of Mankten feune 20 21 er) Charles M. Coate, Esq. . (SBN 140404) Theresa E, Johnson, SN 254123) iLED Shian Brisbois, E: : 279072) supono GEL Califor $200 Wish Bh is § 1060 \ a ilshire Blvd., Ste. Los Angeles, CA 90025 \t S NOV 12 2015 310) 576-6161 eee Fax: (310) 576-6160 ee ve Oficed/Cherk Email ezoatighamssote om be Deputy Attorneys for K2 Communications, Inc. idee SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES K2 COMMUNICATIONS, INC., a Case No.: pcg 00877 California Corporation, con Pint (On: inti 1) BREACH OF WRITTEN CONTRACT; Plaintiff, 2) ACCOUNTING; uv vs, 3) FRAUD; and, (4) MATERIAL MISREPRESENTATION. IN A SECURITIES TRANSACTION NANOTECH ENTERTAINMENT, INC. a Nevada Corporation conducting business in California; AARON TAYLOR, an individual; and DOES 1 through 10, inclusive, Defendants. JURISDICTION AND VENUE 1. This Court has personal jurisdiction over the Defendants igs Bio Pursuant to California Code of Civil Procedure §410.10. The amoui prego i excess of $1,000,000.00 exclusive of interest and costs. Furthermore verive igor this judicial district pursuant to C.C.P. §395, since the parties expressly bargtingd writing for exclusive venue in state or federal court located in the City of Los Arieted fl 8834 oz COMPLAINT OL L ORIG 13600/ 119 4480080810 u 12 13 14 15 16 17 18 19 20 21 v2) ® @ and State of California and the contract at issue in this action was breached in Los ‘Angeles County. Specifically, the parties agreed in writing in pertinent part as follows: “10.10 Consent to Jurisdiction Licensor ... (v) agrees that any litigation, action or proceeding arising out of or relating to this Agreement shall be instituted by Licensor exclusively in state or federal court located in the city of Los Angeles and State of California.” THE PARTIES 2. Plaintiff K2 Communications, Inc. (“Plaintiff” or “K2”) was and is now, and at all relevant times mentioned herein, a California corporation with its principal place of business located in the County of Los Angeles, State of California. K2 is 4 production and distribution company specializing in emerging non-traditional mediq programming, including Giant Screen Films for both large format and digital theaters Video on Demand, Interactive Media, branded content and High Definition television and DVD. 3. Plaintiff is informed and believes and on that basis alleges that Defendant NanoTech Entertainment, Inc. (“NTE” or “Defendant”) was and is now, and at all time: mentioned herein, a Nevada Corporation with its principal place of business located in San Jose, California. 2 COMPLAINT10 i 12 ue) 14 15 16 17 18 20 21 4. Plaintiff is informed and believes and on that basis alleges that Defendant Aaron Taylor (“Taylor” or “Defendant”) was at all relevant times herein and is managing agent of NTE who acted with advance knowledge and conscious disregard, wl authorized and ratified the conduct described herein. He is identified as part of NTE" “Corporate. Team” along with 7 other individuals on NTE’s website (http:/nanotechent.com). Plaintiff is further informed and believes that Taylor is a citizen of the State of California and a resident of San Jose County. 5. According to NTE’s website (http://nanotechent.com): “NanoTech Entertainment is a conglomerate of entertainment companies focused on leveraging technology to deliver state of the art entertainment and communications products. Headquartered in San Jose, CA NanoTech Entertainment is a technology company that focuses on all aspects of the entertainment industry. With six technology business units, focusing on 3D, Gaming, Media & IPTV, Mobile Apps, and Manufacturing, the company has a unique business model.” 6. Plaintiff is informed and believes and on that basis alleges that at relevant times David Foley was previously the Co-Founder, President, and CEO of, as well as 4 former Director, Secretary, and Treasurer of, NTE. Plaintiff is further informed an believes and on that basis alleges that at relevant times David Foley was indicted federal counts of conspiracy to commit mail and wire fraud, and conspiracy to commit bank fraud (18 U.S.C. Sec. 1349) and following the entry of guilty pleas was later designated to a federal correctional institution in connection with his sentencing in Junq 2015 in the action entitled USA v. Foley, et, al., U.S.D.C. for the Northem District of California Case No. 5:11-c1-00554-BJD. 3 COMPLAINT10 ul 12 13 14 15 16 7 18 19 20 GENERAL ALLEGATIONS 7. Plaintiff re-alleges and incorporates herein Paragraphs 1 - 6. 8. Prior to and including July 2014 and again in August 2014 NTE offered t sell Plaintiff securities in NTE in the form of common stock. Paragraph 5.1 of the Augus 20, 2014 Agreement states that the minimum guarantee of $2,500 per month per titld would be paid, “...with 50% cash and 50% Companiy stock (OTC:NTEK) with the stoc! value locked in at the signing of this Agreement...” Accordingly, a full Fifty Percent o the total compensation was to be paid to K2 in NTE’s stock. 9. Plaintiff is informed and believes and on that basis alleges that on or about the date the August 20, 2014 Agreement was executed, the “locked-in” stock value was at or about 5.24 cents a share. Recently, the value of the stock has since dropped to $ .0072 (less than one cent a share) for a decrease of more than 86%, By “locking” in the stoc price at 5.24 cents a share, the value of K2’s shares have significantly decreased in value. 10. During the term of the Agreement, NTE owed 13,716,603 shares to K2, but has only delivered 855,283 shares, leaving a balance due and owing of 12,861,320 NTEK| shares. 