EXCLUSIVE PATENT AND NON - EXCLUSIVE COPYRIGHT LICENSE

Securities and Exchange Commission. Asterisk denote omission.





EXHIBIT 10.16







MASSACHUSETTS INSTITUTE OF TECHNOLOGY





AKAMAI TECHNOLOGIES, INC.



EXCLUSIVE PATENT AND NON - EXCLUSIVE COPYRIGHT LICENSE



THIS OFFER WILL EXPIRE ON NOVEMBER 30, 1998 TABLE OF CONTENTS



RECITALS ......................................................................1



1. Definitions................................................................2



2. Grant of Rights............................................................4



3. Company Diligence Obligations..............................................6



4. Delivery of Materials......................................................8



5. Royalties and Payment Terms................................................9



6. Reports and Record Keeping................................................11



7. Patent Prosecution........................................................13



8. Infringement..............................................................14



9. Copyright.................................................................16



10. Indemnification and Insurance............................................16



11. No Representations or Warranties.........................................17



12. Assignment...............................................................18



13. General Compliance with Laws.............................................18



14. Termination..............................................................19



15. Dispute Resolution.......................................................20



16. Miscellaneous............................................................22



APPENDIX A....................................................................25



APPENDIX B....................................................................26



APPENDIX C....................................................................27



APPENDIX D....................................................................28

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisk denote omission.



MASSACHUSETTS INSTITUTE OF TECHNOLOGY

EXCLUSIVE PATENT AND NON-EXCLUSIVE COPYRIGHT LICENSE AGREEMENT





This Agreement, effective as of the date set forth above the signatures of the parties below (the "EFFECTIVE DATE"), is between the Massachusetts Institute of Technology ("M.I.T."), a Massachusetts corporation, with a principal place of business at 77 Massachusetts Avenue, Cambridge, MA 02139-4307 and Akamai Technologies, Inc. ("COMPANY"), a Delaware corporation, with a principal place of business at __________.





WHEREAS, M.I.T. is the owner of certain PATENT RIGHTS and an owner of certain COPYRIGHTS (as later defined herein) relating to M.I.T. Case No. [**], [**], et al.; M.I.T. Case [**], et al.; and M.I.T. Case No. [**], et al and has the right to grant licenses under said PATENT RIGHTS and COPYRIGHTS, subject only to a royalty-free, nonexclusive non-transferable license to practice the PATENT RIGHTS and COPYRIGHTS granted to the United States Government for government purposes;



WHEREAS, the Conflict Avoidance Statement of [**] inventor/equity participants in COMPANY is Appendix C hereto; the [**] inventor/equity participants in COMPANY is Appendix D;



WHEREAS, M.I.T.'s Vice President for Research has approved that [**] the inventors of the PATENT RIGHTS and [**] of the authors of the COPYRIGHTS, now hold or shall shortly acquire an equity position in COMPANY and that M.I.T. is accepting equity as partial consideration for the rights and licenses granted under this Agreement;



WHEREAS, M.I.T. desires to have the PATENT RIGHTS and COPYRIGHTS developed and commercialized to benefit the public and is willing to grant a license thereunder;



WHEREAS, COMPANY has represented to M.I.T., to induce M.I.T. to enter into this Agreement, that COMPANY shall commit itself to a thorough, vigorous and diligent program of exploiting the PATENT RIGHTS and COPYRIGHTS so that public utilization shall result therefrom; and WHEREAS, at least one of the "authors" has assigned his full and undivided interest in the COPYRIGHT to M.I.T.; and



WHEREAS, COMPANY desires to obtain a license under the PATENT RIGHTS and COPYRIGHTS upon the terms and conditions hereinafter set forth.



NOW, THEREFORE, M.I.T. and COMPANY hereby agree as follows:



1. DEFINITIONS.



1.1 "AFFILIATE" shall mean any legal entity (such as a corporation, partnership, or limited liability company) that controls, or is controlled by, COMPANY. For the purposes of this definition, the term "control" means (i) beneficial ownership of at least fifty percent (50%) of the voting securities of a corporation or other business organization with voting securities or (ii) a fifty percent (50%) or greater interest in the net assets or profits of a partnership or other business organization without voting securities.



