NanoPierce Technologies, Inc., Obtains Judicial Title to Particle Interconnect Technology and Patents.

Business Editors

DENVER--(BUSINESS WIRE)--Oct. 8, 2002

NanoPierce Technologies, Inc., (OTCBB:NPCT) today announced that pursuant to a Settlement Agreement signed by all parties and enforced by Court Order, it has obtained judicial title to all Patents relating to the Particle Interconnect Technology. The Court Order, among other things, declares "that NanoPierce Technologies, Inc., owns the entire, exclusive, incontestable ownership, right, title and interest in the Patents." The Court Order cannot be appealed.

The same Court Order declares that Louis DiFrancesco owns the sole, exclusive, and incontestable right, to receive and collect all royalties and other payments from all licenses outstanding on September 3, 1996. Should any of these licenses have been or be terminated, Mr. DiFrancesco would have the right to receive royalties for the term of any new license granted by NanoPierce to the same licensees or their respective affiliates within three (3) years of the date of the Order. Mr. DiFrancesco has the right to directly enforce the royalty, maintenance fee, payment, accounting, audit, default, cure and termination provisions of all licenses outstanding on September 3, 1996, and any successor license.

Mr. DiFrancesco was also granted a limited, two (2) year, non-transferable, with no right to sublicense, royalty-bearing license to produce all integrated circuit (IC) sockets for leaded package semiconductor parts including the following types of sockets as generally defined in the industry BGA, DIP, CERDIP, PLCC, LCC, SOIC, SSOIC, SOP, PGA, LGA, TSOP, TAB, SIP, ZIP, Flat pack, PQFP, CQFP, QUIP, and DTCP. The foregoing list is not exclusive and the parties mutually understand and expect that new socket types will be developed for leaded packaged semiconductor parts. Without limiting the foregoing, the scope of the License Agreement shall also include: (i) laminated interlayer connections; (ii) the right to use Particle Interconnect Technology in thermally conductive applications not involving semiconductor heat sinks; and (iii) using Particle Interconnect Technology non-semiconductor, non-electrical industrial applications to mechanically join metal plates. Excluded from the scope of the License Agreement are sockets for use in the automated handling and testing of ICs, lead frames and semiconductor heat sinks; provided, however, if the exclusivity provisions of a certain third-party license is terminated for any reason, then the License Agreement shall be deemed automatically expanded to include such sockets as well. The License Agreement renews automatically for additional, successive two-year periods provided Mr. DiFrancesco makes certain minimum royalty payments and otherwise complies with the terms of the License Agreement. NanoPierce released to Mr. DiFrancesco all rights to a patent application, unrelated to the Particle Interconnect Technology, which it had previously abandoned.

NanoPierce will make a one-time payment of $15,000 to Mr. DiFrancesco as part of the Settlement Agreement.

The Court Order also contains the following permanent injunction:

1. Defendants Louis DiFrancesco and Particle Interconnect Research & Development, Inc., their agents, servants, employees and attorneys and those persons in active concert or participation with any of them who receive actual notice of this Consent Order and Judgment by personal service or otherwise are hereby restrained from:

(a) Contacting any actual or potential customer, licensee or investor of Plaintiffs or their related entities under the auspices that DiFrancesco or Particle Interconnect Research and Development represents, works for, or is associated with the Plaintiffs other than as a licensee of Plaintiffs, except that DiFrancesco or his representatives may contact Exatron, Meyers, Johnson-Matthey or potential successors to Micromodule Systems and Multiflex pursuant to Section D(8) below which he has previously assigned to the Plaintiffs for the purpose of attempting to collect royalty payments, maintenance fees, and other amounts payable or which may in the future become payable and for obtaining accountings, exercising audit, default and cure rights under the licenses outstanding on September 3, 1996. Nothing herein shall prevent DiFrancesco from contacting any individual or entity for any legitimate business or personal purpose provided that DiFrancesco complies with the provisions of this Paragraph B(1)(a).

(b) Making any statement to any actual or potential customer, licensee or investor of Plaintiffs or their related entities which directly or by implication asserts that:

(i) With the exception of the Abandoned Application as described in Section D(6) hereof and any Improvements owned by DiFrancesco, DiFrancesco owns all or any portion of the Patents or licenses (except for the right to collect the monthly payments, maintenance fees and any other amounts payable from Exatron, Meyers, and Johnson-Matthey or potential successors to Micromodule Systems and Multiflex pursuant to Section D(8) below) which he has previously assigned to the Plaintiffs; or

(ii) DiFrancesco owns all or any part of any other intellectual properties invented, developed or owned by Plaintiffs or any of their successors; or

(iii) DiFrancesco's consulting agreement with Particle Interconnect Corporation has not expired.

Nothing in the preceding paragraph shall prohibit DiFrancesco from making any statement to any actual or potential customer, licensee or investor of Plaintiffs or their related entities which directly or by implication asserts that DiFrancesco is the inventor of the Particle Interconnect Technology or a licensee of Plaintiffs; provided that, at the time such statement is made, it is factually correct in all material respects.