11. The sale of securities to Plaintiff in California pursuant to the July 2014 and August 2014 Video-On-Demand License Agreements was preceded by falsd mistepresentations of material fact as well as omissions of material fact that were madq by Taylor who was at all relevant times herein and is a managing agent of NTE. Taylor acted with advance knowledge and conscious disregard, and authorized and ratified the false statements of a material fact and omitted material statements of material fact t 4 COMPLAINT10 u ae 13 14 15 16 17 18 19 20 21 22 Mark Kresser on behalf of Plaintiff as its President during telephone conversation: oceurring while Kresser was in Los Angeles, California the spring and or summer o' 2014. Taylor on behalf of NTE informed Mr. Kresser on behalf of K2 in a very confident manner that the NTE was (i) a financially strong company and had the financial ability t meet all of its obligations to K2 under the July and August Video-On-Demand Licens Agreements, and (ii) that NTE had implemented a successful business plan and that NTE’s stock price would increase in value. Plaintiff is further informed and believes and on that basis alleges that at all relevant times preceding execution of the July 2014 and August 2014 Video-On-Demand License Agreements Taylor knew that NTE’s (no\ former) President David Foley had been indicted on federal counts of conspiracy t commit mail and wire ftaud, and conspiracy to commit bank fraud (18 U.S.C. Sec. 1349) and that designation of David Foley to a federal correctional institution could bd anticipated. 12, The statements and material representations of fact made by Taylor on behalf of NTE to Mr. Kresser on behalf of K2 were false when made. By indicating that NTE’s stock would increase in value, NTE encouraged and induced Mr. Kresser onl behalf of K2 to “lock-in” the price of the shares that were to be issued to pay for Fifty Percent of the minimum guarantee at execution of the July 2014 and August 2014 Video: On-Demand License Agreements. In addition, NTE materially omitted from disclosure, and failed to inform K2 that NTE’s (now former) President David Foley had beer] indicted on federal counts of conspiracy to commit mail and wire fraud, and conspirac 5 COMPLAINT@ 10 TT 12 B 14 15 16 7 18 19 20 21 2 to commit bank fraud (18 U.S.C. Sec. 1349) and that designation of David Foley to 4 federal correctional institution could be anticipated. 13. Plaintiff is informed and believes and on that basis alleges that the above representations by Taylor were made, and that material omissions of fact were withheld from Mr. Kresser on behalf of Plaintiff, with the intent to induce and did induce Kresse1 to execute the July 2014 and August 2014 Video-On-Demand License Agreements and caused Plaintiff to deliver extensive programming to NTE, which has exploited suck] programming without ever properly paying for it as agreed. 14. Plaintiff, at the time these material misrepresentations and material omissions of fact occurred, was ignorant of the falsity of the above representations and unaware of the facts that were materially omitted by NTE and justifiably and reasonabl; relied upon such misrepresentations and omissions of material fact. If Plaintiff had been, aware of the falsity of the above misrepresentations of material fact, or had been aware o: such materially omitted facts as set forth above, Plaintiff would have never have signed the July 2014 and August 2014 Video-On-Demand License Agreements ot agreed deliver to NTE extensive programming. 15. Based on the foregoing, in or about July 2014 and August 2014 K2 a: “Licensor” on the one hand, and NTE on the other hand entered into Video-On-Demand License Agreements. Both Video-On-Demand License Agreements were executed on} behalf of NTE by Taylor as its “EVP.” True and correct copies of these Video-On. Demand License Agreements are attached hereto as Exhibits “A” and “B” and are full incorporated by reference herein. NTE principally drafted Exhibits “A” and “1 6 COMPLAINT10 Ml 12 13 14 15 16 7 18 19 20 21 22 16. - The material express and implied terms of the later August 2014 Video-On- Demand License Agreement included, inter alia, the following: (a) NTE was granted non-exclusive rights to transmit “Included Programs” worldwide (unless specified otherwise) for a twenty four month period, which wa: anticipated to commence November 2014. (b) Pursuant to 45.1 it reads in pertinent part: “NTE shall pay Licensor [K2] a monthly minimum guarantee (the “MG”) in the amount of $2500.00 per month pey Included Program for the Term. The MG shall be paid with 50% cash and 0% Company stock (OTC:NTEK) with the stock value locked in at the signing of this Agreement...” (c) At Exhibit A (Standard Terms and Conditions) Para. 5.1 it reads inj pertinent part: “NTE shall provide Licensor with a calendar monthly reports (delivery of such report via e-mail is acceptable) in accordance with Licensor’s then current busines: practices containing the following information for such reporting period: (i) the name o the number each included Program for which a Customer Transaction was concluded; of Customer Transactions for each such included Program; and (iii) the applicable License Fees payable to Licensor... Each monthly report shall be delivered to Licensor] along with payment of any License Fees then due, no later than thirty (30) days after th Jast day of the applicable calendar month...” : (d) At Exhibit A (Standard Terms and Conditions) Para. 9.1 it reads in| pertinent part: Event of Default. Each of the following events shall constitute an event o} default hereunder (an “Event of Default”): 1 COMPLAINT10 12 HE) 14 a 16 7 18 19 20 21 9.1.1 The commission by a Party of a material breach of any material provision of this Agreement, unless such breach is cured within thirty (30) days following} receipt of notice of such breach, or if not able to be so cured, then resolved to the other Party’s reasonable satisfaction with such period; . (e) | At Exhibit A (Standard Terms and Conditions) Para. 10.9 it provides that the Governing Law is that of the State of California. (f) At Exhibit A (Standard Terms and Conditions) Para. 10.12 an integration) clause is set forth. (g) At Exhibit A (Standard Terms and Conditions) Para. 10.13 it provides that “This Agreement may not be changed, modified, amended or supplemented, except in] writing signed by both Parties.” 