Exhibit 10.4

PATENT PURCHASE AGREEMENT

This PATENT PURCHASE AGREEMENT (this “Agreement”) is entered into, as of the
Effective Date (defined below), by and between Great Links G.B. Limited
Liability Company, a Delaware limited liability company, with an office at 1209
Orange Street, Wilmington, DE 19801 (“Purchaser”), and Path 1 Network
Technologies, Inc., a Delaware corporation, with an office at 6215 Ferris
Square, Suite 140, San Diego, CA 92121 (“Seller”). The parties hereby agree as
follows:

 

1. BACKGROUND

1.1 Seller owns certain provisional patent applications, non-provisional patent
applications, patents, and/or related foreign patents and applications.

1.2 Seller wishes to sell to Purchaser all right, title, and interest in such
patents and applications and the causes of action to sue for infringement
thereof and other enforcement rights.

1.3 Purchaser wishes to purchase from Seller all right, title, and interest in
the Assigned Patent Rights (defined below), free and clear of any restrictions,
liens, claims, and encumbrances, except as expressly set forth herein.

 

2. DEFINITIONS

“Abandoned Assets” means those specific provisional patent applications,
non-provisional patent applications, patents and other governmental grants or
issuances listed on Exhibit C.

“Affiliate” means: any corporation, company or other entity of which a party
hereto directly or indirectly (i) has voting shares or other voting securities,
ownership and control of more than fifty percent (50%) of the outstanding shares
or securities entitled to vote for the election of directors or similar managing
authority of such entity or (ii) does not have outstanding shares or securities,
but has more than fifty percent (50%) of the ownership interest representing the
right to manage such entity. An entity shall be deemed to be an Affiliate under
this Agreement only so long as all the requirements of being an Affiliate in as
(i) or (ii) above are met.

“Assigned Patent Rights” means the Patents and the additional rights set forth
in paragraph 4.2.

“Assignment Agreements” means the agreements assigning ownership of the Assigned
Patent Rights and the Abandoned Assets from the inventors and/or prior owners to
Seller.

“Docket” means Seller’s or its agents’ list or other means of tracking
information relating to the prosecution or maintenance of the Patents throughout
the world, including, without limitation, information relating to deadlines,
payments, and filings, which is current as of the Effective Date.

“Effective Date” means the date set forth as the Effective Date on the signature
page of this Agreement.

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“Executed Assignments” means both the executed and notarized Assignment of
Patent Rights in Exhibit B and the executed Assignment of Rights in Certain
Assets in Exhibit C, each as signed by a duly authorized representative of
Seller.

“Live Assets” means the provisional patent applications, non-provisional patent
applications, and patents listed on Exhibits A and/or B (as such lists may be
updated based on Purchaser’s review pursuant to paragraph 3.1).

“Patents” means, excluding the Abandoned Assets, all (a) Live Assets;
(b) patents or patent applications (i) to which any of the Live Assets directly
or indirectly claims priority, (ii) for which any of the Live Assets directly or
indirectly forms a basis for priority, and/or (iii) that directly or indirectly
incorporate by reference the Live Assets or are directly or indirectly
incorporated by reference by the Live Assets; (c) reissues, reexaminations,
extensions, continuations, continuations in part, continuing prosecution
applications, requests for continuing examinations, divisions, and registrations
of any item in any of the foregoing categories (a) and (b); (d) foreign patents,
patent applications and counterparts of any of the foregoing categories
(a) through (c), including, without limitation, certificates of invention,
utility models, industrial design protection, design patent protection, and
other governmental grants or issuances; and (e) any items in any of the
foregoing categories (b) through (d) whether or not expressly listed as Live
Assets and whether or not claims in any of the foregoing have been rejected,
withdrawn, cancelled, or the like.

“Primary Warranties” means, collectively, the representations and warranties of
Seller set forth in paragraphs 6.1, 6.2, 6.3, 6.4, and 6.5 hereof.

“Patent History Files” means the names, addresses, email addresses, and phone
numbers of prosecution counsel and agents, and all files, documents and tangible
things, as those terms have been interpreted pursuant to rules and laws
governing the production of documents and things, constituting, comprising or
relating to the investigation, evaluation, preparation, prosecution,
maintenance, defense, filing, issuance, registration, assertion or enforcement
of the Patents.

“Transmitted Copy” has the meaning set forth in paragraph 8.12.

 

3. TRANSMITTAL, REVIEW, CLOSING CONDITIONS AND PAYMENT

3.1 Transmittal. Within twenty (20) calendar days following the later of the
Effective Date or the date Purchaser receives a Transmitted Copy this Agreement
executed by Seller, Seller will send to Purchaser the Executed Assignments, the
List of Prosecution Counsel, the Docket, the Patent History Files as they exist
at the time, and all other files and original documents (including, without
limitation, Letters Patent, assignments, and other documents necessary to
establish that Seller’s representations and warranties of Section 6 are true and
correct) in Seller’s possession reasonably relating to the Patents and/or the
Abandoned Assets (“Initial Deliverables”). Seller acknowledges and agrees that
Purchaser may reasonably request, and Seller will promptly deliver, additional
documents based on Purchaser’s review of the Initial Deliverables (such
additional documents and the Initial Deliverables are, collectively, the
“Deliverables”), and that as a result of Purchaser’s review, the lists of Live
Assets on Exhibits A and B and the list of Abandoned Assets on Exhibit C, may be
revised by mutual agreement of Seller and Purchaser before the Closing to
conform these lists to the definition of Patents (and these revisions may
therefore require the inclusion of additional provisional patent applications,
patent applications, and patents on Exhibit A or B or both). To the extent any
of the Live Assets are removed for any reason, the payment in paragraph 3.4 may
be reduced by mutual agreement of the parties.

 

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3.2 Closing. The closing of the sale of the Assigned Patent Rights and the
assignment of the Abandoned Assets hereunder will occur when all conditions set
forth in paragraph 3.3 have been satisfied or waived (the “Closing”). Purchaser
and Seller will use reasonable efforts to carry out the Closing within thirty
(30) calendar days following the later of the Effective Date or the date on
which the last of the Deliverables was received by Purchaser.

