In this task, you're given a passage that represents a legal contract or clause between multiple parties. Your job is to write questions that ask the basic details corresponding to the legal contracts or clauses. Avoid questions that can be answered correctly without actually understanding the paragraph, and which might have multiple answers. The answer to each question should be unambiguous.

Input: Consider Input: Exhibit 10.10   ASIA PACIFIC CABLE NETWORK 2     CONSTRUCTION AND MAINTENANCE   AGREEMENT     Singapore   April 18th, 2000





  TABLE OF CONTENTS   PARAGRAPH

    1 Definitions and Interpretations

      2 APCN 2 Configuration

      3 Establishment of the APCN 2 Management Committee

      4 Provision, Construction and Ownership of Segments

      5 Definition of APCN 2 Capital Costs

      6 Definition of Operation and Maintenance Costs

      7 Allocation and Billing of APCN 2 Costs

      8 Currency of Payment

      9 Keeping and Inspection of Books for Segment S and T

      10 Duties and Rights as to Operation and Maintenance of Segments

      11 Use of Segment T

      12 Acquisition and Use of Capacity

      13 Expansion of Equipped Capacity

      14 Increase or Decrease of Design Capacity

      15 Obligation to Provide Transiting Facilities to Extend APCN2 Capacity

      16 Obligation to Connect the APCN 2 with Inland Systems

      17 Direct Access to Network Interface and Equal Access to Terminal Station

      18 Duration of Agreement and Realization of Assets

      19 Obtaining of Approvals

      20 Privileges for Documents or Communications

      21 Relationship of Parties

      22 Assignment of Rights and Obligations

      23 Default

  1







  24 Waiver

      25 Compliance with Law

      26 Ratification of Decisions and Actions

      27 Resolution of Disputes

      28 Supplements and Amendments to this Agreement

      29 Execution of Agreement

      30 Successors Bound

      31 Confidentiality

      32 Settlement of Claims by Parties

      33 Force Majeure

      34 Severability

      35 Entire Agreement



Testamonium

  2





  SCHEDULES   Schedule A Parties to the Agreement     Schedule B Investment Shares, Ownership Interest, Voting Interests, and Allocation of Capital Cost and O&M Costs     Schedule C Capacity Allocation and Interest in Unallocated Capacity     Schedule D Sales of IRU Capacity         ANNEXES

    Annex 1 Terms of Reference for the Procurement Group     Annex 2 Terms of Reference for the AR&RSC, O&MSC, F&ASC and I&ASC     Annex 3 Terms of Reference for the Network Administrator     Annex 4 Terms of Reference for the Central Billing Party     Annex 5 Configuration of APCN 2     Annex 6 Billing Currency and Source of Rate for Financial Charges     Annex 7 Rules on Use of Capacity     Annex 8 Segment T Facilities and Functions   3





  ASIA PACIFIC CABLE NETWORK 2 CONSTRUCTION & MAINTENANCE AGREEMENT   THIS AGREEMENT, made and entered into this 18th day of April 2000, between and among the Parties signatory hereto (hereinafter collectively called Parties and individually called Party), which Parties are identified in Schedule A,   WITNESSETH:   WHEREAS, digital telecommunications services are being provided in the Asia Pacific Region by means of fiber optic submarine cable and satellite facilities; and   WHEREAS, other digital light-wave submarine cable systems, presently in service in the Asia Pacific Region, have facilitated a rapid growth of new telecommunications requirements designed to take advantage of reliable, secure and economically priced services based on state of the art and available digital technology; and   WHEREAS, it is now apparent that this rapid growth in traffic demand will lead to a greater demand for facilities in the Asia Pacific Region necessitating the construction of additional Asia Pacific fiber optic submarine cable facilities (hereinafter referred to as the Asia Pacific Cable Network 2 or APCN 2); and   WHEREAS, the reliability of telecommunications services and its usefulness to customers requires the availability of the appropriate facilities and technology, including the APCN 2 for diverse routing and instantaneous restoration of services; and   WHEREAS, China Telecom, CWHKTI, Chunghwa Telecom, Korea Telecom, Japan Telecom, NTT Com, KDD Corp., Telekom Malaysia, SingTel, and Telstra, (the MOU Parties) signed a Memorandum of Understanding to plan the APCN 2 effective from 16th June 1999 (hereinafter referred to as the MOU) to permit activities, as defined in the MOU; and   WHEREAS, the First Supplemental MOU, the Second Supplemental MOU, the Third Supplemental MOU and the Fourth Supplemental MOU were effective from October 5, 1999, October 6, 1999, February 29, 2000 and April 4, 2000 respectively; and   WHEREAS, the MOU and the Supplemental MOUs are hereinafter collectively called the MOU; and   WHEREAS, the MOU states that it shall continue in force until the signing, by the Parties, of the APCN 2 Construction and Maintenance Agreement; and   WHEREAS, the Parties now desire to construct the APCN 2 as a fully integrated Asia Pacific network comprised of 4 fully restorable fiber optic pairs; and   WHEREAS, the Parties now desire to define the terms and conditions upon which the APCN 2 will be provided, constructed, operated and maintained.   4





  NOW, THEREFORE, the Parties hereto, in consideration of the mutual covenants herein expressed, covenant and agree with each other as follows:   1. DEFINITIONS AND INTERPRETATIONS   1.1 The following definitions and interpretations shall apply to certain terms used in this Agreement:   (a) Affiliate: A company is the Affiliate of another if either company owns directly or indirectly less than 50% but no less than 10% of its equity.   (b) Branching Unit (BU): Equipment that permits interconnection between 3 cable Segments and provides the optical fiber and power conductor between 3 cable Segments.   (c) Cable Landing Point: Cable Landing Point shall be the beach joint or the mean low watermark of ordinary spring tides if there is no beach joint.   (d) Capacity Types shall be categorized as follows:   Allocated Capacity - capacity allocated in the APCN 2 to a Party in return for its financial investment.       Design Capacity - the maximum capacity that the APCN 2 is designed to provide which shall be no less than 2.5 Tbit/s.

      Equipped Capacity - the amount of capacity physically provided in the APCN 2 at any one time.       Initial Equipped Capacity - Initial Equipped Capacity of the APCN 2 shall be at least 80Gbit/s.       IRU Capacity - capacity acquired after execution of this Agreement on an IRU basis from the Unallocated Capacity.

      Unallocated Capacity - the difference in capacity between the Equipped Capacity and the Allocated Capacity.

  (e) Carrier: Any entity authorized or permitted under the laws of its respective Country, or another Country in which it operates, to acquire and use international transmission facilities for the provision of international telecommunications services and which is in possession of any necessary operating license to enable it to do so.   (f) Country: The word Country as used in this Agreement shall mean a country, territory or place, as appropriate.   5





  (g) Direct Access: The direct connection to the Network Interface of Segment S without going through any other party's equipment.   (h) Initial Parties: The Initial Parties are Advantel, C&W, China Telecom, China Unicom, Concert Ltd, Chunghwa Telecom, CWHKTI, Global One, JT, KDD, KPN, KT, Layer 2, MCIITI, MFN, NCIC, NTT Com, Onelink, PLDT, SingTel, StarHub, Teleglobe, Telstra, TFN, TM and Williams.   (i) IRU: Indefeasible Right of Use which does not convey ownership and voting rights in the management of the APCN 2.   (j) Minimum Investment Unit: A unit designated as the minimum unit of investment in the APCN 2, which is equivalent to one whole STM- 1 ring, allowing the use of two (2) half STM-1 ring circuits on any Path within the APCN 2. The Minimum Investment Unit is hereinafter termed as a MIU.   (k) Network Interface: The nominal STM-l digital/optical input/output ports, and/or STM-4, STM-16 and STM-64 on the digital/optical distribution frame (including the digital/optical distribution frame itself).   (l) Parent Company: A company that owns directly or indirectly no less than 50% of equity of a company.   (m) Path: The connectivity in the APCN 2 between any two Network Interfaces which is independent of the actual physical links used to connect these Network Interfaces.   (n) Provisional Acceptance: The issuance of a certificate of Provisional Acceptance shall be that of Segment S pursuant to the terms and conditions set forth in the Supply Contract.   (o) Ready For Provisional Acceptance Date: The date on which the entire Wet Segment of the APCN 2 is provisionally accepted by the Procurement Group on behalf of the Parties. The Ready for Provisional Acceptance Date (hereinafter referred to as the RFPA Date) shall be 31st August 2001, or such other date as may be agreed by the Management Committee.   (p) Ready for Service Date: The date on which commercial service can be placed on the entire APCN 2. For the purposes of this Agreement, the Ready For Service Date (hereinafter referred to as the RFS Date) shall be 30th September 2001, or such other date as may be agreed by the Management Committee.   (q) Subsidiary: A company that is directly or indirectly owned by a Parent Company holding no less than 50% of its equity.   6





  (r) Supply Contract: The contracts placed by the Procurement Group on behalf of the Parties for the supply of the Wet Segment of the APCN 2.   (s) Terminal Parties: The Terminal Parties are China Telecom, CWHKTI, Chunghwa Telecom, KDD, Korea Telecom, NTT Com, PLDT, SingTel, and Telekom Malaysia.   (t) Wet Segment: For the purposes of this Agreement, Segments S1, S2, S3, S4, S5, S6, S7, and S8 as defined below are collectively called the Wet Segment.   1.2 Schedules and Annexes   The Schedules and Annexes to this Agreement, and any written amendments thereto or any Schedules or Annexes substituted therefore, shall form part of this Agreement, and any Paragraph which contains a reference to a Schedule or Annex shall be read as if the Schedule or Annex was set out at length in the body of the Paragraph itself. In the event that there is any conflict between the terms and conditions of this Agreement and the Schedules and Annexes to this Agreement, the terms and conditions of this Agreement shall prevail.   1.3 Paragraph headings   The headings of the paragraphs are inserted for convenience and do not form part of this Agreement and shall not have any effect on the interpretation thereof.   1.4 Interpretation   Where the sense requires, words denoting the singular only shall also include the plural and vice versa. References to persons shall include firms and companies and vice versa. Reference to the male shall include the female.   2. APCN 2 CONFIGURATION   2.1 The configuration of APCN 2 shall be as shown in Annex 5, which shall be regarded as consisting of a terrestrial section (hereinafter called Segment T) and a submarine section (herein called Segment S or the Wet Segment).   2.2 Segment T shall be regarded as comprising of the following Segments:   Segment T1: A Terminal Station at Katong   Segment T2: A Terminal Station at Kuantan   Segment T3: A Terminal Station at Lantau   Segment T4: A Terminal Station at Chongming   7





  Segment T5: A Terminal Station at Pusan   Segment T6: A Terminal Station at Kitaibaraki   Segment T7: A Terminal Station at Chikura   Segment T8: A Terminal Station at Tanshui   Segment T9: A Terminal Station at Shantou   Segment T10: A Terminal Station at Batangas   2.3 Segments T1, T2, T3, T4, T5, T6, T7, T8, T9 and T10 shall each consist of:   (i) an appropriate share of land and buildings at the specified locations for the cable landing, Terminal Station and for the cable route including cable rights-of-way and ducts or conduits between the Terminal Station and its respective Cable Landing Point, and an appropriate share of common services and equipment at each of those locations together with equipment in each of those Terminal Stations and at a remote location as necessary which is solely associated with the APCN 2, but not part of the Wet Segment; and   (ii) An appropriate share of the test equipment.   2.4 Segment S shall be regarded as comprising of the following Segments:   Segment S1: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Katong; and the Network Interface at the Terminal Station at Kuantan.   Segment S2: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Kuantan; and the Network Interface at the Terminal Station at Lantau.   Segment S3: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Lantau; and the Network Interface at the Terminal Station at Chongming.   Segment S4: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Chongming; and the Network Interface at the Terminal Station at Pusan; and the Network Interface at the Terminal Station at Kitaibaraki.   8





  Segment S4A:

The whole of the submarine cable containing four (4) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Chongming and BU1.       Segment S4B:

The whole of the submarine cable containing two (2) optical fiber pairs provided between BU1 and BU2.       Segment S4C:

The whole of the submarine cable containing four (4) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Kitaibaraki and BU2.       Segment S4W:

The whole of the submarine cable containing two (2) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Pusan and BU1.       Segment S4E:

The whole of the submarine cable containing two (2) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Pusan and BU2.   Segment S5: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Kitaibaraki; and the Network Interface at the Terminal Station at Chikura.   Segment S6: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Chikura; and the Network Interface at the Terminal Station at Tanshui.   Segment S7: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Tanshui; and the Network Interface at the Terminal Station at Shantou.   Segment S8: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Shantou; and the Network Interface at the Terminal Station at Batangas; and the Network Interface at the Terminal Station at Katong.   9





  Segment S8A:

The whole of the submarine cable containing four (4) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Shantou and BU3.       Segment S8B:

The whole of the submarine cable containing two (2) optical fiber pairs provided between BU3 and BU4.       Segment S8C:

The whole of the submarine cable containing four (4) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Katong and BU4.       Segment S8N:

The whole of the submarine cable containing two (2) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Batangas and BU3.       Segment S8S:

The whole of the submarine cable containing two (2) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Batangas and BU4.   2.5 Segment S shall include:   (i) all transmission, power feeding, system management, Network Protection Equipment and test equipment directly associated with, and required to operate and maintain the submersible plant including, where applicable, a remote control and supervisory equipment;   (ii) the power equipment provided wholly for use with the equipment listed in (i) above;   (iii) the transmission cable equipped with appropriate optical amplifiers, BUs, and joint housings between the applicable Terminal Stations:   (iv) the sea earth cable and electrode system and/or the land earth system, or an appropriate share thereof, associated with the terminal power feeding equipment in the respective Terminal Stations; and   (v) terminal equipment, including Network Interface for STM-1, STM-4, STM-16 and STM-64 levels, in each of the Terminal Stations.   2.6 In this Agreement, references to any Segment, however expressed, shall be deemed to include, unless the context otherwise requires, additional property incorporated therein by agreement of the Management Committee. Each Segment shall be regarded as including   10





  its related spare and standby units and components, including, but not limited to, optical amplifiers, BUs, cable lengths, and terminal equipment.   11





  3. ESTABLISHMENT OF THE APCN 2 MANAGEMENT COMMITTEE   3.1 The Parties shall form an APCN 2 Management Committee (hereinafter referred to as the Management Committee), for the purpose of directing the progress of engineering, provision, installation, bringing into service and continued operation of the APCN 2, consisting of one representative of each of the Parties to this Agreement. The Management Committee shall make all major decisions necessary to effectuate the purposes of this Agreement.   3.2 Two or more Parties may designate the same Party to serve as their representative at specific meetings of the Management Committee and/or its Subcommittees established pursuant to Subparagraph 3.7 of this Agreement.   3.3 Each of the Initial Parties shall, on a rotational basis, provide the Chairman of the Management Committee which will meet on the call of a Chairman or whenever requested by one or more Parties together representing at least five per cent (5%) of the total voting interests specified in Schedule B. The Chairman shall give at least thirty (30) days' advance notice of each meeting, together with a copy of the draft agenda. In cases of emergency, such notice period may be reduced where at least seventy-five (75) percent of the total voting interests are in agreement. Documents for the meeting should be made available to members at least fourteen (14) days before the meeting, but the Management Committee may agree to discuss papers distributed on less than fourteen (14) days' notice.   3.4 The Management Committee shall make every reasonable effort to reach agreement with respect to matters to be decided. Unless otherwise provided for in this Agreement, in the event an agreement cannot be reached, the decision will be carried on the basis of simple majority of the total voting interests specified in Schedule B, which must include a simple majority of the voting interests of the Terminal Parties and a simple majority of the voting interests of the non-Terminal Parties. A member of the Management Committee representing more than one Party shall separately cast the votes to which each Party he represents is entitled.   3.5 Any Party not represented at a Management Committee meeting, but entitled to vote, may vote on any matter on the agenda of such a meeting by either appointing a proxy in writing or giving notice of such vote to the Chairman prior to the submission of such matters for vote at such meetings.   3.6 No decisions of the Management Committee, its Subcommittees or any other groups established by the Management Committee shall override any provisions of this Agreement or in any way diminish the rights or prejudice the interests granted to any Party under this Agreement.   3.7 To aid the Management Committee in the performance of its duties, the following Subcommittees shall be formed, and said Subcommittees, under the direction of the   12





  Management Committee, shall be responsible for their respective areas of interest listed in Annex 2 and any other areas of interest designated by the Management Committee:   (i) Investment and Agreement Subcommittee (hereinafter referred to as I&ASC)   (ii) Financial and Administrative Subcommittee (hereinafter referred to as F&ASC)   (iii) Operations and Maintenance Subcommittee (hereinafter referred to as O&MSC)   (iv) Assignments, Routing, and Restoration Subcommittee (hereinafter referred to as AR&RSC)   3.8 The Management Committee shall form a Procurement Group (hereinafter referred to as PG), consisting of representatives from each of the Initial Parties. This group shall act on behalf of the Parties to this Agreement for the purpose of arranging for the construction, implementation, and installation of the Wet Segment of APCN 2 and be solely responsible for all actions as may be required to contract with the Suppliers to provide the Wet Segment of the APCN 2. The Terms of Reference of the PG are contained in Annex 1.   3.9 The Management Committee may establish such other subcommittees or working groups as it shall determine within its discretion to provide assistance in the performance of its responsibilities. The PG and the Subcommittees shall meet at least once annually after the execution date of this Agreement and more frequently if necessary, until two years following the RFS Date and thereafter as may be appropriate. Meetings of the PG and a Subcommittee may be called to consider specific questions at the discretion of its Co-Chairmen whenever requested by one or more Initial Parties.   3.10 The respective Co-Chairmen of each Subcommittee, or a designated representative of each Subcommittee, shall attend the Management Committee meetings and meetings of each other Subcommittee in an advisory capacity as necessary. On or about two (2) years after the RFS Date, the Management Committee shall determine whether any of its Subcommittees should remain in existence. If the Management Committee determines that one or more of its Subcommittees shall not remain in existence, the responsibilities assigned to a Subcommittee whose existence has been terminated under this Subparagraph 3.10 shall revert to the Management Committee unless otherwise provided for in this Agreement.   3.11 The Terms of Reference for the Network Administrator (hereinafter referred to as NA) are as set forth in Annex 3 of this Agreement.   3.12 The Terms of Reference for the Central Billing Party (hereinafter referred to as CBP) are as set forth in Annex 4 of this Agreement. At or after the RFS Date the CBP shall be reappointed or a new CBP appointed from the Parties by an open tendering process.   3.13 The Terms of Reference of all Subcommittees, the NA, the CBP and the PG established pursuant to this Paragraph 3 shall be amended by the Management Committee as and when as it is necessary.   13





  4. PROVISION, CONSTRUCTION AND OWNERSHIP OF SEGMENTS   4.1 The following Parties shall own, provide and agree to act as the Terminal Parties for the following Segments;   SEGMENT

