This Patent License Agreement (this “Agreement”) is made as of October 18, 2002 (the “Effective
`Date”), between Khietech Inc, a Delaware corporation having its principal place of business at 3140
`Whisperwoods Court, Northbrook, Illinois 60062 (“_"Kin‘etech”) and Brilliant Digital Entertainment,
`Inc, a Delaware corporation having its principal place of business at 6355 Topanga Canyon Boulevard,
`Suite 120, Woodland Hills, California 91367 (“Brilliant”) and Altnet, Inc, a Delaware corporation
`having its principal place of business at 6355 Topanga Canyon Boulevard, Suite 120, Woodland Hills,
`California 91367 (“Aitnet”) (Brilliant and Altnet together shall be referred to herein as the “Licensee”).
`
`R.E..(lI..'II.A..L.S
`
`Kinetech is the co~owner of United States Patent No. 5,978,791 and all related intellectual
`A.
`property. The term “Extent” will include US. Patent No. 5,978,791 and all improvements, modifications,
`continuations, continuationsdn-part, divisions, reissues and re-examinations thereof.
`
`Licensee desires to obtain a license to use the Patent (as defined herein) in connection with
`B.
`exploiting various opportunities within the Permitted Use (as defined in Section 1.1 below) in the Territory
`(as defined in Section 1.1 below) (“Bi1siness”). Kinetech is willing, to provide Licensee with a license to use
`the Patent in connection with Licensee’s Business upon the terms of this Ageenient.
`
` I
`
`In consideration of the foregoing and the various obligations and rights set forth below, the parties
`agree as follows:
`
`ABIICLEL1
`L}LCI*ll‘.*lLS.E
`
`Subject to the terms and conditions set forth in this Agreement, Kineteoh
`Ll
`grants Licensee only in the United States of America, its territories, and its possessions, as well as any
`other country or geographic region for which a patent application has been filed by Kinetecli or a patent
`has been issued to Kinetech that
`is,
`in all material respects, substantially similar to the Patent
`(“Territory,°’) a limited, nonexclusive (subject, however, to the exclusivity terms set forth in Section 1.l,l
`below), nondtransferable, revocable, sublicenseble (subject to the terms set forth in Section 1.12 below) right
`(the “License”) under and to the Patent for the sole purpose of developing, nisrketing, renting and/or selling
`products and/or services which, without this License, would intiinge or contribute to the i.nfiingement of any
`claim of the Patent (as defined in this Section below) only within the constraints of the permitted uses set
`forth in Schedule 1.}! attached hereto and by this reference incorporated herein (the “Permitted Use”) and in
`connection therewith, to use any method the practice of which, without this License, would infringe or
`contribute to the infiingement of any claim of the Patent, For purposes of this Agreement, the term,"
`“Patent” includes any other United States or foreign patent filed by, or issued or assigned to Kinetech or
`Ronald Lachrnan (or for which Kinetech otherwise has a right or ability to grant a license under) that would
`be necessary for Licensee to conduct the Business or to develop, market, andfor sell products and/or services
`embodying patent no. 5,978,791 within the scope of the Permitted Use, including without limitation, any
`improvements (as defined in Section 22 below), all additional applications for, corresponding to and claiming,
`the benefit of, and continuations, divisions, reissues and foreign counterparts of same.
