary to carry out the
intent of this Section 11.5. 

        11.5.2    Use of Joint Intellectual Property.    Subject to and without limiting
Section 11.5.1, each of DT and MYT may make, use, sell, offer to sell, import, copy, modify, distribute, make a derivative work or otherwise practice or exploit any Joint Intellectual Property
without having any obligation to the other Party. DT and MYT each hereby waive all rights to an accounting for profits resulting from either Party's use of the Joint Intellectual Property. 

        11.5.3    Enforcement.    Prior to commencing any action or placing in issue in a legal
proceeding against a third party concerning the validity, scope, infringement or enforceability of any Joint Intellectual Property, DT or MYT, as the case may be, shall notify the other Party of the
matter. Consent by the other Party to proceed with the action shall not be required, provided that the Party taking the action shall not unnecessarily compromise the other Party's interest in the
Joint Intellectual Property, and shall permit the other Party at its election and expense to join the action if permitted by law. All amounts obtained during such enforcement of any Joint Intellectual
Property shall belong to the Party initiating such enforcement action, provided that the enforcing Party shall deliver the other Party a pro-rata share of such amounts in proportion to the
extent (if any) the other Party shared in the costs of such enforcement action. 

9

  

        11.5.4    Employees and Consultants.    Each Party shall maintain agreements with its
employees and consultants sufficient to enable such Party to comply with its obligations under this Section 11.5. 

        11.6    Indemnification.    

        11.6.1    MYT Indemnification.    MYT shall pay all costs relating to any claim that any
Permitted Use (as defined below) of the Joint intellectual Property infringes the right of any third party and MYT shall indemnify, defend and hold DT and its shareholders, Affiliates, employees,
officers, directors and contractors harmless from and against any and all losses, liabilities, judgments, awards, damages and costs (including attorneys' fees, experts' fees and expenses) in any claim
or suit arising out of an allegation that the Joint Intellectual Property (or any Permitted Use thereof, including, without limitation, incorporating such Joint Intellectual Property into a Product or
manufacturing process, or the sale, offer for sale or importation of such Product) infringes any third party's rights including, without limitation, any Intellectual Property rights, or violates any
applicable law, rule or regulation of any governmental authority or agency. 

        For
purposes of this Agreement, "Permitted Use" shall mean any use of the Joint Intellectual Property (i) in any application currently used by MYT or DT at the time such Joint
Intellectual Property was developed (including, without limitation, incorporating such Joint Intellectual Property into any Product or manufacturing process, or the sale, offer for sale or importation
of such Product) or any other uses that are not materially different from such applications, or (ii) any other use of the Joint Intellectual Property after notification to MYT of such use if
MYT confirms that such use does not infringe any third party's Intellectual Property rights, or violate any applicable law, rule or regulation of any governmental authority or agency. 

        11.6.2    DT Indemnification.    DT shall pay all costs relating to any claim that the DT
intellectual Property infringes the right of any third party and DT shall indemnify, defend, and hold MYT and its shareholders, Affiliates, employees, officers, directors and contractors harmless from
and against any and all losses, liabilities, judgments, awards, damages and costs (including attorneys' fees, experts' fees and expenses) in any claim or suit arising out of an allegation that the DT
Intellectual Property used pursuant to Sections 11.1.2 and 11.1.3 infringes any third party's rights including, without limitation, any Intellectual Property rights or violates any applicable law,
rule or regulation of any governmental authority or agency. 

        11.7    Bankruptcy.    All rights and licenses granted under or pursuant to this Agreement by
one Party to the other are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States
Bankruptcy Code, licenses of rights to "intellectual property" as defined under Section 101 of the United States Bankruptcy Code. Subject to all of the terms, conditions and obligations of this
Agreement, the Parties agree that the licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the United States Bankruptcy Code. 

        8.    Termination.    Section 16 is hereby amended as follows: 

        (a)   The
following shall be added at the end of Section 16.1.: 

        In
the event of any termination of this Agreement under Section 16.2, this Section 16.1 shall have no further force and effect. 

10

 

        (b)   Section 16.2
shall be deleted in its entirety and the following is hereby inserted in lieu thereof: 

        16.2    Termination for Breach of Intellectual Property Rights.    Each Party acknowledges
that (i) any misuse of any of the other Party's Intellectual Property, (ii) any violation of the licenses granted under this Agreement, or (iii) any disclosure of the other
Party's Confidential Information is likely to cause serious and irreparable harm, the amount of which may be difficult to estimate, thus making any remedy at law or in damages inadequate. Each Party
therefore agrees that if the other Party breaches any provision of this Agreement relating to the other Party's Intellectual Property, the licenses granted hereunder, or Confidential Information or if
such Party has cause to believe that the other Party intends to or is about to breach the same, then such Party shall be entitled to, and the other Party hereby consents to, injunctive relief (without
having to post a bond), restraining or enjoining the act (or failure to act) constituting the breach or threatened breach, or such other equitable and legal remedies as may be available in the
circumstances. In addition, if any such breach remains uncured for 10 days after receiving written notice thereof, the non-breaching Party may terminate this Agreement without
mediation or arbitration under Section 16.1. The Parties agree that the exclusive venue and place of jurisdiction for any proceeding brought under this Section 16.2 shall be the State of
Colorado, City and County of Denver, including the United States District Court for the District of Colorado in Denver, and each Party hereby waives any objection relating to the basis for personal or  in rem jurisdiction or to venue which it may now or hereafter have in any such suit, action or proceeding. 