TERMINAL PARTY       T1

SingTel T2

TM T3

CWHKTI T4

China Telecom T5

KT T6

NTT Com T7

KDD T8

Chunghwa Telecom T9

China Telecom T10

PLDT   4.2 The Terminal Parties shall make available to the other Parties hereto any reasonable information requested by the Parties relating to the engineering, provision, construction, or installation of Segment T in a timely manner. The various Segment T shall be provided in sufficient time to permit APCN 2 to be placed into operation by the RFS Date.   4.3 Ownership of the Wet Segment shall be as shown in Schedule B to this Agreement. The Wet Segment of APCN 2 shall be owned by the Parties in common and undivided shares.   4.4 The provision of the Wet Segment shall be through a Supply Contract to be placed by the PG with Suppliers subject to approval by the Management Committee.   4.5 Each of the Parties shall be entitled, on request and at its own expense, to receive from the PG a copy of the Supply Contract subject to the acceptance by each such Party of any reasonable conditions of confidentiality imposed by the Supply Contract. 4.6 The PG shall ensure that the Supply Contract specifies that the Wet Segment is to be provided by the RFPA Date.   4.7 The PG shall ensure that the Supply Contract shall afford them or their designated representatives reasonable rights of access to examine, test, and inspect the APCN 2 cable equipment, material, supplies and installation activities.   4.8 In the event that the Wet Segment fails to meet the specifications referred to in the Supply Contract for its provision, fails to provide the specified capacity, or is not engineered, provided, installed and ready in sufficient time to meet the RFPA Date as specified in the Supply Contract, or if the Suppliers are otherwise in material breach of the Supply Contract, the PG may, pursuant to this Paragraph 4 and in accordance with the Supply Contract, take such actions as may be necessary to exercise the rights and   14





  remedies available under the terms and conditions of the Supply Contract. Such actions by the PG shall be subject to any direction deemed necessary by the Management Committee.   4.9 The members of the PG shall not be liable to any other Party or to each other for any loss or damage sustained by reason of a Supplier's failure to perform in accordance with the terms and conditions of its Supply Contract, or as a result of APCN 2 not meeting the RFPA Date as specified in the Supply Contract, or if APCN 2 does not perform in accordance with the technical specifications and other requirements of the Supply Contract, or APCN 2 is not integrated or placed into operation. The Parties recognize and agree that the PG does not make any representations or warranties, including, but not limited to, any representation or warranty regarding:   (i) the performance of the Supply Contract by the Supplier   (ii) the performance or reliability of the Wet Segment, or   (iii) that APCN 2 shall be integrated or placed into operation and the Parties hereby agree that nothing in this Agreement shall be construed as such a warranty or guarantee.   5. DEFINITION OF APCN 2 CAPITAL COSTS   5.1 The capital costs (herein referred to as the Capital Costs) are the costs incurred in connection with the engineering, provision, construction and installation of Segment S and Segment T, or causing them to be engineered, provided, constructed and installed and shall include:   (a) appropriate costs, including appropriate financial charges, incurred under the MOU in respect of specific activities such as desk top surveys and meeting expenses that are reasonably related to the construction of the APCN 2;   (b) those costs payable to the Supplier(s) under the Supply Contract attributable to the Wet Segment;   (c) the fixed costs and the additional Capital Costs to be reimbursed to the Terminal Parties for the provision of the Terminal Stations in accordance with the costs schedule and scope of work given in Annex 8;   (d) those costs directly incurred by the Initial Parties which shall be fair and reasonable in amount and not included in the Supply Contract and which have been directly and reasonably incurred solely for the purpose of, or to be properly chargeable in respect of, such engineering, provision, construction, installation and laying of the Wet Segment, including but not limited to, the costs of engineering, design, materials, manufacturing, procurement and inspection, installation, removing (with appropriate reduction for salvage), cable ship and other ship costs, burying, fisherman's compensation including reasonable related   15





  expenses, testing associated with laying or installation, customs duties, taxes (except income tax imposed upon the net income of a Party), appropriate financial charges, supervision, billing activities, overheads and insurance of or a reasonable allowance in lieu of insurance if such Party elects to carry a risk itself, being a risk which is similar to one against which a supplier has insured or against which insurance is usual or recognized or would have been reasonable;   (e) those fees payable to the NA, up to the RFS Date, in fulfilling its responsibilities as set forth in Annex 3;   (1) those fees payable to the CBP, up to the RFS Date, in fulfilling its responsibilities as set forth in Annex 4;   (g) those costs incurred, up to the RFS Date, by the custodians of the original, amendments and supplements to this Agreement, for distributing certified photocopies of this Agreement and/or amendments or supplements to the Parties to this Agreement;   (h) those costs reasonably incurred (as approved by the Management Committee) by the Parties, up to the RFS Date, hereto in the holding of' the meetings of the PG and I&ASC;   (i) those costs reasonably incurred (as approved by the Management Committee) by the Parties, up to the RFS Date, hereto in the hosting of the meetings of the Management Committee and its Subcommittees; and   (j) the costs associated with any additional work or property incorporated into the Segment S or Segment T subsequent to the RFS Date by agreement of the Management Committee.   5.2 For purposes of this Agreement, the cost of the repair or replacement of any part of the APCN 2 in the event of damage or loss arising during construction, laying, burying installing and the bringing into operation of the APCN 2, which is attributable under the Supply Contract to the Parties, shall be regarded as part of the Capital Costs.   5.3 Any of the Parties may at its own expense insure against risks so far as its own share of such costs is concerned. Should the Parties jointly agree to insure against risks, the costs of such insurance shall form part of the Capital Costs, as approved by the Management Committee.   16





  6. DEFINITION OF OPERATION AND MAINTENANCE COSTS   The costs associated with the operation and maintenance duties (herein called the O&M Costs) are the costs reasonably incurred in the operation and maintenance of Segment S and Segment T including, but not limited to:   (a) the cost of attendance, testing, adjustments, repairs and replacements, cable ships, (including standby costs), cable depots, maintenance and repair devices that are or may hereafter become available, customs duties, taxes, (except income tax imposed on the net income of a Party) paid in respect of such facilities, billing activities, financial charges attributable to other Parties, shares of costs incurred by a Terminal Parties, supervision, overheads and costs and expenses reasonably incurred on account of claims made by or against other persons in respect of such facilities or any part thereof and damages or compensation payable by the Parties concerned on account of such claims;   (b) those costs incurred by the Terminal Parties, including additions thereto, with respect to the operation and maintenance of their respective Terminal Stations, allocable to the APCN 2. Where the use of a Terminal Station or of certain equipment situated therein, such as power supply or testing and maintenance equipment, is shared, by agreement of the Parties, by the APCN 2 and other communications systems terminating at that Terminal Station, the costs of operation and maintenance of such shared Terminal Station or equipment (not solely attributable to a particular communication system or systems) will be allocated among the systems involved in the proportions in which they use the shared equipment or facility. For such purposes, the Management Committee shall approve the method for determining the portion of a shared Terminal Station allocable to the APCN 2. Costs as used in this Paragraph 6 with reference to each of the Terminal Stations shall include costs reasonably incurred in operation and maintenance of the facilities involved, including, but not limited to, the cost of attendance, testing, adjustments, repairs and replacements, customs duties, taxes (except income tax imposed upon the net income of a Party) paid in respect of such facilities, billing activities, administrative costs, financial charges, and costs and expenses reasonably incurred on account of claims made by or against other persons in respect of such facilities or any part thereof and damages or compensation payable by the Terminal Station owner on account of such claims;   (c) those fees payable to the NA, after the RFS Date, in fulfilling its responsibilities as set forth in Annex 3;   (d) those fees payable to the CBP after the RFS Date, in fulfilling its responsibilities as set forth in Annex 4;   17





  (e) those costs reasonably incurred (as approved by the Management Committee) by the Parties, after the RFS Date, hereto in the holding of the meetings of the PG and the I&ASC; and   (f) those costs reasonably incurred (as approved by the Management Committee) by the Parties, after the RFS Date, hereto in the hosting of the meetings of the Management Committee and its Subcommittees.   7. ALLOCATION AND BILLING OF APCN 2 COSTS   7.1 The APCN2 Capital Costs as defined in Paragraph 5 shall be borne by the Parties in the proportions set forth in Schedule B.   7.2 The O&M Costs as defined in Paragraph 6 shall be borne by the Parties in the proportions set forth in Schedule B.   7.3 The Terminal Parties shall each render invoices to the CBP for any O&M Costs incurred as outlined in Paragraph 6 not more frequently than quarterly and by the tenth (10th) day of the appropriate month in accordance with procedures to be established by the F&ASC and approved by the Management Committee. The Party rendering an invoice shall furnish such further details of such invoice as the other Parties may reasonably require. On the basis of such invoices, the CBP shall pay such amounts as may be owed sixty (60) days from the 10th calendar day of the month in which the invoice was rendered or on the following working day if day sixty (60) is not a working day in the CBP's Country.   7.4 The Terminal Parties shall each render invoices to the CBP for any Capital Costs incurred as outlined in Paragraph 5 (except Terminal Station cost) not more frequently than quarterly and by the tenth (10th) day of the appropriate month in accordance with procedures to be established by the F&ASC and approved by the Management Committee. The Party rendering an invoice shall furnish such further details of such invoice as the other Parties may reasonably require. On the basis of such invoices, the CBP shall pay such amounts as may be owed sixty (60) days from the 10th calendar day of the month in which the invoice was rendered or on the following working day if day sixty (60) is not a working day in the CBP's Country.   7.5 Unless the Management Committee authorizes changes to the procedure for the rendering of bills associated with the Capital Costs or O&M Costs, the CBP shall promptly render bills, in accordance with this Paragraph 7 and the billing and payment procedures established by the F&ASC and approved by the Management Committee, to each of the Parties for such Parties' pro rata shares of these costs. Such bills shall be rendered by the CBP not more frequently than quarterly and shall contain a reasonable amount of detail to substantiate them. On the basis of such bills, each Party shall pay the CBP, such amounts as may be owed by the end of the calendar month following the calendar month in which the bill was rendered, on the date specified by the CBP.   18





  7.6 In the case of bills containing costs billed on a preliminary billing basis, appropriate adjustments will be made in subsequent bills promptly after the actual costs involved are determined. As soon as practicable the CBP shall make such adjustments and render such bills or arrange for such credits as appropriate due to changes in the cost actually incurred.   7.7 As soon as practicable after the RFS Date, the amount of each Party's share of the Capital Costs shall be computed by the CBP who shall make appropriate adjustments and render any necessary bills or arrange for any necessary refunds by way of final settlement in order that each Party may bear its proper share of the costs as provided in this Paragraph 7.   7.8 For purposes of this Agreement, financial charges shall be computed as applicable on a daily basis from the date payment is incurred until the date payment is due, at a rate equal to the lowest publicly announced prime rate or minimum commercial lending rate, however described, for 90 day loans in the currencies of the Initial Parties or the currency of billing, as applicable, charged by established commercial banks in the countries concerned on the fifteenth day of the month in which the costs were incurred by the invoicing Parties. If such a day is not a business day, the rate prevailing on the next business day shall be used. The source of the rate of such financial charges shall be as shown at Annex 6. The application of financial charges relating to costs incurred for the APCN 2 Capital Costs and O&M Costs shall be limited to a maximum of 120 days, unless otherwise approved by the Management Committee.   7.9 Amounts billed and not paid when due shall accrue extended payment charges from the day following the date on which payment was due until paid. If the due date is not a business day, the due date shall be postponed to the next business day. For the purpose of this Agreement, extended payment charges shall be computed at three hundred percent (300%) of the rate described in Subparagraph 7.8 on the day following the date payment on the bill was due. In the event that applicable law does not allow the imposition of extended payment charges at the rate established in accordance with this Subparagraph 7.9, extended payment charges shall be at the highest rate permitted by applicable law, which in no event shall be higher than the rate computed in accordance with this Subparagraph 7.9. For purposes of this Agreement, paid shall mean that the funds are immediately available for use by the recipient.   7.10 Credits for refunds of financial charges and bills for extended payment charges shall not be rendered if the amount of charges involved is less than the equivalent of one hundred ($100) US dollars or its equivalent in the billing currency.   7.11 A bill shall be deemed to have been accepted by the Party to whom it is rendered if that Party does not present a written objection on or before the date when payment is due. If such objection is made, the Parties concerned shall make every reasonable effort to settle promptly the dispute concerning the bill in question. If the objection is sustained and the billed Party has paid the disputed bill, the agreed upon overpayment shall be promptly refunded to the objecting Party by the invoicing Party together with any financial charges   19





  calculated thereon at a rate determined in accordance with Subparagraph 7.8 of this Agreement from the date of payment of the bill to the date on which the refund is transmitted to the objecting Party. If the objection is not sustained and the billed Party has not paid the disputed bill, said Party will pay such bill promptly together with any extended payment charges calculated thereon at a rate determined in accordance with Subparagraph 7.9 of this Agreement from the day following the day on which payment was due until paid. Nothing in this Subparagraph 7.11 shall relieve a Party from paying those parts of a bill that are not in dispute.   7.12 Upon the signing of this Agreement, the CBP shall render bills to the Parties for approximately five percent (5%) of their financial commitment in APCN2 as determined by Schedule B. The exact amount of the bills and the billing procedure shall be determined by the Management Committee. The funds received by the CBP from these bills shall be kept in an interest bearing account for the benefit of the Parties to be maintained by the CBP and the used solely and in their entirety to pay the first invoices received by the CBP.   8. CURRENCY OF PAYMENT   All invoices rendered to the CBP shall be in the currency of the United States, or in the currency of the invoicing Party which is specified in Annex 6 or the currency in which the cost was incurred in the case of O&M Costs. Such invoices shall be paid in the currency in which the invoices are rendered. The CBP shall render bills to the Parties in the currency of the United States and be paid in the same currency. In conjunction with the CBP, the F&ASC shall develop procedures to deal with the differences between the exchange rates in the circumstances when the currency of invoices rendered to the CBP is not the currency of the United States.   9. KEEPING AND INSPECTION OF BOOKS FOR SEGMENT S AND T   9.1 For those portions of the Wet Segment, if any, specified in the Supply Contract as cost incurred items, the PG shall ensure that the Supply Contract requires the Supplier to keep and maintain such books, records, vouchers and accounts of all such costs with respect to the engineering, provision and installation of those items for a period of five (5) years from the RFPA Date of the Wet Segment, as specified in the Supply Contract.   9.2 For those portions of the Wet Segment specified in the Supply Contract as fixed cost items, the PG shall ensure that the Supply Contract requires the Supplier to keep and maintain records with respect to their respective billing of those items for a period of five (5) years from the RFPA Date of the Wet Segment, as specified in the Supply Contract.   9.3 The PG shall ensure that the Supply Contract requires the Supplier to obtain from their contractors and subcontractors such supporting records, for other than the cost of fixed cost items, as may be reasonably required by Subparagraph 9.1 and to keep and maintain such records for a period of five (5) years from the RFPA Date of the Wet Segment, as specified in the Supply Contract.   20





  9.4 The PG shall ensure that the Supply Contract shall afford the Parties to this Agreement the right to review the books, records, vouchers, and accounts required to be kept, maintained, and obtained pursuant to Subparagraphs 9.1, 9.2 and 9.3.   9.5 With respect to costs incurred for the provision of the Wet Segment by a Party, comparable records to those specified in Subparagraphs 9.l, 9.2 and 9.3 as appropriate, shall be maintained by the Party for a period of five (5) years from the date that such costs were incurred.   9.6 The PG and the Terminal Parties shall each keep and maintain such books, records, vouchers, and accounts of all costs that are incurred in the engineering, provision and installation of the Wet Segment and Segment T and not included in the Supply Contract, which they incur directly, for a period of five (5) years from the RFS Date or the date the work is completed, whichever is later. The CBP shall keep and maintain such books, records, vouchers and accounts with respect to its billing of costs incurred by the Terminal Parties and any other Party having incurred costs for implementation of APCN 2 as authorized by the Management Committee, and costs billable under the Supply Contract for a period of five (5) years from the System RFS Date or the date on which the work is completed, whichever is later.   9.7 With respect to the operation and maintenance costs of Segments T and the Wet Segment, such books, records, vouchers, and accounts of costs, as are relevant, shall be kept and maintained by the Terminal Parties for a period of five (5) years from the date on which the corresponding bills are rendered to the Parties. If a Terminal Party does not retain these records beyond this period, a summary of important items should be retained for the life of APCN 2.   9.8 Any Party shall have the right to review or audit the relevant books, records, vouchers, and accounts of costs pursuant to this Paragraph 9. In affording the right to review or audit, any such Party whose records are being reviewed or audited shall be permitted to recover, from the Party or Parties requesting the review or audit, the entire costs reasonably incurred in complying with the review or audit. In the case of an audit initiated by the Management Committee and exercised by the F&ASC, the audited Party or Parties shall be permitted to recover the entire costs of the review or audit from the Parties in the proportions specified in Schedule B.   9.9 Any rights of review and audit pursuant to this Paragraph 9 shall only be exercisable through the F&ASC in accordance with the F&ASC's audit procedures.   10. DUTIES AND RIGHTS AS TO OPERATION AND MAINTENANCE OF SEGMENTS   10.1 Each Terminal Party shall be solely responsible for the operation and maintenance of their respective Segment T as identified in Paragraph 4 and that portion of Segment S between the Network Interface at the Terminal Station and their respective Cable   21





  Landing Point. Such Terminal Party shall use all reasonable efforts to maintain or cause to be maintained economically their respective Segment T and such portion of Segment S, in efficient working order.   10.2 The Terminal Parties (for the purposes of this Paragraph 10, collectively called the Maintenance Authorities and each individual called a Maintenance Authority or MA), shall be jointly responsible for the operation and maintenance of the Wet Segment and shall use all reasonable efforts to maintain economically the Wet Segment in efficient working order and with an objective of achieving effective and timely repairs when necessary.   10.3 Prior to the RFS Date the MAs shall submit for review by the O&MSC and approval by the Management Committee appropriate practices and procedures for the continued operation and maintenance of the Wet Segment. The MAs shall each provide information to the O&MSC regarding the practices and procedures for the continued operation and maintenance of their respective Segments. The MAs shall also furnish such budgetary estimates of the cost of such operation and maintenance of the APCN 2 as the Management Committee may reasonably request. Following the RFS Date, the MAs shall provide the O&MSC and the Management Committee with such reports as it may reasonably require on the operation of the APCN 2 including any proposals for planned repair or improvement work, together with appropriately revised budgetary estimates relating to the operation and maintenance of the APCN 2. The O&MSC may review and amend the practices and procedures for the operation and maintenance of the Wet Segment, subject to the approval of the Management Committee. To facilitate in the maintenance of the APCN 2, the MAs may revise the allocation of responsibilities amongst themselves for the Wet Segment between the Cable Landing Points and any such decision shall be subject to the approval of the Management Committee.   10.4 The MAs shall have the right to deactivate the Wet Segment or any part thereof, in order to perform their duties. Prior to such deactivation, reasonable notice shall be given to, and coordination shall be made with, the other Parties hereto. To the extent possible, sixty (60) days prior to initiating action, the MA involved shall advise the other Parties hereto in writing of the timing, scope, and costs of significant planned maintenance operations, of significant changes to existing operations and maintenance methods and of contractual arrangements for cable ships that will have a significant impact on operation or maintenance costs. Should one or more Parties representing at least two- thirds (66.67%) of the total voting interests in accordance with Schedule B, wish to review such an operation or change prior to its occurrence, such Party or Parties shall notify the appropriate Maintenance Authority and a O&MSC Co-Chairman in writing within thirty (30) days of such advice. Upon such notification, the O&MSC shall initiate action to convene an ad hoc meeting for such review.   10.5 Notwithstanding Paragraph 32, each MA shall be authorized to pursue claims in its own name, on behalf of the Parties, in the event of any damage or loss to the APCN 2 and may file appropriate lawsuits or other proceedings on behalf of the Parties. The MA shall immediately inform the Management Committee and comply with any direction   22





  therefrom. Subject to obtaining the prior concurrence of the Management Committee, a MA may settle or compromise any such claims and execute releases and settlement agreements on behalf of the Parties as necessary to effect a settlement or compromise.   10.6 Each Party that has designed or procured equipment used in the APCN 2 shall give necessary information relating to the operation and maintenance of such equipment to the MA responsible for operating and maintaining such equipment, as reflected in this Paragraph 10. Each Maintenance Authority shall have prompt access necessary for the performance of its   10.7 [Missing]   interruption. if the MA responsible, as specified in this Paragraph 10, fails to restore those facilities to efficient working order and operation within a reasonable time after having been called upon to do so by any other Party to whom capacity is assigned by this Agreement, the Management Committee may, to the extent that it is practical to do so, place, or cause to be placed, such facilities in efficient working order and operation and charge the Parties their proportionate shares of the costs reasonably incurred in doing so.   10.8 Each Party to this Agreement, at its own expense, shall have the right to inspect from time to time the operation and maintenance of any portion of the APCN 2 and to obtain copies of the maintenance records. For this purpose, the Maintenance Authority shall retain significant records, for a period of not less than five (5) years from the date of the record. If these records are destroyed at the end of this period, a summary of important items should be retained for the life of the APCN 2.   10.9 The MAs shall be entitled to establish the necessary agreements in respect of the crossings by the Wet Segment of other undersea plant, including but not limited to pipelines, and may sign these agreements on behalf of the Parties after approval by the Management Committee and shall provide the Parties with appropriate copies of these agreements on request.   11. USE OF SEGMENT T   11.1 The Terminal Parties hereby grant to the Parties accessing APCN 2 at their respective terminal station, the right of use in the relevant Segment T (hereinafter referred to as Terminal Station Right of Use) on the terms and conditions stated in this Paragraph 11, to the extent required for the use of its Allocated Capacity, for the purpose of using APCN 2 and carrying on the related activities at that location in accordance with this Agreement. This Terminal Station Right of Use shall commence on the RFS Date and shall continue for the duration of this Agreement.   11.2 In the event that an agreement for another cable system utilizing any Terminal Station of the APCN 2 is terminated prior to the termination of this Agreement, the owner of the respective Segment T, with the agreement of the Parties hereto, shall take all necessary   23





  measures to ensure that the Terminal Station in question will be available for the APCN 2 for the duration of this Agreement on fair and equitable terms. If the Terminal Station in question is not available for the landing and terminating of the APCN 2 for any reason, the owner of the Terminal Station shall provide reasonable advance notice to all Parties and such owner, in agreement with the Parties hereto, shall take all necessary measures to ensure that another appropriate Terminal Station will be available for the APCN 2 for the duration of this Agreement on terms and conditions similar to those contained in this Agreement. Applicable costs to the Parties will be determined by the Management Committee.   11.3 For each Terminal Station Right of Use, the Parties hereto shall not be required to pay any additional charges over and above the Capital Costs and O&M costs.   11.4 Notwithstanding Subparagraph 11.1 of this Agreement, a Party thereby granted a Terminal Station Right of Use interest in Segment T may, prior to the commencement of that Terminal Station Right of Use interest, elect to renounce its Terminal Station Right of Use entitlement and to instead have use of any Segment T for the duration of this Agreement on such terms and conditions as are agreed between that Party and the relevant Terminal Party, and in such event the provisions of Subparagraphs 11.1 of this Agreement shall apply in relation to such use except insofar as they may be modified by such agreements. This Subparagraph 11.4 shall not operate to confer on a Party any financial or other benefit of substance to which that Party would not otherwise be entitled under this Agreement.   11.5 The Terminal Parties agree to grant a Terminal Station Right of Use to APCN 2 IRU purchasers.   11.6 In the event of a sale or other disposition of Segment T1, T2,T3, T4, T5, T6, T7, T8, T9 and T10, or part thereof prior to the termination of this Agreement, the owner shall share with the other Parties hereto any net proceeds, or costs, of such sale or disposition received, or expended, by the owner, to the extent allocable to the Capital Costs, in the proportions set forth in Schedule B.   12. ACQUISITION AND USE OF CAPACITY   12.1 Capacity of APCN 2 can only be used by a carrier.   12.2 Parties shall obtain Allocated Capacity in the form of MIU on an ownership basis as shown in Schedule C, in return for their financial investment as identified in Schedule B.   12.3 Procedures for Parties activation of their Allocated Capacity will be developed by the AR&RSC and the NA for Management Committee approval.   24