`
`Notwithstanding anything to the contrary contained in Section 1.1
`1.1.1
`above and subject to the conditions contained in this Section l.l.l, Kinetech agrees that Kinetech will not
`itself develop, market, lease and/or sell, and will not ofier or grant any license of the Patent to any third
`party for the purpose of developing, marketing, leasing and/or selling, products and/or services within
`the scope of the Perinitted Use in the Territory that would without a License of the Paten,tinfi'in e to
`
`
`
`f‘\/'\K II""Il"\V“"’l I"I"‘l
`
`ll
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`I
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`
`Patent for as long as the rights under the Patent remain enforceable (“Exclusivity Period”), and to this
`extent, the License shall be deemed to be exclusive to Licensee. The Exclusivity Period granted in this
`Section l.l.l shall, at Kineteclfs sole reasonable discretion, become void and the rights granted Licensee
`in this Section 1.1.1 shall be revoked and terminated upon the commence of any of the following events, at
`which point the only rights ofLicensee shall be the License as granted in Section 1.1 above:
`
`lflicensee voluntarily ceases its substantial efforts as a core business focus of Licensee to
`(a)
`market and sell products and/or services which embody the Patent Within the Permitted Use to third parties
`that are not Licensee Afiliated Companies (as defined in Section 1.1.2 below) in the Territory; or
`
`If Licensee voluntarily ceases its substantial eflbrts to facilitate the market expansion and
`(b)
`exploitation of business opportunities for the Business; or
`
`IfLicensee involurrtarily ceases exploitation of the Business, due to legal enforcement or
`(c)
`otherwise, for a period of six (6) months or more, except if such involuntary cessation is caused by a third
`party claim that the Patent infringes on such third parties’ patent rights.
`
`Subject to the additional terms and conditions set forth on Schedule
`1.1.2
`1.1.2 attached hereto and by this reference incorporated herein, Licensee may subliccnse the rights granted to
`Licensee in the License hereunder only to third parties that are not “Licensee Afiiliated Companies” (as
`defined below) and only for the purpose of (i) developing, marketing, renting and/or selling products and/or
`services utilizing the invention embodied in the Patent for the Permitted Use in the Territory, or (ii) a bona
`fide litigation settlement or cross~licensing transaction; in each case on the condition that Licensee delivers an
`execution copy of any such proposed sublicensing agreement to Kinetech no later than ten (10) days prior to
`executing such sublicensing agreement with a sublicensee pursuant to the notice provisions set forth in
`Section 9.2 of this Agreement. K.inetech’s failure to provide written notice of objection pursuant to the
`notice provisions set forth in Section 9.2 of this Agreement to any ofthe terms of such proposed sublicensing
`agreement within the ten (10) day period referred to above shall constitute its agreement that the rights to
`any the Patent granted in such sublicense agreement do not exceed the rights granted by Kinetech to
`Licensee pursuant to this Agreement. Licensee specifically agrees that the rights to the Patent granted in
`such sublicense agreement may not exceed the rights granted by Kinctech to Licensee pursuant to this
`Agreement as such may be determined by Kinetech in its sole reasonable judgment. Furthermore,
`Licensee specifically agrees that Licensee may not grant such sublicensees the right to fiirther sublicense
`the Patent to related parties or third parties. ‘Licensee Affiliated Companies" shall mean any entity which
`is directly or indirectly majority owned or controlled by either Licensee or in which either Licensee directly or
`indirectly owns 5% or more of such entity’s outstanding equity securities.
`
`Licensee shall keep its rights to the Patent hereunder lice of
`1.2
`any liens, claims or encumbrances of any type other than liens that may be granted from time to time to
`lenders in connection with senior and subordinated debt financing. Licensee is authorized to use the Patent
`solely in accordance with the Permitted Use in the Territory. Licensee must obtain Kinetech's prior written
`permission (which may be withheld by Kinetech in Kinetech’s sole discretion) before utilizing the Patent for
`any purpose not specitically authorized as a Permitted Use or for any use, without exception, outside the
`Territory.
`
`Subject to Section l.l.l only, Kinetech reserves the right to use the
`1.3
`Patent in any manner, or grant licenses, assign, convey, transfer, sell or otherwise alienate the Patent to any
`third party for use outside the field and scope of the Permitted Use, Whether or not such use by Kinetech or
`such third party is in direct con1petiti_ppi,_£; '_th the business ofLicensee.