3.3 Closing Conditions. The following are conditions precedent to Purchaser’s
obligation to make the payment in paragraph 3.4.

(a) Signature by Seller. Seller timely executed this Agreement and delivered a
Transmitted Copy of this Agreement to Purchaser’s representatives by not later
than             ,              at 5:00 p.m.,              time and promptly
delivered two (2) executed originals of this Agreement to Purchaser’s
representatives.

(b) Transmittal of Documents. Seller delivered to Purchaser all the
Deliverables.

(c) Compliance With Agreement. Seller and Purchaser performed and complied in
all respects with all of the obligations under this Agreement that are to be
performed or complied with by it on or prior to the Closing.

(d) Representations and Warranties True. Purchaser is reasonably satisfied that,
as of the Effective Date and as of the Closing, the representations and
warranties of Seller contained in Section 6 are true and correct, and that
Seller is reasonably satisfied that, as of the Effective Date and as of the
Closing, the representations and warranties of Purchaser contained in Section 7
are true and correct.

(e) Patents Not Abandoned. Purchaser is satisfied that, as of the Effective Date
and as of the Closing, none of the assets that are included in the Live Assets
have expired, lapsed, been abandoned, or deemed withdrawn.

(f) Delivery of Executed Assignments. Seller caused the Executed Assignments to
be delivered to Purchaser’s representatives.

(g) Delivery of Updated Exhibit E. Seller delivered to Purchaser an updated
version of Exhibit E (as described in paragraph 6.1 below) that is current as of
Closing.

3.4 Payment. At Closing, Purchaser will pay to Seller’s agent’s account, as
designated by Seller in writing to Purchaser prior to Closing, the amount of
Five Hundred and Thirty Five Thousand U.S. Dollars (US $535,000.00) as an
administrative convenience; such payment is received in that account on behalf
of Seller. Such payment shall fully satisfy all payment obligations under this
Agreement to Seller. Seller shall be fully responsible for, and Purchaser shall
not be liable to Seller or any other person or entity for any dispute regarding,
allocation of payment made under this Agreement. Purchaser may record the
Executed Assignments with the applicable patent offices only on or after Closing
and full payment to Seller’s agent’s account, as set forth above, of the full
amount set forth in this paragraph 3.4.

 

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3.5 Termination and Survival. In the event all conditions to Closing set forth
in paragraph 3.3 are not met within ninety (90) days following the Effective
Date, Purchaser will have the right to terminate this Agreement by written
notice to Seller. Upon termination, Purchaser will return all documents
delivered to Purchaser under this Section 3 to Seller. The provisions of
paragraphs 8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7, 8.8, 8.9, 8.10, and 8.11 will
survive any termination.

 

4. TRANSFER OF PATENTS AND ADDITIONAL RIGHTS

4.1 Assignment of Patents. Upon the Closing, Seller hereby sells, assigns,
transfers, and conveys to Purchaser all right, title, and interest in and to the
Assigned Patent Rights. Seller understands and acknowledges that, if any of the
Patents are assigned to Seller’s affiliates or subsidiaries, Seller may be
required prior to the Closing to perform certain actions to establish that
Seller is the assignee and to record such assignments. Prior to Closing, Seller
will deliver to Purchaser a Transmitted Copy of the Assignment of Patent Rights
in the form set forth in Exhibit B prior to Closing and will deliver or cause to
be delivered to Seller’s agent the original Assignment of Patent Rights in the
form set forth in Exhibit B (as may be updated based on Purchaser’s review
pursuant to paragraph 3.1). As of the Closing, Seller will cause Seller’s agent
to send via overnight mail the original Assignment of Patent Rights in the form
set forth in Exhibit B, to be received by Purchaser the morning of the day
following the Closing.

4.2 Assignment of Additional Rights. Upon the Closing, Seller hereby also sells,
assigns, transfers, and conveys to Purchaser all right, title and interest in
and to all

(a) inventions, invention disclosures, and discoveries specifically disclosed in
any of the Patents;

(b) rights to apply in any or all countries of the world for patents,
certificates of invention, utility models, industrial design protections, design
patent protections, or other governmental grants or issuances of any type
related to any of the Patents and the inventions, invention disclosures, and
discoveries specifically disclosed therein;

(c) causes of action (whether known or unknown or whether currently pending,
filed, or otherwise) and other enforcement rights under, or on account of, any
of the Patents and/or the rights described in subparagraph 4.2(b), including,
without limitation, all causes of action and other enforcement rights for
(i) damages, (ii) injunctive relief, and (iii) any other remedies of any kind
for past, current and future infringement; and

(d) rights to collect royalties or other payments under or on account of any of
the Patents and/or any of the foregoing.

4.3 Assignment of Rights in Certain Assets. Upon the Closing, Seller hereby
sells, assigns, transfers, and conveys to Purchaser all Seller’s right, title,
and interest in and to the Abandoned Assets. Prior to Closing, Seller will
deliver to Purchaser a Transmitted Copy of the Assignment of Certain Rights in
the form set forth in Exhibit C and Seller will deliver or cause to be delivered
to Seller’s agent the original Assignment of Certain Rights in the form set
forth in Exhibit C (as may be updated based on Purchaser’s review pursuant to
paragraph 3.1). As of the Closing, Seller will cause Seller’s agent to send via
overnight mail the original Assignment of Certain Rights in the form set forth
in Exhibit C, to be received by Purchaser the morning of the day following the
Closing.

 

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4.4 License Back to Seller under Patents. Upon the Closing, Purchaser hereby
grants to Seller and its Affiliates, under the Patents, and for the lives
thereof, a royalty-free, non-exclusive, non-sublicensable right and license
(“Seller License”) to practice the methods and to make, have made, use,
distribute, lease, sell, offer for sale, import, export, develop and otherwise
dispose of and exploit any Seller products and products of Affiliates of Seller
covered by the Patents (“Covered Products”). The Seller License shall apply to
the reproduction and subsequent distribution of Covered Products under Seller’s
trademarks and brands, in substantially identical form as they are distributed
by the Seller, by authorized agents of the Seller such as a distributor,
replicator, VAR or OEM. The Seller License is nontransferable (by operation of
law or otherwise) except as set forth in paragraph 4.5. The Seller License, as
to any Affiliate of Seller, will terminate as to such Affiliate if and when such
Affiliate ceases to meet the requirements of being an Affiliate of Seller.