        (c)   The
following shall be inserted after the last sentence of Section 16.3: 

        Upon
the termination or expiration of this Agreement for any reason, unless the Parties mutually agree in writing to the contrary and as is necessary for MYT to complete its obligations
under the current term (without any opportunity for renewal) of any agreement with any third party or an Affiliate for the manufacture of products on the Line under Section 2.7 (except in the
case where such use of the Line caused the termination of this Agreement), the licenses set forth in Section 11.1 shall terminate and MYT shall immediately stop the production of any Products
then in process; except that in the case of the expiration of this Agreement or a termination of this Agreement by DT, at DT's option, MYT shall continue production of the Products to the extent
necessary to meet any orders of Products which were accepted by MYT prior to the expiration or termination of the Agreement. In addition, MYT shall immediately cease using all of the DT Intellectual
Property relating to the Products and shall promptly deliver to DT all Finished Product manufactured hereunder along with all copies or tangible forms of the DT Intellectual Property and Joint
Intellectual Property used in the Line or in any other manufacturing process used to produce the Products together with all FLC materials, equipment and other tangible property supplied by or for DT.
Sections 2.7, 6, 8, 9, 11.1.1, 11.2, 11.3, 11.4, 11.5, 11.6, 12, 14, 16 and 17 shall survive the expiration or termination of this Agreement for any reason. 

        9.    General Terms.    Section 17 of the Original Agreement shall be amended as follows: 

        (a)   The
following shall be inserted after the last sentence of Section 17.3: 

        Upon
such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties agree to negotiate in good faith to modify this Agreement so as
to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the obligations contemplated hereunder are fulfilled to the maximum extent possible. 

11

 

        (b)   Section 17.5
shall be deleted in its entirety and the following is inserted in lieu thereof: 

        All
notices hereunder, other than day-to-day communications, shall be in writing and delivered (i) personally, (ii) by registered or certified mail,
postage prepaid; (iii) by overnight courier service, or (iv) by facsimile, confirmed promptly by one of the foregoing delivery methods, to the following addresses of the respective
Parties: 

	If to DT, individual copies to:	 	With a copy to:
	

Displaytech, Inc.

Attn:

Chief Executive Officer or President

2602 Clover Basin Drive

Longmont, CO 80503-7603

Phone: (303) 772-2191

Fax: (303) 772-2193	
 	

Displaytech, Inc.

Attn: General Counsel

 

2602 Clover Basin Drive

Longmont, CO 80503-7603

Phone: (303) 772-2191

Fax: (303) 772-2193
	

If to MYT, individual copies to:	
 	

With a copy to:
	

Miyota Co., Ltd.

Attn: President

4107-5 Miyota-machi

Kitasaku-gun

Nagano-ken

389-0294 Japan

Phone: 81 0267 (32) 3331

Fax: 81 0267 (32) 6327	
 	

Toshihiko Ide

353 Yaehara Kitamimaki-mura

Kitasaku-gun

Nagano-ken

389-0406 Japan

81 0268 (67) 1911

81 0268 (67) 1913

        Notices
shall be effective: (a) upon receipt if personally delivered or delivered by confirmed facsimile; (b) on the fifth business day following the date of mailing, if
mailed; and (c) upon receipt, if sent by overnight courier service. A Party may change its address listed above by notice to the other Party. 

        (c)   A
new Section 17.11 shall be added as follows: 

        17.11    Export Controls.    It is understood and acknowledged that the DT Intellectual
Property and Products are subject to export control laws, trade embargoes, regulations, orders and other restrictions of any country governing the export of the DT Intellectual Property and the
Products, and each Party agrees that it shall comply with such laws, trade embargoes, regulations, orders and other restrictions. Without limiting the generality of the foregoing, MYT shall comply at
all times with all restrictions imposed by the U.S. Government under the U.S. Export Administration Act of 1979, as amended, and regulations issued under such Act and trade sanctions programs
administered by the U.S. Department of Treasury. MYT acknowledges that currently such trade sanction programs prohibit DT from engaging in transactions with certain countries and parties including,
the Balkans, Burma, Cuba, Iran, Iraq, Liberia, Libya, North Korea, Sierra Leone, Sudan, the Taliban, UNITA (Angola) and Yugoslavia among others. The obligation of each Party under this Section shall
survive the termination of this Agreement. 

        (d)   A
new Section 17.12 shall be added as follows: 

        17.12    Foreign Corrupt Practices Act.    MYT acknowledges that it is familiar with and
understands the prohibitions of U.S. Foreign Corrupt Practices Act 1977, as amended (the "FCPA"), and that it has not engaged and shall not engage, and has not caused or permitted and shall not cause
or permit any of its shareholders, directors, officers, employees or agents 

12

 

or
any of its Affiliates or their shareholders, directors, officers, employees or agents to engage, in any act that would involve a violation of the FCPA. MYT agrees that it shall immediately notify
DT if MYT receives or acquires knowledge of, directly or indirectly, any request or action which MYT believes will or may be a violation of the FCPA. MYT further agrees to indemnify DT against any and
all costs, fines and other liabilities imposed on DT as a result of any such actions by MYT or its Affiliates or its or their respective shareholders, directors, officers, employees or agents. 

        (e)   A
new Section 17.13 shall be added as follows: 

        17.13    Independent Contractor Relationship.    The relationship between the Parties under
this Agreement is that of independent contractors, and this Agreement does not constitute, and shall not be deemed to constitute a joint venture or partnership between the Parties hereto, and neither
Party shall be deemed to be an agent of the other, or have authority to bind, obligate or make an agreement for the other Party. 

        (f)    A
new Section 17.14 shall be added as follows: 

        17.14    Affiliates and Subcontractors.    Neither Party shall subcontract any of is
obligations hereunder without the written consent of the other Party. Each Party shall exercise sole control of its Affiliates, permitted subcontractors and consultants, shall ensure that they comply
with all of the terms and conditions of this Agreement and shall be solely responsible for their actions and omissions. Any breach of the terms of this Agreement by a Party's Affiliates,
subcontractors or consultants shall constitute a breach by such Party, entitling the non-breaching Party to pursue against it all rights and remedies under this Agreement or applicable law
that such other Party would have been entitled to assert against the Party had the Party directly breached this Agreement. In furtherance of the foregoing, to the extent that any obligations of either
Party are subcontracted hereunder, such subcontractor must agree in writing to be bound by the terms of this Agreement or, in the case of the confidentiality obligations under Section 12, an
agreement no less restrictive than the provisions of Section I2 and either Party may review such writings and agreements upon reasonable notice to the other Party. 