`
`Concurrent with the execution of this Agreement, as consideration for
`1.4
`
`the License, Licensee will issue to if grinetech a warrant to purchase five million (5,000,000) shares of
`Licensee cornmon stock exerc‘isable§*fo1* a period of seven years following the Effective Date at an
`exercise price of the greater of $000001 per share or par value (“Warrant”) pursuant to the Warrant
`
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`Agreement attached as Exhibit A (“Consideration”). Licensee specifically acknowledges and agrees
`that the shares underlying the Warrant shall be included as part of the next registration of Licensee’s
`common stock filed by the Licensee under the Securities Act of 1933, as amended (other than
`registrations on Form S-8 covering compensatory option plans), and that such registration shall be filed
`no later than November 29, 2002. Licensee shall use all reasonable efforts to complete such registration
`process before January 23, 2003.
`
`Stems. The status ofLicensee under this Agreement is that of an independent contractor and
`1.5
`not an agent or employee of Kinetech for all purposes, including Without limitation payment of all taxes and
`assessments which any state, federal, municipal or other taxing authority may impose.
`
`1.6 . During the term of this Agreement, Kinetech shall take all actions reasonably
`necessary to maintain the Patent. Licensee agrees to pay Kinetech one third (1/3) of all expenses and/or fees
`(including attorneys fees and filing costs) Kinetech incurs in maintaining the Patent,
`including without
`limitation, all
`filings and other requirements regarding all
`improvements, modifications, continuations,
`continuations—in~part, divisions,
`re—issues and re-examinations thereof including all U.S. Patent and
`Trademark Orifice or Patent Trial and Appeal Board administrative proceedings challenging the validity ofthe
`Patent or any of the claims of the Patent. Licensee shall make such payments to Kinetech within thirty (30)
`days of receiving an invoice iiom Kinetech.
`
`ARIICLE2
` HE
`
`Licensee acknowledges that as between Licensee and
`2.1.
`Kinetech, Kinetech has the exclusive, proprietary ownership and, except for the License granted hereunder,
`use rights to the Patent. No title to or ownership of the Patent in any form (except for the License) is
`transferred to Licensee. All rights not expressly granted to Licensee are expressly reserved by Kinetech.
`
`2.2. .
`
`2.2.1 Licensee agrees that Kinetech will have the sole and
`exclusive right, title, and interest (both legal and equitable) to all of the intellectual
`property rights in all developments, adoptions, enhancements or modifications that
`constitute improvements in or to the Patent or otherwise fall
`the scope of the
`Patent claims (“Improvements”) made by either Licensee or Kinetech. Kinetech
`agrees that the Improvements will be deemed (without the payment of additional
`royalties) part of the License granted hereunder to Licensee. Neither Kinetech nor
`Licensee are, however, obligated to make any Improvements.
`Furthermore,
`Licensee hereby acknowledges and agrees that any Improvements made by
`Licensee,
`in any way, will be deemed to be done under Kinetech’s approval,
`direction and control and that all such Improvements shall be considered a work
`made for hire and Kinetech shall own all right, title and interest therein. Kinetech
`shall be considered the author of the Improvements for purposes of copyright and
`thus shall own all the rights in and to the copyright of the Improvements and only
`Kinetech shall have the right to copyright the same, which Kinetech may do in its
`name or in such name as Kinetech may choose.
`To the extent
`that
`the
`Improvements or the copyrights therein do not automatically vest in Kinetech,
`Licensee hereby grants, assigns and transfers to Kinetech all right,
`title and
`interest in and to the Improvements to the extent that Licensee has had or will
`have any right, title or interest therein. Kinetech shall have the sole and exclusive
`rights to all the Improvements and any additions and modifications thereto
`throughout the world, whether such rights currently exist or are recognized in the
`future, and in all media and languages, Whether now or subsequently existing.
`Licensee shall execute such further instruments as Kinetech may request
`to
`evidence, establish, maintain or protect Kinetech’s rights in and ownership of the
`
`l"sl'\AlI\--lI*\P"""lI-I"'lnI
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`Improvements.
