LICENSE AGREEMENT

Exhibit 10.1

EXECUTION COPY

LICENSE AGREEMENT

      This License Agreement (the “ Agreement ”) is entered into as of November 30, 2007 (the “ Signing Date ”), by and between Tvia, Inc. (“ Tvia ”), a Delaware corporation having a place of business at 4001 Burton Drive, Santa Clara, CA 95054, and MediaTek USA Inc. (“ Licensee ”), a Delaware corporation having a place of business at 2860 Junction Ave. San Jose, CA 95134.

      Whereas , Tvia has developed certain display processor technology known as the Mars technology which is described in Exhibit A;

      Whereas , Tvia desires to license such Mars technology and documentation to Licensee and Licensee’s Affiliates subject to the terms and the conditions set forth in this Agreement,

      Whereas , Licensee and its Affiliates desire to obtain a license to use the Mars technology for incorporation into their products;

      Wherefore , the parties agree as follows:

1. Definitions.

     Whenever used in this Agreement, the terms set forth in this Section 1 shall have the meanings ascribed to them below.

      1.1 “Licensed Technology” means Tvia’s Mars technology described in Exhibit A to this Agreement.

      1.2 “Affiliates” means any owner or subsidiary of Licensee or any person or entity, domestic or abroad, directly or indirectly controlling, controlled by, or under common control with Licensee or Licensee’s owner. For purposes of this agreement, “ control ” means the ownership of more than 50% of the voting stock of such entity or the ability to control the day-to-day operations and business of such entity.

      1.3 “Business Day” means a day, other than Saturday, Sunday, or other day on which commercial banks in San Francisco, California are authorized or required by applicable law to close.

      1.4 “ Corporate Documents ” means copies of resolutions duly adopted by the Board of Directors of Tvia approving this Agreement and the transactions contemplated thereby, in form and substance reasonably satisfactory to Licensee, and, as determined by Tvia as of the Signing Date, of any other necessary corporate action or approvals in connection with the entry and performance by Tvia of this Agreement.

      1.5 “Escrow Agent” means U.S. Bank National Association.

      1.6 “Escrow Agent Agreement” means the escrow agreement to be executed by and among the Escrow Agent, Licensee, and Tvia in the form to be agreed among the Escrow Agent, Licensee, and Tvia.

      1.7 “Escrow Release Date” means the date six (6) months immediately following the Effective Date.

      1.8 “Indemnitee” means Licensee, Licensee’s current and future Affiliates, and their respective successors and assigns.

      1.9 “ In-House Counsel Opinion ” means an opinion of the In-house Legal Counsel of Tvia dated on or after the date hereof and addressed to Licensee, in substantially the form of Exhibit D attached hereto, to the effect that Tvia has the necessary corporate power and authority to enter into this Agreement and the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action and approvals.

      1.10 “Products” means all products offered by Licensee or its Affiliates now or hereafter existing.

      1.11 “Territory” means the world.

      1.12 “Third Party” means any person or entity other than Tvia and its Affiliates.

      1.13 “ Effective Date ” means the earliest date at which all of the following shall have occurred:

           (i)  Delivery to Licensee by Tvia of final and/or executed versions of (a) the Corporate Documents and (b) the In-House Counsel Opinion; and

           (ii)  The closing of the transactions contemplated by that certain Assets Transfer Agreement by and between MediaTek Inc. China, a company established under the laws of the People’s Republic of China, and Tvia, Inc. China, a company established under the laws of the People’s Republic of China, dated contemporaneously herewith.

2. License Grants; Ownership.

      2.1 License Grant. Subject to the terms and conditions of this Agreement, as of the Effective Date, Tvia hereby grants to Licensee and its Affiliates an irrevocable, non-exclusive, perpetual license to make, have made, use, have used, import, offer to sell and sell (through multiple layers of distribution) Products which incorporate the Licensed Technology in the Territory (“ License ”). Licensee and its Affiliates shall have the right to reproduce, modify, and make derivative works of the Licensed Technology for incorporation into its Products. Prior to the Effective Date, Tvia grants to Licensee and its Affiliates a non-exclusive, non-transferable, royalty-free, perpetual license to make, have made, use, and have Products which incorporate the Licensed Technology solely for Licensee to evaluate the Licensed Technology (“ Interim License ”). As of the Effective Date, the Interim License will terminate and be replaced by the License.

      2.2 License Restrictions. Licensee acknowledges that any usage of the Licensed Technology not within the scope of the licenses granted in Section 2.1 is prohibited. Licensee specifically agrees that it will not, and will ensure that its Affiliates do not, market or sell the Licensed Technology as a stand alone product.

      2.3 Delivery. Tvia will deliver copies of the Licensed Technology in appropriate electronic formats, including without limitation, copies of any software in executable and source code form, schematics, drawings, sketches, diagrams, figures, instructions, specifications and related documentation to Licensee within five (5) Business Days after the Signing Date.

      2.4 Ownership of the Licensed Technology. Notwithstanding any other provision of this Agreement, Tvia retains all ownership, right, title and interest in and to the Licensed Technology and all associated intellectual property rights therein. Licensee acknowledges that the Licensed Technology is and shall remain the property of Tvia. This ownership provision does not apply to any new developments, in any form, added to the Licensed Technology, created by Licensee or Licensee’s Affiliates, that are separable from the Licensed Technology.

      2.5 Modifications/Improvements by Licensee. Notwithstanding any other provision of this Agreement, all right, title and interest in and to any new developments, in any form, added to the Licensed Technology, as intellectual property separate from and exclusive of the Licensed Technology, created by Licensee or Licensee’s Affiliates on or after the Signing Date, and all related intellectual property rights, shall be owned by Licensee.

