EXHIBIT 10.14
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding is entered into this 29th day of October 2001
between Hisense Electric Co. Ltd of 00 Xxxxxx Xxxx, Xxxxxxx, Xxxxx and IRICO
Group Corp of 0 Xxxxxxx xxxx, Xxxxxxxx, Xxxxxxx, Xxxxx and SpatiaLight Inc.
("SpatiaLight") of 0 Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000,
Xxxxxx Xxxxxx of America together "the parties"
WHEREAS
1. Hisense and IRICO are leading Chinese Electronics manufacturers which
propose to enter into the market for manufacturing LCOS television sets.
2. Hisense and IRICO recognize that SpatiaLight has commercial and
technical expertise of value to its business.
3. Hisense and IRICO have entered into a full Non-disclosure Agreement with
SpatiaLight and are fully aware of the confidential nature of these
discussions.
4. SpatiaLight is a leading LCOS chip design and manufacturing company and
wishes to strengthen its relationship with Hisense and IRICO to assist
in the development of the Chinese market.
5. The parties recently had friendly and constructive meetings and have
recognized that each could benefit in important ways by working
together.
6. To help further discussions and co-operation the parties have agreed
this memorandum to clarify their intentions.
NOW IT IS AGREED
The parties agree to co-operate in developing Hisense and IRICO's
manufacture of LCOS television sets.
1. Business Scope: The purchase by Hisense and IRICO of Display Units
manufactured by SpatiaLight. A Display Unit is defined as a light engine
inclusive of lamp and ballast manufactured exclusively for SpatiaLight
by Fuji fitted with SpatiaLight's chips.
2. SpatiaLight will supply two prototype Display Units for Hisense and
IRICO to promote SpatiaLight's technology in China and Hisense and
IRICO's product development. Hisense and IRICO undertake to return these
prototypes plus any other materials SpatiaLight provides within an
agreed time period should Hisense and IRICO not proceed to enter into a
purchase contract.
3. SpatiaLight will provide technical assistance to Hisense and IRICO to
make and test mock LCOS TV using SpatiaLight's chips and optical engines
to ensure relevant technical criteria are satisfied.
4. Given that SpatiaLight's products and quality suit the Chinese market
Hisense and IRICO will either build new or transform existing production
capacity into a production line.
Hisense and IRCO's target output will be:
First Year 12,000 sets
5. In relation to its planned production ramp-up and following satisfactory
technical testing of SpatiaLight's Display Units, Hisense and IRICO
agree to enter into a contract with SpatiaLight for the purchase of its
Display Units. The actual quantity of orders will be by the parties in
due time.
50
6. Under the current market condition, the price of each display unit is
estimated to be USD 1600.00 (excluding import tariff and VAT). The
actual price will be discussed by the parties in due time.
7. The method of payment will accord to international practice acceptable
to SpatiaLight, Hisense and IRICO.
OTHER ISSUES
In relation to the desire of both Hisense and IRICO and SpatiaLight to develop
their commercial relationship beyond the foregoing the following is also agreed.
8. The parties agree to use this Memorandum of Understanding as a basis to
advance their future co-operation.
9. Hisense and IRICO undertake not to disclose trade secrets, technical and
other assistance provided by SpatiaLight. If Hisense and IRICO want to
co-operate with SpatiaLight's competitors, they must return the
prototypes provided by SpatiaLight in advance.
Signed on behalf of Hisense Signed on behalf of SpatiaLight
Name: \s\XXXXXXXX XXX Name: \s\XXXXXX XXXXX
------------------------------ -----------------------------
Xxxxxxxx Xxx Xxxxxx XXXXX
Title: Vice President Title: Chief Executive
Signed on behalf of IRICO
Name: \s\XXXXXXXXX XX
---------------------------
Xxxxxxxxx Xx
51