`
`2.2.2
`
`Subject to
`the terms and conditions contained herein and notwithstanding any provisions ofthis
`Agreement
`to the contrary,
`the parties agree that Licensee shall own any
`improvement in, modification to or development of any method or apparatus
`used for manufacturing and/or using products or services embodying the Patents
`as well as any improvement in, modification to or development of any l<now~how
`used for manufacturing and/or using products or services embodying the Patents
`(collectively,
`“Related Development”).
`The
`definition
`of
`“Related
`Developrnenf’ specifically excludes the Patent. Notwithstanding any other
`provision of this Agreement, the parties acknowledge and agree that the Altnet
`P2P software stack does not contain any proteotible element of the Patent and
`that, as between Licensee and Kinetech, Licensee has the exclusive, proprietary
`ownership and use rights to the Altnet PZP soitware stack, together with all code
`and other components thereof, whether developed by or for, or licensed to,
`Licensee and any improvements or modifications thereto,
`including all
`l<now~
`how, tecmques, inventions and code relating thereto (collectively, the “Altnet
`P21’ Stac *”).
`
`2.3 . Each party acknowledges and agrees that they may receive certain
`proprietary information of the other party marked as confidential. All such information, specifically marked
`as confidential by a disclosing party, shall constitute trade secrets ofthe disclosing party within the meaning of
`the Uniform Trade Secrets Act (“Trade Secrets”). The confidential obligations of a receiving party herein
`will cease as to Trade Secrets that: (l) have become publicly known through no fault of the receiving party;
`(2) are received by the receiving party properly and lawfiilly from a third party without restriction on
`disclosure and without knowledge or reasonable suspicion that the third party’s disclosure is in breach of any
`obligations to the disclosing party, (3) have been developed by the receiving party completely independent of o
`the delivery of Trade Secrets by the disclosing party hereunder; or (4) have been approved for public release
`by written authorization of the disclosing party, or (5) are required by judicial, legislative or regulatory
`process to be disclosed (provided, that if any Trade Secrets are required by judicial, legislative or regulatory
`process to be disclosed, the receiving party shall provide the disclosing party with prompt written notice of
`any such request or requirement so that the disclosing party may seek an appropriate protective order or
`other appropriate remedy and/or waive compliance with the terms ofthis agreement.)
`
`Licensee agees to cause any products made by or for Licensee which are
`2.4
`covered by one or more claims of the Patent to have clearly marked thereon, in a manner that is commercially
`reasonable and customary for such category ofproducts a patent notice listing the number(s) ofthe Patent.
`
`AB.T.[CLE.3
`
`
`3.1
`
`llutics.
`
`3.1.1 Due to the importance and sensitivity of the Trade Secrets disclosed by Kinetech,
`Licensee agrees that during the Agreement Period and for three years following the termination of this
`Agreement or the License for any reason, Licensee shall (1) hold such Trade Secrets in confidence, (ii) not use
`such Trade Secrets except for the purposes contemplated by this Agreement, (iii) not publish or disclose such
`Trade Secrets to third parties unless authorized in writing by Kinetech; and (iv) not permit any individual who
`is not in Licensees employment to use, publish, disseminate, disclose or have access to the Trade Secrets,
`except for those third parties who have a need to loiow and who have agreed in writing to maintain the
`confidentiality thereof .