1.2 "COPYRIGHTS" shall mean M.I.T.'s copyrights in the PROGRAM.



1.3 "COPYRIGHT TERM" shall mean the period of time commencing on the EFFECTIVE DATE and ending with the expiration of the term for which the COPYRIGHT is granted, unless earlier terminated in accordance with the provisions of this Agreement.



1.4 "DERIVATIVE(S)" shall mean COMPANY-created computer software which shall include, in whole or in part, the PROGRAM, including, but not limited to, translations of the PROGRAM to other foreign or computer languages, adaptations of the PROGRAM to other hardware platforms, abridgments, condensations, revisions, and software incorporating all or any part of the PROGRAM. COMPANY shall be entitled to establish all proprietary rights for itself in the intellectual property represented by DERIVATIVES, whether in the nature of trade secrets, copyrights, patents or other rights, subject to COPYRIGHT and PATENT RIGHTS. Any copyright registration by COMPANY for DERIVATIVES shall give full attribution to M.I.T.'s COPYRIGHT.



1.5 "END-USER" shall mean a customer authorized to execute the PROGRAM or its DERIVATIVE for internal purposes only and not for further distribution or resale, and shall include customers granted site-wide rights to use and not for resale.



- 2 - 1.6 "EXCLUSIVE PERIOD" shall mean the period of time set forth in Section 2.2.



1.7 "FIELD" shall mean all product, process and service categories.



1.8 "LICENSED PRODUCT" shall mean



(a) any product that cannot be



(1) manufactured, used, leased, sold or imported, in whole or in part, without infringing on one or more claims under the PATENT RIGHTS or



(2) executed, reproduced, or modified, in whole or in part, without infringing the COPYRIGHT and



(b) DERIVATIVES.



1.9 "LICENSED PROCESS" shall mean any process or service that cannot be performed, in whole or in part, without using at least one process that infringes one or more claims under the PATENT RIGHTS.



1.10 "PATENT RIGHTS" shall mean:



(a) United States and international patent applications listed on Appendix A and the resulting patents;



(b) any patent applications filed by M.I.T. claiming the subject matter of the M.I.T. Cases listed in Appendix A;



(c) any divisionals, continuations, continuation-in-part applications, and continued prosecution applications (and their relevant international equivalents) of the patent applications described in (a) and (b) above to the extent the claims are directed to subject matter specifically described in such patent applications, and the resulting patents;



(d) any patents resulting from reissues, reexaminations, or extensions (and their relevant international equivalents) of the patents described in (a), (b), and (c); and



(e) international (non-United States) patent applications filed after the EFFECTIVE DATE and the relevant international equivalents to divisionals, continuations, continuation-in-part applications and continued prosecution applications of such patent applications and any patents resulting from reissues, reexaminations, or extensions of the patents



- 3 - Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisk denote omission.



described in (d) to the extent the claims are directed to subject matter specifically described in the patents or patent applications referred to in (a), (b), (c) and (d), above, and the resulting patents.



1.11 "PROGRAM" shall mean the computer software including object code and source code that is part of M.I.T. Case No. [**] et al and related documentation, if any, existing as of the EFFECTIVE DATE and any M.I.T. owned derivative works or improvements to the PROGRAM created within one year of the EFFECTIVE DATE.



1.12 "REPORTING PERIOD" shall begin on the first day of each calendar year and end on the last day of such calendar year.



1.13 "SUBLICENSEE" shall mean any non-AFFILIATE sublicensee of the rights granted COMPANY under Sections 2.1 and 2.3, excluding END-USERS.



1.14 "PATENT TERM" shall mean the period of time commencing on the EFFECTIVE DATE and ending with the expiration or abandonment of all issued patents and filed patent applications within the PATENT RIGHTS, unless earlier terminated in accordance with the provisions of this Agreement.



1.15 "TERRITORY" shall mean worldwide.