4.5 Limitation on Transferability of Seller License. The Seller License may be
assigned by Seller once and only once within two (2) years of the Effective Date
(the “Unrestricted Assignment Period”) without restriction on the assignee
(“Assignee”) other than such restrictions as are set forth in paragraph 4.4
above (provided that Seller gives Purchaser prompt written notice of the
assignment within fifteen (15) days after such assignment), and after such
assignment the assignee and its Affiliates shall have all license rights granted
hereunder to Seller and its Affiliates, respectively, subject to the
restrictions set forth herein. After the earlier of the expiration of the
Unrestricted Assignment Period or the assignment of the Seller License in
accordance with the preceding sentence, the Seller License may be transferred
only to a transferee that is purchasing the entire business line of the Covered
Products of Seller or the Assignee, as applicable (a “Permitted Transferee”). In
the event of such a transfer(a “Transfer”), the Permitted Transferee and its
Affiliates shall have all license rights granted hereunder to Seller and its
Affiliates, respectively, subject to the restrictions set forth herein. Further,
in the event of a Transfer, the Covered Products will be limited to the products
that had been commercially released by Seller and, if applicable, the Assignee,
or that are in the prototype phase of development and are intended for
commercial release solely by or on behalf of Seller or the Assignee, as
applicable, prior to the effective date of such Transfer and the merely
incremental differences of such products, and the Covered Products will not
include, and in no event will the Seller License extend to, any other products,
processes or services of (x) a Permitted Transferee, (y) any affiliate (other
than Seller, the Assignee or an Affiliate of the Permitted Transferee, as
applicable) of such purchaser or successor, or (z) any other person. Seller or
the Assignee, as applicable, shall, within thirty (30) days after a Transfer,
provide Purchaser with written notice of such Transfer, which notice will
contain: (i) the effective date of the Transfer, (j) a description of the
transaction through which the Transfer occurred, and (k) detailed information
regarding the respective products, processes and services of Seller, the
Assignee, the Permitted Transferee, and the purchasing entity, as applicable, as
of the effective date of the Transfer, and the Seller License will immediately
terminate in the event that Seller or the Assignee, as applicable, fails to
provide such notice as and when set forth above. The Permitted Transferee may
not transfer the Seller License (by operation of law or otherwise). The Seller
License will immediately terminate upon any attempted transfer (by operation of
law or otherwise) that is not in strict conformance with this paragraph 4.5, and
any such attempted transfer will be void.

4.6 Right to Sue Visionary Solutions, Inc. for Breach of Contract.
Notwithstanding paragraph 4.2, Seller will retain, and will not transfer in
whole or in part to Buyer, the sole right to sue Visionary Solutions, Inc.
(“Visionary Solutions”) for breach of contract under the Technology License
Agreement between Seller and Visionary Solutions dated as of December 11, 2001.
The right retained by Seller under this paragraph 4.6 does not include the right
to bring against Visionary Solutions any claim other than a breach of contract
claim, and Seller will have no right to sue Visionary Solutions or any other
party for infringement of any of the Assigned Patent Rights.

 

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5. ADDITIONAL OBLIGATIONS

5.1 Further Cooperation. At the reasonable request of Purchaser, Seller will
execute and deliver such other instruments and do and perform such other acts
and things as may be necessary or desirable for effecting completely the
consummation of the transactions contemplated hereby, including, without
limitation, execution, acknowledgment, and recordation of other such papers, and
using commercially reasonable efforts to obtain the same from the respective
inventors, as necessary or desirable for fully perfecting and conveying unto
Purchaser the benefit of the transactions contemplated hereby. To the extent any
attorney-client privilege or the attorney work-product doctrine applies to any
portion of the Patent History Files, Seller will ensure that, if any such
portion of the Patent History File remains under Seller’s possession or control
after Closing, it is not disclosed to any third party unless (a) disclosure is
ordered by a court of competent jurisdiction, after all appropriate appeals to
prevent disclosure have been exhausted, and (b) Seller gave Purchaser prompt
notice upon learning that any third party sought or intended to seek a court
order requiring the disclosure of any such portion of the Patent History File.
In addition, Seller will continue to prosecute, maintain, and defend the Patents
at its sole expense until the Closing.

5.2 Payment of Fees. Seller will pay any maintenance fees, annuities, and the
like due or payable on the Patents until the Closing. For the avoidance of
doubt, Seller shall pay any maintenance fees for which the fee is payable (e.g.,
the fee payment window opens) on or prior to the Closing even if the surcharge
date or final deadline for payment of such fee would be within one month after
the Closing.

 

6. REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Purchaser as follows that, as of the
Effective Date and as of the Closing:

6.1 Authority. Seller has the full power and authority and has obtained all
third party consents, approvals, and/or other authorizations required to enter
into this Agreement and to carry out its obligations hereunder, including,
without limitation, the assignment of the Assigned Patent Rights to Purchaser.

6.2 Title and Contest. Seller owns all right, title, and interest to the
Assigned Patent Rights, including, without limitation, all right, title, and
interest to sue for infringement of the Patents. Seller has obtained and
properly recorded previously executed assignments for the Patents as necessary
to fully perfect its rights and title therein in accordance with governing law
and regulations in each respective jurisdiction. The Assigned Patent Rights are
free and clear of all liens, claims, mortgages, security interests or other
encumbrances, and restrictions. There are no actions, suits, investigations,
claims, or proceedings threatened, pending, or in progress relating in any way
to the Assigned Patent Rights. There are no existing contracts, agreements,
options, commitments, proposals, bids, offers, or rights with, to, or in any
person to acquire any of the Assigned Patent Rights.