`
`3.1.2 Due to the importance and sensitivity of the Trade Secrets disclosed by Licensee,
`_
`Kinetech agrees that during the Agreement Period and for three years following the termination of this
`
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`Agreement or the License for any reason, Kinetech shall (i) hold such Trade Secrets in ‘confidence, (ii) not use
`such Trade Secrets except for the purposes contemplated by this Agreement, (iii) not publish or disclose such
`Trade Secrets to third parties unless authorized in writing by Kinetech; and (iv) not permit any individual who
`is not in Kineteclfs employment to use, publish, disseminate, disclose or have access to the Trade Secrets,
`except for those third parties who have a need to know and who have agreed in writing to maintain the
`confidentiality thereof
`
`3.2 . A receiving party shall with reasonable promptness notify the disclosing
`patty of any information which comes to the receiving party’s attention which does or might indicate that
`there has been any loss of confidentiality arising from the receiving party°s act or omissions concerning the
`disclosing party’s Trade Secrets, it being understood, however, that a party that is required to provide such
`notice shall have no liability for any delay in providing such notice if the party required to be notified is not
`materially prejudiced by such delay. In such event, the receiving party will take all commercially reasonable
`steps within its power to limit the spread of such information, including but not limited to taking whatever
`legal action necessary to terminate such spread. The disclosing party, in its sole discretion, will have the right
`to take over and assume control of any such litigation, by providing receiving party with written notice of its
`decision to do so, and the receiving party will cooperate fully with the disclosing party in such litigation.
`
`Licensee covenants that it shall not attack, compromise, file suit
`3.3
`against or in any manner attempt to vitiate or commit or fail to take any action which could. vitiate any
`of the rights, titles or interests of Kinetech in the Patents.
`
`Licensee's obligations under this Article 3 will survive the
`3.4
`termination ofthis Agreernent or any of this Agreement‘s provisions, for any reason.
`
` A
` mS
`
`Kinetech wanrants that, to the best of Kirieteclfs actual knowledge
`4.1
`on the Effective Date,: (i) Kinetech has sufficient rights in the Patent, to grant the License; (ii) the Patent is
`valid and enforceable, (iii) the 13 page document entitled “Claims Allowed in Truehlaines Continuation
`Application” provided to Licensee by Kinetech is an accurate and complete description ofa continuation of
`the Patent that has been granted by the United States Patent and Trademark Ofiice; (iv) no other person has
`the right. to grant any license or to practice or use the data processing system described in the Patent within
`the scope of the "Permitted Use and
`the Territory; and (V) Kinetechs license of the Patent pursuant to
`this Agreement does not, to the best ofKinetech’s actual knowledge on the Effective Date, infiinge any rights
`of any third party under any United States patent law.
`
`UiEW S SET FORTHIN SECTION 4.1
`4.2
`EXCLUSIVE WARRANTIES OF KINETECH UNDER TTJIS
`AND 4.3 ARE THE‘: SOLE
`AGREEMENT.
`KINETECH SPECIFICALLY DISCLAIIVIS AND LICENSEE SPECIFICALLY
`WAIVES ALL WARRANTIES WTEHCH ARE NOT CONTAINED IN SECTION 4,1 ABOVE,
`WEEHER EXPRESS OR iMfPLB3I), ORAL OR WRIITEN OR ARISING BY TRADE USAGE OR
`OTl~H~3RWTSE, WCLUDING BUT NOT LlIl\/LITED TO EXPRESS OR IMPLIED WARRANTIES OF
`l\/lER.CI~l:AI‘lTABlLl’l‘Y AND FITNESS FOR A PARTICULAR PURPOSE.
`
`4.3
`respect to itself, represents and warrants to the other as follows:
`
`Licensee and Kinetech hereby each, with
`
`It is a corporation duly organmed, validly existing and in good standing under the
`4.3.1
`laws ofthe state ofits incorporation;
`
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`It has all requisite corporate power and authority to own and operate its properties
`4.3.2
`and assets, to execute and deliver this Agreement and to carry out the provisions ofthis Agreement;
`
`The execution, delivery and performance of this Agreement by it and the
`4.3.3
`consurnrnation by the it of the transactions conternplated hereby do not and will not conflict with, or
`constitute a material default (or an event that with notice or lapse of time or both would become a default)
`under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material
`agreement, indenture or instrument to which the it is a party;
`
`4.3.4 All corporate action on its part and on the part of its oficers, directors and
`stockholders necessary for the authorization of this Agreement and the perforrnance of all of its obligations
`hereunder has been taken; and
`
`This Agreement, when executed and delivered, shall be, valid and binding upon it and
`4.3.5
`enforceable in accordance with its terms, except:
`(i) as limited by applicable bankruptcy,
`insolvency,
`reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights;
`and (ii) general principles of equity that restrict the availability of equitable remedies.