2. Particle Interconnect Corporation, NanoPierce Technologies, Inc., Intercell International Corporation, and Paul H. Metzinger, their respective agents, servants, employees and attorneys and those persons in active concert or participation with any of them who receive actual notice of this Consent Order and Judgment by personal service or otherwise are hereby restrained from:

(a) Interfering with DiFrancesco's rights to collect royalties, maintenance fees and other amounts now payable or accruing and payable in the future under the licenses outstanding on September 3, 1996, (or any successor license in connection with which DiFrancesco has a right to receive royalties pursuant to Section D(8) below) and/or his right to enforce the accounting, audit, default, cure and other royalty related provisions of the licenses outstanding on September 3, 1996.

(b) Assigning, modifying or terminating the royalty, payment, accounting, default, cure and termination provisions of any Current Licenses (defined as the Exatron and Meyers Licenses) or any successor license in connection with which DiFrancesco has a right to receive royalties pursuant to Section D(8) below (all other licenses outstanding on September 3, 1996, having been cancelled or otherwise terminated or expired).

3. With the exception of the Joint Press Release attached hereto as Exhibit 5, all parties and their respective agents and attorneys and those persons in active concert or participation with any of them who receive actual notice of this Order by personal service or otherwise are hereby restrained from disclosing to any person or party the terms of this Consent Order and Judgment and from making any public comment whatsoever concerning their respective opposing parties in this action. Nothing in the preceding sentence shall prohibit either party from: (i) disclosing that DiFrancesco is a licensee of NanoPierce, its successors and assigns, provided at the time made, such statement is true; or, (ii) that DiFrancesco is the inventor of the Particle Interconnect Technology provided that in making any such statement, DiFrancesco in no way implies that he has any ownership interest in the Patents (other then the Abandoned Patent and improvements made by him) or the licenses granted thereunder. The Court specifically finds that damages for violation of this injunction would be substantial but impossible to calculate with specificity and adopts the parties' agreement that the appropriate remedy for violation of this injunction shall be payment of liquidated damages in the amount of $25,000.00 for the first violation and $50,000.00 for each succeeding violation.

4. Upon execution of this Consent Order and Judgment, NanoPierce shall provide DiFrancesco with a letter executed by an authorized representative of NanoPierce and notarized that acknowledges that (i) DiFrancesco is the inventor of the Particle Interconnect Technology embodied in the Patents which technology and Patents have been assigned to NanoPierce and, (ii) DiFrancesco is a duly authorized licensee of NanoPierce. NanoPierce, its successors and assigns shall also promptly and truthfully respond to any verbal inquiry by a third-party who attempts to confirm DiFrancesco's status as the inventor of the Particle Interconnect Technology embodied in the Patents and as a licensee of NanoPierce.

5. The Parties, and each of them have irrevocably waived any right they may otherwise have had to seek appellate review of this Consent Order and Judgment and are hereby restrained from seeking appellate review of this Consent Order and Judgment.

6. The Parties, and each of them, irrevocably waive any right they may otherwise have had from the beginning of time to the date of this Consent Order and Judgment to bring any action of any type or description against their respective opposing parties and are hereby restrained from doing so with the exception of actions to enforce the terms and conditions contained in this Consent Order and Judgment. In the event action is brought to enforce the terms and conditions of this Consent Order and Judgment, attorneys' fees shall be awarded to the prevailing party.

Paul H. Metzinger, President & CEO of NanoPierce Technologies, Inc., said: "We are delighted this long, difficult and expensive process is over. The Judicial Declaratory Order vesting unchallengeable ownership of all the Patents in NanoPierce Technologies, Inc., permits the company to go forward with major financing and licensing the Particle Interconnect Technology. The potential lingering cloud of legal doubt in the minds of prospective investors or licensees whether the Company owned the Particle Interconnect Technology has been permanently removed. It is a very important development for the Company."

Louis DiFrancesco said: "I am pleased to resolve this difficult and consuming dispute in a reasonable and fair manner. I look forward to proving, through the exercise of my license rights, the true potential that I, as the inventor, have always known the Particle Interconnect Technology to have."

About NanoPierce Technologies, Inc.

NanoPierce Technologies, Inc. of Denver, Colorado, USA, is traded on the NASDAQ stock market (OTC:BB:NPCT) as well as on the Frankfurt and Hamburg exchanges (OTC:NPI). In addition to the 12 patents it owns, NanoPierce has numerous applications pending, others in preparation, and various other intellectual properties related to NanoPierce's proprietary NCS(TM) (NanoPierce Connection System). This advanced system is designed to provide significant improvement over conventional electrical and mechanical interconnection methods for high-density circuit boards, components, sockets, connectors, semiconductor packaging and electronic systems.

This announcement contains forward-looking statements about NanoPierce Technologies, Inc., and its subsidiaries, that may involve risks and uncertainties. Important factors relating to the Company's operations could cause actual results to differ materially from those in forward-looking statements and are further detailed in filings with the Securities and Exchange Commission (SEC) available at the SEC's website (http://www.sec.gov). All forward-looking statements are based on information available to NanoPierce Technologies, Inc., on the date hereof, and NanoPierce Technologies, Inc., assumes no obligation to update such statements.