  ASSIGNMENT OF CAPACITY   12.4 For each MIU of its Allocated Capacity, a Party is allowed to assign two (2) half STM-l circuits on any Path within the APCN 2. All such circuits are ring-protected. Additional ring-protected half STM-1 circuits may be granted proportionately to a Party's Allocated Capacity as shown in Schedule C at the discretion of the Management Committee according to the recommendation of the AR&RSC and the NA.   12.5 The Parties may designate a portion of their Allocated Capacity in specific Paths of the APCN 2 as:   (i) Jointly Assigned Circuit (hereinafter referred to as JAC) which shall be considered as consisting of two half STM-I circuits, with one half STM-1 circuit assigned to a Party, which together with the corresponding half STM-1 circuit, shall be used for the provision of international telecommunications services between such a Party and another Carrier that has received the right of use pursuant to this Paragraph 12 or an APCN 2 IRU purchaser. Any alteration to the JAC is subject to bilateral agreement between both Carriers.   (ii) Wholly Assigned Circuit (hereinafter referred to as WAC) which shall be considered as consisting of two half STM-1 circuits assigned to one Party.   USE OF WHOLLY ASSIGNED CIRCUIT   12.6 A Party is allowed to use its WAC for the provision of international telecommunications services with itself, its Subsidiary, its Parent Company and/or the Subsidiary of the Party's Parent Company provided that the correspondent parties are also Carriers.   12.7 A Party is also allowed to use its WAC to interconnect with other communication systems for the provision of international telecommunications services terminating outside the APCN 2 landing Countries. If such WAC is originated from any APCN 2 landing Country, such Party must be a Carrier of that Country.   12.8 A Party is also allowed to use its WAC for the provision of international telecommunications services with its Affiliate and/or the Affiliate of the Party's Parent Company provided that this Affiliate is a Carrier and a cash contribution is made by the Party to a special fund dedicated solely to fund future upgrades to increase the Equipped Capacity. The amount of the contribution is described in Annex 7.   PORTABILITY OF CAPACITY   12.9 A Party is allowed to de-assign its JAC and/or WAC to its Allocated Capacity provided that bilateral agreement is given by the concerned Camera and according to the guidelines to be developed by the AR&RSC and the NA.   12.10 Re-assignment of Allocated Capacity which resulted from the de-assignment of the JAC and/or WAC shall give priority to the assignment of Allocated Capacity which has not   25





  been de-assigned before, in the event that there is any conflicting requirement for use of capacity on the APCN 2.   12.11 Under no circumstances shall a Party's JAC and/or WAC be de-activated due to the assignment of other Parties' Allocated Capacity.   TRANSFER OF CAPACITY   12.12 For the purpose of this Agreement, Transfer of capacity (hereinafter called Transfer) is the making available of all the right of use of the capacity being made available that is accorded to a Party by this Agreement to a third party without transferring the Party's other obligations and rights including the right of Transfer.   12.13 Transfer of a Party's Allocated Capacity to its Subsidiary or its Parent Company or the Subsidiary of the Party's Parent Company is allowed provided that the capacity transferred is in multiples of the MIU and that the recipient of the transferred capacity is a Carrier.   12.14 Transfer of a Party's Allocated Capacity to its Affiliate and/or the Affiliate of the Party's Parent Company is also allowed provided that the capacity transferred is in multiples of the MIU and that the recipient of the transferred capacity is a Carrier. For the Transfer to an Affiliate, the transferring party shall make a cash contribution to a special fund dedicated solely to fund future upgrades to increase the Equipped Capacity. The amount of the contribution is described in Annex 7.   12.15 The conditions applicable to the use and Transfer of capacity as specified in Annex 7 shall be relaxed after the Equipped Capacity is expanded to four (4) times of Initial Equipped Capacity or two (2) years after the RFS date whichever comes first unless an earlier date is approved by the Management Committee. Any relaxations on these conditions shall be approved by a vote of the members of the Management Committee representing at least seventy-five percent (75%) of the total voting interests as specified in Schedule B.   12.16 The Unallocated Capacity in the APCN 2 shall be owned by the Parties in common and undivided shares in accordance with the percentages in Schedule C.   12.17 IRU Capacity will be sold at the MJU level. Such IRU Capacity will be sold from the Unallocated Capacity. Proceeds from the sale of such IRU Capacity shall be used to fund the Expansion of the APCN 2 Equipped Capacity.   12.18 A Party or IRU purchaser may use its MIU with itself, another Party, or IRU purchaser to form matched circuits.   12.19 The distribution of capacity from the initial Unallocated Capacity shall be made no later than three (3) years from the RFS date on a pro rata basis, in MIUs, in accordance with the percentages in Schedule C. The exact time to implement such distribution of capacity   26





  shall be decided by a vote of members of the Management Committee representing at least two-thirds (66.67%) of the total voting interests as specified in Schedule B.   12.20 Once the Equipped Capacity is expanded to six (6) times of Initial Equipped Capacity or three (3) years after the RFS date whichever comes first unless an earlier date is approved by the Management Committee, any Party is entitled to sell IRU to other Carriers from its Allocated Capacity on a private basis without any restrictions except that the IRU shall be for the life of APCN 2. The terms and conditions including pricing of such private IRU sales are bilateral matters between granting Party and purchaser.   12.21 When Unallocated Capacity is depleted, and during the period until the availability of additional Unallocated Capacity, a Party may be allowed to sell IRU to other Carriers from its Allocated Capacity privately subject to the Management Committee's approval on a case by case basis. The terms and conditions including pricing of such private IRU sales are bilateral matters between granting Party and purchaser.   12.22 Notwithstanding any other provisions in this Paragraph 12, when the Equipped Capacity is expanded to six (6) times of Initial Equipped Capacity or three (3) years after the RFS date whichever comes first, any Party is entitled to make available any of its Allocated Capacity for use by other Carriers on any commercial basis without any restrictions.   12.23 Guidelines for use of the IRU Capacity and Terms and Conditions of the IRU agreement shall be developed by the I&ASC and approved by a vote of members of the Management Committee representing at least two-thirds (66.67%) of the total voting interests as specified in Schedule B. The NA shall be authorized to execute IRU agreements for one or more whole MIUs with APCN 2 IRU Capacity purchasers on behalf of the Parties to this Agreement. No provisions of the IRU agreement shall override the provisions of this Agreement.   12.24 Schedules B, C, and D shall be modified by the NA, as appropriate, to reflect any revised ownership of capacity or sales of IRU Capacity pursuant to this Paragraph 12.   12.25 The Management Committee may authorize use of the Unallocated Capacity for restoration of telecommunications services and other purposes. The terms and conditions of such use shall be determined by the Management Committee based, in part, on terms to be agreed to by the relevant Terminal Parties of the APCN 2, in recognition of the technical and operational impact on the Terminal Station operations. Parties will receive revenues in accordance with Schedule C.   12.26 The communications capability of any capacity may be optimized by the Parties to whom such capacity is allocated by the use of equipment which will more efficiently use such capacity provided that the use of such equipment does not cause an interruption of, or interference, impairment, or degradation to, the use of any other capacity in the APCN 2 or prevent the use of similar equipment by other Parties. A Party to whom capacity is allocated shall permit the use of such equipment by a Carrier to which such Party has   27





  made available the use of any such capacity, provided that such Carrier agrees that its use of the equipment will satisfy the conditions set forth in this Subparagraph 12.26.   12.27 A Party may sell capacity in fascicles smaller than a STM-1 in the APCN 2 at any time on any basis other than by transfer of ownership. The APCN 2 shall not be responsible for aggregating such capacity to the STM-1 level.   13. EXPANSION OF EQUIPPED CAPACITY   13.1 Any upgrade of Equipped Capacity of APCN 2, including any costs, financial adjustments and allocation of capacity associated with such upgrade, shall be approved by vote of members of the Management Committee representing at least two-thirds (66.67%) of the total voting interests as specified in Schedule B.   13.2 All Parties shall have the might to a pro-rata share of the upgrade capacity in accordance with Schedule C. However, no Party shall be forced to participate in such an upgrade. Parties not   14. INCREASE OR DECREASE OF DESIGN CAPACITY   14.1 In the event that the Initial Parties consider that it is beneficial to increase the Design Capacity of APCN 2, a Design Capacity expansion, including any costs, financial adjustments and allocation of capacity associated with such upgrade, shall be decided by the Management Committee representing at least two-thirds (66.67%) of the total voting interests as specified in Schedule B. However, no Party shall be forced to participate in such an upgrade, in the event that incremental funding is required to execute such an upgrade. Schedules B and C shall be appropriately modified to reflect the revisions associated with such increase of Design Capacity.   14.2 In the event that the capacity which APCN 2 or any Segment thereof is capable of providing is reduced below the capacity required to support the Allocated Capacity on its existing or planned routings as a result of physical deterioration, or for other reasons beyond the control of the Parties, the Management Committee shall initiate a review of the capacity routings, in order to support the rerouting of such Allocated Capacity.   14.3 In the event that the capacity which APCN 2 or any Segment thereof is capable of providing is lower than the capacity needed to support the routing of circuits assigned in APCN 2, the Allocated Capacity of the Parties may be reduced or changed as necessary and agreed by the Parties affected, and financial adjustments shall be made among the Parties, as necessary, on the terms and conditions to be agreed by the Management Committee. The Schedules shall be modified, as appropriate, to reflect the revised Allocated Capacity associated with such decrease of the Design Capacity.   28





  15. OBLIGATION TO PROVIDE TRANSITING FACILITIES TO EXTEND APCN2 CAPACITY TO EXTEND APCN 2 CAPACITY   15.1 The Terminal Parties shall use all reasonable efforts to provide and maintain or cause to be provided and maintained in working order for the duration of this Agreement, the necessary transit facilities within their respective Countries as may be reasonably required for extending capacity in the APCN 2 so as to provide connections to the other international cables' transmission facilities.   15.2 The facilities provided pursuant to Subparagraph 15.1 shall be suitable for extending capacity in the APCN 2 of all payload types as defined in Subparagraph 15.3 and shall be furnished and maintained on terms and conditions which shall be no less favorable than those granted to another Carrier for transmission facilities of similar type and quantity transiting the location involved. Such terms and conditions shall not be inconsistent with applicable governmental regulations in the Countries in which the facilities are located.   15.3 As required the Terminal Parties shall support payloads of STM-l, STM-4, STM-l6 and STM-64.   16. OBLIGATION TO CONNECT THE APCN 2 WITH INLAND SYSTEMS   16.1 The Parties shall, at their own expense, on or before the RFS Date, do or cause to be done, all such acts and things as may be necessary within its operating Country to provide and maintain throughout the period of this Agreement suitable connection of capacity from APCN 2 with appropriate inland communications facilities in its operating Country.   16.2 The Terminal Parties will provide connection to APCN 2 to other Carriers within their Countries on terms and conditions negotiated and agreed by the parties concerned.   17. DIRECT ACCESS TO NETWORK INTERFACE AND EQUAL ACCESS TO TERMINAL STATION   17.1 The Terminal Parties agree to confer the right of Direct Access at the Network Interface to each Party and all other Carriers that have received the Right of Use pursuant to Paragraph 12. The connection to the Network Interface at specific Terminal Stations shall be provided at a reasonable cost in accordance with the physical, engineering and any locally applicable arrangements between the Carriers accessing the Network Interface and the respective Terminal Parties at the Terminal Station.   17.2 Upon request by the Parties or the other Carriers, the Terminal Party shall enter into negotiation in good faith with these parties to agree the above arrangements in a timely manner. Any arrangements agreed upon shall be reasonable and non-discriminatory.   29





  17.3 The physical and engineering arrangements to be negotiated shall include all reasonable arrangements such as mid-span interconnection, equipment co-location (whether physical or virtual), or the sharing of Direct Access facilities by one or more Carriers in accordance with applicable commercial arrangements to be negotiated between the Terminal Party and the Carriers concerned.   17.4 The Terminal Parties shall not and hereby pledge not to impede or cause to impede any qualified Carriers in exercising their right of Direct Access hereby conferred, including but not limited to the negotiation between the non-Terminal Parties and Carriers for their own facilities to access their Allocated Capacity including for purpose of providing backhaul and transiting facilities.   18. DURATION OF AGREEMENT AND REALIZATION OF ASSETS   18.1 This Agreement shall become effective on the date and year first above written and shall continue in operation for at least an initial period of twenty-five (25) years following the RFS Date (hereinafter referred to as initial Period) and shall be terminable thereafter by agreement of the Parties. However, any Party may terminate its participation in this Agreement at the end of the Initial Period or any time thereafter by giving not less than one (1) year's prior notice thereof, in writing, to the other Parties.   18.2 This Agreement may be terminated at any time during the Initial Period by agreement in writing of all the Parties. If unanimous agreement cannot be reached between all the Parties for the retirement of APCN 2 during its specified useful life, this subject matter shall be referred to the Management Committee for resolution in accordance with paragraph 3 but in this case a ninety percent (90%) majority of the total voting interests as specified in Schedule B is required.   18.3 After the Initial Period of twenty-five (25) years, decommissioning can be implemented by agreement of a number of Parties representing at least two-thirds (66.67%) of the voting interests specified in Schedule B.   18.4 If a Terminal Party terminates its participation in this Agreement pursuant to Subparagraph 18.1 of this Agreement after the Initial Period of twenty-five (25) years, the remaining Parties and the said Terminal Party will negotiate a reasonable agreement in order to ensure the continuous operation of the said Terminal Party's Terminal Station after the Initial Period.   18.5 Upon the effective date of termination of participation of a Party, Schedules of this Agreement shall be appropriately modified. The remaining Parties to this Agreement shall assume the obligations, capital, operation, and maintenance interests of the Party terminating its participation in proportion to their interests assigned immediately preceding such effective date of termination, except for the continuing rights and obligations of the terminating Party as specified in Subparagraph 18.7 of this Agreement.   30





  No credit for capital costs will be made to a Party that terminates its participation in accordance with Subparagraph 18.1.   18.6 Upon decommissioning of the APCN 2, the Parties shall use all reasonable efforts to liquidate Segment S1, S2, S3, S4, S5, S6, S7, and S8 of the APCN 2, within one (1) year, by sale or other disposition between the Parties or any of them or by sale to other entities or persons; but no sale or disposition shall be effected except by agreement between or among the Parties to this Agreement at the time of decommissioning. In the event agreement cannot be reached, the decision will be carried on the basis of a simple majority vote of the total voting interests as specified in Schedule B. The net proceeds, or costs of decommissioning, removal, every sale or other disposition shall be divided between or among the Parties to this Agreement who have or were deemed to have interests in the subject thereof, in the proportions in which such Parties, interests are specified in Schedule B immediately preceding the time any Party terminates its participation in this Agreement. The Parties shall execute such documents and take such action as may be necessary to effectuate any sale or other disposition made pursuant to this Paragraph 18.   18.7 Unless the Management Committee shall otherwise determine, a Party's termination of its participation in this Agreement or the termination of this Agreement, pursuant to Subparagraph 18.1, shall not relieve that Party or the Parties hereto from any liabilities arising from events occurring before a Party's termination on account of claims made by third parties in respect of such facilities or any part thereof and damages or compensation payable on account of such claims, or obligations which may arise in relation to the APCN 2 due to any law, order or regulation made by any government or supranational legal authority pursuant to any international convention, treaty or agreement. Any such liabilities or costs incurred or benefits accruing in satisfying such obligations shall be divided among the Parties hereto in the proportions in which such Parties, interests are specified in Schedule B immediately preceding the time a Party terminates its participation in this Agreement or this Agreement is terminated pursuant to Subparagraph 18.1, whichever occurs first.   19. OBTAINING OF APPROVALS   19.1 The performance of this Agreement by the Terminal Parties is contingent upon the obtaining and continuance of such governmental approvals, consents, authorizations, licenses, and permits as may be required or be deemed necessary by the Terminal Parties and as may be satisfactory to them, and the Terminal Parties shall use all reasonable efforts to obtain and to have continued in effect such approvals, consents, authorizations, licenses, and permits.   19.2 The Terminal Parties shall make all reasonable efforts to handle matters relating to the obtaining and continuance of such governmental approvals, consents, authorizations, licenses, and permits for the Landing, construction and operation of APCN 2 in their respective Countries.   31





  19.3 In the event that any Terminal Party fails, or is likely to fail, to obtain such approvals, consents, authorizations, licenses or permits, that Terminal Party shall give immediate notice to the Management Committee for it to take appropriate action pursuant to this Agreement.   20. PRIVILEGES FOR DOCUMENTS OR COMMUNICATIONS   In the event that the Management Committee decides to go to arbitration in accordance with Paragraph 27, each Party specifically reserves, and is granted by each of the other Parties, in any action, arbitration or other proceeding between or among the Parties or any of them in a country other than that Party's own country, the right of privileges, in accordance with the laws of the country in which the arbitration or litigation takes place with respect to any documents or communications which are material and pertinent to the subject matter of the action, arbitration or proceeding in which privilege could be claimed or asserted by that Party in accordance with those laws.   21. RELATIONSHIP OF PARTIES   21.1 The relationship among the Parties shall not be that of partners, and nothing herein contained shall be deemed to constitute a partnership among them. The common enterprise between and among the Parties shall be limited to the express provisions of this Agreement. The liability of the Parties shall be several and not joint or collective.   21.2 Each Patty agrees to indemnify each of the other Parties in respect of all costs, expenses, damages and demands, arising out of or in connection with any claim against, or liability of, the latter as an owner of APCN 2 where such claim is made by, or the liability is to, any third party not being a Party hereto and arises out of or in connection with APCN 2 provided that no indemnifying Party shall be obligated to contribute more than its share of liability as per Schedule B. Subject to there being no conflict of interest, each Party so indemnifying shall have the right, at its sole cost and expense, to observe but not directly participate in any discussions, meetings or conferences held prior to or during any settlement or legal proceedings resulting from any such claim or liability.   21.3 Under no circumstances shall any Party be liable to any other Party in contract, tort, (including negligence or breach of statutory duty) or otherwise for loss (whether direct or indirect) of profits, property, traffic, business or anticipated savings, or for any indirect or consequential loss or damage in connection with the operation of this Agreement howsoever caused. Such causes shall include (but not be limited to):   (i) any delay in the provision of the APCN 2; (ii) any damage to, breakdown in or failure of the APCN 2; and (iii) any interruption of service,   32





  whatever may be the reason or duration for such loss, damage or delay and for however long it shall continue.   22. ASSIGNMENT OF RIGHTS AND OBLIGATIONS   22.1 Except as otherwise provided in Paragraph 12 and Subparagraphs 22.2, 22.3, 22.4 and 22.5, during the term of this Agreement, no Party may assign, sell, transfer or dispose of the whole or any parts of its rights or obligations under this Agreement   22.2 A Party may at any time, with the prior written consent of the Management Committee, assign, sell or transfer the whole of its rights and obligations under this Agreement. The Management Committee must not unreasonably withhold or delay its approval.   22.3 A Party may at any time assign, sell or transfer the whole of' its rights and obligations under this Agreement to:   (a) a successor of that Party; (b) a Parent Company of that Party; (e) a Subsidiary or Affiliate of that Party; and (d) another Subsidiary or Affiliate of that Party's Parent Company.   22.4 A Party (hereafter Assignor) may assign, sell or transfer a portion of its rights under this Agreement to a Parent Company, its Subsidiary, and/or the Subsidiary of the Party's Parent Company (hereafter Assignee). Such partial assignment shall be allowed only once to any such Assignee, and shall not negate any of the obligations of the Assignor. If the Assignor is an Initial Party, then the Initial Party status of the Assignor shall be maintained and the Assignor's voting rights shall be shared with such Assignee. The relevant Schedules to this Agreement shall be revised to reflect each such partial assignment permitted hereunder, showing the Assignee as a Party. No subsequent assignment shall be effected by the Assignee except as provided in Subparagraph 22.3(a).   22.5 Without limiting the applicability of Subparagraph 22.4, a Party may assign its rights, title and interests in any portion of APCN 2 within the territorial limits of any Country (both under the current and any future configuration) to a Subsidiary, Parent Company or a Subsidiary of a Parent Company of that Party only if:   a) the Assignee shall own and be responsible for the capital, operations and maintenance costs listed against the Party for that portion of APCN 2 within the territorial limits of any Country (both under the current and future configuration); the Party shall own and be responsible for the capital, operating and maintenance costs listed against the Party for the remainder of APCN 2; and   b) the Assignee will have no tights and obligations independent from the rights and obligations of the Party in respect of the assigned portion of the APCN 2   33