`
` S
` AflQN
`
`Subject to the limitations set forth in Article 6 below, Kinetech
`5.1
`shall defend, indemnify and hold harmless Licensee from all liabilities and reasonable expenses (including but
`not limited to attorneys‘ fees) judgments, fines or penalties which Licensee incurs that result from any breach
`of Kineteclfs representations, warranties or obligations under this Agreement, whether such actions are civil,
`criminal, administrative or investigative, including any associated appeals, provided that Licensee both (i)
`notifies Kinetech in writing within thirty (3 0) days of receipt of notice of such claim, action, suit or
`proceeding; and (ii) provides Kinetech with all information Within Licensee's possession that is required for
`the defense of such suit.
`In the matter of a third party patent infringernent claim, in lieu of indenmitication,
`Kinetecli, at its sole option, may obtain for Licensee rights equivalent to the License.
`
`Subject to the limitations set forth in Article 6 below, Licensee shall
`5.2
`defend, indemnify and hold harmless Kinetech from all liabilities and reasonable expenses (including but not
`limited to attorneys’ fees) judgments, fines or penalties which Kinetech may incur that result from any claims,
`actions, suits or proceedings which arise due to actions of Licensee which constitute a breach of Licensees
`representations, warranties or obligations under this Agreement, whether such actions are civil, criminal,
`administrative or investigative, including any associated appeals, provided that Kinctech both (i) notifies
`Licensee in writing within thirty (30) days of receipt of notice of such claim, action, suit or proceeding; and
`(ii) provides Licensee with all information within Kineteclfs possession that is required for the defense of such
`Slut,
`
`No later than ten (10) business days from receipt of written notice of
`5.3
`a suit or claim which involves the indemnification obligations of the other party, each party to this Agreement
`will provide written notice to the other party of the indemnifiable suit or claim in question. The party with the
`indernniiication obligation (the “itndemnifying Party”), will select a representative and!or counsel to assume
`primary responsibility for such claim or suit, at its sole cost and expense.
`
`5.4 . The Indemnifying Party, at its sole expense, will assume control of the
`negotiation of any settlement otter to or from a third party, if such settlement is due to a claim or suit which
`involves the Indemnifying Party's indemnification obligations under this Agreement. The party being
`indemnified reasonably will assist the Indemnifying Party in any such settlement, suit or proceeding, provided
`that such assistance will be at the sole cost and expense ofthe Indemnifying Party. Unless Licensee and
`Kinetech otherwise agree, no settlement shall limit, restrict or otherwise affect the right ofKinetech or
`Licensee to carry on or conduct their business (then or in the future) or require any payment to be made or
`
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`license to be granted by Kinetech or Licensee, or limit, restrict, make more expensive or lessprofitable or
`otherwise adversely affect the manner in which Kinetech or Licensee cames on or conducts xts business (then
`or in the future).