        10.    Schedules.    The following Schedules attached to the Original Agreement are hereby deleted in their entirety
and replaced with the Schedules attached hereto (together with all schedules contemplated hereunder): 

 Schedule 1.C, Competitive Products  

 Schedule 2.3, Product Description  

 Schedule 2.4, Process Procedure Documentation (QC Process Charts)  

 Schedule 3.1, Minimum Annual Volume Requirements for PLP Exclusivity  

 Schedule 3.2, Pricing Formula for Finished Products for Private Label Products  

 Schedule 7.1, Price  

        11.    Termination.    That certain Letter Agreement by and between DT and MYT, dated March 20, 1999, relating
to the Confidential Information of DT, is hereby terminated and shall have no further force and effect. 

        12.    Conflict.    If any conflict should arise between the terms and provisions of this Amendment and the Original
Agreement, this Amendment shall govern. In the event of any conflict between the Original Agreement (as amended by this Amendment) and that certain Private Label Product Supply 

13

 

Agreement,
dated January 19, 2001, between the Parties (the "Supply Agreement"), the terms and conditions of the Supply Agreement shall govern in all respects except for any conflict with
Section 3.1, in which case, this Amendment shall govern. 

        13.    Amendment No. 5.    The Parties hereby agree to use best efforts to negotiate a definitive Amendment
No. 5 to the Original Agreement by June 30, 2003 ("Amendment No. 5"). Amendment No. 5 will address the following: (i) volume and other obligations relating to PLPs,
(ii) warranty, shipment and forecasting provisions, (iii) product recalls, (iv) pricing based on the volume of the Products purchased by DT and based on a cost model, and
(v) additional amendments that are necessary to clarify the Original Agreement and to update the Schedules. 

        14.    No Other Amendments.    Except as amended hereby, the Original Agreement shall remain in full force and effect
in accordance with its original terms. 

        15.    Counterparts.    This Amendment may be executed in counterparts, each of which shall constitute an original and
all of which, when taken together, shall constitute one and the same document. Executed counterparts sent by facsimile or by other means of transmission shall be effective as originals. 

[The remainder of this page is intentionally left blank.]

14

        IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above. 

	MIYOTA CO., LTD.	 	DISPLAYTECH, INC.
	

 	

 	
 	

 	

 
	By:	/s/  YUZO MAEKAWA      
	 	By:	/s/  RICHARD BARTON      

	 	Name: Yuzo Maekawa	 	 	Name: Richard Barton
	 	Title: President	 	 	Title: CEO

Schedule 1.C  

April 2,
2003 

Competitive Products  

[*****]

[*****]

[*****] 

	 
	 	 
	 	[*****]
	 	[*****]
	 	[*****]
	 	[*****]
	 	[*****]

	Glass on Silicon	 	[*****]	 	[*****]	 	[*****]	 	[*****]	 	[*****]	 	[*****]
	 	 	[*****]	 	[*****]	 	[*****]	 	[*****]	 	[*****]	 	[*****]
	Glass on Glass	 	[*****]	 	[*****]	 	[*****]	 	[*****]	 	[*****]	 	[*****]
	 	 	[*****]	 	[*****]	 	[*****]	 	[*****]	 	[*****]	 	[*****]
	Any Viewfinders	 	 	 	[*****]	 	[*****]	 	[*****]	 	[*****]	 	[*****]

	*
	Unless approved by DT

	no
	[*****]

	yes
	[*****]

	royalty
	[*****]

	

	[*****] 

Chart
agreed on DT & MYT conference call April 2, 2003 

Schedule 2.3  

         

  

Data Sheet  

LightViewTM QVGA

Display Module
  Model QDM-0076-MV5 

        

  

Features  

	•
	Extended temperature range of-30°C to 80°C (storage)

 
	•
	 Programmability supports multiple brightness settings

 
	•
	 QVGA format with 320 × 240 pixels; 24-bit color capability on every pixel

 
	•
	 Flexible device design made possible through an easy-to-use electrical interface

 
	•
	 Performance adjustments of display can be passed on to end-user

 
	•
	 Less than 135 mW typical display module power consumption (at 16 MHz) including LED illumination

 
	•
	 4.8 mm (0.19") active display panel diagonal

 
	•
	 Display panel fill factor greater than 88%

 
	•
	 Low voltage operation:  

Display panel: 3.3 ± 0.3 V  

LED illumination: 5.0 ± 0.5 V  

	•
	 Fast switching Ferroelectric Liquid Crystal (FLC) materials and technology

 
	•
	 Adjustable frame rate—up to 100 color frames per second

 
	•
	 Independent color LED brightness control; programmable gamma control; power saving mode

 
	•
	 Simple, 8-bit digital interface, with data rates up to 24 Mbytes/second

 
	•
	 Two-wire control interface (TWIN)

 
	•
	 Color sequential mode of operation

 
	•
	 High brightness display module for indoor and outdoor use; greater than 340 cd/m2 typical luminance

 
	•
	 Contrast ratio greater than 100:1

 
	•
	 White point calibrated to 6500 ± 500 K

 
	•
	 Flexible image orientation supports multiple mounting designs  

	•
	 Improved mounting flexibility allows fewer constraints, wider variety of mounting options  

Applications  

	•
	Digital still camera viewfinders

 
	•
	 Video camcorder viewfinders

 
	•
	 Wireless communication devices

 
	•
	 Portable DVD players

 
	•
	 Battery-powered games

 
	•
	 Ultra-portable display applications  

Description  

        The QVGA Display Module Model QDM-0076-MV5 is a high resolution, self-illuminated display solution with an extended
temperature range, capable of operating between -10°C and 60°C, and of being stored between -30°C and 80°C. Compact and
lightweight, this Display Module is designed for portable, battery-powered devices. The display includes a power saving mode, reducing power consumption to less than 5 mW. QVGA Display Module
applications include
high resolution color viewfinders for both digital still and video cameras, wireless communication devices, portable DVD viewers, battery-powered games, and ultra-portable display applications. 