17. Shortly after entering into the August 2014 Video-On-Demand License Agreement NTE materially breached the August 2014 Video-On-Demand Licensq Agreement by the following conduct: (a) _ Failing to pay requisite minimum guarantees to K2. As of the filing of this Complaint, K2’s business records indicate that NTE has paid to K2 only $108,437 but owes K2 another $195,312.50 more in additional cash payments under the agreed upon) monthly minimum guarantees. Attached hereto and incorporated by reference herein as Exhibit “C” are true and correct copies of two invoices that were submitted to NTE earl during the term that were the only two fully paid before NTE indicated that it did not have the ability to pay minimum guarantees going forward as it had agreed. 8 COMPLAINT10 ul 12 13 14 15 16 7 18 iL) 20 21 (b) Failing to make any stock payments to K2 following the first month installment. According to the closing price of NTE stock trading on the OTC markets under the symbol (NTEK) on August 20, 2014, the stock value price of NTEK locked in at the signing of the August 20, 2014 Video-On-Demand License Agreement was at o1 about $0.0524 a share. Attached hereto and incorporated by reference herein collectivel as Ex\ it “D” is share price history for “NTEK” over the last three years and specifically for August 20, 2014. Notwithstanding NTE’s failure to tender NTEK stoc in accordance with the August 20, 2014 Video-On-Demand License Agreement a: obligated, the stock price of NTEK has plummeted and the value of K2’s shares have collapsed. : (©) Failing to issue calendar monthly reports to K2 for Included Program: reflecting inter alia number of Customer Transactions for each Included Program. 18. Accordingly, NTE has materially breached the express and implied term: of the August 2014 Video-On-Demand License Agreement, and was notified of its material breach and provided an opportunity to cure such breach and has failed to do so. Attached hereto and incorporated by reference herein as Exhibit “E” is a true and correct copy of an August 20, 2015 letter to NTE sent to the attention of Taylor. 19, At this point NTE has communicated that it does not have the ability to pa minimum guarantees going forward as it had agreed, and Plaintiff is informed and believes that NTE and Taylor knew or should have known at the time the August 2014 Video-On-Demand License Agreement was executed that NTE lacked sufficien economic resources to perform its obligations thereunder. NTE's disavowal of its future 9 COMPLAINTa 10 TT 12 13 14 15 16 7 18 ey 20 21 monthly minimum guarantee cash payments constitutes an anticipatory breach of it payment obligations to Plaintiff. FIRST CAUSE OF ACTION BREACH OF WRITTEN CONTRACT (Against Defendant NTE and Does 1 - 10) 20. Plaintiff repeats and incorporates the allegations set forth in paragraphs 1| through 19 of this Complaint as if set forth in full herein. 21. In or about July 2014 and August 2014 K2 as “Licensor” on the one hand, and NTE on the other hand entered into Video-On-Demand License Agreements. Both] ‘Video-On-Demand License Agreements were executed on behalf of NTE by Taylor as it “EVP.” True and correct copies of these Video-On-Demand License Agreements ard attached hereto as Exhibits “A” and “B” and are fully incorporated by reference herein| NTE principally drafted Exhibits “A” and “B”, 22. The material express and implied terms of the later August 2014 Video-On. Demand License Agreement included, inter alia, the following: (a) NTE was granted non-exclusive rights to transmit “Included Programs” worldwide (unless specified otherwise) for a twenty four month period, which wa: anticipated to commence November 2014. (b) Pursuant to $5.1 it reads in pertinent part: “NTE shall pay Licensor [K2] 4 monthly minimum guarantee (the “MG”) in the amount of $2500.00 per month pe Included Program for the Term. The MG shall be paid with 50% cash and 50% Company stock (OTC:NTEK) with the stock value locked in at the signing of thi to COMPLAINT10 iB 12 13 14 15 16 7 18 19 20 21 22 Agreement...” (©) At Exhibit A (Standard Terms and Conditions) Para. 5.1 it reads inj pertinent part: “NTE shall provide Licensor with a calendar monthly reports (delivery o} such report via e-mail is acceptable) in accordance with Licensor’s then current busines: practices containing the following information for such reporting period: (i) the name o} each included Program for which a Customer Transaction was concluded; (ii) the number of Customer Transactions for each such included Program; and (iii) the applicabld License Fees payable to Licensor... Each monthly report shall be delivered to Licensor, along with payment of any License Fees then due, no later than thirty (30) days after th last day of the applicable calendar month...” (d) At Exhibit A (Standard Terms and Conditions) Para. 9.1 it reads inj pertinent part: Event of Default. Each of the following events shall constitute an event o default hereunder (an “Event of Default”): 9.1.1 The commission by a Party of a material breach of any material provision of this Agreement, unless such breach is cured within thirty (30) days following receipt of notice of such breach, or if not able to be so cured, then resolved to the othe Party’s reasonable satisfaction with such period; (©) At Exhibit A (Standard Terms and Conditions) Para. 10.9 it provides tha the Governing Law is that of the State of California. (6) At Exhibit A (Standard Terms and Conditions) Para. 10.12 an integration] clause is set forth. u COMPLAINT10 M1 12 13 14 1s 16 18 19 20 21 22 (g) At Exhibit A (Standard Terms and Conditions) Para. 10.13 it provides that “This Agreement may not be changed, modified, amended or supplemented, except ii writing signed by both Parties.” 