  The aforementioned provision shall not be used to circumvent the provisions under Paragraph 12.   22.6 A Party exercising its rights under Subparagraphs 22.2, 22.3, 22.4 or 22.5 must give notice in writing to all other Parties in a timely manner.   23. DEFAULT   23.1 If any Party fails to make any payment required by this Agreement on the date when it is due and such default continues for a period of at least one (1) month after the payment due date, the CBP shall notify the billed Party and also the Management Committee in writing of the status of the matter and will request the reclamation of capacity, as provided for in this Paragraph 23, if full payment is not received within two (2) months of such notification. If full payment is not received within such specified period, the Management Committee may reclaim the Capacity in the APCN 2 allocated to the billed Party.   23.2 The Management Committee shall consider any extenuating circumstances not within the specific control of the billed Party in determining whether or not to reclaim the capacity assigned to such billed Party. If the Management Committee nevertheless reclaims any capacity in the APCN 2 assigned to such defaulting Party, the defaulting Party shall not be entitled to any payment or credit for the reclaimed capacity. The Management Committee shall determine arrangements for disposition of any reclaimed capacity. All rights of a defaulting Party under this Agreement shall terminate as of the time all its capacity in the APCN 2 is reclaimed by the Management Committee; and concurrent with such reclamation of capacity, the defaulting Party will no longer be deemed to be a Party to this Agreement. Such reclamation shall not relieve the defaulting Party from its obligations under this Agreement, including but not limited to the payment of its unpaid accounts, which have been incurred prior to the actual reclamation. The defaulting Party is not entitled to any reimbursement of any amounts it had paid under this Agreement. In such circumstances, the Schedules shall be revised to reflect the default of a Party and the reallocation of interests pursuant to the arrangements determined by the Management Committee.   23.3 Notwithstanding Subparagraph 23.2, reclamation of a Terminal Party's capacity will not release the Terminal Party from providing, operating and maintaining its respective Terminal Station until a reasonable agreement is negotiated in order to ensure the continuous operation of the said Terminal Party's Terminal Station after reclamation of its capacity.   24. WAIVER   The failure of any Party, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder shall not thereafter be   34





  construed as a waiver of any breach or default, or as a waiver of any such provision, right, or privilege hereunder.   25. COMPLIANCE WITH LAW   In the performance of their obligations hereunder, the Parties agree to comply with all applicable laws of all Countries having jurisdiction over the activities performed under or stipulated by this Agreement.   26. RATIFICATION OF DECISIONS AND ACTIONS   Each Party to this Agreement does hereby unconditionally ratify and accept as binding on it, its successors, permitted assigns or trustees all decisions and actions theretofore taken directly or indirectly by any other Party or Parties or any committee or Subcommittee or group pursuant to and in accordance with this Agreement.   27. RESOLUTION OF DISPUTES   27.1 If a dispute should arise under this Agreement between or among the Parties they shall make every reasonable effort to resolve such dispute. However, in the event that they are unable to resolve such dispute, the matter shall be referred to the Management Committee which shall either resolve the matter or determine the method, such as arbitration, by which the matter should be resolved. This procedure shall be the sole and exclusive remedy for any dispute which may arise under this Agreement between or among the Parties. The performance of this Agreement by the Parties shall continue during the resolution of any dispute.   27.2 If any difference shall arise between or among the Parties or any of them in respect of the interpretation or effect of this Agreement or any part or provision thereof or their rights and obligations thereunder, and by reasons thereof there shall arise the need to decide the question by what municipal or national law this Agreement or any part or provision thereof is governed, the following facts shall be excluded from consideration, namely that this Agreement was made in a particular country and that it may appear by reason of its form, style, language or otherwise to have been drawn preponderantly with reference to a particular system of municipal or national law; the intention of the Parties being that such facts shall be regarded by the Parties and in all courts and tribunals wherever situated as irrelevant to the question aforesaid and to the decision thereof.   28. SUPPLEMENTS AND AMENDMENTS TO THIS AGREEMENT   28.1 This Agreement shall not be amended, supplemented, or modified unless the Parties representing at least ninety percent (90%) of the voting interests specified in Schedule B   35





  have indicated their approval in writing. The Chairman of the Management Committee must provide advance written notice, of at least thirty (30) days, to all Parties of the proposed amendment, supplement or modification and shall notify all Parties in writing once the required level of approval has been obtained and at least ten (10) days prior to execution of the amendatory or supplementary agreement   28.2 Each Party except SingTel and PLDT authorizes the Chairman of the Management Committee to execute on its behalf any amendatory or supplementary agreement implementing an amendment, supplement or modification approved under Subparagraph 28.1. SingTel and PLDT shall provide the Power of Attorney to the Chairman of the Management Committee to execute on its behalf any amendatory or supplementary agreement implementing an amendment, supplement or modification approved under Subparagraph 28.1 in a timely manner.   28.3 Subparagraphs 28.1 and 28.2 shall not apply to any Schedule or Annex modified in accordance with other provisions of this Agreement, and any Schedule or Annex so modified shall be deemed to be part of this Agreement in substitution for the immediately preceding version of that Schedule or Annex.   29. EXECUTION OF AGREEMENT   29.1 This Agreement and any Supplements and Amendments hereto shall be executed in one (1) original in the English language. Identical counterparts may be executed and when so executed shall be considered as an original. Such counterparts shall together, as well as separately constitute one and the same instrument.   29.2 The NA shall be the custodian of the original and will provide certified copies to Parties to this Agreement.   30. SUCCESSORS BOUND   This Agreement shall be binding on the Parties, their successors, and permitted assigns.   31. CONFIDENTIALITY   31.1 All data and information that is acquired or received by any Party in connection with the APCN 2 in anticipation of or under this Agreement shall be held confidential and shall not be divulged in any way to any third party, without the prior approval of the Management Committee.   31.2 Notwithstanding Subparagraph 31.1, any Party may, without such approval, disclose such data and information to:   36





  (i) the extent required by any applicable laws, or the requirements of any recognized stock exchange in compliance with its rules and regulations or in the case of a Party wholly owned by a sovereign government, by the rules of governance of the Party; or   (ii) any government agency lawfully requesting such information; or   (iii) any Court of competent jurisdiction acting in pursuance of its powers.   31.3 Any Party may disclose such data and information to such persons as may be necessary in connection with the conduct of the operations of the APCN 2 upon obtaining a similar undertaking of confidentiality from such persons to whom such information may be disclosed.   31.4 Each Party shall remain bound by the provisions of this Paragraph 31 during the period of this Agreement and for the period of five (5) years following termination of this Agreement.   32. SETTLEMENT OF CLAIMS BY PARTIES   32.1 If any Party is obliged by a final judgment of a competent tribunal or under a settlement approved by the Management Committee, to discharge any claim by a third party, including all costs and expenses associated therewith, resulting from the implementation of this Agreement, the Party which has discharged the claim shall be entitled to receive from the other Parties reimbursement in the proportions as set out in Schedule B.   32.2 If any claim is brought against a Party in connection with the APCN 2, the Party shall, as a condition of reimbursement under Subparagraph 32.1, give written notice thereof to the Management Committee as soon as practicable and shall not admit liability nor settle, adjust or compromise the claim without the approval of the Management Committee.   32.3 Before any Party brings a claim against any third party in respect of loss or damage to any part of the APCN 2, it shall first consult with the Management Committee and shall not settle, adjust, or compromise such a claim without the approval of the Management Committee.   32.4 Notwithstanding Subparagraphs 32.2 and 32.3, if the Management Committee issues any directions to a Party relating to the conduct of any such claim, then that Party must comply with those directions.   32.5 Costs, expenses, damages, or compensation payable to the Parties on account of claims made against third parties shall be shared by the Parties in the proportions as set out in Schedule B.   37





  32.6 Upon termination of this Agreement pursuant to Paragraph l8, the Parties shall not be relieved from any liabilities, costs, damages or obligations which may arise in connection with claims made by third parties with respect to the APCN 2, or any part thereof, or which may arise in relation to the APCN 2 due to any law, order or regulation made by any government or international convention, treaty or agreement. Any such liabilities, costs, damages or obligations shall be divided among the Parties in the proportions as set out in Schedule B.   33. FORCE MAJEURE   If any Party cannot fulfill its obligations in this Agreement due to an event beyond its reasonable control, including, but not limited to lighting, flood, exceptionally severe weather, fire or explosion, civil disorder, war or military operations, national or local emergency,   35.2  This Agreement supersedes the MOU. Any liabilities which any Party has incurred arising out of or by virtue of the MOU shall be dealt with in accordance with the provisions of this Agreement.   38





  TESTIMONIUM   IN WITNESS WHEREOF, the Parties hereto have severally subscribed these presents or caused them to be subscribed in their names and on their behalf by their respective officers thereunto duly authorized.     For and on behalf of Advantage Telecommunications Ltd.         By:

        For and on behalf of Cable & Wireless Global Network Limited         By:

        For and on behalf of Cable & Wireless HKT international Limited         By:

        For and on behalf of China Telecom         By:

  39





  For and on behalf of China United Telecommunications Corporation         By:

        For and on behalf of Chunghwa Telecom Co., Ltd.,         By:

        For and on behalf of Concert Global Network Services, Ltd.         By:

        For and on behalf of Global One Communications Network, Inc.



        By:

        For and on behalf of Japan Telecom Co., Ltd.



        By:

  40





  For and on behalf of KDD Corporation



        By:

        For and on behalf of Korea Telecom



        By:

        For and on behalf of KPN Telecom B.V.



        By:

        For and on behalf of Layer 2 Communications Group Ltd.



        By:

        For and on behalf of MCI International Telecommunications. Inc.



        By:

  41





  For and on behalf of Metromedia Fiber Network Services, Inc.



        By:

        For and on behalf of New Century InfoComm Ltd., Preparatory Office         By:

        For and on behalf of NTT Communications Corporation



        By:

        For and on behalf of Onelink Cable Network Limited



        By:

        By:

        For and .on behalf of Philippine Long Distance Telephone Company         By:

  42





  For and on behalf of Singapore Telecommunications Limited



        By:

        For and on behalf of StarHub Pte Ltd



        By:

        For and on behalf of Taiwan Fixed Network Co., Ltd. Preparatory Office



        By:

        For and on behalf of Teleglobe USA Inc.



        By:

        For and on behalf of Telekom Malaysia Berhad (128740-P)



        By:

  43





  For and on behalf of Telstra Global Networks Limited         By:

        For and on behalf of Williams Communications, Inc.,         By:

        For and on behalf of APT Satellite Telecommunications Limited         By:

        For and on behalf of Bayan Telecommunications, Inc.



        By:

  44





  For and on behalf of China Netcom Corporation Ltd.



        By:

        For and on behalf of The Communications Authority of Thailand



        By:

        For and on behalf of CTI International Limited



        By:

        For and on behalf of Dacom Corporation



        By:

        For and on behalf of edge2net Inc.



        By:

  45





  For and on behalf of Eastern Telecommunications Philippines, Incorporated         By:

        For and on behalf of Global Access Ltd.



        By:

        For and on behalf of Globe Telecom, Inc.



        By:

        For and on behalf of GNG Networks. Inc.



        By:

        For and on behalf of GTE Intelligent Network Service Incorporated         By:

  46





  For and on behalf of PT Indosat (Persero) Tbk



        By:

        For and on behalf of Maxis International Sdn. Bhd



        By:

        For and on behalf of New World Telephone Limited



        By:

        For and on behalf of NTT Com Asia Ltd.



        By:

        For and on behalf of Onse Telecom Corporation



        By:

  47





  For and on behalf of Telia AB (publ)



        By:

        For and on behalf of TT dotCom Sdn Bhd



        By:

  48

Output: Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.


Input: Consider Input: Exhibit 10.24    [***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.   EXECUTION VERSION   STRATEGIC ALLIANCE AGREEMENT

  THIS STRATEGIC ALLIANCE AGREEMENT (Agreement) is made and entered into as of November 6, 2016 (the Effective Date) by and between Dialog Semiconductor (UK) Ltd., a corporation organized under the laws of England and Wales, having its principal office at 100 Longwater Avenue, Green Park, Reading, RG2 6GP, United Kingdom (DIALOG) and Energous Corporation, a Delaware corporation, having its principal office at 3590 North First Street, Suite 210, San Jose, CA 95134 (ENERGOUS).   WHEREAS DIALOG is a supplier of mixed-signal semiconductor products;   WHEREAS ENERGOUS is a supplier of uncoupled wirefree charging systems, including antennas, semiconductors, firmware, software, algorithms, and sensors;   WHEREAS concurrently with their execution of this Agreement, DIALOG and ENERGOUS are entering into a separate Securities Purchase Agreement, pursuant to which DIALOG will make an investment in ENERGOUS, and ENERGOUS will issue to DIALOG shares of its common stock and a warrant to purchase its common stock on the terms set forth therein.   WHEREAS DIALOG and ENERGOUS desire to enter into a strategic relationship to distribute to the marketplace certain ENERGOUS products and technology and to potentially collaborate on further initiatives pursuant to the terms and conditions of this Agreement.   NOW, THEREFORE, in consideration for the premises and mutual covenants contained herein, DIALOG and ENERGOUS hereby agree as follows:   1. DEFINITIONS.   All capitalized terms used in this Agreement will have the meaning set out below, or if not defined below, the meaning as defined elsewhere in the Agreement.   1.1 Affiliate means any person or entity that controls, is controlled by or is under common control with the specified person or entity, but only so long as such control exists. The term control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise.   1.2  Approved Production Specifications means those materials, processes and workmanship specifications of Manufacturing Subcontractors as approved by ENERGOUS for the manufacture and production of the Products.   1.3 Change of Control means any transaction or series of transactions that results in (i) the consolidation or merger of the specified party (Target) into or with any other corporation or corporations, (ii) the sale, conveyance or disposition of all or substantially all of the assets of the Target, (iii) the transfer of more than fifty percent (50%) of the voting power of the Target to any entity or entities not controlled by the Target, or (iv) any similar form of acquisition or any liquidation, dissolution or winding up of the Target or other transaction that results in the discontinuance of the Target's business; provided, however, that Change of Control will not include any transaction or series of transactions entered into primarily for equity financing purposes (including, without limitation, any private equity investment or any public offering of securities).









  1.4  Deposit Materials means all chip level design databases, circuit schematics, test and characterization programs and associated documentation reasonably required to have Products manufactured, or to allow design bugs or Epidemic Defects to be fixed in the Product.   1.5 Design-In Phase means the phase in the sales cycle with a prospective customer for a Product that follows the customer's decision to move forward with the potential Product, during which chip samples are delivered to customer and the parties work together to design the evaluation board for in-system evaluation.   1.6 Documentation means all information that is necessary or useful to support DIALOG's authorized manufacture, testing, sale and support of the Products, including but not limited to Product Specifications, data sheets, application notes, application board gerber files/BOM, sales and marketing collateral, Product errata, test reports, characterization reports, software (e.g., firmware, GUI), test plans and yield data in connection with the manufacture and sale of Products, Approved Production Specifications, test and characterization programs and associated documentation reasonably required to have Products manufactured, assembled and tested, designs of all Tooling and all other items reasonably required for the manufacture of the Products.   1.7 Epidemic Defects means material defects of any Product resulting from a common root cause solely attributable to the Product Specifications or Approved Production Specifications and which results in returns (in accordance with the returns procedure mutually agreed between the parties in the Commercialization Plan) of more than [***] percent ([***]%) of the quantity of such Product manufactured in any [***] day period. Any number of material defects affecting any number of Products which result from a single common root cause or combination of causes and result in returns of more than [***] ([***]%) of such Products manufactured in any [***] day period will be treated as the occurrence of a single Epidemic Defect for purposes of this Agreement.   1.8 Insolvency Event means (a) without a successor, the specified party fails to function as a going concern or to operate in the ordinary course, or (b) other than in the case when the specified party is a debtor-in-possession and continuing to fulfill all its obligations under this Agreement, a receiver or trustee in bankruptcy is appointed for such party or its property, or such party makes a general assignment for the benefit of its creditors, or such party commences, or has commenced against it, proceedings under any bankruptcy, insolvency or debtor's relief law, in each case which proceedings are not dismissed within ninety (90) days.   1.9 Intellectual Property Rights means any and all Patent Rights, copyright rights, Marks rights (including all associated goodwill), mask work rights, trade secret rights and all other intellectual and industrial property rights of any sort throughout the world (including any application therefor).     * Confidential Treatment Requested

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  1.10  Invention means any idea, concept, discovery, invention, development, technology, work of authorship, trade secret, software, firmware, library, component, tool, mask work, process, method, technique, know-how, show-how, data, plan, formula, device, apparatus, specification, design, documentation or other material or information, tangible or intangible, whether or not it may be patented, copyrighted or otherwise protected (including all versions, modifications, enhancements and derivative works thereof).   1.11 Manufacturing Subcontractors means (a) [***] and/or its Affiliate that is the wafer foundry for the Products ([***]), (b) [***] and/or its Affiliate that is responsible for the assembly, packaging and testing of the Products, and (c) and other third party contractors DIALOG or ENERGOUS use, or may from time to time use, for the manufacturing, assembly, testing, or packaging of the Licensed Products or Licensed Product components.   1.12 Marks means trademarks, service marks, trade dress and trade names.   1.13 Mask Set means the mask set for fabrication of wafers at a foundry supplier.   1.14 Mass Production Qualified Product means a fully qualified Product which has completed 500 hour high temperature over lifetime (HTOL) testing and has been shipped in excess of [***] units for purposes of incorporation in customer products.   1.15 MCM means a multichip module, being a single package that includes multiple integrated circuit dies, including a Product die.   1.16 Net Sales means the invoiced amounts for the Sale of Products less: (a) amounts credited for return of any such Products; (b) amounts separately stated with respect to shipment of such Products for insurance, handling, duty, freight, and taxes; and (c) any discounts, credits or rebates in the relevant royalty or service fee period.   1.17 New Product means a product developed by or on behalf of ENERGOUS after the Effective Date that is not a Product Update; provided, however, that New Products exclude any product developed by a successor or acquirer of ENERGOUS.   1.18  Patent means any United States or foreign patent or patent application, including any provisional application, continuation, continuation-in-part, divisional, registration, confirmation, revalidation, reissue, PCT application, patent term extension, supplementary protection certificate, and utility model, as well as all foreign counterparts of any of the foregoing, and related extensions or restorations of terms thereof.   1.19 Patent Rights means rights under any Patent.   1.20 Person a human being or group of human beings, a company, corporation, a partnership or other legal entity (artificial or juristic person) recognized by law as having rights and duties.     * Confidential Treatment Requested

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  1.21 Products means the ENERGOUS products set forth in  Exhibit A, as such Exhibit may be amended from time to time by mutual agreement between the parties, that have been released by ENERGOUS to production, including all Product Updates, which will be deemed to have been added to Exhibit A automatically, without any further action required by the parties, immediately following the release to production date.   1.22 Product Die means the silicon die incorporated within Products.   1.23 Product IP means (a) all Intellectual Property Rights in and to the Products, including all Product Updates, (b) any other Inventions and work products created or developed in connection with research and development or manufacturing efforts relating to the Products, including all Intellectual Property Rights therein and (c) all Intellectual Property Rights in and to the Mask Sets and Tooling, in each of the foregoing cases, that are owned or controlled by ENERGOUS, its Affiliates or any successor or assign.   1.24 Product Specifications means ENERGOUS' written technical specifications for the Products as referenced in datasheets and related documentation such as errata sheets. All Product Specifications are subject to change with at least one (1) months prior written notice to DIALOG, provided that with respect to any warranty for Products covered by this Agreement, the Product Specification in effect at the time of shipment of the relevant Product will apply for warranty purposes notwithstanding any subsequent change to the Product Specifications as provided herein.   1.25 Product Updates means any updates, improvements and other modifications to the Products made by or for ENERGOUS, including, without limitation: (a) any updates or modifications to the software (DSP code, firmware, GUI (graphical user interface) code); (b) modifications of silicon, including, without limitation; such modifications made solely for cost reduction purposes, and including only metal layer as well as all layer mask changes; (c) modifications which increase the distance over which wireless power is transmitted or received, subject to the limitations set out in Exhibit A; (d) modifications which increase the amount of power which is transmitted or received; (e) modifications to improve functionality or efficiency or add or improve features; and (f) modifications required to attain regulatory approvals, including, but not limited to, FCC approval; provided, however, that Product Updates will only include any of the foregoing developed by an acquirer or successor of ENERGOUS for a period of [***] after a Change of Control of ENERGOUS, and provided further that any Products incorporating Product Updates will be subject to separate terms and conditions to be agreed in good faith by the Parties, which terms and conditions will be no less favourable to DIALOG than those with respect to the Product to which the Product Update corresponds.   1.26 Sale, Sell or Sold mean the sale, transfer, exchange or other disposition of Products, by DIALOG or any of its Affiliates to any customer or other third party, directly or indirectly through one or more tiers of distribution, for consideration that is recognized as revenue by DIALOG or its Affiliates according to applicable generally accepted accounting principles.   1.27 Semiconductor Supplier means any Person, other than DIALOG or its Affiliates, which primarily, or in its ordinary course of business, sells or distributes integrated circuits in packaged, die, multichip module or similar form.   * Confidential Treatment Requested