        A
drop-in replacement for Model QDM-0076-MV1, the MV5 Display Module offers improved mounting flexibility and requires less handling prior to
mounting. 

        With
320 × 240 full-color pixels, the QVGA Display Module Model QDM-0076-MV5 provides an integrated display solution,
incorporating the display panel, polarization optics, illumination, and control circuitry in a compact optical-mechanical package. Like all Displaytech products, the module takes advantage of the fast
switching speeds and superior optical qualities of our patented Ferroelectric Liquid Crystal (FLC) materials and technology. The FLC enables bright, full-color graphics and crisp text at
frame rates up to 100 Hz over a broad temperature range. 

        This
high brightness Display Module delivers over 340 cd/m2 for indoor and outdoor use. It also supports programmable brightness settings that may be passed on to the end
user. Display Module power consumption is less than 135 mW at 60 Hz frame rates. Designed specifically for portable display applications, the Display Module minimizes power consumption by efficient
and effective utilization of field sequential color operation. The display also includes a power saving mode that dramatically reduces typical power consumption to less than 5 mW. Excellent optical
efficiency is provided with both an aperture ratio greater than 88% and a top metal reflectance greater than 85%. 

        The
QVGA Display Module features a programmable response curve, allowing for gamma response values from 1.0 to approximately 3.0. Specifically, manufacturers can control brightness and
color or can pass control of these parameters on to the end-user using device interfaces. This gives manufacturers the freedom to design application devices with customer satisfaction, and
not display limitations, as their primary focus. Available control registers provide additional optimization for specific customer applications through the TWIN interface. Data interfacing to Model
QDM-0076-MV5 consists of an 8-bit digital data bus operating at up to 24 MHz. 

Illumination System  

        The QVGA Display Module Model QDM-0076-MV5 is designed to allow the variables of image size and location, field of view, and eye relief to
be addressed with maximum flexibility. This allows manufacturers the freedom to approach optical eyepiece design in the way that best fits their specific application. 

        Color
is achieved by sequentially illuminating the QVGA display panel with red, green, and blue light-emitting diodes (LEDs). This LED system provides very efficient, independently
controlled emitters for each primary color, with excellent color saturation and one of the broadest color gamuts in the display industry. Fast FLC switching speeds enable rich full color by
synchronously displaying individual red-green-blue (RGB) fields in rapid succession. Each pixel produces an individual pure color—there are no color triads to
reduce resolution or spatial clarity. The module uses a proprietary illuminator design optimized for uniform brightness and minimum form factor. The end result is the ability to show colors that are
unattainable on standard monitors or laptop screens. 

        These
additional colors are shown in Figure 1 as the area outside of the CRT gamut and inside of the labeled LED sources. 

  

Figure 1: QVGA Display Module Color Gamut Overlaid on 1931 CIE Color Chart  

 Package Description  

        The display panel is packaged on a ceramic substrate that provides both strength and stability and is attached to a flex circuit that allows for design and
mounting creativity. The integrated illuminator
consists of a plastic housing containing the full-color LED and optical films. The Display Module is designed to accommodate manufacturer preferences in system mounting, allowing for
extreme flexibility in application packaging design. Figure 2 shows MV5 model packaging to scale. 

  

Figure 2: QDM-0076-MV5 Package  

 Interface  

        Data interfacing to the QVGA MV5 model consists of an 8-bit digital data bus operating at up to 24 MHz. The digital video interface consists of an
8-bit data bus (VIDEO_IN [7:0]), FRAME_START, DATA_VALID, CLK (data clock), DISP_CLK (display clock) input signals, and the FULL output signal. Figure 3 shows the
pin configuration of the display module interface (not to scale). 

        The
MV5 model is controlled by the TWIN serial interface to program internal registers. User-programmable register values control image orientation, brightness, and color
balance (or white point). The MV5 model contains a set of registers that also control operation and report the status of the display. These control registers allow manufacturers to control several
important parameters: brightness and color control through LED registers, and display response through the gamma table register. Control of these parameters may also be passed on to the
end-user via device interfaces. This flexibility allows for both freedom in designing applications and enhanced satisfaction of end-user preferences. 

  

Figure 3: Model QDM-0076-MV5 Connection Diagram  

 Product Specifications

QVGA Display Module Model QDM-0076-MV5  

	General	 	 
	Format	 	QVGA (320 × 240 full color pixels)
	Viewing area	 	3.84 × 2.88 mm
	Array diagonal	 	4.83 mm (0.19")
	Pixel pitch	 	12.0 mm
	Fill factor	 	88.7%
	Color depth	 	24 bit color operation (16.7 million colors)
	Frame rate (full color)	 	100 Hz (maximum)

75 Hz (nominal)
	
Optical(1)	
 	

 
	Brightness	 	340 cd/m2 nominal
	Contrast ratio	 	100:1
	White color temperature	 	6500±500 K
	
Electrical	
 	

 
	Interface	 	8 bit digital data bus at up to 24 MHz
	 	Display panel	 	3.3 V CMOS (digital)
	 	LED illuminator	 	5.0 V
	

Power consumption (Display panel + LED illuminator) at 16 MHz	
 	

 
	 	Total module	 	<135 mW
	 	Low power mode	 	approximately 5 mW
	
Physical	
 	

 
	Dimensions (L × W × H)

(excludes flex circuit)	 	14.1 × 15.8 × 7.3 mm
	Weight	 	1.7 g
	
Thermal	
 	

 
	Operating temperature	 	-10° C to 60° C
	Storage temperature	 	-30° C to 80° C

QDM-0076-MV5
specifications are subject to change 

	(1)
	Quantities
apply to product performance at standard operating temperature, 25° C. 