6.3 Existing Licenses. No licenses under the Patents, or interest or rights in
any of the Assigned Patent Rights, have been granted or retained by Seller, any
prior owners, or inventors.

 

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6.4 Restrictions on Rights. Purchaser will not be subject to any covenant not to
sue or similar restrictions on its enforcement or enjoyment of the Assigned
Patent Rights or the Abandoned Assets as a result of any prior transaction
related to the Assigned Patent Rights or the Abandoned Assets.

6.5 Validity and Enforceability. None of the Patents or the Abandoned Assets
(other than Abandoned Assets for which abandonment resulted solely from unpaid
fees and/or annuities) has ever been found invalid, unpatentable, or
unenforceable for any reason in any administrative, arbitration, judicial or
other proceeding, and Seller does not know of and has not received any notice or
information of any kind from any source suggesting that the Patents may be
invalid, unpatentable, or unenforceable. To the extent “small entity” fees were
paid to the United States Patent and Trademark Office for any Patent, such
reduced fees were then appropriate because the payor qualified to pay “small
entity” fees at the time of such payment and specifically had not licensed
rights in the any Patent to an entity that was not a “small entity.”

6.6 Conduct. To Seller’s knowledge formed after reasonable due diligence and
investigation, Seller or its agents or representatives have not engaged in any
conduct, or omitted to perform any necessary act, the result of which would
invalidate any of the Patents or hinder their enforcement, including, without
limitation, misrepresenting Seller’s patent rights to a standard-setting
organization.

6.7 Enforcement. Seller has not put a third party on notice of actual or
potential infringement of any of the Patents or the Abandoned Assets. Seller has
not invited any third party to enter into a license under any of the Patents or
the Abandoned Assets. Seller has not initiated any enforcement action with
respect to any of the Patents or the Abandoned Assets.

6.8 Patent Office Proceedings. None of the Patents or the Abandoned Assets has
been or is currently involved in any reexamination, reissue, interference
proceeding, or any similar proceeding, and no such proceedings are pending or
threatened.

6.9 Fees. All maintenance fees, annuities, and the like due or payable on the
Patents as set forth in paragraph 5.2 have been timely paid on or before the
date of the Closing. Exhibit E sets forth all future payment deadlines known to
Seller after reasonable due diligence and investigation with respect to the
Patents, and Seller will update Exhibit E to cause it to be current as of
Closing.

6.10. Abandoned Assets. According to each applicable patent office, each of the
Abandoned Assets has expired, lapsed, or been abandoned or deemed withdrawn.

 

7. REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to Seller as follows that, as of the
Effective Date and as of the Closing:

7.1 Purchaser is a limited liability company duly formed, validly existing, and
in good standing under the laws of the jurisdiction of its formation.

7.2 Purchaser has all requisite power and authority to (i) enter into, execute,
and deliver this Agreement and (ii) perform fully its obligations hereunder.

 

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8. MISCELLANEOUS

8.1 Limitation of Liability. EXCEPT IN THE EVENT OF BREACH OF ANY OF THE PRIMARY
WARRANTIES BY SELLER OR SELLER’S INTENTIONAL MISREPRESENTATION, SELLER’S TOTAL
LIABILITY UNDER THIS AGREEMENT WILL NOT EXCEED THE PURCHASE PRICE SET FORTH IN
PARAGRAPH 3.4 OF THIS AGREEMENT. PURCHASER’S TOTAL LIABILITY UNDER THIS
AGREEMENT WILL NOT EXCEED THE PURCHASE PRICE SET FORTH IN PARAGRAPH 3.4 OF THIS
AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THE LIMITATIONS ON POTENTIAL LIABILITIES
SET FORTH IN THIS PARAGRAPH 8.1 WERE AN ESSENTIAL ELEMENT IN SETTING
CONSIDERATION UNDER THIS AGREEMENT.

8.2 Limitation on Consequential Damages. EXCEPT IN THE EVENT OF SELLER’S
INTENTIONAL MISREPRESENTATION, NEITHER PARTY WILL HAVE ANY OBLIGATION OR
LIABILITY (WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE) OR
OTHERWISE, AND NOTWITHSTANDING ANY FAULT, NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR
IMPUTED), REPRESENTATION, STRICT LIABILITY OR PRODUCT LIABILITY), FOR COVER OR
FOR ANY INCIDENTAL, INDIRECT OR CONSEQUENTIAL, MULTIPLIED, PUNITIVE, SPECIAL, OR
EXEMPLARY DAMAGES OR LOSS OF REVENUE, PROFIT, SAVINGS OR BUSINESS ARISING FROM
OR OTHERWISE RELATED TO THIS AGREEMENT, EVEN IF A PARTY OR ITS REPRESENTATIVES
HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE PARTIES ACKNOWLEDGE
THAT THESE EXCLUSIONS OF POTENTIAL DAMAGES WERE AN ESSENTIAL ELEMENT IN SETTING
CONSIDERATION UNDER THIS AGREEMENT.

8.3 Compliance With Laws. Notwithstanding anything contained in this Agreement
to the contrary, the obligations of the parties with respect to the consummation
of the transactions contemplated by this Agreement shall be subject to all laws,
present and future, of any government having jurisdiction over the parties and
this transaction, and to orders, regulations, directions or requests of any such
government.