`
`AEIICLEA
` flQNS
`
`WITH '11-{E EXCEPTION OF ANY
`6.1
`DAMAGES ARISING OUT OF THE PERFORMANCE OR FAILURE OF PERFORMANCE BY
`
`KINETECH UNDER SECTION 3.1.2 OF THIS A NT, KINIEITECH DISCLAIMS AND WILL
`NOT BE LIABLE FOR, AND LICENSEE WAIVES ANY CLAIMS OR REI\/XEDIES LICENSEE MAY
`HAVE AGAINST NTECH FOR INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR
`PUNITIVE DAMAGES INCLUDING BUT NOT LIMITED TO DAIVIAGES ARISING FROM LOST
`PROFITS OR LACK OR LOSS OF PRODUCTIVITY OF LICENSEE OR ANY OTHER INDIVIDUAL
`OR .E"l\l’I'ITY WHICH ARISE OUT OF ANY BREACH OF THIS AGREEMENT BY KINETECH OR
`ANY OBLIGATIONS KINETECH OWED TO LICENSEE OR KII\lETECI:I‘S BREACH OF
`WARRANTY, OR WHICH ARISE PURSUANT TO ANY TORT (INCLUDING NEGLIGENCE AND
`STRICT LIABILITY, BUT EXCLUDING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OR
`OTHER CLAIM, OR FOR ANY CIJAIM MADE AGAINST LICENSEE BY ANY OTHER PARTY,
`EVEN IF KIFQIETECH HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH CLAIM IN
`ADVANCE.
`
`WITH THE EXCEPTION OF ANY
`6.2
`DAIVIAGES ARISING OUT OF TIIE PERFORMANCE OR FAILURE OF PERFORMANCE BY
`LICENSEE UNDER SECTION 3.1.1 OF THIS AGREEMENT, LICENSEE DISCLAIMS AND WILL
`NOT BE LIABLE FOR, AND KINETECH WAIVES ANY CLAIMS OR REMEDIES LICENSEE MAY
`HAVE AGAINST LICENSEE FOR INDIRECT, SPECIAL, CONSEQUENTLAL, INCIDENTAL OR.
`PUNITIVE DAMAGES INCLUDING BUT NOT LIMITED TO DAMAGES ARISING FROM LOST
`PROFITS OR. LACK OR LOSS OF PRODUCTIVITY OF LICENSEE OR ANY OTHER INDIVIDUAL
`OR EN'l‘ITY WHICH ARISE OUT OF ANY BREACH OF THIS AGREEMENT BY LICENSEE OR
`ANY OBLIGATIONS LICENSEE OWED TO KINETECH OR LICENSEE’S BREACH OF
`WARRANTY, OR WHICH ARISE PURSUANT TO ANY TORT (INCLUDING NEGLIGENCE AND
`STRICT LLABILITY, BUT EXCLUDING GROSS NEGLIGEN’CE OR WILLFUL MISCONDUCT) OR
`OTHER CLAIIVI, OR FOR ANY CLAIM MADE AGAINST KII‘~IET.ECH BY ANY OTHER PARTY,
`EVEN IF LICENSEE HAS BEEN ADVISED OF THE POSSEILITY OF SUCH CLAIM IN
`ADVANCE.
`
`Nothing in this Agreement, however, limits the ability ofléineteeh or
`6.3
`Licensee to seek injunetive relief and other normnenetary equitable remedies in matters irivolving breaches of
`obligations under this Agreement including, Without limitation, the provisions of Section 1, 3 and 4, it being
`acknowledged that such breaches may cause a party to suffer irreparable harm and may not be adequately
`compensated in damages. Nothing in this Agreement prevents either Kinetech or Licensee from bringing
`such an action for injunctive relief in lieu of exercising termination rights or in addition to seeking damages
`under this Agreement.
`
` J
`
`7.1 . Licensee will keep accurate records concerning its use ofthe Patent for
`three (3) concurrent year periods during the Agreement Period and for a period of three (3) years following
`the Agreement Period, and shall provide copies of such records to Kinetech upon Klneteelfs request, andfer
`shall allow Kineteeh to examine Licensee's records at its premises and to copy or make abstracts of such
`
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`records, upon Kinetech providing live (5) days advance notice of its intention to do so. Notwithstanding
`anything to the contrary stated above, Licensee shall keep copies ofall sublioensing agreements ofthe License
`granted Licensee herein during the entire Agreement Period and for a peiiod of three (3) years following the
`Agreement Period,
`
`in writing pursuant to the notice
`7.2 . Licensee shall notify Kinetech,
`provisions contained herein, of any reasonably suspected infringement of the Patent in the Territory that
`is within the scope of the Permitted Use, and shall
`inform Kinetech of any evidence of such
`infiingernent. In the event of such infringement under the Permitted Use, when commercially reasonable
`under the circumstances based on a reasonable expectation that recoverable damages materially exceed
`expected litigation costs, Licensee shall have the obligation, at Licensees sole expense,
`to take
`whatever action necessary to enforce Kineteclfs and Licensee’s rights in the Patent in the Territory.