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  1.28 Term means the Initial Term and any and all Renewal Term(s) as set forth in Section 15.1 hereof.   1.29 Third Party IP means Intellectual Property Rights licensed from a third party relating to the Products.   1.30 Tooling means the physical Mask Sets, packaging fixtures, test fixtures, test programs, processes, software source code and any other physical tooling or program source code required for the manufacture, packaging, assembly and testing of the Products.   1.31 Uncoupled Power Transfer Technology means    a family of wire-free technology  defined by the AirFuel Alliance that provides power to devices at a distance, and that currently includes (i) RF, (ii) ultrasonic transduction, and (iii) Laser power beaming. Notwithstanding the foregoing, the meaning of Uncoupled Power Transfer Technology excludes technology which functions primarily for data transmission or direct- current-to-direct-current (DC-to-DC) power conversion.   2. LICENSE.   2.1 License Grant. Subject to the restrictions set out in Section 2.2, ENERGOUS hereby grants to DIALOG a non-exclusive (subject to Section 2.5), irrevocable, worldwide, sub-licensable (solely in accordance with Section 2.4), royalty-bearing license during the Term under all Product IP to:   (a) repackage or have repackaged the Product Die into various package formats or layouts, and to integrate the Product Die into MCMs, which may incorporate DIALOG or third party intellectual property (such repackaged Product Die, MCMs and Products, are individually and/or collectively referred to as the Licensed Products);   (b) have the Licensed Products manufactured, tested and packaged by Manufacturing Subcontractors;   (c) Sell, offer for Sale, import, export and support the Licensed Products, including without limitation, providing system design, troubleshooting and failure analysis support for DIALOG's customers and their customers;   (d) use and modify the Tooling and Documentation for the purposes of paragraphs (a) to (d) of this Section 2.1.   2.2 Excluded Applications. Until the earlier of (i) termination of ENERGOUS' exclusivity obligations to the Key Customer set forth in Exhibit F (the Key Customer) existing as of the Effective Date with respect to the following applications, or (ii) [***] that incorporates ENERGOUS wireless charging technology, or (iii) [***] and subject to the exceptions set out in Section 2.3, DIALOG will not be permitted to Sell Licensed Products for use in the following applications (the Excluded Applications):   (a) [***];   * Confidential Treatment Requested

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  (b) [***];   (c) [***];   (d) [***]; and   (e) [***] designed for use with any of the applications in paragraphs (a) to (d) of this Section 2.2.   For the avoidance of doubt, DIALOG will be permitted to Sell Licensed Products for use in any or all of the Excluded Applications (A) at any time on or after [***] or, if earlier, (B) [***] that incorporates ENERGOUS wireless charging technology, or (C) upon the termination of ENERGOUS' exclusivity obligations to the Key Customer existing as of the Effective Date with respect to the above applications.   2.3 Exceptions to Excluded Applications. The following applications are exceptions to and excluded from the Excluded Applications (the Permitted Applications):   (a) [***];   (b) [***];   (c) [***];   (d) [***];   (e) [***];   (f) [***];   (g) [***];   (h) [***];   (i) [***]; and   (j) [***].   The fact that a [***] has [***] does not automatically preclude such device from falling under paragraphs (b), (c) and (d) of this Section 2.3   2.4  Sublicenses. DIALOG may sublicense the foregoing license rights to any of its Affiliates. DIALOG will be responsible for the observance and performance by all such Affiliates of all of DIALOG's obligations pursuant to this Agreement. DIALOG may sublicense the foregoing license rights to Manufacturing Subcontractors solely to the extent necessary and appropriate for them to manufacture, assemble, test and provide support for the Products. DIALOG may not sublicense the foregoing license rights to any other third party without ENERGOUS' prior written consent.   * Confidential Treatment Requested

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  2.5 Exclusivity.   (a)  Subject to paragraph (b) of this Section 2.5, ENERGOUS will not, and will not enable any Semiconductor Supplier, to manufacture, have manufactured, offer for sale, sell, import or export the Products or Product Die in commercial volumes, except a Semiconductor Supplier to the Key Customer for use in the Excluded Applications.   (b) ENERGOUS will use its diligent, good faith efforts to promote DIALOG as the preferred supplier of Products and Product Die. However, ENERGOUS is allowed to engage with a Semiconductor Supplier to supply comparable products or product die to a customer if either (i) the customer which has not been engaged with DIALOG with respect to such product or product die notifies ENERGOUS or DIALOG in writing by an authorized officer of the customer that it does not want to use DIALOG or a DIALOG Affiliate as a supplier of such product or product die; or (ii) if DIALOG has been engaged with the customer, the customer notifies ENERGOUS or DIALOG in writing prior to commencement of the Design-In Phase that it does not want to use DIALOG or a DIALOG Affiliate as a supplier of such product or product die. For clarity, ENERGOUS shall not intentionally supply Products, Product Die or comparable products or product die to customers directly or through distribution channels.   2.6 Branding.   (a) Products Sold by DIALOG or its Affiliates may be branded as DIALOG products. All sales and marketing collateral, software tools and material for promotional activities relating to the Products will utilize ENERGOUS branding in a prominent basis as an equivalent partner with respect to such Products.   (b) To the extent the parties engage in any co-branding activities, then, subject to the terms and conditions of this Agreement and during the Term, each party (in such capacity, Licensor) hereby grants to the other party (in such capacity, Licensee) a non-exclusive, non- transferable, worldwide right and license (without the right to sublicense), under Licensor's Intellectual Property Rights in Licensor's Marks, to use those Marks of Licensor set forth in  Exhibit D solely in connection with the marketing, sale and distribution of such co-branded Products in accordance with this Agreement.   (c) Use of Licensor's Marks will be subject to the following terms and conditions: (i) all goodwill generated by use of Licensor's Marks by Licensee will inure to the benefit of Licensor; (ii) Licensee will use Licensor's Marks only in such forms and with such graphics as authorized by Licensor; and (iii) Licensee will identify Licensor's Marks as being owned by Licensor and will (A) cause the symbol ® to appear adjacent to and slightly above any registered Licensor Mark, or (B) alternatively, for any Licensor Marks that are not registered, the symbol TM or SM, as applicable.   2.7 No Other Rights. Except for the rights and licenses expressly granted in this Agreement, no other right is granted, no other use is permitted and all other rights are expressly reserved.

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  3. SOURCING.   3.1 Product Manufacture. Concurrent with or before execution of this Agreement, and substantially in the form attached as Exhibit C, ENERGOUS will provide written authorization to its Manufacturing Subcontractors to confirm DIALOG's and, if applicable, DIALOG's Affiliates' rights to procure the Licensed Products and related services directly from such Manufacturing Subcontractors utilizing ENERGOUS' Tooling and any associated manufacturing resources. DIALOG and its sublicensed Affiliates may directly contract with the Manufacturing Subcontractors for the manufacture and supply of Licensed Products under terms and conditions that DIALOG or such Affiliates may directly negotiate with such third parties.   3.2 Additional Manufacturing Subcontractors. DIALOG at its sole discretion may qualify and establish an alternative source to some or all of ENERGOUS' Manufacturing Subcontractors for the manufacturing of the Licensed Products and ENERGOUS will provide its written authorization thereof if requested by DIALOG.   3.3  Tooling. Subject to ENERGOUS' rights in the Product IP and any Third Party IP (including, without limitation, that of any Manufacturing Subcontractors), each party will own all right, title and interest in the physical Tooling procured or generated by that party for the manufacturing, testing and packaging of the Licensed Products. For the avoidance of doubt, as between the parties, ENERGOUS will also continue to own all right, title and interest in and to the firmware, DSP code and GUI software embedded in the Products, including all Intellectual Property Rights embodied therein. Upon the termination of DIALOG's right to manufacture the Licensed Products following any expiration or termination of the Agreement or any Wind Down Period or Continuing Obligation period, as applicable, then all right, title and interest in the Tooling will automatically transfer to ENERGOUS subject to any Third Party IP, and DIALOG will, at ENERGOUS' option, either sell any Tooling in its possession to ENERGOUS at cost or destroy the Tooling and certify in writing as to same.   4. PRODUCT COMMERCIALIZATION.   4.1 Commercialization Plan.   (a) Exhibit E hereto sets out the plan for the commercialization of the Licensed Products (the Commercialization Plan). The Commercialization Plan sets forth the parties' respective rights and obligations with respect to commercial and technical activities to be performed to maximize potential Sales of Licensed Products. The Commercialization Plan will be reviewed and (if necessary) updated by the parties on a quarterly basis during the Term.   (b) Each party will appoint (and notify the other party of the name of) a member of their management team who will serve as that party's primary contact for all matters related to this Agreement (each, a Liaison), including resolution of issues that may arise under this Agreement. Each party may replace its Liaison at any time by notice in writing to the other party.   (c) The Commercialization Plan includes a go-to-market plan. ENERGOUS will provide commercially reasonable sales training, material and support to DIALOG's global application, sales and marketing teams and customers, including the support set out in Section 4.3.

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  (d) ENERGOUS will also support DIALOG with an operations and quality plan, which will set forth information relating to quality matters, including, but not limited to, testing, yield management, RMA process, failure analysis/corrective action procedure, ECN/PCN process and detailed agreement on mutual rights and responsibilities with respect to any quality issues or warranty claims (hereinafter Quality Plan). Both parties will work in good faith to finalize and implement the Quality Plan within 90 days after the Effective Date of this Agreement. DIALOG will be responsible for its own frontline quality function and corrective actions, with technical input from ENERGOUS as required.   (e) The parties may promote the relationship with marketing initiatives and also agree to engage in joint marketing communication activities related to the relationship described in this Agreement or to the promotion of the Licensed Products, as set forth in the Commercialization Plan or otherwise mutually agreed between the parties from time to time.   4.2 Commercialization Meetings. The parties will meet regularly, but at least once each month during the Term, either in person or by telephone, video or internet conference call, to share technical and commercial information as reasonably required to facilitate the parties' exercise of their respective rights and performance of their respective obligations under this Agreement. The information shared by the parties will include, but is not limited to (a) market and competitive dynamic updates, (b) activities and progress updates at DIALOG's customers, (c) technical review and feedback from customers, (d) non-binding 12 month rolling Sales and Royalty and Service Fee forecasts for the Licensed Products, (e) initiatives to boost sales potential for the Licensed Products. Customer information shared will be within the limits allowed by any non-disclosure agreements DIALOG may have entered into with such customers.   4.3 Technical Support. ENERGOUS will support DIALOG's or its Affiliates' engineers and, in some cases and at DIALOG's request, the customer directly in providing standard design-in support (including antenna design support) for customers' products. If the customer requires unique or custom engineering services (i.e., support and services not limited to those with general application to Product customers), then ENERGOUS will contract directly with such customer for the provision of such services. ENERGOUS will provide DIALOG with any and all information that is necessary or useful to support its authorized manufacture, testing, marketing, Sale, troubleshooting, compatibility analysis, performance tuning, failure analysis, and other support of the Licensed Products, including the Documentation and any updates thereto or revisions thereof which are reasonably necessary or appropriate to provide technical support for the Products to DIALOG customers. ENERGOUS receives the Service Fee for providing the support described in this Section 4.3 to DIALOG and its customers during the Term. In the event the Technical Support provided by ENERGOUS falls below a mutually-agreed upon service level that is common to the semiconductor industry or reasonably requested by DIALOG's customers, and after failure by ENERGOUS to address such deficiency within a twenty (20) day notice period, DIALOG may suspend the payment of Service Fees until such service level is provided. Furthermore, in the event ENERGOUS fails to meet its obligations as set forth in the Quality Plan, and after failure by ENERGOUS to address such deficiency within a thirty (30) day notice period, DIALOG may suspend the payment of Service Fees until such obligations are met.

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  5. PRODUCT DEVELOPMENT AND PRODUCT UPDATES.   ENERGOUS will have control and authority over the design and development of the Products, including without limitation, developing and implementing all Product Updates. ENERGOUS reserves the right to implement Product Updates at any time in its sole discretion. The parties will consult each other on the perceived product needs of the market and DIALOG's customers and how best to respond to such needs. DIALOG may suggest Product Updates to ENERGOUS provided, but all the development of Product Updates will be at ENERGOUS' sole discretion. ENERGOUS will share its relevant product roadmaps from time to time to maximize collaboration opportunities.   6. INTELLECTUAL PROPERTY OWNERSHIP.   6.1 Product IP. ENERGOUS retains right, title and interest in and to the Product IP, ENERGOUS' Marks and ENERGOUS' Confidential Information, including all Intellectual Property Rights embodied therein. No transfer or grant is made hereunder by ENERGOUS of any of these rights or any of its other rights, whether by implication, estoppel or otherwise, other than the limited rights and licenses expressly granted by ENERGOUS in this Agreement, and all such other rights are hereby reserved.   6.2 DIALOG Intellectual Property. DIALOG retains rights, title and interest in and to DIALOG's Marks and DIALOG's Confidential Information, including all Intellectual Property Rights embodied therein. No transfer or grant is made hereunder by DIALOG of any of these rights or any of its other rights, whether by implication, estoppel or otherwise, other than the limited rights and licenses expressly granted by DIALOG in this Agreement and all such other rights are hereby reserved.   7. PRODUCT SALES.   7.1 Sales. Subject to the terms and conditions of this Agreement, and except as set forth in the Commercialization Plan or otherwise agreed in writing between the parties, DIALOG will market and Sell the Licensed Products as authorized under this Agreement. DIALOG will independently manage and process its own forecasting, operations and order management.   7.2 Discontinuation of Sale of Products. If DIALOG decides to discontinue Sales of any Product, it will notify ENERGOUS at least [***] prior to such discontinuance, and following such notification, the exclusivity rights, if any, associated with that Product will cease; provided, however, this provision will not apply in the event that DIALOG continues Sales of Product Updates, repackaged Product Dies or MCMs.   7.3 Supply of Products to ENERGOUS. DIALOG will provide 1000 samples of each Product free of charge to ENERGOUS for the purposes of evaluation and demonstration. For additional volumes required by ENERGOUS, DIALOG will sell to ENERGOUS on a reasonable cost plus basis for the purposes of evaluation and demonstration. These samples are provided as is, are not intended for resale by ENERGOUS, and no indemnification or other warranties from DIALOG will apply.   * Confidential Treatment Requested

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  8. OTHER PRODUCTS.   8.1 New Products. In the event that ENERGOUS develops New Product, ENERGOUS will provide DIALOG with written notice describing the New Product before marketing, selling or distributing the New Product with or to any third party. Upon receipt of such notice, DIALOG will have [***] to notify ENERGOUS in writing that it desires to add such New Product as Product under this Agreement. If DIALOG provides such a notice, for a period of [***] following ENERGOUS' receipt of such notice, ENERGOUS and DIALOG will negotiate in good faith the terms pursuant to which such New Product will be added as a Product to this Agreement. ENERGOUS may not negotiate with any third party the rights to market, sell or distribute any New Product until the earliest to occur of the following (a) DIALOG does not provide ENERGOUS with notice that it desires to add such New Product to this Agreement within the above-described [***] period, (b) ENERGOUS and DIALOG do not reach mutually agreeable terms for adding such New Product to this Agreement during the [***] negotiation period or (c) DIALOG provides ENERGOUS with written notice that it does not wish to negotiate with respect to such New Product. For clarity, after any of the events described in the foregoing subsections (a), (b) or (c) occurs, the New Product will not be covered under this Agreement, and ENERGOUS will be free to manufacture, market, sell, distribute and otherwise exploit such New Product as it deems fit in its sole discretion, including in collaboration with or through one or more third parties.   8.2 No Competing Products.   (a) Until expiration or earlier termination of the Agreement, DIALOG agrees that it and its Affiliates will not, without ENERGOUS' written approval, intentionally sell, distribute or work with any third party to develop products incorporating any Uncoupled Power Transfer Technology other than Licensed Products; provided, however, that DIALOG shall not be under any such restrictions in relation to services or products it provides to the Key Customer in the event the Key Customer terminates its agreement with ENERGOUS.   (b) In the event that ENERGOUS does not receive Federal Communications Commission approval of any Licensed Product for power transmission [***] by the [***], (i) ENERGOUS may provide written notice to DIALOG which references this Section 8.2(b) and indicates ENERGOUS' intention to enable one or more Semiconductor Suppliers to supply Products for [***]; and (ii) DIALOG may provide written notice to ENERGOUS which references this Section 8.2(b) and indicates DIALOG's intention to sell, distribute or work with one or more third parties to develop products incorporating Uncoupled Power Transfer Technology for [***]. [***] following the date such notice is given pursuant to Section 20.1, the restrictions in Section 8.2(a) shall no longer apply to DIALOG for Uncoupled Power Transfer Technology in [***] and the restrictions relating to enabling a Semiconductor Supplier in Section 2.5(a) shall no longer apply to ENERGOUS for Products or Product Die in [***].   (c) In the event that ENERGOUS does not receive Federal Communications Commission approval of any Licensed Product for power transmission in [***] by the [***], (i) ENERGOUS may provide written notice to DIALOG which references this Section 8.2(c) and indicates ENERGOUS' intention to enable one or more Semiconductor Suppliers to supply Products for [***]; and (ii) DIALOG may provide written notice to ENERGOUS which references this Section 8.2(c) and indicates DIALOG's intention to sell, distribute or work with one or more third parties to develop products incorporating Uncoupled Power Transfer Technology for [***]. [***] following the date such notice is given pursuant to Section 20.1, the restrictions in Section 8.2(a) shall no longer apply to DIALOG for Uncoupled Power Transfer Technology in [***] and the restrictions relating to enabling a Semiconductor Supplier in Section 2.5(a) shall no longer apply to ENERGOUS for Products or Product Die in [***].   * Confidential Treatment Requested

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  9. ROYALTIES AND SERVICE FEES.   9.1 Royalties. DIALOG will pay ENERGOUS the Royalties set forth in  Exhibit B. For clarity, DIALOG will be responsible for paying to ENERGOUS any Royalties payable hereunder as a result of its Affiliates' Licensed Product Sales.   9.2 Service Fee. Subject to Section 4.3, DIALOG will pay ENERGOUS the Service Fees set forth in Exhibit B. For clarity, subject to Section 4.3, DIALOG will be responsible for paying to ENERGOUS any Service Fees payable hereunder for services provided by ENERGOUS hereunder to DIALOG's Affiliates or any of DIALOG's or its Affiliates' customers.   9.3 Payment. Payments of Royalties and Service Fees will be due on a calendar quarterly basis, within [***] days after the end of the calendar quarter in which the applicable Licensed Products were Sold or services were rendered. From the date a payment is due, unless otherwise agreed, any late payment will accrue a late payment fee of [***] per month, or the highest interest rate permitted by law, whichever is less.   9.4 Reports. Each payment made hereunder will be accompanied by a report detailing (a) the total number of units, on a product-by- product basis, of the Licensed Products Sold during the previous calendar quarter, (b) DIALOG's and its Affiliates' Net Sales attributable to such Licensed Product units during such calendar quarter, and (c) reasonable details regarding the calculation of the quarterly Royalty payment and Service Fee. Such information will be maintained in strict confidence by ENERGOUS under Section 10 of this Agreement.   9.5 Books. With respect to its exercise of the rights and licenses granted in, and payment obligations under, this Agreement, DIALOG and its Affiliates will keep accurate books and other records, including but not limited to supporting documentation for the Royalties and Service Fees paid hereunder (the Records). These Records will be maintained for a period of at least three (3) years from the date of the related payment (Record Retention Period), notwithstanding any termination of expiration of this Agreement.   9.6 Audit Rights. During the Record Retention Period, ENERGOUS may appoint a mutually agreed independent, internationally recognized third-party certified auditor who will have the right to inspect and copy the Records upon reasonable prior notice, and DIALOG will (and will cause its Affiliates to) allow necessary access including, as applicable, to its premises where such Records are located. ENERGOUS may exercise such right to this independent-third party audit no more than one time per calendar year and each such audit will be conducted during normal business hours. Such audit may also not interfere with DIALOG's or its Affliates' quarterly closing of its books. In the event that such audit reveals an underpayment of Royalties or Service Fees owed by DIALOG, DIALOG will promptly pay ENERGOUS the amount of the underpayment. If such underpayment is in excess of [***] of the Royalties or Service Fee due for the period audited, DIALOG will also reimburse ENERGOUS for its reasonable, out-of-pocket cost of such audit. In the event that such audit reveals an overpayment of Royalties or Service Fees owed by DIALOG, ENERGOUS will promptly pay DIALOG the amount of the overpayment.   * Confidential Treatment Requested