8.4 Confidentiality of Terms. The parties hereto will keep the terms and
existence of this Agreement and the identities of the parties hereto and their
affiliates confidential and will not now or hereafter divulge any of this
information to any third party except (a) with the prior written consent of the
other party; (b) as otherwise may be required by law or legal process,
including, without limitation, in confidence to legal and financial advisors in
their capacity of advising a party in such matters; (c) during the course of
litigation, so long as the disclosure of such terms and conditions is restricted
in the same manner as is the confidential information of other litigating
parties; (d) in confidence to its legal counsel, accountants, banks and
financing sources and their advisors solely in connection with complying with
its obligations under this Agreement; (e) by Purchaser, in order to perfect
Purchaser’s interest in the Assigned Patent Rights or the Abandoned Assets with
any governmental patent office (including, without limitation, recording the
Executed Assignments in any governmental patent office); or (f) to enforce
Purchaser’s right, title, and interest in and to the Assigned Patent Rights or
the Abandoned Assets; provided that, in (b) through (d) above, (i) to the extent
permitted by law, the disclosing party will use all legitimate and legal means
available to minimize the disclosure to third parties, including, without
limitation, seeking a confidential treatment request or protective order
whenever appropriate or available; and (ii) the disclosing party will provide
the other party with at least ten (10) days’ prior written notice of such
disclosure. Without limiting the foregoing, Seller will cause its agents
involved in this transaction to abide by the terms of this paragraph, including,
without limitation, ensuring that such agents do not disclose or otherwise
publicize the existence of this transaction with actual or potential clients in
marketing materials, or industry conferences.

 

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8.5 Governing Law; Venue/Jurisdiction. This Agreement will be interpreted,
construed, and enforced in all respects in accordance with the laws of the State
of Delaware, without reference to its choice of law principles to the contrary.
Seller will not commence or prosecute any action, suit, proceeding or claim
arising under or by reason of this Agreement other than in the state or federal
courts located in Delaware. Seller irrevocably consents to the jurisdiction and
venue of the courts identified in the preceding sentence in connection with any
action, suit, proceeding, or claim arising under or by reason of this Agreement.

8.6 Notices. All notices given hereunder will be given in writing (in English or
with an English translation), will refer to Purchaser and to this Agreement and
will be: (i) personally delivered, (ii) delivered postage prepaid by an
internationally recognized express courier service, or (iii) sent postage
prepaid registered or certified U.S. mail (return receipt requested) to the
address set forth below:

 

If to Purchaser

  

If to Seller

Great Links G.B. Limited Liability Company

1209 Orange Street

Wilmington, DE 19801

 

Attn: Managing Director

  

Path 1 Network Technologies, Inc.

6215 Ferris Square, Suite 140

San Diego, CA 92121

 

Attn: Jeremy Ferrell

Notices are deemed given on (a) the date of receipt if delivered personally or
by express courier (or if delivery refused, the date of refusal), or (b) the
fifth (5th) calendar day after the date of posting if sent by U.S. mail. Notice
given in any other manner will be deemed to have been given only if and when
received at the address of the person to be notified. Either party may from time
to time change its address for notices under this Agreement by giving the other
party written notice of such change in accordance with this paragraph.

8.7 Relationship of Parties. The parties hereto are independent contractors.
Nothing in this Agreement will be construed to create a partnership, joint
venture, franchise, fiduciary, employment or agency relationship between the
parties. Neither party has any express or implied authority to assume or create
any obligations on behalf of the other or to bind the other to any contract,
agreement or undertaking with any third party.

8.8 Equitable Relief. Seller acknowledges and agrees that damages alone may be
insufficient to compensate Purchaser for a breach by Seller of this Agreement
and that irreparable harm may result from a breach of this Agreement. Purchaser
shall have the right to seek an order for injunctive relief to prevent a breach
or further breach, and the entering of an order for specific performance to
compel performance of any obligations under this Agreement.

8.9 Severability. If any provision of this Agreement is found to be invalid or
unenforceable, then the remainder of this Agreement will have full force and
effect, and the invalid provision will be modified, or partially enforced, to
the maximum extent permitted to effectuate the original objective.

8.10 Waiver. Failure by either party to enforce any term of this Agreement will
not be deemed a waiver of future enforcement of that or any other term in this
Agreement or any other agreement that may be in place between the parties.

 

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8.11 Miscellaneous. This Agreement, including its exhibits, constitutes the
entire agreement between the parties with respect to the subject matter hereof
and merges and supersedes all prior and contemporaneous agreements,
understandings, negotiations, and discussions. Neither of the parties will be
bound by any conditions, definitions, warranties, understandings, or
representations with respect to the subject matter hereof other than as
expressly provided herein. The section headings contained in this Agreement are
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. No oral explanation or oral information by
either party hereto will alter the meaning or interpretation of this Agreement.
No amendments or modifications will be effective unless in a writing signed by
authorized representatives of both parties; provided, however, that, prior to
Closing, Purchaser and Seller may mutually agree to update Exhibits A and B to
include any patents or patent applications within the definition of Patents,
based on its review of the Deliverables as defined in paragraph 3.1, by
providing updated Exhibits A and B to Seller. The terms and conditions of this
Agreement will prevail notwithstanding any different, conflicting or additional
terms and conditions that may appear on any letter, email or other communication
or other writing not expressly incorporated into this Agreement. The following
exhibits are attached hereto and incorporated herein: Exhibit A (entitled
“Patents to be Assigned”); Exhibit B (entitled “Assignment of Patent Rights”);
Exhibit C (entitled “Assignment of Rights in Certain Assets”) and Exhibit D
(entitled “Press Release”); and Exhibit E (entitled “Maintenance Fee and Annuity
Deadlines”). To the extent that any of the terms or conditions of Sections 1
through 8 of this Agreement conflicts with any of the terms or conditions
contained in Exhibit B or Exhibit C, the terms and conditions of Sections 1
through 8 of this Agreement shall control.

8.12 Counterparts; Electronic Signature; Delivery Mechanics. This Agreement may
be executed in counterparts, each of which will be deemed an original, and all
of which together constitute one and the same instrument. Each party will
execute and promptly deliver to the other parties a copy of this Agreement
bearing the original signature. Prior to such delivery, in order to expedite the
process of entering into this Agreement, the parties acknowledge that a
Transmitted Copy of this Agreement will be deemed an original document.
“Transmitted Copy” means a copy bearing a signature of a party that is
reproduced or transmitted via email of a .pdf file, photocopy, facsimile, or
other process of complete and accurate reproduction and transmission.