23. Shortly after entering into the August 2014 Video-On-Demand Licensq Agreement NTE materially breached the August 2014 Video-On-Demand Licens¢ Agreement by the following conduct: (a) Failing to pay requisite minimum guarantees to K2. As of the filing of this Complaint, K2°s business records indicate that NTE has paid to K2 only $108,437 but is past due to K2 $195,312.50 in cash payments under the agreed upon monthly minimui guarantees, with additional sums becoming due each month, which have been disavowed, by NTE. Attached hereto and incorporated by reference herein as Exhibit “C” are trud and correct copies of two invoices that were submitted to NTE early during the term that were paid before NTE indicated that it did not have the ability to pay minimui guarantees going forward as it had agreed. (b) Failing to make any stock payments to K2 following the first monthl installment. According to the closing price of NTE stock trading on the OTC market: under the symbol (NTEK) on August 20, 2014 the day the stock value price of NTE! was locked in was 0.0524 a share. Attached hereto and incorporated by reference herein collectively as Exhibit “D” is a share price history for “NTEK” over the last three year and specifically for August 20, 2014 is reflected. (©) Failing to issue calendar monthly reports to K2 for Included Programs reflecting inter alia number of Customer Transactions for each Included Program. 2 COMPLAINT10 ll 12 1B 14 15 7 18 19 20 21 22 24. _ Accordingly, NTE has materially breached the express and implied term of the August 2014 Video-On-Demand License Agreement, and was notified of it ‘material breach and provided an opportunity to cure such breach and has failed to do so. “E” is a true and correct Attached hereto and incorporated by reference herein as Ex! copy of an August 20, 2015 letter to NTE sent to the attention of Taylor. 25. At this point NTE has communicated that it does not have the ability to pa: minimum guarantees going forward as it had agreed, and Plaintiff is informed and believes that NTE and Taylor knew or should have known at the time the August 2014, Video-On-Demand License Agreement was executed that NTE lacked sufficient economic resources to perform its obligations thereunder. 26. Plaintiff has performed all conditions, covenants and promises required under the August 2014 Video-On-Demand License Agreement, except those conditions, covenants and promises which have been prevented or otherwise excused by the conduct of the Defendant. 27. As a direct and proximate result of the foregoing breaches of contract, Plaintiff has been damaged in an amount which has not been fully ascertained, but whic! it is informed and believes is or in excess of USD $610,312.50 in monthly minimum! guarantee cash payments, plus interest and costs, plus additional stock that has nevei been tendered as agreed, and therefore Plaintiff is informed and believes that its damage: equal or exceed one million dollars. As a further direct and proximate result of tha foregoing breach of contract, Plaintiff is also entitled to the remedy of an accounting. 13 COMPLAINT10 1 12 13 14 15 16 17 18 19 20 21 22 Finally, Plaintiff reserves the right to amend this Complaint when further discovery si warrants. SECOND CAUSE OF ACTION ACCOUNTING (Against Defendant NTE and Does 1 - 10) 28. Plaintiff repeats and incorporates the allegations set forth in paragraphs 1| through 27 of this Complaint as if set forth in full herein. 29. As alleged above, the parties entered into the August 2014 Video-On. Demand License Agreement Distribution Agreement. As a licensee, Defendant (and it successors and assigns) owed certain duties to the Plaintiff, including, among othe: things, to promptly and accurately report to and compensate Plaintiff with respect t Included Programs. 30. Plaintiff is informed and believes, and thereon alleges, that Defendant has received and will continue to receive monies, property or other benefits in connectio with the exploitation of Included Programs, from which money is due to the Plaintiff. 31. The exact amount of monies, property or other benefits due from Defendant to Plaintiff are unknown to Plaintiff and cannot be ascertained without an appropriatd accounting of the monies, property or other benefits received by Defendant in connection with its exploitation of the Included Programs. 32. Plaintiff has demanded that Defendant account for the aforementioned monies, property or other benefits and to pay all amounts due, owing and payable t Plaintiff. Defendant has rejected such demand. Plaintiff is informed and believes that “ COMPLAINTa) un 10 i 12 13 14 15 16 7 18 19 20 21 22 e e Defendant has failed to render complete and accurate reportings or to pay Plaintiff the amounts due and owing and that an accounting is necessary in order to ascertain what is owing. THIRD CAUSE OF ACTION FRAUD (Against All Defendants and Does | - 10) 33. Plaintiff repeats and re-alleges paragraphs | through 19 of this Complaint as though fully set forth in full herein. 