Corporate Profile  

        Longmont, Colo.-Displaytech, Inc. makes and sells microdisplays with superior image quality to performance-driven consumer electronics
companies, providing sustainable competitive advantages to their digital still cameras, camcorders, and mobile communication device customers. Displaytech offers high-quality, patented
Ferroelectric Liquid Crystal (FLC) display products through its LightViewTM product lines, which use less power and with smaller form factors allowing for product design innovation and
meeting tough manufacturing demands.
Established partnerships with industry-leading manufacturers also position Displaytech to keep pace with the challenges of the high volume consumer electronics market. For more information visit
www.displaytech.com 

	Displaytech, Inc.	 	Telephone	 	303-772-2191
	2602 Clover Basin Drive	 	Toll free (USA)	 	800-397-8124
	Longmont, Colorado 80503-7604	 	Fax	 	303-772-2193
	USA	 	Email	 	QVGAsupport@displaytech.com
	 	 	Website	 	www.displaytech.com

  

  

Preliminary Data Sheet  

Light ViewTM 311k Analog Display Module  

        [GRAPHIC] 

Summary  

        The Displaytech LightViewTM 311k Display Module is a high resolution, low power offering specifically designed for color digital still camera and video
camcorder electronic viewfinder applications. The module provides an integrated display solution, incorporating the display panel, polarization optics, illumination, and control circuitry in a compact
opto-mechanical package. This product takes advantage of the fast switching speeds and superior optical qualities of our patented Ferroelectric Liquid Crystal (FLC) materials, delivering
images free of motion smearing or color breakup. This high brightness display module delivers 250 cd/m2 while consuming less than 225 mW at 120 Hz frame rate. The display also includes a
sleep mode that dramatically reduces power consumption to less than 5 mW. Industry standard analog interfaces are supported for easy product integration. 

Features  

	•
	High
resolution format with 432 x 240 full color pixels (311,000 effective dots)

	•
	Fast
switching Ferroelectric Liquid Crystal (FLC) material eliminates motion smearing

	•
	Supports
consumer product temperature ranges

	•
	Low
power: Less than 225 mW including LED illumination and display driver

	•
	120
Hz frame rate (360 Hz RGB field rate)

	•
	Performance
adjustments of the display including brightness and gamma can be passed on to end-user

	•
	All
digital display with superior image quality

	•
	Color
sequential mode of operation 

Applications  

	•
	Digital
still camera viewfinders

	•
	Video
camcorder viewfinders

	•
	Wireless
communication devices

	•
	Head
mounted displays

	•
	Ultra-portable
display applications 

Availability  

	

• Engineering Samples:	
 	

June 2003	
 	

 
	

• Pre-production Prototypes:	
 	

September 2003	
 	

 
	

• Volume Production:	
 	

Q4 2003	
 	

 

Supported Interfaces  

	•
	Analog
YUV

	•
	Analog
RGB 

Block Diagram  

Preliminary Product Specifications

LightViewTM 311k Analog Display Module  

	General	 	 
	Format:	 	432 × 240
	Array diagonal:	 	0.255"
	Pixel Pitch:	 	12 mm × 16.2 mm
	Fill Factor:	 	> 90%
	Color depth:	 	24 bit
	Frame Rate:	 	120 Hz (360 Hz RGB field rate) for NTSC

100 Hz (300 Hz RGB field rate) for PAL
	
Optical(1)	
 	

 
	Brightness:	 	250 cd/m2 Nominal
	Contrast Ratio:	 	> 100:1 @ room temperature
	White Color Temperature:	 	6,500 ± 500 K Adjustable
	
Electrical	
 	

 
	Supported Interfaces:	 	Analog RGB or Analog YUV with Hd, Vd
	Power Consumption:	 	Total Module:                < 175 mW @

(Display panel + LED Illuminator + Controller)
	Required Supply Voltages:	 	2.5V (Core)

3.3V (I/O)

5V (LED)
	
Packaging Dimensions:	
 	

20.20 × 19.20 × 13.5 mm (TBD)
	
Thermal	
 	

 
	Operating temperature:	 	-10 °C to 70 °C
	Storage temperature:	 	-30 °C to 83 °C

LDM-0311-A
specifications are subject to change 

	(1)
	Quantities
apply to product performance at standard operating conditions 

Corporate Profile  

        Longmont, Colo.-based Displaytech, Inc. makes and sells microdisplays with superior image quality to performance-driven consumer electronics companies,
providing sustainable competitive advantages to their digital still cameras, camcorders, and mobile communication device customers. Displaytech offers high-quality, patented Ferroelectric
Liquid Crystal (FLC) display products through its
LightViewTM product lines, which use less power and with smaller form factors allowing for product design innovation and meeting tough manufacturing demands. Established partnerships with
industry-leading manufacturers also position Displaytech to keep pace with the challenges of the high-volume consumer electronics market. 