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  9.7 Taxes. Each party will be responsible to collect, bear and pay any and all taxes levied or based upon the party's sale of the Products, Product Die or Licensed Products, including, all sales, use, value added, withholding or similar taxes. In the event that the government of a country imposes any income taxes on payments made by a party to the other hereunder and requires a party to withhold such tax from such payments, such party may deduct such tax from such payments. Each party will be responsible for its own banking costs relating to the receipt of payments of Royalties and Service Fees and any other monies payable to it in connection with this Agreement.   9.8 Payment Currency. All payments due under this Agreement will be payable in U.S. Dollars. With respect to Net Sales invoiced in a currency other than U.S. Dollars, the Net Sales will be expressed in the domestic currency of the entity making the Sale, together with the U.S. Dollar equivalent, calculated using the conversion rate existing in the United States (as reported in the Wall Street Journal) on the last working day of each month of the calendar quarter in which the Net Sales were made. Such payments will be without deduction of exchange, collection or other charges.   10. CONFIDENTIALITY.   10.1 Scope. The term Confidential Information means all financial, business and technical information disclosed by or on behalf of a party in relation to this Agreement (whether tangible or intangible, and including all copies, analyses and derivatives thereof), that is marked or otherwise identified as proprietary or confidential at the time of disclosure, or which by its nature would be understood by a reasonable person to be proprietary or confidential, including all copies, abstracts, summaries, analyses and derivatives thereof. Confidential Information does not include information the receiving party can demonstrate (a) was rightfully furnished to it without restriction by a third party without breach of any obligation to the disclosing party, (b) is generally available to the public without breach of this Agreement, (c) was available to or already in the possession or control of the receiving party on a non-confidential basis before receipt from the disclosing party or (d) is independently developed by it or its employees without reliance on such information. Information associated with DIALOG's quarterly Royalty or Service Fee disclosures is Confidential Information of DIALOG.   10.2 Non-Disclosure. The receiving party agrees (a) not to copy or use the disclosing party's Confidential Information except and only for the purposes contemplated by this Agreement, (b) to maintain it as confidential, and exercise reasonable precautions to prevent unauthorized access, use and disclosure, (c) not to disclose it to any third party other than the receiving party's employees and contractors who have a need to know for the permitted purpose and who are bound by obligations that are at least as protective as the restrictions in this Agreement and (d) not to export or re-export in violation of U.S. or other export control laws or regulations any such Confidential Information or product thereof. Each party will bear the responsibility for any breach of this Section 10 by its and its Affiliates' employees and contractors. Upon any termination of this Agreement or, in the event of any Wind Down Period or Continuing Obligation period, upon the expiration of such period, and within fifteen (15) days after request by the disclosing party, each receiving party will return the Confidential Information of the other or destroy such Confidential Information and all copies of it and all information, records and materials developed therefrom, except that the recipient may retain one copy for archival purposes to ensure compliance with the provisions of this Agreement, and nothing contained herein will require the erasure, deletion, alteration or destruction of any Confidential Information required to be retained for legal or regulatory purposes or stored on back-up tapes or other back-up media or archiving systems made in the ordinary course of business, subject in each case to the confidentiality obligations set forth herein. Each party may only disclose the general nature, but not the specific terms, of this Agreement without the prior consent of the other party; provided, however, either party may provide a copy of this Agreement or otherwise disclose its terms on a confidential basis in connection with any legal or regulatory requirement, financing transaction or due diligence inquiry. For clarity, in the event that use, disclosure or retention of any Confidential Information is required in order for DIALOG to exercise the license granted in Section 2, this Section 10 will not be deemed to prevent such use, disclosure or retention.

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  10.3 Required Disclosure. Nothing herein will prevent a receiving party from disclosing all or part of the other's Confidential Information as necessary pursuant to court order, the lawful requirement of a governmental agency or when disclosure is required by operation of law (including disclosures pursuant to applicable securities laws or regulations thereunder); provided, that prior to any such disclosure, the receiving party will use reasonable efforts to (a) promptly notify the disclosing party in writing of such requirement to disclose, and (b) cooperate fully with the disclosing party in protecting against or minimizing any such disclosure or obtaining a protective order.   11. REPRESENTATIONS AND WARRANTIES; DISCLAIMERS.   11.1 Mutual Representations and Warranties. ENERGOUS and DIALOG hereby each represent and warrant to the other that as of the Effective Date:   (a) it is a duly and validly organized and existing corporation in good standing under the laws of the state or country of its incorporation, as applicable, and that it is legally qualified to do business in each jurisdiction in which this Agreement may be performed and the performance of its activities hereunder requires such qualification;   (b)  the performance of this Agreement and the consummation of the transactions contemplated herein will not result in any breach or violation of any terms or provisions of, or constitute a default under, its certificate of incorporation or by-laws or other organizational documents, or any material agreement or instrument to which it is a party, by which it is bound, or to which any of its property is subject;   (c) all requisite corporate action has been taken for the due authorization, execution, delivery and performance of this Agreement by it, and this Agreement constitutes a legally binding obligation, enforceable against such party in accordance with its terms, except insofar as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally; and

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  (d) it is not a party to any litigation relating to, or that could reasonably be expected to affect, its ability to perform its obligations under this Agreement.   11.2 Product Warranty.   (a)  ENERGOUS warrants that (i) when manufactured in accordance with the Approved Production Specifications, and as implemented in a suitable circuit application in accordance with the Product Specifications, the Products and Product Die will conform to the Product Specifications and will be free from defects that could have been avoided in their design; (ii) the Products, any constituent parts or functionality thereof, the Documentation and the Deposit Materials do not infringe any third party's Intellectual Property Rights; (iii) it did not misappropriate any third party's trade secrets in the development of the Products, any constituent parts or functionality thereof, the Documentation or the Deposit Materials; and (iv) when delivered (including any software updates if any), no Product will contain any viruses, Trojan horses or other harmful code. The above warranties are valid for a period of [***] from the date of shipment of any Licensed Product to any customer.   (b) The warranty contained in Section 11.2(a) does not apply to the extent any Product is operated in a manner other than that specified by the Product Specifications, is treated with abuse, negligence or other improper treatment (including, without limitation, use outside the device maximum ratings, package MSL (moisture sensitivity level) guidelines or environmental limits as may be set forth in the Product Specifications), or is defective as a result of any materials or workmanship of the Manufacturing Subcontractors or failure of the Manufacturing Subcontractors to manufacture the Product according to Approved Production Specifications. As such, any warranty claims due to defects in build, materials or workmanship will be directed to the Manufacturing Subcontractors as part of that contract between DIALOG or, if applicable, its Affiliate and such parties.   (c) With the exception of the warranties in Section 11.2(a)(ii) (third party IP infringement) and Section 11.2(a)(iii) (misappropriation of third party trade secrets) related to any Product Die, the warranties in this Section 11.2 do not apply to MCMs or repackaged Product Die developed by or for DIALOG or its Affiliates.   (d) In the event any warranty claim is due to or arises from an Epidemic Defect, ENERGOUS will be responsible for all costs and expenses directly incurred by DIALOG or its Affiliates or their respective customers as a result of reasonable inspection, servicing, repairs, replacements, recall notices, recalls and responses with respect thereto, provided that ENERGOUS' aggregate liability to DIALOG and its Affiliates and their respective customers under this paragraph (d) will not exceed [***] per occurrence of an Epidemic Defect. Each party will immediately notify the other upon becoming aware of the circumstance that could reasonably be construed to be an indication of an Epidemic Defect, and, in any event, will notify the other party immediately upon becoming aware of the existence of an Epidemic Defect. ENERGOUS and DIALOG will expeditiously work together in good faith to determine a technical resolution of the Epidemic Failure. ENERGOUS agrees to make all commercially reasonable efforts to promptly diagnose the Epidemic Failure's root cause, provide DIALOG a report detailing the results of ENERGOUS' investigation and plan an effective workaround and a permanent solution. ENERGOUS will consult with DIALOG on any proposed workarounds and other solutions.   * Confidential Treatment Requested

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  11.3  Infringement of Intellectual Property Rights. If any of the Products, Product Die, Documentation or Deposit Materials is, or in ENERGOUS' or DIALOG's opinion is likely to become, the subject of an Intellectual Property Rights infringement claim, and as a result DIALOG or any of its Affiliates or their respective customers are enjoined, or in ENERGOUS' or DIALOG's opinion are likely to be enjoined, from using the Products, Product Die, Documentation or Deposit Materials, ENERGOUS will use its best efforts to:   (a) procure for DIALOG and its Affiliates and their respective customers the right to continue to use the Products, Product Die, Documentation or Deposit Materials, as applicable; or, but only in the event that, despite ENERGOUS' best efforts to do so, ENERGOUS is unable to so procure such right,   (b) replace or modify the Products, Product Die, Documentation or Deposit Materials, as applicable, to make them non-infringing, provided that the replaced or modified Products, Product Die, Documentation and Deposit Materials remain substantially similar in performance to the infringing Products, Product Die, Documentation and Deposit Materials.   If none of the foregoing alternatives is available within a commercially reasonable time period, DIALOG may terminate this Agreement with immediate effect, provided that it will give ENERGOUS prompt prior written notice thereof. Nothing in this Section 11.3 is intended to limit DIALOG's rights to indemnification under Section 12 in connection with any such infringement claim.   11.4  Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 11, THE PRODUCTS, THE PRODUCT IP, TOOLING, DOCUMENTATION, DEPOSIT MATERIALS, CONFIDENTIAL INFORMATION AND ALL LICENSES, SERVICES AND OTHER ITEMS PROVIDED BY A PARTY TO THE OTHER PARTY HEREUNDER ARE PROVIDED AS IS, WITHOUT WARRANTY OF ANY KIND. EXCEPT FOR THOSE WARRANTIES EXPRESSLY PROVIDED HEREIN, EACH PARTY SPECIFICALLY DISCLAIMS ALL WARRANTIES, WHETHER ORAL OR WRITTEN, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL WARRANTIES ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE IN TRADE.   12. INDEMNIFICATION.   12.1 Indemnification by Energous. Subject to Section 12.2, ENERGOUS agrees to indemnify, hold harmless and, in the case of any third party claims, defend DIALOG and its Affiliates and each of their respective directors, officers, employees, contractors, agents, distributors and customers (collectively, DIALOG Indemnitees) from and against and in respect of any and all alleged or actual demands, claims, actions, causes of action, suits or proceedings, assessments, awarded damages (including punitive damages), liabilities, interest and penalties, costs and expenses (including, without limitation, court costs and reasonable legal fees and disbursements in connection therewith) (each, a Claim) to the extent resulting from, arising out of, relating to, or imposed upon or incurred by any DIALOG Indemnitees by reason of (a) death or bodily injury caused by or resulting from use of the Products, (b) any breach of any representation or warranty made by ENERGOUS hereunder or to any third party in relation to the Products or Product Die, (c) the infringement or misappropriation of any third party Intellectual Property Rights in relation to the Products or Product Die, (d) the infringement or misappropriation of any third party Intellectual Property Rights as a result of DIALOG's or its Affiliates' exercise of rights in accordance with the terms of this Agreement, including, but not limited to, the Manufacturing Subcontractors' manufacture of the Products on their behalf, provided that the Products are manufactured in strict compliance with the Product Specifications and Approved Production Specifications and only to the extent such Claims arise due to compliance with the Product Specifications and/or the Approved Production Specifications or use of the Tooling provided by ENERGOUS hereunder, (e) the infringement by DIALOG of any third party Marks rights as a result of its authorized use of the ENERGOUS Marks, (f) any failure by ENERGOUS to comply with applicable laws, regulations and standards, or (g) ENERGOUS' negligence, intentional misconduct or fraud.

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  12.2 Exclusion. Notwithstanding the provisions of Section 12.1, ENERGOUS will not be liable to the extent any Claim results from (a) modification of the Products by DIALOG, its Affiliates and/or any third party (including the Manufacturing Subcontractors), or combination of the Products with other products, offered by DIALOG, its Affiliates and/or any third party, (b) acts or omissions of any Manufacturing Subcontractor (except to the extent such Claims are due to the infringement or misappropriation of third party Intellectual Property Rights arising from such Manufacturing Subcontractor's manufacturing of the Products on behalf of DIALOG in strict compliance with the Product Specifications, Approved Production Specifications and Tooling provided by ENERGOUS), (c) failure of any DIALOG Indemnitee to comply with applicable laws, regulations and standards, or (d) negligence, intentional misconduct or fraud of any DIALOG Indemnitee. For clarification, if any of the foregoing is not the cause, in whole or in part of the Claim, ENERGOUS is not relieved of its obligations under Section 12.1.   12.3 Conditions. DIALOG must notify ENERGOUS within thirty (30) business days after receipt of actual notice of any Claim by a third party for which it seeks indemnification; provided, however, any failure or delay in notice will not relieve ENERGOUS of its obligations hereunder except to the extent that ENERGOUS is actually prejudiced by such failure to notify. ENERGOUS will have control and authority with respect to the defense, litigation, compromise or settlement of such third party Claim (except to the extent that any settlement involves any commitments, responsibilities or obligations on the part of DIALOG, in which case such settlement will require the prior written consent of DIALOG, which consent will not be unreasonably delayed, conditioned or withheld). DIALOG will cooperate and provide assistance and information as may reasonably be required by ENERGOUS (but at ENERGOUS' expense) in connection therewith. DIALOG reserves the right to participate at its own cost in any third party proceedings with counsel of its own choosing. In the event that ENERGOUS does not respond to any third party Claim or does not sufficiently defend such third party Claim, DIALOG, acting reasonably, may step in and take over the defense of such Claim. Costs incurred in the settlement of any Claim, including, but not limited to, reasonable legal expenses, may be off set against future Royalties and Service Fees payable.

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  12.4 Insurance. Each party will maintain, during the Term and for three (3) years thereafter, such comprehensive general liability insurance (including without limitation, products liability) as will adequately protect it against its potential liabilities under this Agreement, in amounts customary in the semiconductor industry for similar services and products. Each party will, at the other party's request, provide to the other party a certificate of insurance evidencing the foregoing insurance coverage.   13. LIMITATION OF LIABILITY.   13.1 EXCEPT IN THE CASE OF (a) ANY BREACH OF SECTION 10 (CONFIDENTIALITY), (b) THE PARTIES' OBLIGATIONS UNDER SECTION 12 (INDEMNIFICATION), (c) A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (d) LIABILITY ARISING FROM EPIDEMIC DEFECTS (WHICH WILL BE SUBJECT TO THE LIMITATION SET FORTH IN SECTION 11.2(d)), IN NO EVENT WILL EITHER PARTY BE LIABLE UNDER THIS AGREEMENT, REGARDLESS OF THE FORM OF ANY CLAIM OR ACTION (WHETHER IN CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE), FOR ANY (i) INDIRECT, PUNITIVE, INCIDENTAL, RELIANCE, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF BUSINESS, REVENUES, PROFITS OR GOODWILL, OR (ii) AGGREGATE DAMAGES IN EXCESS OF [***]. IN ADDITION, ENERGOUS' LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER SECTION 12.1(b) SHALL IN NO EVENT EXCEED [***]. THESE LIMITATIONS ARE INDEPENDENT FROM ALL OTHER PROVISIONS OF THIS AGREEMENT AND WILL APPLY NOTWITHSTANDING THE FAILURE OF ANY REMEDY PROVIDED HEREIN.   14. COMPLIANCE WITH LAWS.   Each party will comply with all law and regulations applicable such party's performance under this Agreement, including but not limited to U.S. Export Administration laws and regulations and any other export, import and re-export control laws applicable to such party. The parties will refrain from exporting or re-exporting the Products or Product IP or any technical data or other materials received from each other, or the direct product of any of these, to any country, individual or organization proscribed by the United States government, unless properly authorized by the appropriate agencies of the United States government. Each party will provide all information under its control which is necessary or useful for the other party to ship or receive the Products, including, but not limited to, U.S. Export Control Classification Numbers (ECCNs), U.S. Customs Certificates of Delivery, Certificates of Origin and U.S. Federal Communications Commission identifier, if applicable. Each party agrees that it will not act in any fashion or take any action in violation of any applicable anti-bribery or anti-corruption legislation in any jurisdiction in which it does business, which prohibits the offering, giving or promising to offer or give, directly or indirectly, money or anything of value to any official of a government, political party or instrumentality to assist it in obtaining or retaining business, including the U.S. Foreign Corrupt Practices Act or any comparable legislation in another country.   * Confidential Treatment Requested

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  15. TERM AND TERMINATION.   15.1 Term. This Agreement is effective on the Effective Date. Unless earlier terminated as provided herein, this Agreement continues in effect for an initial term of seven (7) years (Initial Term) and will automatically renew for one or more annual periods after the Initial Term (each a Renewal Term) unless either party gives notice of non-renewal at least one hundred eighty (180) days prior to the beginning of any Renewal Term.   15.2 Termination.   (a) Mutual Termination Rights. Either party may, in addition to any other remedies available to it under this Agreement or at law or in equity, terminate this Agreement (or, in the event this Agreement has been previously terminated, the Wind Down Period, if any) immediately upon the issuance of written notice to the other party in the event that (i) the other party materially breaches a material provision of this Agreement, and fails to cure such breach within thirty (30) days, or (ii) the other party undergoes an Insolvency Event.   (b) Termination By ENERGOUS.   (i) If ENERGOUS is acquired by a third party, ENERGOUS' acquirer will have the right, for a period of [***] following closing of such acquisition, to terminate this Agreement upon written notice to DIALOG.   (ii)  ENERGOUS will have the right to terminate this Agreement immediately upon the issuance of written notice to DIALOG (A) if DIALOG undergoes a Change of Control involving a competitor of ENERGOUS (as reasonably determined by ENERGOUS), or (B) if DIALOG or any of its Affiliates acquires, whether directly or indirectly through a sale of assets or a Change of Control transaction or otherwise, any competitor of ENERGOUS. DIALOG will provide ENERGOUS with notice of any such Change of Control or acquisition within [***] after the closing thereof and ENERGOUS' right to terminate the Agreement will expire [***] after receipt of such notice.   (iii) ENERGOUS may, at any time after the third anniversary of the Effective Date, terminate this Agreement with or without cause upon not less than one hundred and eighty (180) days prior written notice to DIALOG.   (iv) ENERGOUS will have the right to terminate this Agreement, upon not less than [***] prior written notice to DIALOG, in the event that, following termination by the [***] of its agreement with ENERGOUS, DIALOG participates in or indicates its intention to participate in the development, design or manufacture of products incorporating Uncoupled Power Transfer Technology not provided by ENERGOUS to [***].   (c) Termination by DIALOG.   (i) If DIALOG is acquired by a third party, DIALOG's acquirer will have the right, for a period of [***] following closing of such acquisition, to terminate this Agreement upon written notice to ENERGOUS.   * Confidential Treatment Requested

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  (ii) DIALOG may terminate this Agreement, immediately upon issuance of written notice to ENERGOUS in the event that: (A) DIALOG or its Affiliates fail to achieve a design-win pipeline with an annual projected sales value to DIALOG of at least [***] in the [***] after the availability of a Mass Production Qualified Product; or (B) the aggregate annual Net Sales of Products are below [***] by the [***] of the availability of a Mass Production Qualified Product, or below [***] by the [***] of the availability of a Mass Production Qualified Product, or below [***] by each [***] of the availability of a Mass Production Qualified Product during the remainder of the Term.   (iii)  DIALOG will have the right to terminate this Agreement immediately upon the issuance of written notice to ENERGOUS (A) if ENERGOUS undergoes a Change of Control involving a competitor of DIALOG, or (B) if ENERGOUS acquires, whether directly through a sale of assets or through a Change of Control transaction, any competitor of DIALOG (as reasonably determined by DIALOG). ENERGOUS will provide DIALOG with notice of any such Change of Control or acquisition within [***] after the closing thereof and DIALOG's right to terminate the Agreement will expire [***] after receipt of such notice.   15.3 Effect of Termination. Upon any termination or expiration of this Agreement, all rights, licenses (including any sublicenses granted by DIALOG) and obligations hereunder will cease, except that the provisions of Sections 6 (Intellectual Property Ownership), 9 (Royalties and Service Fees), 10 (Confidentiality), 11 (Representations and Warranties; Disclaimers), 12 (Indemnification), 13 (Limitation of Liability), 15.3 (Effect of Termination), 15.4 (Wind Down Period), 16 (Escrow), 18 (Non-Solicitation), 19 (Choice of Law and Dispute Resolution) and any provisions to give effect thereto, will survive such termination or expiration and remain in full force and effect in accordance with their terms.   15.4 Wind Down Period.   (a) Notwithstanding any statement in Section 15.3 to the contrary, upon any termination or expiration of this Agreement and until the later to occur of (i) [***] from the Effective Date or (ii) [***] following the effective date of termination or expiration of this Agreement (the Wind Down Period), the parties' respective rights and obligations under Sections 2 (License), 3 (Sourcing), 7 (Product Sales), 9 (Royalties and Service Fees), 11 (Representations and Warranties; Disclaimers), 12 (Indemnification), 13 (Limitation of Liability), 14 (Compliance with Laws), 15.2 (Termination), 16 (Escrow) and all Exhibits hereto which are associated with any of the foregoing listed sections will remain in full force and effect as to (A) any Products or repackaged Product Die with respect to which DIALOG or any of its Affiliates has secured a design win at a customer prior to or within one (1) month after the start of the Wind Down Period, or (B) the sale of any MCMs which have been released for production at a foundry, provided, however, that DIALOG's license rights under Section 2.1 (including any sublicenses granted by DIALOG pursuant to Section 2.4) will be non-exclusive during the Wind Down Period.   (b) If, at the time of notice of any termination of this Agreement, DIALOG or any of its Affiliates has a written supply contract with a customer that extends beyond the end of the Wind Down Period (a Continuing Obligation), DIALOG and/or its Affiliates may continue to Sell Licensed Products to such customer through the term of the Wind Down Period and for the remainder of the term of such Continuing Obligation, provided that in no event may DIALOG or its Affiliates Sell Licensed Products to such customer pursuant to this Section 15.4(b) for a period longer than [***] after the effective date of termination of this Agreement. In such event, the provisions of this Agreement that survive during the Wind Down Period will continue to survive for the remainder of the period of time that DIALOG is authorized to Sell Licensed Products to any customer in accordance with the foregoing sentence. The rights granted under this Section 15.4(b) will be conditioned upon DIALOG providing ENERGOUS a complete or redacted copy of the applicable supply contract demonstrating the existence of the Continuing Obligation as of the date of notice of termination or, if DIALOG or its Affiliate is prohibited from providing a copy of the contract by the confidentiality obligations set forth therein, a written certification from an officer of DIALOG attesting to the existence of the Continuing Obligation.   * Confidential Treatment Requested