34. In or about July 2014 and August 2014 K2 as “Licensor” on the one hand, and NTE on the other hand entered into Video-On-Demand License Agreements. Botl Video-On-Demand License Agreements were executed on behalf of NTE by Taylor as it “EVP.” Plaintiff is informed and believes and on that basis alleges that Defendant Aaro1 Taylor (“Taylor” or “Defendant”) was at all relevant times herein and is a managing agent of NTE who acted with advance knowledge and conscious disregard, and authorized and ratified the conduct described herein. True and correct copies of thes its “A” and “B” Video-On-Demand License Agreements are attached hereto as Exhi and are fully incorporated by reference herein. NTE principally drafted Exhibits “A” and “B”. 35. Shortly after entering into the August 2014 Video-On-Demand Licens¢ Agreement NTE materially breached the August 2014 Video-On-Demand Licens¢ Agreement by the following conduct: 15 COMPLAINTre) ui 10 ret 12 13 14 15 16 17 18 19 20 21 22 (a) _ Failing to pay requisite minimum guarantees to K2. As of the filing of thi Complaint, K2’s business records indicate that NTE has paid to K2 only $108,437 but owes K2 another $195,312.50 more in additional cash payments under the agreed upo monthly minimum guarantees. Attached hereto and incorporated by reference herein a: Exhibit “C” are true and correct copies of two invoices that were submitted to NTE earl during the term that were paid before NTE indicated that it did not have the ability to pa minimum guarantees going forward as it had agreed. (b) Failing to make any stock payments to K2 following the first month! installment. According to the closing price of NTE stock trading on the OTC market under the symbol (NTEK) on August 20, 2014 was $0.0524 a share. Attached hereto and incorporated by reference herein collectively as Exhibit “D” is share price history for “NTEK” over the last three years and specifically for August 20, 2014 is reflected. (©) Failing to issue calendar monthly reports to K2 for Included Programs, reflecting inter alia number of Customer Transactions for each Included Program. 36. Plaintiff is informed and believes and alleges thereon that at the time thd Video-On-Demand License Agreements attached hereto as Exhibits “A” and “B” full incorporated by reference herein were executed by Taylor and that were principall drafted by NTE, Taylor and NTE knew or should have known that NTE did not have sufficient financial resources to perform the August 2014 Video-On-Demand License ‘Agreement. Correspondingly, the representations that NTE could meet its obligations ay set forth therein were false when made, and Plaintiff is informed and believes and allege: thereon that at the time the representations were personally made by Taylor on behalf of 16 COMPLAINT10 i 12 13 14 15 16 7 18 19 20 21 22 Defendants to Mark Kresser on behalf of Plaintiff in August 2014 while Kresser was in] Los Angeles, Defendants knew that the representations were false, and that Defendant hhad no intention of performing in accordance with the August 2014 Video-On-Demand License Agreement at the time they entered into it. 37. Taylor on behalf of NTE informed Mr. Kresser on behalf of K2 in a very) confident manner that the NTE was (i) a financially strong company and had the financial ability to meet all of its obligations to K2 under the July and August Video-On-Demand License Agreements, and (ji) that NTE had implemented a successful business plan and that the stock price would increase in value. Plaintiff is further informed and believe: and on that basis alleges that at all relevant times preceding execution of the July 2014 and August 2014 Video-On-Demand License Agreements Taylor and Defendants kne' that NTE’s (now former) President David Foley had been indicted on federal counts o conspiracy to commit mail and wire fraud, and conspiracy to commit bank fraud (1 US.C. Sec. 1349), and that designation of David Foley to a federal correctional institution could be anticipated. 38. Plaintiff is informed and believes and on that basis alleges that the above representations by Taylor were made, and that material omissions of fact were withheld from Mr. Kresser on behalf of Plaintiff, with the intent to induce and did induce Kresse to execute the August 2014 Video-On-Demand License Agreement and caused Plaintit to deliver extensive programming to NTE, which has exploited such programming without ever properly paying for it as agreed. 39, Plaintiff, at the time these material misrepresentations and material 7 COMPLAINT10 ll 12 B 14 1s 16 17 18 19 20 21 22 omissions of fact occurred, was ignorant of the falsity of the above representations and unaware of the facts that were materially omitted by NTE and justifiably and reasonabl} relied upon such misrepresentations and omissions of material fact. If Plaintiff had been, aware of the falsity of the above misrepresentations of material fact, or had been aware o such materially omitted facts as set forth above, Plaintiff would have never have signed the August 2014 Vi -0-On-Demand License Agreement or agreed to deliver to NTE} extensive programming, 40. Asa proximate result of the fraudulent or reckless conduct of Defendants ag herein alleged, Plaintiff has been harmed and damaged in an amount approximating ot exceeding the jurisdictional minimums of this Court and reserves the right to seek leave to amend this Complaint when further discovery so warrants. 41. The aforementioned conduct of Defendants was willful and malicious and ‘was intended to oppress and cause injury to K2. 2 therefore alleges that Defendants have committed fraud as defined by C.C. § 3294 with regard to the above reference misrepresentations and that K2 should recover punitive damages in an amount sufficient to punish Defendants according to their wealth and assets and to deter Defendants fro1 repeating such conduct in the future. MW MW Wy 18 COMPLAINTan 10 rT 12 13 14 15 16 17 18 19 20 21 22 FOURTH CAUSE OF ACTION MATERIAL MISREPRESENATION IN A SECURITES TRANSACTION (Against Defendant NTE and Does 1 - 10) 42. Plaintiff repeats and re-alleges paragraphs 1 through 19 of this Complain as though fully set forth in full herein. 