3. Payments And Taxes.

      3.1 License Fees. Within five (5) Business Days of the Effective Date, Licensee shall pay Tvia a royalty license fee of six million, seven hundred thousand U.S. dollars (U.S. $6,700,000), less the Escrow Fund which will be deposited with the Escrow Agent pursuant to Section 3.3.

      3.2 Payment. All payments shall be made in U.S. dollars by wire as specified by Tvia and reasonably acceptable to Licensee.

      3.3 Escrow Deposit. Within five (5) Business Days of the Effective Date, Licensee shall deliver to the Escrow Agent an amount in cash, denominated in U.S. dollars, equal to $1,000,000 (the “ Escrow Fund ”) to be held pursuant to the provisions of the Escrow Agent Agreement.

      3.4 Taxes. Each party shall be responsible for all taxes imposed on such party by operation of law.

4. Warranties.

      4.1 Licensee represents and warrants that: (1) Licensee has the authority to enter into this Agreement, (2) Licensee has the financial ability and resources to make the payments to Tvia as required under this Agreement, and (3) Affiliates will pay the balance of any amounts due to Tvia should Licensee fail to make payment in accordance with the terms of this Agreement.

      4.2 Tvia represents and warrants that (1) Tvia is the owner of the Licensed Technology and that Tvia has the authority to grant the licenses granted hereunder, free and clear of all liens, claims and encumbrances, (2) there is no claim or proceeding pending or threatened with respect to the Licensed Technology, (3) the exercise of the rights granted under Section 2 do not infringe or violate the intellectual property rights of any third party.

      4.3 EXCEPT AS SET FORTH IN SECTION 4.2, THE LICENSED TECHNOLOGY AND DOCUMENTATION ARE PROVIDED “AS IS” AND WITHOUT WARRANTY. EXCEPT AS SET FORTH IN SECTION 4.2, TVIA EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES RELATING TO THE LICENSED TECHNOLOGY AND DOCUMENTATION, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, WHETHER ARISING IN LAW, CUSTOM, CONDUCT, OR OTHERWISE. EXCEPT AS SET FORTH IN SECTION 4.2, NO PERSON IS AUTHORIZED TO MAKE ANY WARRANTY OR REPRESENTATION CONCERNING THE PERFORMANCE OF THE LICENSED TECHNOLOGY.

5. Limitation Of Liability.

      5.1 LICENSEE SHALL NOT BE LIABLE TO TVIA, TVIA’S AFFILIATES, OR ANY OTHER PARTY CLAIMING THROUGH OR UNDER TVIA, FOR ANY LOST PROFITS, OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, WHETHER IN AN ACTION IN CONTRACT, TORT (INCLUDING STRICT LIABILITY), BASED ON A WARRANTY, OR OTHERWISE ARISING OUT OF OR CONNECTED WITH THIS AGREEMENT, EVEN IF LICENSEE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

      5.2 EXCEPT FOR THE INDEMNIFICATION PROVISIONS SET FORTH IN SECTION 8.1, TVIA SHALL NOT BE LIABLE TO LICENSEE, LICENSEE’S AFFILIATES OR ANY OTHER PARTY CLAIMING THROUGH OR UNDER LICENSEE, FOR ANY LOST PROFITS, OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, WHETHER IN AN ACTION IN CONTRACT, TORT (INCLUDING STRICT LIABILITY), BASED ON A WARRANTY, OR OTHERWISE ARISING OUT OF OR CONNECTED WITH THIS AGREEMENT, EVEN IF TVIA HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

6. Term And Termination.

      6.1 Term. This Agreement shall become effective on the Signing Date and continue in effect until terminated according to its terms.

      6.2 Termination . Each party shall be entitled to terminate this Agreement upon written notice to the other party if the other party materially breaches any obligation hereunder, which breach continues or remains uncured for a period of thirty (30) days after receipt of written notice from the non-defaulting party, unless such breach cannot by its nature be cured, in which event the defaulting party shall be deemed in default hereof upon the occurrence of such breach.

      6.3 Survival. The provisions of Sections 1, 2, 4, 5, 6.3, 7, 8, and 9 shall survive any expiration or termination of this Agreement.

7. Employees

     Notwithstanding anything in the Confidentiality and Non-solicitation Agreement between Tvia and Licensee dated October 8, 2007 to the contrary, Tvia hereby expressly grants to Licensee or its Affiliates the right to offer to hire and to hire and to enter into employment contracts with those employees of Tvia who are specified in Exhibit B subject to the valid and lawful consent of each such employee to employment with Licensee or its Affiliates. Licensee shall have no obligation with respect to liabilities related to Tvia’s employment of such persons prior to the Signing Date (or the termination of employment with Tvia), including, without limitation, any obligations for accrued but unpaid wages, accrued vacation pay, severance, and other benefits.

8. Indemnification Procedures

      8.1 Indemnity. Notwithstanding anything to the contrary in this Agreement or elsewhere, Tvia shall indemnify and hold Licensee and its Affiliates harmless from and against any and all liabilities, losses, damages, costs, fees and expenses, including reasonable attorneys’ fees, (the “ Damages ”) arising out of or related to (i) any breaches of any representation or warranty set forth in Section 4.2 (“ Breaches ”) or (ii) any claims (“ IP Claims ” and, together with any Breaches, the “ Claims ”) brought against Licensee or its Affiliates that the m