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  16. ESCROW.   16.1 Escrow. ENERGOUS will at its expense, at DIALOG's written request during the Term and any Wind Down Period, enter into a three- party escrow deposit arrangement, in accordance with this Section 16, with a recognized escrow agent (the Escrow Agent) of mutual agreement. ENERGOUS will keep the Deposit Materials in escrow and ensure on a quarterly basis that all the information relating to the Deposit Materials in escrow is current, including deposit of any Product Updates.   16.2 Release of Deposit Materials. In the event of any Insolvency Event and where the design files need to be accessed by DIALOG to fix an Epidemic Defect or other Product design or production issue impacting yield or quality (Release Condition), the Escrow Agent will, in accordance with the terms of the escrow agreement between the parties and the Escrow Agent (the Escrow Agreement), release the Deposit Materials to DIALOG.   16.3 License. ENERGOUS hereby grants DIALOG a non-exclusive, non-transferable (except as set forth in Section 2) license under the Product IP to use any of the Deposit Materials released from escrow for the purpose of fixing an Epidemic Defect or other Product design or production issue impacting yield or quality during the Term and, if applicable, any Wind Down Period or Continuing Obligation period, including, but not limited to, authorizing any third party subcontractor to manufacture and supply Products, provided, however, that DIALOG continues to make all Royalty payment owed to ENERGOUS (or the then-current owner of the Product IP) as provided in this Agreement. No Service Fees will be payable under this license. DIALOG agrees not to exercise such license until occurrence of a Release Condition, subject to the other restrictions set forth in this Section 16. Such license may be exercised by DIALOG only during the Term and any Wind Down Period or Continuing Obligation period and is subject to DIALOG's continued compliance with all of the other applicable terms and conditions of this Agreement during any such applicable period. All Deposit Materials will be deemed ENERGOUS' Confidential Information hereunder. DIALOG's license to possess and use the Deposit Materials does not include any right to disclose, market, sublicense or distribute the Deposit Materials to any third party other than its Affiliates and Manufacturing Subcontractors.   16.4 Rights in Bankruptcy. The licenses granted pursuant to this Agreement are license to rights in intellectual property (as that term is defined in Section 101 of the United States Bankruptcy Code) and governed by 11 USC Section 365(n). Accordingly, if a trustee in bankruptcy rejects the Escrow Agreement and/or this Agreement as executory contracts, then Company may elect to retain its rights under this Agreement in accordance with and subject to the provisions of 11 USC Section 365(n).

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  17. PUBLICITY.   17.1 Publicity. Within 30 days of the Effective Date each party will issue a mutually agreed joint press release regarding the strategic cooperation for the supply of Products and the strategic cooperation between the parties.   18. NON-SOLICITATION.   18.1 Non-Solicitation. During the Term and for a [***], neither party will without the written consent of the other party (which may be granted or denied in its sole discretion) (a) directly or indirectly recruit or solicit for employment or for the provision of services any employee of the other party, (b) otherwise solicit, induce or influence any employee to leave their employment with the other party, or (c) attempt to do any of the foregoing; provided, however, that the foregoing will not apply to (y) any employee of the other party that responds to a public advertisement of employment opportunities or (z) any employee that was terminated without cause by the other party. ENERGOUS and DIALOG acknowledge and agree that the covenants in this Section 18 are reasonable and necessary to protect each of their trade secrets, Confidential Information and stable workforces.   19. CHOICE OF LAW AND DISPUTE RESOLUTION.   19.1 Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, exclusive of conflict of laws principles.   19.2 Dispute Resolution; Jurisdiction. Any dispute or claim arising out of or relating to this Agreement (including any matters regarding its existence, scope, validity, breach or termination, or any non-contractual obligations arising out of or related to it) that is not able to be resolved through negotiations will be submitted to arbitration in San Francisco, California, administered by the International Chamber of Commerce under its Rules of Arbitration. There will be one arbitrator. The language of the arbitration will be English. The award will be in writing, state the reasons for the award and be final and binding. Judgment on the award may be enforced in any court of competent jurisdiction. Except as may be required by law, the parties will preserve the confidentiality of all aspects of the arbitration. The arbitration will be the sole and exclusive forum for final resolution of any such dispute or claim, provided, however, that, because each party will have access to and become acquainted with Confidential Information of the other party, the unauthorized use or disclosure of which may cause irreparable harm and significant injury which may be difficult to ascertain and which may not be compensable by damages alone, the parties agree that the damaged party will have the right to seek an injunction, specific performance or other equitable relief without prejudice to any other rights and remedies that it may have for such unauthorized use or disclosure. Each party irrevocably waives all rights to a jury trial in any judicial proceeding permitted hereunder. For the avoidance of doubt, the validity, construction, and enforceability of this Agreement and the resolution of disputes arising out of and relating to this Agreement, will be governed solely by this Section 19.   * Confidential Treatment Requested

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  20. MISCELLANEOUS PROVISIONS.   20.1 Notices. All notices required or permitted under this Agreement will be in writing, reference this Agreement and be deemed given: (a) when delivered personally; or (b) when sent by electronic mail with electronic confirmation of receipt, provided that such notice is immediately confirmed as provided in (c) or (d) below; or (c) seven (7) days after having been sent by registered or certified mail,; or (d) two (2) days after deposit with a commercial courier service, with written verification of receipt. All communications will be sent to the addresses set forth below. Either party may change its address by giving notice pursuant to, and specifically referring to, this Section 20.   If to ENERGOUS:   Energous Corporation 3590 North First Street Suite 210 San Jose, California 95134 U.S.A. Attn: Brian Sereda, CFO

If to DIALOG:   Dialog Semiconductor (UK) Ltd 100 Longwater Avenue Green Park Reading, RG2 6GP United Kingdom Attn: Legal Department   20.2 Relationship of Parties. ENERGOUS and DIALOG are independent business entities. Neither party nor its employees, consultants, contractors or agents are agents, employees, partners or joint venturers of the other party, nor do they have any authority to bind the other party by contract or otherwise to any obligation. The parties will not represent to the contrary, either expressly, implicitly, by appearance or otherwise.   20.3 Force Majeure. Except for obligations to pay amounts due under this Agreement, neither party will be liable for any failure or delay in its performance under this Agreement due to causes which are beyond its reasonable control, including, but not limited to, acts of God, acts of civil or military authority, fires, epidemics, floods, earthquakes, riots, wars, sabotage, labor shortages or disputes, and governmental actions; provided, however, that the affected party: (a) gives the other party written notice of such cause promptly, and in any event within fifteen (15) days of discovery thereof; and (b) uses its reasonable efforts to correct such failure or delay in its performance as soon as possible. The affected party's time for performance or cure under this Section 20.3 will be extended for a period equal to the duration of the cause.   20.4 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any jurisdiction in which this Agreement is being performed, then: (a) such provision will be deleted from this Agreement in that jurisdiction to the extent of such invalidity or unenforceability without invalidating the remaining provisions of this Agreement, and any such unenforceability in that jurisdiction will not make that provision unenforceable in any other jurisdiction; and (b) the parties will agree on an alternative provision that best accomplishes the objectives of such provision, to the extent legally permissible in such jurisdiction.

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  20.5 No Waiver. No waiver or consent in connection with or relating to this Agreement will bind either party unless in writing and signed by the party against which enforcement is sought. Waiver by either party of any default will not be deemed a waiver by such party of the same or any other default that may thereafter occur.   20.6 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be an original, but taken together constituting one and the same instrument. Execution of a facsimile copy (including PDF) will have the same force and effect as execution of an original, and a facsimile/electronic signature will be deemed an original and valid signature.   20.7 Headings and References. The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.   20.8 Construction. The parties and their respective counsel have negotiated this Agreement. This Agreement will be fairly interpreted in accordance with its terms and without any strict construction in favor of or against either party.   20.9 Complete Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes and replaces all prior or contemporaneous understandings or agreements, written or oral, regarding such subject matter. No amendment to or modification of this Agreement will be binding unless in writing and signed by a duly authorized representative of both parties.   20.10 Assignment. This Agreement may not be assigned by either party without the express written consent of the other party, which approval will not be unreasonably withheld or delayed, except that either party may (without consent but with notice to the other party) assign this Agreement in its entirety to any successor in the event of a Change of Control of such party.   20.11 Notice of Merger or Acquisition. Until the date that this Agreement terminates or is terminated in accordance with Section 15 hereof, ENERGOUS agrees that, [***].   * Confidential Treatment Requested

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  IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.   ENERGOUS CORPORATION   DIALOG SEMICONDUCTOR (UK) LTD           By: /s/ Stephen R. Rizzore   By: /s Mark Tyndall           Name: Stephen R. Rizzore   Name: Mark Tyndall           Title: President and Chief Executive Officer   Title: SVP Corporate Development and Strategy

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  EXHIBIT A   PRODUCTS   Any ENERGOUS integrated circuit (IC) designed to receive power wirelessly and any ENERGOUS IC used in a wireless transmitter, including, but not limited to, the following Products (and any related Product Updates):   [***]     * Confidential Treatment Requested

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  EXHIBIT B   ROYALTIES AND SERVICE FEES   Royalties and Service Fees payable by DIALOG and/or its Affiliates to ENERGOUS hereunder will be calculated on a Product by Product basis as defined herein.   Margin Split:   Combined Royalties and Service Fees shall equal [***].   Dialog will retain the remaining [***].   [***].   [***].   Notwithstanding any provision of the Agreement, no Royalties or Service Fees will be payable to ENERGOUS hereunder in connection with any Sale to any customer of prototype or sample Licensed Products [***].   * Confidential Treatment Requested

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  EXHIBIT C   Example of Letter of Authorization: Mask Set(s) Authorization for Third Party's Product(s)   To whom it may concern   Pursuant to a STRATEGIC ALLIANCE Agreement between Dialog Semiconductor (UK) Ltd and Energous Corporation dated November 6, 2016 (to which [Manufacturing Subcontractor] is not a party), we, Energous Corporation (Energous), hereby agree and authorize [Manufacturing Subcontractor], under the terms of this Letter of Authorization, to use the Mask Set(s) specified below for manufacturing products for the supply to the Third Party specified in paragraph 2 below only:   1. Mask Set(s) details: Mask Set(s) Product Type: Foundry Code:   2. Third Party details: Third Party's Name: Dialog Semiconductor [purchasing entity to be determined] Third Party's Address: Contact name of Third Party:   3. Volume of products The number of products to be manufactured with the Mask Set(s) will be unlimited, unless otherwise instructed by us below:   Authorized Amount: [UNLIMITED]   4. Duration of Authorization The duration of this Letter of Authorization will be unlimited, unless otherwise instructed by us below:   Duration of Authorization: [UNLIMITED]   5. Confidential Information Other than wafers for products specified under paragraph 1 above (which contain Energous designs), [Manufacturing Subcontractor] will not disclose to the Third Party any information which is proprietary or confidential to Energous.

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  6. Reporting Upon Energous' request (but not more frequently than once per calendar year), [Manufacturing Subcontractor] will provide Energous with the accumulated wafer volumes ordered (and shipped) to the Third Party under this Letter of Authorization. By signing this Letter of Authorization, the Third Party authorizes [Manufacturing Subcontractor] to report to Energous accordingly.   8. Governing Law This Letter of Authorization will be governed by and construed in accordance with the laws of California, excluding its conflict of laws provisions, and be subject to the non-exclusive jurisdiction of the California courts.   Very truly yours,       Energous Incorporated           Name:       Title:       Date:                   Agreed by Dialog Semiconductor (UK) Ltd           Name:       Title:       Date:     This Letter of Authorization is subject to the approval of the Manufacturing Subcontractors.

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  EXHIBIT D   LICENSED MARKS   DIALOG LICENSED MARKS:   Dialog Dialog Semiconductor   ENERGOUS LICENSED MARKS:   Energous WattUp Unleash your power   Pending:   [***]   * Confidential Treatment Requested

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  EXHIBIT E   Commercialization plan   Objective   The Commercialization Plan sets forth the parties' respective rights and obligations with respect to commercial and technical activities to be performed to maximize potential Sales of Licensed Products.   [***]   Review   O The Commercialization Plan will be reviewed and (if necessary) updated by the parties on a quarterly basis throughout the Term of the agreement.     * Confidential Treatment Requested

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  EXHIBIT F   CUSTOMER: [***]     * Confidential Treatment Requested

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Output: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?


Input: Consider Input: Exhibit 10.19 JOINT CONTENT LICENSE AGREEMENT This JOINT CONTENT LICENSE AGREEMENT (the Agreement), dated February 1, 2018 (the Effective Date), is made by and between WPT Enterprises, Inc., a Delaware corporation, with offices located at 1920 Main Street, Suite 1150, Irvine, CA 92614 (WPT), and ZYNGA INC., a Delaware corporation with offices located at 699 8th Street, San Francisco CA, 94103 (Zynga US) and ZYNGA GAME IRELAND LIMITED, a limited company organized under the laws of Ireland, resident in Ireland and having its registered office located at The Oval, Building One, Third Floor 160 Shelbourne Road Ballsbridge 4 Co. Dublin Ireland (Zynga Ireland, and together with Zynga US and their respective Affiliates, Zynga). In addition to the Definitions set forth in Section 1 of the Additional Provisions (attached and incorporated by reference), all capitalized terms used herein shall have the meanings set forth below. In consideration of the mutual promises herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: BASIC PROVISIONS 1. Joint Content License Relationship. Among other games, Zynga produces and distributes the ZYNGA POKER® game on a number of global platforms, including Apple iOS, Google Android, Facebook and the zynga.com website. The ZYNGA POKER® game features a Zynga Poker Tournaments Mode that Zynga can customize. Among other things, WPT is the creator of the World Poker Tour, WPT Tournaments and the WPT Invitational Tournaments. WPT Tournaments and WPT Invitational Tournaments are televised poker tournaments where a partner can promote its brand. The parties desire to work cooperatively, but independently, to use commercially reasonable efforts to engage in the marketing and promotional activities described in Exhibit A, including, but not limited to Zynga promoting the WPT brand in a WPT-branded Zynga Poker Tournament Mode, and WPT promoting the Zynga brand in WPT Tournaments and WPT Invitational Tournaments. This Agreement describes the terms of a content license and cooperative marketing relationship under which each party will independently or cooperatively engage in mutually agreed activities to promote each other's products and services throughout the Territory (as defined below). 2. Territory. The Territory for this Agreement is worldwide, but not including Asian countries (including, but not limited to, Bangladesh, Bhutan, Brunei, Cambodia, East Timor, Hong Kong, India, Indonesia, Japan, Laos, Macau, Malaysia, Maldives, Mongolia, Myanmar, Nepal, North Korea, Pakistan, People's Republic of China, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Vietnam). The parties acknowledge and agree that the rights granted hereunder by Zynga (a) with respect to the United States are granted to, held and exercised by Zynga US and (b) with respect to all other parts of the Territory are granted to, held and exercised by Zynga Ireland.

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3. Term. This Agreement will be in effect for three (3) years from the Effective Date (Initial Term) unless terminated earlier in accordance with this Agreement. This Agreement shall automatically extend for an additional two (2) years on the same terms herein (Renewal Term) provided WPT receives payments greater than twelve million U.S. dollars ($12,000,000) within the Initial Term. The Initial Term and any such Renewal Term are collectively referred to as the Term. 4. Annual Minimum Guarantee. Zynga will pay WPT three million U.S. dollars ($3,000,000) per year according to the following schedule (which the parties may alter upon mutual agreement) (the Annual Minimum Guarantee): a. Within thirty (30) days of executing this Agreement: $1.5M b. July 1, 2018: $1.5M c. January 1, 2019: $1.5M d. July 1, 2019: $1.5M e. January 1, 2020: $1.5M f. July 1, 2020: $1.5M 5. Royalty. Zynga will pay to WPT ten percent (10%) of the cumulative Net Revenue (as defined in Section 3.b. of the Additional Provisions) (Royalty) from the WPT-branded Zynga Poker Tournament Mode or other such use of the WPT brand on the Zynga platform. Zynga shall not be required to pay the Royalty to the extent offset by the Annual Minimum Guarantee payments previously paid to WPT during the Term. Conversely, Zynga shall not be required to make Annual Minimum Guarantee payments to the extent offset by the Royalty previously paid to WPT during the Term. The Additional Provisions and any attached Exhibits are incorporated by reference. Signature page to follow.

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IN WITNESS WHEREOF ZYNGA INC. Signature: ______________________ Name: _________________________ Title: __________________________

WPT ENTERPRISES, INC. Signature: _________________________ Name: ____________________________ Title: _____________________________ ZYNGA GAME IRELAND LIMITED Signature: ______________________ Name: _________________________ Title: __________________________

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ADDITIONAL PROVISIONS The following Additional Provisions form part of the Agreement dated February 1, 2018 entered into by and between ZYNGA INC. and ZYNGA GAME IRELAND LIMITED and their respective affiliates (Zynga), and WPT Enterprises, Inc. (WPT). 1. DEFINITIONS a. Affiliate means an entity, directly or indirectly, controlled by, controlling of, or under common control with a party, either now or in the future, and their respective successors and assigns. b. Artwork means, without limitation, all pictorial, graphic, visual, audio, audio-visual, digital, literary, animated, artistic, dramatic, sculptural, musical or any other type of creation or application, whether finished or not, including, without limitation, animation, drawings, designs, sketches, images, illustrations, film, video, electronic, digitized or computerized information, software, object code, source code, on-line elements, music, text, dialogue, stories, visuals, effects, scripts, voiceovers, logos, one-sheets, promotional pieces, packaging, display materials, printed materials, photographs, interstitials, notes, shot logs, character profiles and translations. c. Agreement means the Basic Provisions, these Additional Provisions, and any and all attached Exhibits. d. Licensed Property means those specific trademarks, service marks, publicity rights, copyrights, intellectual property rights, and any other items set forth in this Agreement, which the parties may utilize in connection with the marketing and promotional activities in Exhibit A. A list of the Licensed Property for each party is described in Exhibit B. e. Annual Minimum Guarantee means the guaranteed minimum amount due to WPT by Zynga in consideration of the rights granted herein, which amount may be recoupable from Royalties as set forth below and in the Basic Provisions. f. Royalty means the amount(s) set forth in the Basic Provisions and calculated as described in the Additional Provisions. g. Term means the term of this Agreement as set forth in the Basic Provisions. h. Territory means the territory throughout which the parties are authorized to engage in the marketing and promotional activities as described in Exhibit A and in the Basic Provisions. 2. TRADEMARKS, APPROVALS, AND RESERVATION OF RIGHTS a. Materials. To the extent indicated on Exhibit A, each party will provide the other party with electronic files containing the Licensed Property of such party to be used under this Agreement, as specified in Exhibit B, if any. b. License by Zynga. Subject to the terms and conditions of this Agreement, Zynga grants to WPT a non-exclusive, non- assignable, non-sublicensable, royalty-free, paid up, limited worldwide license to use and display Zynga's Licensed Property solely as necessary to perform WPT's obligations under this Agreement and as specifically described on Exhibit A, in any and all media now known or hereafter devised, for the Term (subject to Section 7.e. of Additional Provisions). c. License by WPT. Subject to the terms and conditions of this Agreement, WPT grants to Zynga a non-exclusive, non-assignable, non-sublicensable, royalty-free, paid up, limited license in the Territory to use and display WPT's Licensed Property solely as necessary to perform Zynga's obligations under this Agreement and as specifically described on Exhibit A, for the Term. d. Trademark Guidelines. In its use of the Licensed Property of the other party (Licensee), each party (Licensor) will comply with any trademark usage guidelines that Licensor may communicate to Licensee from time to time. Each use of Licensor's marks by Licensee will be accompanied by the appropriate trademark symbol (either ™ or ®) and a legend specifying that such marks are trademarks of Licensor as specified on Exhibit B, and will be in accordance with Licensor's then-current trademark usage policies as provided in writing to Licensee from time to time. Licensee will provide Licensor with copies of any materials bearing any of Licensor's marks as requested by Licensor from time to time. If Licensee's use of any of Licensor's marks, or if any material bearing such marks, does not comply with the then-current trademark usage policies provided in writing by Licensor, Licensee will promptly remedy such deficiencies upon receipt of written notice of such deficiencies from Licensor. Other than the express licenses granted herein with respect to each Licensor's marks, nothing herein will grant to Licensee any other right, title or interest in Licensor's marks. All goodwill resulting from Licensee's use of Licensor's marks will inure solely to Licensor. Each party recognizes the great value of the publicity and good will associated with the Licensed Property and acknowledges that: (a) such good will is exclusively that of Licensor or Licensee, as applicable; and (b) the Licensed Property have acquired a secondary meaning as trademarks and/or identifications of Licensor or Licensee, as applicable, in the mind of the purchasing public. Licensee will not, at any time during or after this Agreement, register, attempt to register, claim any interest in, contest the use of, or otherwise adversely affect the validity of any of Licensor's marks (including, without limitation, any act or assistance to any act, which may infringe or lead to the infringement of any such marks).