2. GRANT OF RIGHTS.



2.1 PATENT RIGHTS License Grant. Subject to Section 2.8 and the terms of this Agreement, M.I.T. hereby grants to COMPANY a license for the PATENT TERM under the PATENT RIGHTS to develop, make, have made, use, sell, offer to sell, lease, distribute, and import LICENSED PRODUCTS and to practice LICENSED PROCESSES in the TERRITORY and FIELD.



2.2 Exclusivity. In order to establish an EXCLUSIVE PERIOD as to PATENT RIGHTS for COMPANY, M.I.T. agrees that it shall not grant any other license to the rights granted in Section 2.1 during the period of time commencing on the EFFECTIVE DATE and extending to the end of the PATENT TERM, unless sooner terminated as provided in this Agreement.



- 4 - 2.3 COPYRIGHT License Grant. Subject to Sections 2.4, 2.5, and 2.8 and the terms of this Agreement, M.I.T. also hereby grants to COMPANY the following non-exclusive rights and licenses to M.I.T. COPYRIGHTS in the TERRITORY and FIELD for the COPYRIGHT TERM, unless this Agreement shall be sooner terminated as provided herein:



(a) to execute, reproduce and modify the PROGRAM;

(b) to create DERIVATIVES; and

(c) to distribute the PROGRAM and DERIVATIVES.



2.4 Rights of Sponsors to Copyright. The rights granted in Section 2.3, as they may apply to derivative works or improvements created by M.I.T. after the EFFECTIVE DATE, shall be subject to the rights of any research sponsors of the work leading to such derivatives or improvements.



2.5 Exclusivity as to M.I.T.'s Copyright Rights. M.I.T. agrees that it shall not grant any other licenses to the rights granted in Section 2.3, except as provided in Section 2.4, and will not retain any rights except those set out in Section 2.8.



2.6 Sublicenses. COMPANY shall have the right to grant sublicenses of its rights under Sections 2.1 and 2.3 to SUBLICENSEES and END-USERS. COMPANY shall incorporate terms and conditions into its sublicense agreements sufficient to enable COMPANY to comply with this Agreement. COMPANY shall promptly furnish M.I.T. with a fully signed photocopy of any sublicense agreement used to sublicense rights to SUBLICENSEE and one copy of the form of the END-USER Agreement. Upon termination of this Agreement for COMPANY'S failure to fulfill its obligations under one or all of Sections 3.1 (a), (b), (c), (d), (e), and (f), any SUBLICENSEES not then in default shall have the right to seek a license from M.I.T. M.I.T. agrees to negotiate such licenses in good faith under reasonable terms and conditions. Termination of this Agreement for any other reason shall not have any affect on licenses granted by COMPANY to SUBLICENSEES, provided that such licenses comply with the terms and conditions of this Agreement set forth in Sections 9, 10, 11 and 13.



2.7 U.S. Manufacturing. COMPANY agrees that any LICENSED PRODUCTS used or sold in the United States will be manufactured substantially in the United States.



- 5 - Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisk denote omission.



2.8 Retained Rights.



(a) M.I.T. M.I.T. retains the right to practice under the PATENT RIGHTS and COPYRIGHTS for non-commercial research, teaching, and educational purposes.



(b) Federal Government. COMPANY acknowledges that the U.S. federal government retains a royalty-free, non-exclusive, non-transferable license to any government funded COPYRIGHTS and to practice any government-funded inventions claimed in any PATENT RIGHTS and as set forth in 35 U.S.C. Sections 201-211, and the regulations promulgated thereunder, as amended, or any successor statutes or regulations.



2.9 No Additional Rights. Nothing in this Agreement shall be construed to confer any rights upon COMPANY by implication, estoppel, or otherwise as to any technology, copyrights, or patent rights of M.I.T. or any other entity other than the PATENT RIGHTS or COPYRIGHTS (including such rights in derivative works or improvements to the PROGRAM created within one year of the EFFECTIVE DATE, as set forth in Section 1.11), regardless of whether such technology or patent rights shall be dominant or subordinate to any PATENT RIGHTS or COPYRIGHTS.