For
more information visit www.displaytech.com 

	Telephone:	 	303-772-2191
	Toll free (USA):	 	800-397-8124

  

Data Sheet  

LightViewTM QVGA

Display Engine
  Model QDE-0076-SE1 

        [GRAPHIC] 

Features  

	•
	Fast switching Ferroelectric Liquid Crystal (FLC) materials and technology

 
	•
	 QVGA format with 320 × 240 pixels; 24-bit color capability on every pixel

 
	•
	 Virtual image size of 22.4" as viewed from 2m

 
	•
	 Focus adjustment from -3D to +1D

 
	•
	 Supports consumer product temperature ranges

 
	•
	 Programmability supports multiple brightness settings

 
	•
	 Flexible device design made possible through an easy-to-use electrical inter/ace

 
	•
	 Performance adjustments of display can be passed on to end-user

 
	•
	 Less than 135 mW typical display module power consumption (at 60Hz frame rates) including LED illumination

 
	•
	 Low voltage operation:  

Display panel: 3.3 ± 0.3V  

LED illumination: 5.0 ± 0.5V  

	•
	 Adjustable frame rate—up to 100 color frames per second

 
	•
	 Independent color LED brightness control; programmable gamma control; power saving mode

 
	•
	 Simple, 8-bit digital interface, with data rates up to 24 Mbytes/second

 
	•
	 Two-wire control interface (TWIN)

 
	•
	 Color sequential mode of operation

 
	•
	 High brightness display module for indoor and outdoor use; 343 cd/m2 nominal luminance

 
	•
	 Contrast ratio greater than 100:1

 
	•
	 White point calibrated to 6500 ± 500 K  

Applications  

	•
	Digital still camera viewfinders

 
	•
	 Video camcorder viewfinders

 
	•
	 Wireless communication devices

 
	•
	 Ultra-portable display applications  

Value Proposition  

	•
	Display Engine Module provides seamless integration into end-user applications, significantly reducing engineering design and development
time

 
	•
	 Reduces risk associated with new optics development, and offers a proven, high quality, low-cost microdisplay/optics combination

	•
	Reduces manufacturing labor time during camera/device assembly

	•
	Eliminates clean room requirement for microdisplay integration

	•
	Eases supply chain management requirements for the Electronic Viewfinder Assembly

Description  

        The QVGA Display Engine is a high resolution, self-illuminated display solution with an extended temperature range, capable of operating between
-10°C and 50°C, and of being stored between -30°C and 80°C. The Engine features a virtual image size of 22.4" as viewed from 2
meters and includes focus adjustment from -3D to +1D. Compact and lightweight, the Display Engine is optimized for use in Digital Still Cameras, but is equally effective in Video
Camcorders, Wireless Communication Devices, and Ultra-portable display applications. 

        With
320 × 240 full-color pixels, the QVGA Display Engine provides an integrated display/optics solution, incorporating the Displaytech QVGA Display
Module QDM-0076-MV5, magnification and focusing optics, and mechanical housing. Like all Displaytech products, the module takes advantage of the fast switching speeds and
superior optical qualities of our patented Ferroelectric Liquid Crystal (FLC) materials and technology. The FLC enables bright, full-color graphics and crisp text at frame rates up to 100
Hz over a broad temperature range. 

        This
high brightness Display Engine delivers a nominal 340 cd/m2 for indoor and outdoor use. It also supports programmable brightness settings that may be passed on to the
end user. The Display Module minimizes power consumption by efficient utilization of field sequential color operation. Typical Display Module power consumption is less than 135 mW at 60 Hz frame rates
and also includes a power saving mode that dramatically reduces power consumption to less than 5 mW. Excellent optical efficiency is provided with both an aperture ratio greater than 88% and a top
metal reflectance greater than 85%. 

        The
incorporated QVGA Display Module features a programmable response curve, allowing for gamma response values from 1.0 to approximately 3.0. Specifically, manufacturers can control
brightness and color or can pass control of these parameters on to the end-user using device interfaces. This gives manufacturers the freedom to design application devices with customer
satisfaction, and not display limitations, as their primary focus. Available control registers provide additional optimization for specific customer applications through the TWIN interface. Data
interfacing to the module consists of an 8-bit digital data bus operating at up to 24 MHz. 

Product Specifications

LightView QVGA Display Engine—Model QDE-0076-SE1  

	Engine Specifications	 	QVGA (320 × 240 full color pixels)
	Format:	 	15X
	Magnification:	 	-3D to + 1D
	Adjustment Range:	 	16.1 degrees
	Field of View:	 	22.4" at 2 meters
	Virtual Image Size:	 	24 bits
	Color depth:	 	100 Hz (maximum)
	Frame rate (full color):	 	75 Hz (nominal)
	
Brightness	
 	

340 cd/m2 (nominal)
	Contrast Ratio:	 	100:1
	White Color Temperature:	 	6500 +/- 500 K
	
Electrical	
 	

 
	Interface	 	8 bit digital data bus
	Display panel	 	3.3 V CMOS
	 	LED Illuminator	 	5.0 V
	
Power Consumption (Display panel + LED Illuminator)	
 	

 
	Total Module:	 	< 135 mW @ 60 Hz frame rates
	Low Power Mode:	 	5 mW
	
Physical (Engine Assembly)	
 	

 
	Dimensions (L × W × H):	 	48.65 × 23.56 × 29.23 mm [Length is measured at +1D]
	
Thermal	
 	

 
	Operating temperature:	 	-10° C to 50° C
	Storage temperature:	 	-30° C to 80° C

Corporate Profile  

        Longmont, Colo.-based Displaytech, Inc. makes and sells microdisplays with superior image quality to performance-driven consumer electronics companies,
providing sustainable competitive advantages to their digital still cameras, camcorders, and mobile communication device customers, Displaytech offers high-quality, patented Ferroelectric
Liquid Crystal (FLC) display products through its LightViewTM product lines, which use less power and with smaller form factors allowing for product design innovation and meeting tough
manufacturing demands. Established partnerships with industry-leading manufacturers also position Displaytech to keep pace with the challenges of the high volume consumer electronics market. 

