EXHIBIT 10.15
AGREEMENT OF PRINCIPAL TERMS
This Agreement of Principal Terms is entered into this 2nd day of
November, 2001, between Skyworth Display Ltd. ("Skyworth"), a Hong Kong
corporation whose registered address is Xxxxxxxxx Xxxxxx, 00 Xxxxxxxxx Xxxx,
Xxxxxx Xxx, Xxxx Xxxx and SpatiaLight, Inc. ("SpatiaLight"), a New York
corporation having a principal place of business at 0 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America (Skyworth and SpatiaLight are
sometimes referred to individually as a "party" and jointly as the "parties").
WHEREAS
(a) SpatiaLight is the creator, developer and manufacturer of an active
matrix liquid crystal on silicon microdisplay device having an active
matrix of 1280 pixels by 1024 pixels (or 5 by 4 format) or 1280 pixels
by 720 pixels (or 16 by 9 format) ("LCOS chip"). When the LCOS chips
are fitted onto a light engine, it may be utilized in display
application products such as high definition televisions and home
screen projection systems. As used elsewhere in this Agreement, the
term "Display Unit(s)" refers to three (3) SpatiaLight LCOS chips
fitted onto a light engine designed by SpatiaLight and Fuji Photo
Optical Company ("Fuji") and manufactured by Fuji.
(b) Skyworth is a leading Hong Kong electronics manufacturer who may
enter the market of LCOS television sets using SpatiaLight's
proprietary LCOS chips fitted in the Display Unit.
(c) Skyworth will enter into a full Non-disclosure Agreement with
SpatiaLight dated ("Non-disclosure Agreement") and will be fully bound
by the terms and conditions set forth in that agreement.
(d) SpatiaLight wishes to enter into this Agreement and assist Skyworth
in developing the Chinese market for LCOS televisions using
SpatiaLight's proprietary technology.
(e) The parties recently had friendly and constructive meetings between
their representatives in Hong Kong and have recognized that each could
benefit in important ways by working together.
(f) To help further discussions and co-operation, the parties have
agreed to the following principal terms.
NOW, THEREFORE, the parties hereto agree, as follows:
1. Representations: Each of Skyworth and SpatiaLight, hereby warrants
and represents to the other, as follows:
(a) that it is a legal person validly existing in its jurisdiction
of establishment;
(b) that it has the full power and authority to enter into this
Agreement and perform its contractual obligations; that its
representative who is signing this Agreement has been
authorized to do so pursuant to a valid power of attorney; and
(c) that Skyworth has obtained the necessary license to establish
production in China from Appropriate Chinese authorities,
attached hereto as Exhibit A.
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2. SpatiaLight will make available to Skyworth at a location in
Shenzhen, a prototype rear projection TV fitted with SpatiaLight's
Display Unit. Skyworth will have unlimited access to this facility
for a period of 15 days ("Test Period") from the date this facility
is made available. During the Test Period, Skyworth will use its
best efforts to develop prototype projection TVs using the Display
Units.
(a) During the Test Period, SpatiaLight will provide technical
assistance to Skyworth to make and test prototype LCOS
televisions using the Display Units to meet the technical
criteria established by Skyworth and SpatiaLight, jointly.
(b) If the prototype LCOS televisions meet the specified technical
criteria at the end of the Test Period, Skyworth may enter into
commercial negotiations with SpatiaLight on a mutually
agreeable form for the following number of Display Units: (i)
in calendar year 2002, orders for a minimum of 30,000 Display
Units. (ii) in calendar year 2003 Skyworth estimates orders to
be in the range of 50,000 to 60,000 Display Units. The terms of
payment shall be internationally acceptable methods of payment
acceptable to SpatiaLight.
(c) If the prototype LCOS televisions do not meet the specified
technical criteria at the end of the Test Period, Skyworth
shall return all confidential technology and data and know-how
shall be either destroyed or kept confidential in accordance
with the terms of the Non-disclosure Agreement.
OTHER ISSUES
In relation to the desire of both Skyworth and SpatiaLight to develop their
commercial relationship beyond the foregoing the following is also agreed:
3. During the period that SpatiaLight is working with Skyworth and
providing it with trade secrets, technical and other assistance for
the development of LCOS TVs, Skyworth, its officer, directors,
principals, owners and employees shall undertake not to, directly
or indirectly, communicate any confidential information nor allow
access to the LCOS prototype TV to any competitor of SpatiaLight.
4. The Governing law for this Agreement of Principal Terms shall be
that of the People's Republic of China.
Signed on behalf of Skyworth Signed on behalf of SpatiaLight
Name: \s\ XXXXXX XXXXX Name: \s\XXXXXX X. XXXXX
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Xxxxxx Xxxxx Xxxxxx X. Xxxxx
Title: Chief Executive Officer Title: Chief Executive Officer
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