43. Prior to and including July 2014 and again in August 2014 NTE offered t sell Plaintiff securities in NTE in the form of common stock. Paragraph 5.1 of thd August 20, 2014 Agreement states that the minimum guarantee of $2,500 per month pei title would be paid, “...with 50% cash and 50% Company stock (OTC:NTEK) with thd stock value locked in at the signing of this Agreement...” Accordingly, a full Fifty) Percent of the total compensation was to be paid to K2 in NTE’s stock. 44, Plaintiff is informed and believes and on that basis alleges that on or about the date the August 20, 2014 Agreement was executed, the “locked-in” stock value was a or about 5.24 cents a share. Recently, the value of the stock has since dropped to $ 0074 (less than one cent a share) for a decrease of more than 86%. By “locking” in the stoc price at 5.24 cents a share, the value of K2’s shares have significantly decreased in value. 45. During the term of the Agreement, NTE owed 13,716,603 shares to K2, bul has only delivered 855,283 shares, leaving a balance due and owing of 12,861,320 NTE! shares. 46. The sale of securities to Plaintiff in California pursuant to the July 2014 and August 2014 Video-On-Demand License Agreements was preceded by falsq misrepresentations of material fact as well as omissions of material fact that were made 19 COMPLAINT10 W 12 13, 14 15 16 7 18 19 20 21 22 by Taylor who was at all relevant times herein and is a managing agent of NTE whi acted with advance knowledge and conscious disregard, and authorized and ratified thd false statements of a material fact and omitted material statements of material fact t Mark Kresser on behalf of Plaintiff as its President during telephone conversation: occurring while Kresser was in Los Angeles, California the spring and or summer o| 2014. Taylor on behalf of NTE informed Mr. Kresser on behalf of K2 in a very confident manner that the NTE was (i) a financially strong company and had the financial ability t. meet all of its obligations to K2 under the July and August Video-On-Demand Licensd Agreements, and (ii) that NTE had implemented a successful business plan and that the stock price would increase in value, Plaintiff is further informed and believes and on tha basis alleges that at all relevant times preceding execution of the July 2014 and August 2014 Video-On-Demand License Agreements Taylor knew that NTE’s (now former} President David Foley had been indicted on federal counts of conspiracy to commit mail and wire fraud, and conspiracy to commit bank fraud (18 U.S.C. Sec. 1349) and that designation of David Foley to a federal correctional institution could be anticipated. 47. The statements and material representations of fact made by Taylor on, behalf of NTE to Mr. Kresser on behalf of K2 were false when made. By indicating that NTE's stock would increase in value, NTE encouraged and induced Mark Kresser on] behalf of K2 to “lock-in” the price of the shares that were to be issued to pay for Fift Percent of the minimum guarantee at execution of the July 2014 and August 2014 Video: On-Demand License Agreements. In addition, NTE failed to inform K2 that NTE’s (no former) President David Foley had been indicted on federal counts of conspiracy 20 COMPLAINT10 ll ei 13 14 16 17 18 19 20 a 22 commit mail and wire fraud, and conspiracy to commit bank fraud (18 U.S.C. See. 1349) and that designation of David Foley to a federal correctional institution could be anticipated. 48. Based on the foregoing, in or about July 2014 and August 2014 K2 ag “Licensor” on the one hand, and NTE on the other hand entered into Video-On-Demand License Agreements. Both Video-On-Demand License Agreements were executed on] behalf of NTE by Taylor as its “EVP.” True and correct copies of these Video-On- Demand License Agreements are attached hereto as Exhibits “A” and “B” and are full incorporated by reference herein. NTE principally drafted Exhibits “A” and “B”, 49. Notwithstanding NTE’s failure to tender NTE stock in accordance with thd August 20, 2014 Video-On-Demand License Agreement as obligated, the stock price and value of NTEK have plummeted and the value of K2’s shares, which was consideration material to the parties’ bargained for Video-On-Demand License Agreements, hax collapsed. 50. Asa result of Defendant NTE’s material misrepresentations and omission: of material fact as alleged herein, K2 has suffered damages in an amount in excess of “ jurisdictional limits of this court in an amount to be determined at trial. 51. Plaintiff is informed and believes and on that basis alleges that the above representations by Taylor were made on behalf of NTE, and that material omissions o} fact were withheld from Mr. Kresser on behalf of Plaintiff by NTE through Taylor, wit the intent to induce and did induce Kresser to execute the August 2014 Video-On: ‘Demand License Agreement and caused Plaintiff to deliver extensive programming 2 COMPLAINT10 ll Ps 13 14 15 16 ‘ey 18 19 20 21 22 NTE, which has exploited such programming without ever properly paying for it a: agreed. 52. Plaintiff, at the time these material misrepresentations and materia omissions of fact occurred, was ignorant of the falsity of the above representations and unaware of the facts that were materially omitted by NTE and justifiably and reasonabl relied upon such misrepresentations and omissions of material fact. If Plaintiff had been] aware of the falsity of the above misrepresentations of material fact, or had been aware o such materially omitted facts as set forth above, Plaintiff would have never have signed the August 2014 Video-On-Demand License Agreement or agreed to deliver to NTH extensive programming. 