For more information visit www.displaytech.com  

	Displaytech, Inc.	 	Telephone	 	303-772-2191
	2602 Clover Basin Drive	 	Toll free (USA)	 	800-397-8124
	Longmont, Colorado 80503-7604	 	Fax	 	303-772-2193
	USA	 	Email	 	QVGAsupport@displaytech.com
	 	 	Website	 	www.displaytech.com

  

Data Sheet  

LightViewTM QVGA

Display Engine
  Model QDE-0076-SE2 

        [GRAPHIC] 

Features  

	•
	Fast switching Ferroelectric Liquid Crystal (FLC) materials and technology

 
	•
	 QVGA format with 320 x 240 pixels; 24-bit color capability on every pixel

 
	•
	 Focus adjustment from -3D to +ID

 
	•
	 Supports consumer product temperature ranges

 
	•
	 Programmability supports multiple brightness settings

 
	•
	 Flexible device design made possible through an easy-to-use electrical interface

 
	•
	 Performance adjustments of display can be passed on to end-user

 
	•
	 Less than 135 mW typical display module power consumption (at 60Hz frame rates) including LED illumination

 
	•
	 Low voltage operation:  

Display panel: 3.3 ± 0.3 V  

LED illumination: 5.0 ± 0.5 V  

	•
	 Adjustable frame rate—up to 100 color frames per second

 
	•
	 Independent color LED brightness control; programmable gamma control; power saving mode

 
	•
	 Simple, 8-bit digital interface, with data rates up to 24 Mbytes/second

 
	•
	 Two-wire control interface (TWIN)

 
	•
	 Color sequential mode of operation

 
	•
	 High brightness display module for indoor and outdoor use; 343 cd/m2 nominal luminance

 
	•
	 Contrast ratio greater than 100:1

 
	•
	 White point calibrated to 6500 ± 500 K  

Applications  

	•
	Digital still camera viewfinders

 
	•
	 Video camcorder viewfinders

 
	•
	 Wireless communication devices

 
	•
	 Ultra-portable display applications  

Value Proposition  

	•
	Display Engine Module provides seamless integration into end-user applications, significantly reducing engineering design and development
time

 
	•
	 Reduces risk associated with new optics development, and offers a proven, high quality, low-cost microdisplay/optics combination

	•
	Reduces manufacturing labor time during camera/device assembly

	•
	Eliminates clean room requirement for microdisplay integration

	•
	Eases supply chain management requirements for the Electronic Viewfinder Assembly

Description  

        With 320 × 240 full-color pixels, the QVGA Display Engine provides a high resolution, integrated display/optics solution,
incorporating the Displaytech QVGA Display Module QDM-0076-MV5, magnification and focusing optics, and mechanical housing. Like all Displaytech products, the module takes
advantage of the fast switching speeds and superior optical qualities of our patented Ferroelectric Liquid Crystal (FLC) materials and technology. The FLC enables bright, full-color
graphics and crisp text at frame rates up to 100 Hz over a broad temperature range. Compact and lightweight, the Display Engine is optimized for use in Digital Still Cameras, Video Camcorders,
Wireless Communication Devices, and Ultra-portable display applications. 

        This
high brightness Display Engine delivers a nominal 340 cd/m2 for indoor and outdoor use. It also supports programmable brightness settings that may be passed on to the
end user. The Display Module minimizes power consumption by efficient utilization of field sequential color operation. Typical Display Module power consumption is less than 135 mW at 60 Hz frame rates
and also includes a power saving mode that dramatically reduces power consumption to less than 5 mW. Excellent optical efficiency is provided with both an aperture ratio greater than 88% and a top
metal reflectance greater than 85%. 

        The
incorporated QVGA Display Module features a programmable response curve, allowing for gamma response values from 1.0 to approximately 3.0. Specifically, manufacturers can control
brightness and color or can pass control of these parameters on to the end-user using device interfaces. This gives manufacturers the freedom to design application devices with customer
satisfaction, and not display limitations, as their primary focus. Available control registers provide additional optimization for specific customer applications through the TWIN interface. Data
interfacing to the module consists of an 8-bit digital data bus operating at up to 24 MHz. 

Product Specifications

LightView QVGA Display Engine—Model QDE-0076-SE2  

	Engine Specifications	 	 
	Format:	 	QVGA (320 × 240 full color pixels)
	Magnification:	 	20x
	Adjustment Range:	 	-3D to +1D
	Field of View:	 	21.6 degrees
	Color depth:	 	24 bits
	Frame rate (full color):	 	100 Hz (maximum)

75 Hz (nominal)
	
Module Specifications	
 	

 
	Brightness	 	340 cd/m2 (nominal)
	Contrast Ratio:	 	100:1
	White Color Temperature:	 	6500 ± 500 K
	
Electrical	
 	

 
	Interface	 	8 bit digital data bus
	Display panel	 	3.3 V CMOS
	 	LED Illuminator	 	5.0 V
	
Power Consumption (Display panel + LED Illuminator)	
 	

 
	Total Module:	 	< 135 mW @ 60 Hz frame rates
	Low Power Mode:	 	5 mW
	
Physical (Engine Assembly)	
 	

 
	Dimensions (L × W × H):	 	[Length is measured at +1D]
	With Flex	 	27 × 24 × 47mm
	Without Flex	 	27 × 24 × 26 mm
	
Thermal	
 	

 
	Operating temperature:	 	-10° C to 50° C
	Storage temperature:	 	-30° C to 80° C

Corporate Profile  

        Longmont, Colo.-based Displaytech, Inc. makes and sells microdisplays with superior image quality to performance-driven consumer electronics companies,
providing sustainable competitive advantages to their digital still cameras, camcorders, and mobile communication device customers. Displaytech offers high-quality, patented Ferroelectric
Liquid Crystal (FLC) display products through its LightViewTM product lines, which use less power and with smaller form factors allowing for product design innovation and meeting tough
manufacturing demands. Established partnerships with industry-leading manufacturers also position Displaytech to keep pace with the challenges of the high volume consumer electronics market. 