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Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019





e. Approvals. The Licensed Property shall be displayed or used only in such form and in such manner as has been approved in writing (which may be by email) by Licensor pursuant to this Section 2 and Licensee shall ensure its usage of the Licensed Property solely as approved. Throughout the Term, including any renewals or extensions (if applicable), Licensee shall comply with reasonable quality standards, style guides and clear specifications communicated to Licensee and rights of approval of Licensor set forth in this Section 2 with respect to any and all of its usage of the Licensed Property. Subject to Licensor's prior written approval of any applicable Licensed Property (hereinafter the Approved Content), all Conforming Content will be deemed approved by Licensor. Conforming Content means any and all elements of the Approved Content which (i) do not represent deviations in quality, style, look-and-feel or other aspects of use from the Approved Content and (ii) are consistent with the aesthetic style or tone of the Approved Content. The parties will come to agreement with respect to Exhibit A as to whether prior written approval is needed in every instance or whether it is not needed after the first instance has been approved in writing (e.g., given exigencies in television production business, it is reasonable that Zynga would approve the use of its brand conceptually in elements of an episode but not need to re-approve the use in a similar manner for every episode the brand is used in; and similarly, given exigencies in the social gaming business, it is reasonable that WPT would approve use of its brand conceptually in elements of the Zynga platform but not need to re-approve the use in a similar manner for every poker tournament the brand is used in). i. Licensee may use textual and/or pictorial matter pertaining to the Licensed Property on such promotional, display and advertising material as may, in Licensee's reasonable judgment, promote the awareness, consumption and sale of the Licensed Property. All final advertising and promotional material using the Licensed Property must be submitted to Licensor for its prior written approval. All press releases respecting this Agreement or the relationship of the parties herein shall require prior written approval by the other party. ii. Licensor will use commercially reasonable efforts to provide approval and/or feedback within five (5) business days after its receipt of a creative submission, or re-submission, with respect to the Licensed Property or marketing materials; provided that: (a) if Licensor declines to approve any submission or re-submission, then it shall provide reasonably detailed feedback in order to enable Licensee to modify the Licensed Property or marketing material accordingly in order to address Licensor's concerns and obtain Licensor's approval, and (b) if Licensor fails to (1) approve or (2) disapprove and provide feedback within such timeframe, then such submission or re-submission is deemed to have been approved. No approval may be unreasonably withdrawn by Licensor once delivered. iii. Zynga shall advise WPT to Zynga's knowledge as to which jurisdictions where it may be illegal to advertise Zynga's Licensed Property (if any) given local laws or regulations. iv. WPT or its affiliates shall not authorize a Zynga Competitor to commercially exploit the Licensed Property in connection with social poker gaming via a license similar to the license granted herein for the Term. A Zynga Competitor means: 1) Aristocrat Technologies Australia Pty Ltd. Or Big Fish Games, Inc.; 2) HUUUGE Inc.; 3) Activision Blizzard, Inc., King.com Ltd. Or King.com (US) LLC; 4) Scientific Games Corporation; 5) Tencent Holdings Limited; and 6) Murka Ltd. The parties agree to work together in good faith to amend the definition of a Zynga Competitor if that meaning for Zynga reasonably changes during the Term. f. Reservation of Rights. The parties acknowledge and agree that, except for the rights and licenses expressly granted by each party to the other party under this Agreement, each party will retain all right, title and interest in and to its products, services, marks, copyrights or other intellectual property, and all content, information and other materials on its website(s), and nothing contained in this Agreement will be construed as conferring upon such party, by implication, operation of law or otherwise, any other license or other right. 3. PAYMENT a. Annual Minimum Guarantee. Zynga will pay to WPT the Annual Minimum Guarantee as set forth in the Basic Provisions. The Annual Minimum Guarantee shall be recoupable from such Royalties as are, or have become, paid to WPT. For clarification, the Annual Minimum Guarantee will operate as an advance payment, such that when accrued Royalties exceed the Annual Minimum Guarantee payments already paid, then the excess Royalties will be paid by Zynga to WPT. b. Royalty. The Royalties to be paid by Zynga to WPT is the percentage of Net Revenue as set forth in Section 5 of the Basic Provisions. Net Revenue(s) shall be defined as one hundred percent (100%) of gross revenues and all other receivables of any kind whatsoever received by Zynga or any of Zynga's affiliates attributable to the use of Paid Currency or in connection with the sale of Virtual Digital Goods derived from use of the WPT-brand on the Zynga platform, less the following actual and verifiable Allowable Deductions: (i) out-of-pocket, third-party payment processing and currency system fees, commissions, and platform distribution fees (e.g., Apple, Google or Facebook platform fees); (ii) any governmental taxes (e.g., VAT, excise or sales or use tax, etc.) arising in connection with related receipts, but excluding any taxes on Licensee's net income; and (iii) charge- backs/refunds/cancellations/fraud. Paid Currency means virtual currency purchased using real money. Virtual Digital Goods means any virtual, digital representation of any actual or fictional thing or item within Zynga Poker, which is capable of being made available for distribution, placement, download or other display by electronic means. Any other deductions must be mutually agreed upon in advance and in writing by the parties.

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Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019





c. Payment. All amounts payable and due will be made in U.S. dollars. If withholding taxes are required, Zynga may account for the required amount of such withholding taxes when calculating the Royalty or other payments payable prior to remittance to WPT. Zynga shall provide WPT with an official receipt or other equivalent documentation issued by the appropriate taxing authority or other evidence as is reasonably requested by WPT to establish that such taxes have been paid. Zynga shall pay all amounts accruing under this Agreement for any reporting period to WPT by check or wire transfer to the account specified by WPT in writing, concurrently with Zynga's delivery of the applicable report under Section 3(d), provided that payments will only be paid if the amount owed to WPT for any reporting period is greater than five hundred dollars ($500.00). An amount due of less than five hundred dollars ($500.00) will be accumulated to the next payment and will be included in the amount to be paid to WPT on the next payment date, again provided that the amount owed to WPT in the subsequent month exceeds five hundred dollars ($500.00). Accumulated amounts do not accrue any interest. d. Reporting. Zynga will, within thirty (30) days of the end of each calendar quarter, commencing with the first full calendar quarter following the Effective Date, furnish WPT with complete statements containing the following information with respect to all Net Revenue from the use of the WPT-brand on the Zynga platform, during the preceding period covered by such statement: the Territory; the amount due WPT (or the remaining unrecouped Annual Minimum Guarantee balance as applicable); Net Revenue; Royalties rate; the distribution channels or portals, the platform, the territory(ies), and itemized Allowable Deductions (Royalty Statement(s)). The amount shown to be payable to WPT shall be paid simultaneously with the rendition of the respective Royalty Statement. The statements and payments remitted hereunder shall be delivered to WPT via email to the following email address: Deborah.Frazzetta@wpt.com (ATTN: Deborah Frazzetta, VP, Finance. e. Audit Rights. Zynga shall keep full, complete and accurate books of account and records (collectively records) covering all transactions relating to the subject matter of this Agreement in sufficient detail to enable the Royalties payable hereunder to be determined and verified. Zynga shall permit such records to be examined by authorized representatives of WPT, including such independent auditors as WPT may designate, during usual business hours, with advance notice, to verify to the extent necessary the Royalties paid hereunder, and WPT and its representatives shall use reasonable efforts to minimize disruptions to Zynga's business. Prompt adjustment shall be made by Zynga to compensate for any errors or omissions disclosed by such examination. If the adjustment is more than $1,500 in favor, then out-of-pocket costs of such examination shall be borne by Zynga. f. No Other Charges or Expenses. Neither party will be liable to pay the other party any other types of charges or expenses not agreed to in this Agreement or any related amendment signed by the Parties. 4. REPRESENTATIONS AND WARRANTIES; LIMITATIONS OF LIABILITY a. Each party represents and warrants to the other as follows: (i) it is duly authorized under applicable law and has the authority to enter into and perform this Agreement; (ii) this Agreement constitutes a valid and binding obligation of such party enforceable in accordance with its terms; (iii) the making of this Agreement by such party does not violate any agreement, right or obligation existing between such party and any third party; (iv) the marketing and promotional activities in Exhibit A shall not infringe or misappropriate third party rights, including, without limitation, any patent, trade name, trademark, copyright or other intellectual property or proprietary right and shall not invade or violate any right of privacy, publicity, personal or proprietary right, or other common law or statutory right, nor defame any person or entity in the United States and European Union (the Principal Territories), and to the knowledge of such party, outside the Principal Territories; provided that such party makes no representations regarding the Licensed Property or any other materials provided by Licensor as contemplated under this Agreement. b. DISCLAIMER. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE SUBJECT MATTER HEREOF, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY LEVEL OF BUSINESS OR SERVICE THAT MAY RESULT FROM THIS AGREEMENT, OR ANY WARRANTY OR CONDITION ARISING FROM ANY COURSE OF DEALING, COURSE OF PERFORMANCE OR USAGE IN THE INDUSTRY. c. LIMITATIONS ON LIABILITY/NO INJUNCTIVE RELIEF. EXCEPT IN CASES OF GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUD, INDEMNIFICATION CLAIMS UNDER SECTION 5 OR BREACHES OF SECTION 2 (TRADEMARKS), 8 (CONFIDENTIALITY), OR 9 (NO AGENCY RELATIONSHIP), IN NO EVENT SHALL EITHER PARTY OR ITS OFFICERS, DIRECTORS, OR EMPLOYEES BE LIABLE TO THE OTHER PARTY IN CONNECTION WITH THE SUBJECT MATTER HEREOF, FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND, LOST PROFITS OR LOST REVENUE, WHETHER ARISING IN CONTRACT, TORT, NEGLIGENCE, STATUTE, OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY THEREOF. IN NO EVENT SHALL THE NON-BREACHING PARTY BE ENTITLED TO EQUITABLE OR INJUNCTIVE RELIEF OF ANY KIND.

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Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019





5. INDEMNIFICATION a. WPT shall indemnify, defend, and hold harmless Zynga and its Affiliates, and the respective directors, officers and employees of the foregoing (the Zynga Indemnified Parties) from and against any and all third party claims, actions, suits, costs, liabilities, judgments, obligations, losses, penalties, expenses or damages (including, without limitation, reasonable legal fees and expenses) of whatsoever kind and nature imposed on, incurred by or asserted against any of the Zynga Indemnified Parties arising out of: (i) any breach or alleged breach by WPT of any representation, warranty or covenant made, by WPT pursuant to this Agreement; or (ii) WPT's non-compliance with any applicable federal, state or local laws or with any applicable regulations in connection with its performance of this Agreement. b. Zynga shall indemnify, defend, and hold harmless WPT and its Affiliates, and the respective directors, officers and employees of the foregoing (the WPT Indemnified Parties) from and against any and all third party claims, actions, suits, costs, liabilities, judgments, obligations, losses, penalties, expenses or damages (including, without limitation, reasonable legal fees and expenses) of whatsoever kind and nature imposed on, incurred by or asserted against any of the WPT Indemnified Parties arising out: (i) any breach or alleged breach by Zynga of any representation, warranty or covenant made by Zynga pursuant to this Agreement; or (ii) Zynga's non-compliance with any applicable federal, state or local laws or with any applicable regulations in connection with its performance of this Agreement. c. In order to seek or receive indemnification hereunder in cases involving third-party claims the party seeking indemnification (the Indemnified Party) must have promptly notified the other (the Indemnifying Party) of any claim or litigation of which the Indemnified Party is aware and to which the indemnification relates; and the Indemnified Party must reasonably cooperate with Indemnifying Party in the defense or settlement of such claim or litigation. With regard to any claim or litigation to which the Indemnifying Party itself is not a party, the Indemnifying Party must have afforded the Indemnified Party the opportunity to participate in any compromise, settlement, litigation or other resolution or disposition of such claim or litigation. 6. TERMINATION a. Each party shall have the right at any time to terminate this Agreement without prejudice to any rights which it may have, whether pursuant to the provisions of this Agreement or otherwise in law or in equity or otherwise, upon the occurrence of any one or more of the following events: i. The other party breaches or fails to perform any of its material obligations provided for in this Agreement; ii. The other party is unable to pay its debts when due, or makes any assignment for the benefit of creditors, or files any petition under the bankruptcy or insolvency laws of any jurisdiction, county or place, or has or suffers a receiver or trustee to be appointed for its business or property, or is adjudicated a bankrupt or an insolvent; or iii. The other party asserts any rights in or to the terminating party's intellectual property in violation of this Agreement. a. In the event that any of these events of default should occur and a party elects to exercise its right to terminate this Agreement, such party shall give notice of termination in writing to the other party, which notice shall specify in reasonable detail the event(s) of default that give rise to such termination. The other party shall have thirty (30) days from the effective date of such notice in which to correct any such default(s) (except those which are not curable), and failing such correction by the end of such thirty (30) day cure period, this Agreement shall thereupon immediately terminate. 7. RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION. Upon expiration or termination of this Agreement: a. All rights granted to WPT by Zynga shall immediately revert to Zynga, and WPT shall promptly cease any and all marketing and promotional activities using Zynga's Licensed Property. b. All rights granted to Zynga by WPT shall immediately revert to WPT, and Zynga shall promptly cease any and all marketing and promotional activities using WPT's Licensed Property. c. Notwithstanding the foregoing, for each end user that previously downloaded a Zynga game that includes WPT's Licensed Property, and stored such Zynga game within such end user's device, WPT grants a license and right to continue to use, activate, operate, perform, store, use and display that game on the end user's device in perpetuity at no additional charge; provided, however, that Zynga shall use best efforts to offer end users updates to its games which no longer include WPT's Licensed Property after the Term. d. Notwithstanding any termination of this Agreement, nothing herein will obligate Zynga, any users of a Zynga game that includes WPT's Licensed Property or any third party platform or distribution partners to remove from the publicly available content regarding Zynga services or any user accounts with Zynga, any of the references to user interactions, experience points, achievements, item purchases or other engagements or metrics in the Zynga game(s) that were generated prior to the expiration or termination of this Agreement.

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Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019





e. Notwithstanding any termination of this Agreement, any Approved Content that includes Zynga's Licensed Property may remain in perpetuity in any media in which such Licensed Property was integrated into during the Term (e.g., televised WPT Tournaments or WPT Invitational Tournaments, social media posts, repurposed integrations for best of television programs) or for historical purposes (e.g., reference on WPT's website that Zynga-sponsored tour events took place as part of the tour). f. Sections 1, 3-7, and 8-10 of the Additional Provisions shall survive termination or expiration of this Agreement. 8. CONFIDENTIALITY. The parties acknowledge and agree that the subject matter of this Agreement constitutes Business Purpose and this Agreement and any Exhibits hereunder are Confidential Information of the parties as defined as Information in the Non- Disclosure Agreement between the parties dated August 24, 2017, and accordingly the restrictions relating to confidentiality and use thereof provided in the Non-Disclosure Agreement apply to any party's Confidential Information disclosed pursuant to this Agreement. In the event of a conflict between the Non-Disclosure Agreement and this Agreement, the terms of this Agreement will govern. 9. INDEPENDENT CONTRACTORS. The parties are independent contractors with respect to each other and nothing herein shall create any association, partnership, joint venture or agency relationship between them. Neither party shall have the right to obligate or bind the other party in any manner whatsoever, and nothing herein contained shall give, or is intended to give, any rights of any kind to any third persons. 10. MISCELLANEOUS a. Insurance. Each party agrees to carry liability insurance sufficient to cover the risks posed under this Agreement. b. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute together but one and the same document. c. Notices. All notices and other communications given hereunder shall be in writing and shall be sent by courier service, express mail, personal delivery or mail to the respective addresses of the parties set forth above (or at such other address as such party may designate by notice to the other party). A copy of any notice to WPT shall also be sent to WPT Enterprises, Inc., ATTN: Legal, 1920 Main Street, Suite 1150, Irvine, CA 92614. A copy of any notice to Zynga shall also be sent to Office of the General Counsel, Zynga Inc., 699 8th Street, San Francisco, CA 94103 with a copy to legalnotices@zynga.com. Notice shall be deemed given as follows: upon delivery if sent by courier service, express mail or personal delivery; and five (5) days after the date of mailing, postage prepaid, certified or registered mail if sent by mail. d. Entire Agreement. This Agreement contains the full and complete understanding between the parties hereto with respect to the license granted hereunder and supersedes all prior agreements and understandings, whether written or oral, pertaining thereto. This Agreement cannot be modified except by a written instrument signed by each party hereto. e. Waiver. No waiver of any term or condition of this Agreement shall be construed as a waiver of any other term or condition and no waiver of any default under this Agreement shall be construed as a waiver of any other default. f. Force Majeure. In the event that either party is prevented from engaging in the marketing and promotional activities in Exhibit A manufacturing, distributing or selling the Licensed Property because of any act of God; unavoidable accident; fire, epidemic; strike, lockout, or other labor dispute; war, riot or civil commotion; act of public enemy; enactment of any rule, law, order or act of government or governmental instrumentality (whether federal, state, local or foreign); or other cause beyond such party's control, and such condition continues for a period of two (2) months or more, either party hereto shall have the right to terminate this Agreement effective at any time during the continuation of such condition by giving the other party at least thirty (30) days' notice to such effect. In such event, all payments made shall become immediately due and payable and this Agreement shall be automatically terminated. g. Governing Law and Forum. This Agreement will for all purposes be governed by and interpreted in accordance with the laws of the State of California without giving effect to any conflict of laws principles that require the application of the laws of a different state. Each of the parties hereto (i) irrevocably agrees that the federal and state courts in the Northern District of California shall have sole and exclusive jurisdiction over any suit or other proceeding arising out of or based upon this Agreement, (ii) submits to the venue and jurisdiction of such courts, and (iii) irrevocably consents to personal jurisdiction by such courts. h. Assignment. This Agreement shall bind and inure to the benefit of each party, its successors and assigns. Without the prior written consent of the other party, neither party shall assign or transfer any of its rights or obligations hereunder, in whole or in part, to any third party, and any purported assignment without such prior written consent shall be null and void and of no force and effect; except that notice, but no consent shall be required for such assignment or transfer in connection with an internal reorganization or sale of the transferring party, including by merger or other business combination, or a sale of substantially all of the assets of the transferring party. None of either party's rights hereunder shall devolve by operation of law or otherwise upon any receiver, liquidator, trustee or other party. i. Severability. In case any one or more of the terms contained in this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining terms shall not in any way be affected or impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable terms with valid terms the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable terms.

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Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019





EXHIBIT A MARKETING AND PROMOTIONAL ACTIVITIES (the parties mutually agree to provide additional details and commitments) BY WPT: WPT shall promote the Zynga brand in the following activities: ● Prominent display of the Zynga or Zynga Poker brand in WPT Tournaments and WPT Invitational Tournaments, subject to venue approval, network approval and inventory space given existing sponsorship deals BY ZYNGA: Zynga shall promote the WPT brand in the following activities: ● Creation of a WPT-branded Zynga Poker Tournament Mode playable in the Zynga Poker game or other such use of the WPT brand on the Zynga platform as Zynga determines

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Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019





EXHIBIT B LICENSED PROPERTY (the parties mutually agree to provide additional details on allowable IP) WPT MARKS: ● WPT® ● WORLD POKER TOUR® ZYNGA MARKS: ● ZYNGA® ● ZYNGA POKER®

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Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019


Output: Highlight the parts (if any) of this contract related to Covenant Not To Sue that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?