53. As a proximate result of the fraudulent conduct of Defendants as herein] alleged, Plaintiff has been harmed and damaged in an amount approximating ot exceeding the jurisdictional minimums of this Court and reserves the right to seek leave to amend this Complaint when further discovery so warrants, 54. The aforementioned conduct of Defendants was willful and malicious and was intended to oppress and cause injury to K2. K2 therefore alleges that NTE through Taylor has committed fraud as defined by C.C. § 3294 with regard to the above referenced misrepresentations and that K2 should recover punitive damages in an amount sufficient to punish NTE according to its wealth and assets and to deter NTE fro1 repeating such conduct in the future. 1 Wy 2 COMPLAINT10 il 12 B 4 15 16 7 18 19 20 21 22 PRAYER FOR RELIEF WHEREFORE, Plaintiff prays for judgment against Defendants as follows: 1. For general and compensatory damages currently equal to or exceeding| USD $1,000,000.00 in an amount to be proven at trial, including allowable legal interes on the sum according to proof; 2. For specific performance for issuance of 12,861,320 shares of NTEK stoc or the monetary equivalent thereof; 3. For a constructive trust to be imposed on all wrongful gains, profits and advantages as proven herein; 4. For costs of suit herein; 5. Forallowable attorney fees to the extent permitted by law; 6. Foran accounting; 7. For prejudgment interest according to proof; 8. For an award of punitive damages in an amount sufficient to punis! Defendants according to their wealth and assets and the reprehensibility of their conduct, and to deter Defendants from repeating such conduct in the future. - For such other and further relief as the Court deems proper. Dated: November/Z, 2015 Respectfully submitted, ABI (OATE LLP. By: Charles M, Coate, Esq, Attorneys for Plaintiff K2 Pictures, Inc. 23 COMPLAINTbe a 10 rl 12 13 14 15 16 17 18 19 20 21 22 Dated: November/2-2015 DEMAND FOR JURY TRIAL Plaintiff demands a jury trial on all issues so triable. Respectfully submitted, ABRAMS COATE LLP By Charles M. Coate, Esq. Attorneys for Plaintiff K2 Pictures, Inc. 24 COMPLAINTEXHIBIT A‘VIDEO-ON-DEMAND LICENSE AGREEMENT This Video-on-Demand License Agreement (together with each of the exhibits and schedules hereto, this “Agreement”) is made as of as of the later of the dates set forth in the signature block below (the “Effective Date"), by and between NanoTech Entertainment, Inc. (“NTE”) and K2 Communications, Inc. (“Licensor”). 1, DEFINITIONS. Capitalized terms not otherwise defined in the Main Agreement have the mesning ascribed to them in Exhibit A attached hereto. 1.1 “4K UHD” means a video transmission with up to: (a) 2160 lines of vertical resolution; and (b) 4096 lines of horizontal resolution; provided that a stream of an Included Program licensed in 4K UHD may fall below 2160 lines of vertical resolution or 4096 lines of horizontal resolution from time to time due to network congestion, consumer broadband speed and other technical issues. 1.2 “Authorized Language” means, with respect to each Included Program, all languages unless limited to the language(s) indicated beside such Included Program in the “Authorized Language” column of Schedule 1 hereto. 1.3 “Authorized Resolution” means 4K UHD. 1.4 “License Fees” means VOD License Fees. 1.5. “Licensed Business Model” means Monthly Minimum Guarantee. 1.6 “Promotional Segment” means, with respect to each Included Program, an audio-visual excerpt of such Included Program designated by Licensor in writing to NTE, 1.7 “Territory” means, with respect to each Included Program, worldwide unless limited to the ccountry(ies) indicated beside such Included Program in the “Territory” column of Schedule 1 hereto, 2. TERM. The “Term” of this Agreement shall commence on the first day that NTE is permitted to launch one or more Included Program, currently anticipated to be during the month of November, 2014 (the Launch Date”) and continue through and including the last day of the twenty-fourth full month after the month during which the Launch Date falls. 3, LICENSE. Licensor hereby grants NTE a limited, non-exclusive right and license under copyright ‘or otherwise, in the Territory, during the Term, to Transmit copies of each Included Program, in the Authorized Language, and in the Authorized Resolution, during such Included Program’s applicable License Period, via the Licensed Business Model, for viewing by Customers of the Service. In furtherance of such grant, Licensor hereby grants to NTE with respect to each Included Program, the rights and licenses to: 3.1 advertise, publicize, market, test and promote (collectively, “Promote”) the Licensor Content and its Transmission and exploitation via the Service, commencing ninety (90) days prior ‘to and continuing through the respective License Period of each applicable Included Program, including, without limitation, the right to use and license others to use Licensor’s name, the ttle of, Trailers created for and excerpts from such Included Program (including without limitation audio and video portions either together or separately) and the name, voice and likeness of and any biographical material concerning all persons appearing in or connected with such Licensor Content, trademarks and other identifiers of Licensor and any third party licensed to Licensor in connection with Licensor Content, and any other Promotional Materials provided by Licensor for the purpose of Promoting such Included Program; 1 EXHIBIT3.2 utilize and embed Metadata in connection with the exploitation of all Licensor Content. Licensor shall promptly provide to NTE updates of, and corrections to, Metadata as they