8.13 Publicity and SEC Reporting. Notwithstanding paragraph 8.4, Seller may make
one public announcement contemporaneously with the signing of this Agreement and
one public announcement contemporaneously with Closing, each of which
announcements will be substantially of the form set forth in Exhibit D. Seller
shall submit any such proposed announcement to Purchaser at least five business
days prior to its making such an announcement for Purchaser’s review and
approval, which approval shall not be unreasonably withheld by Purchaser so long
as such proposed announcement substantially conforms to Exhibit D. Seller is
also authorized to file this Agreement with the Securities Exchange Commission,
provided that any such filing will include only those portions of this Agreement
that are required to be filed with the SEC pursuant to customary practice and
applicable laws and regulations.

In witness whereof, intending to be legally bound, the parties have executed
this Patent Purchase Agreement as of the Effective Date.

 

Page 10

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SELLER:     PURCHASER: PATH 1 NETWORK TECHNOLOGIES, INC.     GREAT LINKS G.B.
LIMITED LIABILITY COMPANY By:   /s/    THOMAS L. TULLIE             By:  
/s/    MELISSA COLEMA         Name:   Thomas L. Tullie     Name:   Melissa
Colema Title:   Chief Executive Officer     Title:   Authorized Person

Effective Date: November 17, 2006

 

Page 11

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Exhibit A

PATENTS TO BE ASSIGNED

 

Patent or Application No.

   Country    Filing Date   

Title of Patent and First Named Inventor

6,141,355    U.S.    12/29/1998   

Time-synchronized multi-layer network switch for providing quality of service
guarantees in computer networks

 

Douglas A Palmer

6,215,797    U.S.    08/19/1998   

Methods and apparatus for providing quality-of-service guarantees in computer
networks

 

Ronald D. Fellman

6,246,702    U.S.    12/31/1998   

Methods and apparatus for providing quality-of-service guarantees in computer
networks

 

Ronald D. Fellman

EP99943786    EP    08/18/1999   

Methods and apparatus for providing quality-of-service guarantees in computer
networks

 

Ronald D. Fellman

6,751,231    U.S.    01/16/2001   

Methods and apparatus for providing quality-of-service guarantees in computer
networks

 

Ronald D. Fellman

6,661,804    U.S.    01/17/2001   

Methods and apparatus for providing quality-of-service guarantees in computer
networks

 

Ronald D. Fellman

10/688,787    U.S.    10/17/2003   

Methods and apparatus for providing quality-of-service guarantees in computer
networks

 

Ronald D. Fellman

6,704,329    U.S.    05/07/2002   

Minimizing the effect of jitter upon the quality of service operation of
networked gateway devices

 

Gregory Martin

--------------------------------------------------------------------------------

Exhibit B

ASSIGNMENT OF PATENT RIGHTS

For good and valuable consideration, the receipt of which is hereby
acknowledged, Path 1 Network Technologies, Inc., a Delaware corporation, with an
office at 6215 Ferris Square, Suite 140, San Diego, CA 92121, (“Assignor”), does
hereby sell, assign, transfer, and convey unto Great Links G.B. Limited
Liability Company, a Delaware limited liability company, with an office at 1209
Orange Street, Wilmington, DE 19801 (“Assignee”), or its designees, all right,
title, and interest that exist today and may exist in the future in and to any
and all of the following (collectively, the “Patent Rights”):

(a) the provisional patent applications, patent applications and patents listed
in the table below (the “Patents”);

(b) all patents and patent applications (i) to which any of the Patents directly
or indirectly claims priority, (ii) for which any of the Patents directly or
indirectly forms a basis for priority, and/or (iii) that directly or indirectly
incorporate by reference the Patents or are directly or indirectly incorporated
by reference by the Patents;

(c) all reissues, reexaminations, extensions, continuations, continuations in
part, continuing prosecution applications, requests for continuing examinations,
divisions, registrations of any item in any of the foregoing categories (a) and
(b);

(d) all foreign patents, patent applications, and counterparts of any of the
foregoing categories (a) through (c), including, without limitation,
certificates of invention, utility models, industrial design protection, design
patent protection, and other governmental grants or issuances;

(e) all items in any of the foregoing in categories (b) through (d), whether or
not expressly listed as Patents below and whether or not claims in any of the
foregoing have been rejected, withdrawn, cancelled, or the like;

(f) all inventions, invention disclosures, and discoveries described in any item
in any of the foregoing categories (a) through (e) and all other rights arising
out of such inventions, invention disclosures, and discoveries;

(g) all rights to apply in any or all countries of the world for patents,
certificates of invention, utility models, industrial design protections, design
patent protections, or other governmental grants or issuances of any type
related to any item in any of the foregoing categories (a) through (f),
including, without limitation, under the Paris Convention for the Protection of
Industrial Property, the International Patent Cooperation Treaty, or any other
convention, treaty, agreement, or understanding;

--------------------------------------------------------------------------------

(h) all causes of action (whether known or unknown or whether currently pending,
filed, or otherwise) and other enforcement rights under, or on account of, any
of the Patents and/or any item in any of the foregoing categories (b) through
(g), including, without limitation, all causes of action and other enforcement
rights for

(i) damages,

(ii) injunctive relief, and

(iii) any other remedies of any kind

for past, current, and future infringement; and

(i) all rights to collect royalties and other payments under or on account of
any of the Patents and/or any item in any of the foregoing categories
(b) through (h).

 

Patent or Application No.