2.10 Assignment of Rights to M.I.T. M.I.T. shall make reasonable efforts to seek to obtain assignment of rights of all M.I.T. professors and all M.I.T. students who are known to be authors of the PROGRAM as it exists on the EFFECTIVE DATE of this Agreement.



3. COMPANY DILIGENCE OBLIGATIONS.



3.1 Diligence Requirements. COMPANY shall use diligent efforts, or shall cause its AFFILIATES and SUBLICENSEES to use diligent efforts, to develop LICENSED PRODUCTS or LICENSED PROCESSES and to introduce LICENSED PRODUCTS or LICENSED PROCESSES into the commercial market; thereafter, COMPANY or its AFFILIATES or SUBLICENSEES shall make LICENSED PRODUCTS or LICENSED PROCESSES reasonably available to the public. Specifically, COMPANY or AFFILIATE or SUBLICENSEE, shall fulfill the following obligations:



(a) Within [**] after the EFFECTIVE DATE, COMPANY shall furnish M.I.T. with a written research and development plan describing the major tasks to be achieved in order to bring to market a LICENSED PRODUCT or a LICENSED PROCESS,



- 6 -

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisk denote omission.



specifying the number of staff and other resources to be devoted to such commercialization effort.



(b) Within [**] after the end of each calendar year, COMPANY shall furnish M.I.T. with a written annual report consistent with Article 6.



(c) COMPANY shall develop a working Beta test and models on or before March 1, 1999, and permit an on-site inspection of a Beta test site and models by M.I.T. on or before April 1, 1999, and permit one additional Beta site inspection by M.I.T. at the conclusion of the Beta trial. Prior to any inspection, M.I.T. agrees that each inspection will be subject to a non-disclosure agreement.



(d) COMPANY shall raise at least Five Hundred Thousand Dollars ($500,000) by June 30, 1999 from the sale of Company's equity securities for its own account.



(e) In the aggregate, COMPANY shall raise at least Two Million Dollars ($2,000,000) by April 1, 2000 from the sale of Company's equity securities for its own account.



(f) COMPANY shall make a first commercial sale of a LICENSED PRODUCT and/or a first commercial performance of a LICENSED PROCESS on or before June 1, 1999.



(g) In any year, COMPANY shall obtain revenue from commercial activities as follows:



December 31, 2003 One Million Dollars ($1,000,000);

December 31, 2004 Two Million Dollars ($2,000,000);

December 31, 2005 Three Million Dollars ($3,000,000);

December 31, 2006 Four Million Dollars ($4,000,000);

December 31, 2007 Five Million Dollars ($5,000,000);

December 31, 2008 Six Million Dollars ($6,000,000);



and each year thereafter at least Six Million Dollars

($6,000,000);



or shall



obtain cumulative revenue from commercial activities measured

from January 1, 1999 as follows:



December 31, 2003 One Million Dollars ($1,000,000);

December 31, 2004 Three Million Dollars ($3,000,000);

December 31, 2005 Six Million Dollars ($6,000,000);



- 7 -

December 31, 2006 Ten Million Dollars ($10,000,000);

December 31, 2007 Fifteen Million Dollars ($15,000,000);

December 31, 2008 Twenty Million Dollars ($20,000,000).



Each year thereafter cumulative revenue from commercial

activities shall increase by at least Six Million Dollars

($6,000,000).



COMPANY satisfies the diligence requirement of this Section

3.1(g) in any given year if it satisfies either the revenue

from commercial activities requirement or the cumulative

revenue from commercial activities requirement as set above

for that year.



In the event that COMPANY fails to fulfill any or all of its obligations under Sections 3.1(a), (b), (c), (d), (e), and (f), then M.I.T. may treat such failure as a material breach in accordance with Section 14.3(b).