For more information visit www.displaytech.com  

	Displaytech, Inc.	 	Telephone	 	303-772-2191
	2602 Clover Basin Drive	 	Toll free (USA)	 	800-397-8124
	Longmont, Colorado 80503-7604	 	Fax	 	303-772-2193
	USA	 	Email	 	QVGAsupport@displaytech.com
	 	 	Website	 	www.displaytech.com

  

Preliminary Data Sheet  

Light ViewTM 311k Digital Display Module  

        [GRAPHIC] 

Summary  

        The Displaytech LightViewTM 311k Display Module is a high resolution, low power offering specifically designed for color digital still camera and video
camcorder electronic viewfinder applications. The module provides an integrated display solution, incorporating the display panel, polarization optics, illumination, and control circuitry in a compact
opto-mechanical package. This product takes advantage of the fast switching speeds and superior optical qualities of our patented Ferroelectric Liquid Crystal (FLC) materials, delivering images free
of motion smearing or color breakup. This high brightness display module delivers 250 cd/m2 while consuming less than 175 mW at 120 Hz frame rate. The display also includes a sleep mode
that dramatically reduces power consumption to less than 5 mW. Industry standard digital interfaces are supported for easy product integration. 

Features  

	•
	High
resolution format with 432 x 240 full color pixels (311,000 effective dots)

	•
	Fast
switching Ferroelectric Liquid Crystal (FLC) material eliminates motion smearing

	•
	Supports
consumer product temperature ranges

	•
	Low
power: Less than 175 mW including LED illumination and display driver

	•
	120
Hz frame rate (360 Hz RGB field rate)

	•
	Performance
adjustments of the display including brightness and gamma can be passed on to end-user

	•
	All
digital display with superior image quality

	•
	Color
sequential mode of operation 

Applications  

	•
	Digital
still camera viewfinders

	•
	Video
camcorder viewfinders

	•
	Wireless
communication devices

	•
	Head
mounted displays

	•
	Ultra-portable
display applications 

Availability  

	

• Engineering Samples:	
 	

June 2003	
 	

 
	

• Pre-production Prototypes:	
 	

September 2003	
 	

 
	

• Volume Production:	
 	

Q4 2003	
 	

 

Supported Interfaces  

	•
	8-bit
RGB-serial data, Hd, Vd, Valid, Clock

	•
	CCIR
601

	•
	CCIR
656 

Block Diagram  

Preliminary Product Specifications

LightViewTM 311k Display Module  

	General	 	 
	Format:	 	432 × 240
	Array diagonal:	 	0.255"
	Pixel Pitch:	 	12 mm × 16.2 mm
	Fill Factor:	 	> 90%
	Color depth:	 	24 bit
	Frame Rate:	 	120 Hz (360 Hz RGB field rate)
	
Optical(1)	
 	

 
	Brightness:	 	250 cd/m2 Nominal
	Contrast Ratio:	 	> 100:1 @ room temperature
	White Color Temperature:	 	6,500 ± 500 K Adjustable
	
Electrical	
 	

 
	Supported Interfaces:	 	8-bit RGB-serial data, Hd, Vd, Valid, Clock

CCIR 601

CCIR 656
	Power Consumption:	 	Total Module:                < 175 mW

(Display panel + LED Illuminator + Controller)
	Required Supply Voltages:	 	2.5V (Core)

3.3V (I/O)

5V (LED)
	
Packaging Dimensions:	
 	

20.20 × 19.20 × 13.5 mm (TBD)
	
Thermal	
 	

 
	Operating temperature:	 	-10 °C to 70 °C
	Storage temperature:	 	-30 °C to 83 °C

LDM-0311-A
specifications are subject to change 

	(1)
	Quantities
apply to product performance at standard operating conditions 

Corporate Profile  

        Longmont, Colo.-based Displaytech, Inc. makes and sells microdisplays with superior image quality to performance-driven consumer electronics companies, providing
sustainable competitive advantages to their digital still cameras, camcorders, and mobile communication device customers. Displaytech offers high-quality, patented Ferroelectric Liquid Crystal (FLC)
display products through its LightViewTM product lines, which use less power and with smaller form factors allowing for product design innovation and meeting tough manufacturing demands.
Established partnerships with industry-leading manufacturers also position Displaytech to keep pace with the challenges of the high-volume consumer electronics market. 

For
more information visit www.displaytech.com 

	Telephone:	 	303-772-2191
	Toll free (USA):	 	800-397-8124

Schedule 2.4 

Process
Procedure Documentation (QC Process Charts) 

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SCHEDULE 3.1  

Date
of Update 14-Mar-03 

PLP Minimum Annual Volume  

	Product
 
	 	Q1 2003
	 	Q2 2003
	 	Q3 2003
	 	Q4 2003
	 	Q1 2004
	 	Q2 2004
	 	Notes

	B/W ORCA	 	[*****]	 	[*****]	 	[*****]	 	[*****]	 	 	 	 	 	[*****]
	LV311	 	 	 	[*****]	 	 	 	 	 	 	 	 	 	 

 Process  

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SCHEDULE 3.2  

ORCA  

	 
	 	2003
	 	2004

	 
	 	Q1 03
	 	Q2 03
	 	Q3 03
	 	Q4 03
	 	Q1 04
	 	Q2 04
	 	Q3 04
	 	Q4 04

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SCHEDULE 7.1  

TABLE OF CONTENTS  

	1
	QVGA
PRICING

	2
	LV311
PRICING

	3
	NRE

	4
	INVOICES 

QVGA SE2  

	 
	 	 
	 	Q1 03
	 	Q2 03
	 	Q3 03
	 	Q4 03
	 	Q1 04

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5Kp-20Kp
	
 	

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50Kp-100Kp
	
 	
 
	
 	

 

	
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LV311 NRE FROM MIYOTA TO DT  

	 
	 	Mar-03
	 	Jun-03

	AMOUNT	 	[*****]	 	[*****]

OPEN INVOICE  

	 
	 	INVOICE
	 	DT PLAN
	 	COMMENTS

	MINOLTA REPLACEMENTS	 	[*****]	 	[*****]	 	[*****]
	

CONCORD INVENTORY	
 	

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QuickLinks

MANUFACTURING AGREEMENT

AMENDMENT NO. 1

AMENDMENT NO. 2

AMENDMENT NO. 3

AMENDMENT NO. 4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}]]