   Country    Filing Date   

Title of Patent and First Named Inventor

6,141,355    U.S.    12/29/1998   

Time-synchronized multi-layer network switch for providing quality of service
guarantees in computer networks

 

Douglas A Palmer

6,215,797    U.S.    08/19/1998   

Methods and apparatus for providing quality-of-service guarantees in computer
networks

 

Ronald D. Fellman

6,246,702    U.S.    12/31/1998   

Methods and apparatus for providing quality-of-service guarantees in computer
networks

 

Ronald D. Fellman

EP99943786    EP    08/18/1999   

Methods and apparatus for providing quality-of-service guarantees in computer
networks

 

Ronald D. Fellman

6,751,231    U.S.    01/16/2001   

Methods and apparatus for providing quality-of-service guarantees in computer
networks

 

Ronald D. Fellman

6,661,804    U.S.    01/17/2001   

Methods and apparatus for providing quality-of-service guarantees in computer
networks

 

Ronald D. Fellman

 

Page 2

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10/688,787    U.S.    10/17/2003   

Methods and apparatus for providing quality-of-service guarantees in computer
networks

 

Ronald D. Fellman

6,704,329    U.S.    05/07/2002   

Minimizing the effect of jitter upon the quality of service operation of
networked gateway devices

 

Gregory Martin

Assignor represents, warrants and covenants that:

(1) Assignor has the full power and authority, and has obtained all third party
consents, approvals and/or other authorizations required to enter into this
Agreement and to carry out its obligations hereunder, including the assignment
of the Patent Rights to Assignee; and

(2) Assignor owns, and by this document assigns to Assignee, all right, title,
and interest to the Patent Rights, including, without limitation, all right,
title, and interest to sue for infringement of the Patent Rights. Assignor has
obtained and properly recorded previously executed assignments for the Patent
Rights as necessary to fully perfect its rights and title therein in accordance
with governing law and regulations in each respective jurisdiction. The Patent
Rights are free and clear of all liens, claims, mortgages, security interests or
other encumbrances, and restrictions. There are no actions, suits,
investigations, claims or proceedings threatened, pending or in progress
relating in any way to the Patent Rights. There are no existing contracts,
agreements, options, commitments, proposals, bids, offers, or rights with, to,
or in any person to acquire any of the Patent Rights.

Assignor hereby authorizes the respective patent office or governmental agency
in each jurisdiction to issue any and all patents, certificates of invention,
utility models or other governmental grants or issuances that may be granted
upon any of the Patent Rights in the name of Assignee, as the assignee to the
entire interest therein.

Assignor will, at the reasonable request of Assignee and without demanding any
further consideration therefor, do all things necessary, proper, or advisable,
including without limitation, the execution, acknowledgment, and recordation of
specific assignments, oaths, declarations, and other documents on a
country-by-country basis, to assist Assignee in obtaining, perfecting,
sustaining, and/or enforcing the Patent Rights. Such assistance will include
providing, and obtaining from the respective inventors,

 

Page 3

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prompt production of pertinent facts and documents, giving of testimony,
execution of petitions, oaths, powers of attorney, specifications, declarations
or other papers, and other assistance reasonably necessary for filing patent
applications, complying with any duty of disclosure, and conducting prosecution,
reexamination, reissue, interference or other priority proceedings, opposition
proceedings, cancellation proceedings, public use proceedings, infringement or
other court actions and the like with respect to the Patent Rights. With prior
written approval by Assignee, Assignee will pay Assignor’s reasonable costs and
expenses.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

 

Page 4

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The terms and conditions of this Assignment of Patent Rights will inure to the
benefit of Assignee, its successors, assigns, and other legal representatives
and will be binding upon Assignor, its successors, assigns, and other legal
representatives.

IN WITNESS WHEREOF this Assignment of Patent Rights is executed at
                     on                                                  .

ASSIGNOR:

Path 1 Network Technologies, Inc.

By:

    

Name:

    

Title:

     (Signature MUST be notarized)

STATE OF                             )

                                                 ) ss.

COUNTY OF                         )

On                             , before me,
                                                                 , Notary Public
in and for said State, personally appeared
                                                 , personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.

WITNESS my hand and official seal.

Signature                                                  
                    (Seal)

 

Page 5

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Exhibit C

ASSIGNMENT OF RIGHTS IN CERTAIN ASSETS

For good and valuable consideration, the receipt of which is hereby
acknowledged, Path 1 Network Technologies, Inc., a Delaware corporation, with an
office at 6215 Ferris Square, Suite 140, San Diego, CA 92121, (“Assignor”), does
hereby sell, assign, transfer, and convey unto Great Links G.B. Limited
Liability Company, a Delaware limited liability company, with an office at 1209
Orange Street, Wilmington, DE 19801 (“Assignee”), or its designees, the right,
title, and interest in and to any and all of the following provisional patent
applications, patent applications, patents, and other governmental grants or
issuances of any kind (the “Certain Assets”):

 

Patent or Application No.

   Country    Filing Date   

Title of Patent and First Named Inventor

60/107,430

   U.S.    11/06/1998   

Time-synchronized multi-layer network switch for providing quality of service
guarantees in computer networks

 

Douglas A. Palmer

PCT/US1999/25882

   WO    11/03/1999   

Time-synchronized multi-layer network switch for providing quality of service
guarantees in computer networks

 

Douglas A Palmer

EP99963855

   EP    11/03/1999   

Time-synchronized multi-layer network switch for providing quality of service
guarantees in computer networks

 

Douglas A Palmer

CA19992349461

   CA    11/03/1999   

Time-synchronized multi-layer network switch for providing quality of service
guarantees in computer networks

 

Douglas A Palmer

PCT/US1999/18984

   WO    08/18/1999   

Methods and apparatus for providing quality-of-service guarantees in computer
networks

 

Ronald D. Fellman

--------------------------------------------------------------------------------

PCT/US2002/14847

   WO    05/08/2001   

Minimizing the effect of jitter upon the quality of service operation of
networked gateway devices

 

G. Martin

60/289,678

   U.S.    05/08/2001   

Minimizing the effect of jitter upon the quality of service operation of
networked gateway devices

 

G. Martin

10/757,031

   U.S.    01/13/2004   

Minimizing the effect of jitter upon the quality of service operation of
networked gateway devices

 

G. Martin

CA20022446766

   CA    11/14/2002   

Minimizing jitter in QOS networked gateway devices

 

G. Martin

EP20020736734

   EP    02/25/2004   

Minimizing the effect of jitter upon the quality of service operation of
networked gateway devices

 

G. Martin

Assignor assigns to Assignee all rights to the inventions, invention
disclosures, and discoveries in the assets listed above, together, with the
rights, if any, to revive prosecution of claims under such assets and to sue or
otherwise enforce any claims under such assets for past, present or future
infringement.