In the event that COMPANY fails to fulfill its obligations under Section 3.1(g), and after COMPANY receives written notice from M.I.T. of such failure, M.I.T.'s obligations under Sections 2.2 and 2.5 shall terminate and M.I.T. shall be free to grant other licenses to the PATENT RIGHTS and COPYRIGHTS. Upon termination of the restrictions in Sections 2.2 and 2.5, COMPANY may elect not to continue paying patent fees and costs as outlined in Section 7.3, and M.I.T. may at its own discretion continue or abandon any or all of the PATENT RIGHTS. M.I.T. will notify COMPANY in writing at least 30 days prior to aforementioned discontinuance or abandonment, and COMPANY may elect to resume coverage of patent fees and costs and direct M.I.T. not to discontinue or abandon any or all of the PATENT RIGHTS.



4. DELIVERY OF MATERIALS.



4.1 Upon execution of this Agreement M.I.T. shall deliver to COMPANY one (1) copy of the PROGRAM and related documentation, if any.



4.2 COMPANY accepts the PROGRAM on an "AS IS" basis. Accordingly, M.I.T. shall not be required to load the PROGRAM onto COMPANY's machines; test for proper operation, perform any debugging; make any corrections; provide maintenance; provide any updates, enhanced capabilities, or new features; or assist in the understanding or use of the PROGRAM at any time. The PROGRAM is a research program, and M.I.T. does not represent that it is free of errors or bugs or suitable for any particular tasks.



- 8 -







5. ROYALTIES AND PAYMENT TERMS.



5.1 Consideration for Grant of Rights



(a) Equity and Patent Costs. In consideration of the rights and licenses granted herein, COMPANY agrees to issue equity to M.I.T. as set forth in Section 5.1(b) and to pay patent filing, prosecution, and maintenance costs as set forth in Section 7.3. The parties agree that no other monetary payments are due to M.I.T. hereunder



(b) Issuance of Common Stock to M.I.T.



(i) Equity Financings.





(A) If (x) the COMPANY sells Common Stock or securities convertible into or exchangeable for Common Stock ("Convertible Securities") resulting in gross proceeds to the COMPANY of at least $500,000 (an "Equity Financing"), and (y) the Value (as defined below) of the COMPANY immediately after such Equity Financing is equal to or greater than $6,000,000, then the COMPANY shall issue to M.I.T. promptly after such Equity Financing such number of whole shares of the COMPANY's Common Stock that is determined by subtracting that number of shares of Common Stock, if any, issued pursuant to clause (B) below from the quotient obtained by dividing $288,000 by the Equity Financing Price (as defined below). Except as provided in subsection (b)(ii) below, the COMPANY shall have no further obligation to issue shares of capital stock to M.I.T. under this subsection (b) upon the satisfaction of its obligation to issue shares to M.I.T. after the first Equity Financing where the Value of the COMPANY immediately thereafter is equal to or greater than $6,000,000. For purposes hereof the Value of the COMPANY shall be determined by multiplying the Equity Financing Price by the total number of shares of Common Stock outstanding on a fully-diluted common stock-equivalent basis. "Equity Financing Price" shall mean, with respect to any Equity Financing, the quotient obtained by dividing (a) the gross proceeds paid to the COMPANY in the Equity Financing by (b) the aggregate number of shares of Common Stock (i) sold in the Equity Financing or (ii) into or for which Convertible Securities sold in the Equity Financing may be converted or exchanged, as the case may be. For purposes hereof, an Equity Financing shall not include money borrowed by the COMPANY pursuant to a bridge loan or loans in an aggregate amount not to exceed $1,500,000 where such bridge loan or loans is in anticipation of Equity Financing.







(B) If (x) there is an Equity Financing, and (y) the Value of the COMPANY (as defined below) immediately after such Equity Financing is less than $6,000,000.





- 9 -









then the COMPANY shall issue to M.I.T. promptly after such Equity Financing such number of whole shares of the COMPANY's Common Stock such that M.I.T. holds 4.8% of the total number of shares of Common Stock outstanding on a fully-diluted common stock-equivalent basis. Except as provided in subsection (b)(ii) below, the COMPANY shall have no further obligation to issue shares of capital stock to M.I.T. under this ...