`Kinetech shall fully cooperate with the Licensee, at Licensee’s sole expense, to deal with the suspected
`infringement. With respect to any such claim and suits, Licensee shall employ counsel as mutually
`agreed to by Licensee and Kinetech to direct the litigation and any settlement thereof. Damages or
`other receipts received in connection with such claims, whether settled or litigated, with regard to the
`Patent as used in accordance with the Permitted Use in the Territory, less all out—of—pocket expenses
`associated with such settlement or litigation (“Net Recovery”), shall be paid upon receipt as follows:
`Kinetech shall be paid twenty—five percent (125%) of the Net Recovery and Licensee shall be paid
`seventy-five percent (75%) of the Net Recovery.
`if Licensee fails to take all necessary action within
`twenty (20) days of receiving notice from Kinetech of Kineteclfs intent to take action on an
`infringeinent and if Kinetech reasonably elects to take such action itself after such twenty (20) day
`notice, Licensee agrees to pay, or reimburse Kinetech, for all costs (including attorney fees) associated
`with such action,
`
`Kinetech shall, during the Agreement Period, enforce its
`7.3
`contractual rights in its agreement with Cable and Wireless Co, (formerly, Digital Island, Inc.) as such rights
`may affect the License of the Patent herein to Licensee.
`
`i
`
`An:t:n;Lr..s
`
`The term of the License granted to Licensee hereunder will
`8.1
`commence on the Effective lZ)ate and continue for the life of the Patent (“Agreement Period”), as said
`Patent will be modified, improved and updated from time to time, unless terminated earlier as provided for in
`this Agreement.
`
`8.2 . This Agreement will terminate, at Kinetechfs sole reasonable discretion, prior
`to the expiration of the Agreement Period, upon the occurrence of any of the following; (i) Licensee commits
`a material default under this Agreement (including but not limited to its failure to rnalze a payment of any
`reasonably undisputed amounts owing to Kinetech when and as the same become due) and such default
`remains uncured 30 days following delivery by Kinetech to Licensee of written notice of default, (ii) Licensee
`attempts to sell, mortgage, lease, license, assign, convey, transfer or sublicense the Patent in contravention of
`the terms herein, (iii) Licensee dissolves or liquidatcs; or (iv) if any of K.inetech’s co—owners of the Patent
`reasonably object
`to the License granted hereunder as not being permitted under Kinetcclfs written
`agreement with such co~owners withhi sixty (60) days of the Effective Date and following the exercise of
`Kineteclfs good faith best efforts, Kinetech is unable to overcome such reasonable objection by modification
`of this Agreement or by demonstrating absence of conilict between the terms of this Agreement and
`Kincteclfs written agreement with the co~owners ofthe Patent.
`
`Immediately upon a termination of this Agreement as identified in
`8.3
`Section 82 above, all rights of Licensee hereunder will terminate in their entirety. Except for a termination
`under Section 8.2(iv) above, the termination of this Agreement or the License, however, will not affect or
`impair any obligations or rights which arose prior to the date of such termination or out of the facts or
`occurrences which cause such termination. If this Agreement is terminated under Section 8.2(iv), all rights of
`
`/\/“\rtH"Ir"\r""a l'|"‘I A I
`
`BDE 006657
`Restricted Confidentialwoutside Counsel Only
`
`

`
`including