Assignor hereby authorizes the respective patent office or governmental agency
in each jurisdiction to make available to Assignee all records regarding the
Certain Assets.

 

Page 2

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The terms and conditions of this Assignment of Rights in Certain Assets will
inure to the benefit of Assignee, its successors, assigns, and other legal
representatives and will be binding upon Assignor, its successors, assigns, and
other legal representatives.

DATED this      day of                      20    .

ASSIGNOR:

Path 1 Network Technologies, Inc.

 

By:

    

Name:

    

Title:

     (Signature MUST be notarized)

STATE OF                             )

                                                 ) ss.

COUNTY OF                         )

On                             , before me,
                                                                 , Notary Public
in and for said State, personally appeared
                                                 , personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.

WITNESS my hand and official seal.

Signature                                                  
                    (Seal)

 

Page 3

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Exhibit D

PRESS RELEASE

After execution by both parties:

San Diego, California, [Date]/PRNewswire-FirstCall/ — Path 1 Network
Technologies, Inc. announced today that it has signed an agreement to sell
selected patents and patent applications to Great Links G.B. Limited Liability
Company for net proceeds of approximately $535,000.00, subject to customary
closing conditions. The patents and patent applications sold relate to Path 1
Network Technologies, Inc.’s DotCAM™ Technology. Path 1 Network Technologies,
Inc. retains a, non-exclusive license under the patents for the DotCAM™
Technology.

At Closing:

San Diego, California, [Date]/PRNewswire-FirstCall/ — Path 1 Network
Technologies, Inc. announced today that it has completed the sale of selected
patents and patent applications to Great Links G.B. Limited Liability Company
for net proceeds of approximately $535,000.00. The patents and patent
applications sold relate to Path 1 Network Technologies, Inc.’s DotCAM™
Technology. Path 1 Network Technologies, Inc. retains a, non-exclusive license
under the patents for the DotCAM™ Technology.

--------------------------------------------------------------------------------

Exhibit E

MAINTENANCE FEE AND ANNUITY PAYMENT DEADLINES

Maintenance Fee due by 2007 (Fees are estimates based on “Small Entity” status –
Fees are subject to fluctuations occurring in the Consumer Price Index pursuant
to 35 U.S.C. 41(f).)

a. 6,141,355 – 8th year fee due 10/31/2007 ($1,150)

b. 6,751,231 – 4th year fees due 06/15/2007 ($900)

c. 6,661,804 – 4th year fees due 12/09/2006 ($900)

d. 6,704,329 – 4th year fees due 03-09-2007 ($900)

 

Patent or
Application No.

  

Reel/Frame

  

*Maintenance Fee Due

6,141,355

(09/222,183)

  

009882/0542

 

Assignors:

Palmer, Douglas A.;

Fellman, Ronald D.;

Cruz, Rene L.

 

Assignee:

Path 1 Network Technologies, Inc.

Suite 230

9339 Genesee Avenue

San Diego, California 92121

  

According to PTO’s PAIR, No Fees Due Currently.

 

8th year fee due 10/31/2007 ($1,150)

 

12th year fee due 10/31/2011 ($1,900)

6,215,797

(09/136,706)

  

010195/0851

 

Assignors:

Fellman, Ronald D.;

Cruz, Rene L.

 

Assignee:

Path 1 Network Technologies, Inc.

9339 Genesee Avenue, Suite 230

San Diego, California 92121

  

According to PTO’s PAIR, No Fees Due Currently.

 

8th year fee due 04/10/2008 ($1,150)

 

12th year fee due 04/10/2012 ($1,900)

6,246,702

(09/224,577)

  

009775/0373

 

Assignors:

Fellman, Ronald D.;

Cruz, Rene L.; Palmer, Douglas A.

 

Assignee:

Path 1 Network Technologies, Inc.

9339 Genesee Avenue, Suite 230

San Diego, California 92121

  

According to PTO’s PAIR, No Fees Due Currently.

 

8th year fee due 06/12/2008 ($1,150)

 

12th year fee due 06/12/2012 ($1,900)

6,751,231

(09/761,207)

  

018323/0150

 

Assignors:

Fellman, Ronald D. and

Cruz, Rene L.

 

Assignee:

Path 1 Network Technologies, Inc.

9339 Genesee Avenue, Suite 230

San Diego, California 92121

  

According to PTO’s PAIR, No Fees Due Currently.

 

4th year fees due 06/15/2007 ($900)

 

8th year fee due 06/15/2011 ($1,150)

 

12th year fee due 06/15/2015 ($1,900)

--------------------------------------------------------------------------------

Patent or
Application No.

  

Reel/Frame

  

*Maintenance Fee Due

6,661,804

(09/764,779)

  

018323/0157

 

Assignors:

Fellman, Ronald D.;

Cruz, Rene L.; and Palmer, Douglas A.

 

Assignee:

Path 1 Network Technologies, Inc.

9339 Genesee Avenue, Suite 230

San Diego, California 92121

  

According to PTO’s PAIR, No Fees Due Currently.

 

4th year fees due 12/09/2006 ($900)

 

8th year fee due 12/09/2010 ($1,150)

 

12th year fee due 12/09/2014 ($1,900)

10/688,787

  

014478/0436

 

Assignors:

Fellman, Ronald D.;

Cruz, Rene L.; Palmer, Douglas A.; Schade, Bart

 

Assignee:

Path 1 Network Technologies, Inc.

9339 Genesee Avenue, Suite 230

San Diego, California 92121

  

10/17/2003 filing date

6,704,329

(10/141,630)

  

013185/0842

 

Assignors:

Martin, G. J.

 

Assignee:

Path 1 Network Technologies, Inc.

9339 Genesee Avenue, Suite 230

San Diego, California 92121

  

According to PTO’s PAIR, No Fees Due Currently.

 

4th year fees due 03/09/2007 ($900)

 

8th year fee due 03/09/2011 ($1,150)

 

12th year fee due 03/09/2015 ($1,900)

 

Page 2