become available to Licensor. Without limiting the foregoing, NTE shall have the right to edit or modify “Metadata in order to correct errors and supplement incomplete information, and to add additional categories of information to such Metadata, such as genres, biographical information and product 3.3. encode/ranscode tapes or files of Licensor Content delivered hereunder into the various consumer specification formats, bitrates and resolutions utilized by the Service, in accordance with NTE’s specifications and store such tapes, files or encoded/ranscoded tapes or files during the Term; and 3.4 permit end users of the Service to receive Transmissions to the Streaming Player of the Promotional Segment of each Included Program, during the applicable License Period of the related Included Program, at no charge to each such end user (such rights, the “Promotional Transmission Rights”). All right, ttle and interest in, to and with respect to the Included Programs, and the elements and parts thereof, and means of exhibition and distribution not specifically granted herein to NTE shall be and are specifically and entirely reserved to Licensor. 4. INCLUDED PROGRAMS 4.1 Generally. “Included Programs” shall mean those programs included on Schedule 1, as the same may be supplemented by mutual agreement of the Parties in writing ftom time to time. ‘NTE shall have the right, exercisable in its sole discretion, to determine which Included Program(s) (if any) it shall make available via the Service at any time during the applicable License Period in the Territory and to remove one or more Included Programs from availability via the Service in the Territory at any time during the applicable License Period. 4.2 License Period. The period in the Territory during which Licensor permits NTE to offer each Included Program on the Service (“License Period”) for the Licensed Business Model shall bee set forth on Schedule 1, as indicated beside such Included Program in the “License Period” column of Schedule 1 hereto, subject to Licensor’s withdrawal rights as set forth in Exhibit A attached hereto. 4.3 Delivery. With respect to each Included Program (including each Promotional Segment thereof), Licensor shall deliver the materials listed in Schedule 2 to NTE or NTE’s designee in accordance with the specifications set forth therein, 5. FEES AND PAYMENT; MINIMUM GUARANTEE 5.1 Monthly Minimum Guarantee. NTE shall pay Licensor a monthly minimum ‘guarantee (the “MG”) in the amount of $2500.00 per month per Included Program for the Term. The MG shall be paid with 50% cash and 50% Company stock (OTC: NTEK ) with the stock value price locked in at the signing of this Agreement. () NTE shall make each “MG” payment by the last day of the month that each Included Program is made available on NTE Service, aka- UltraFlix. Nothwithstanding the foregoing, the first MG payment shall be made within 30 days of the Effective Date.6. RESERVED 7. MISCELLANEOUS 7.1 In the event of any conflict between the foregoing (the “Main Agreement”) and any exhibits or schedules attached hereto, the terms of the Main Agreement shall take precedence and shall govern. The attached Exhibit A, Exhibit B, Schedule 1, Schedule 2, Schedule 3, and any other exhibits and schedules attached to this Agreement, are hereby incorporated by reference. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date, NANOTECH ENTERTAINMENT, K2 COMMUNICATIJONS, INC. INC. eae we Mar = e Mark (reSeer wee Press Name: Aaron Taylor Title: BVPEXHIBIT A e STANDARD TERMS AND CONDITIONS Following are the Standard Terms and Conditions of this Agreement (“Standard Terms and Conditions”) between Licensor and NTE. In the event of any conflict between the Standard Terms and Conditions and the Main ‘Agreement, the provisions of the Main Agreement shall control. 1, DEFINITIONS. Capitalized terms not otherwise defined in the Main Agreement have the meaning ascribed to them as follows: 1.1 "Aetual Retail Price” means,» with respect to an Included Program, the non- returnable monies actually received by NTE from a Customer Transaction on a2 VOD Distribution basis, of such Included Program, ‘net of any applicable taxes and levies and payment processing fees (collectively, "Taxes"). For the avoidance of doubt, the retail price on the Service of any Included Program shall be established by NTE in its sole discretion. 1.2. “Affifiate” means, with respect to any Person, any other Person that controls, is controlled by (directly or indirect}, or is under ‘common control with, such Person. 1.3 “Customer Transaction” means each transaction whereby NTE receives the applicable Actual Retail Price from a Customer ‘and, in exchange therefor, such Customer actually receives a Transmission of an Included Program on a VOD Distribution basis from the Service. For clarity, Transmissions of Promotional Segments shall not constitute ‘Customer Transactions hereunder. 1.4 “Customer” means a user of the Service. 1.5 "CVA" means the 21st Century Communication and Video Accessibility Act as promulgated by the requirements, rules and regulations of the Federal Communications Commission (and cocresponding interpretations of the Federal Communications Commission), as ‘may be amended, modified or supplemented 1.6 “Home Video” means DVO, Blu-ray or any other form of home video media now known or hereafter devised (including, without limitation, via electronic or digital sel-through or rental 1.7 "laws" means any statute, law, regulation, ordinance, rule, judgment, order, Gecree, permit, concession, grant, franchise, license, agreement, directive, guideline, policy or rule of common law, or any governmental requirement or other governmental restriction ‘or similar form of decision or determination, or ny interpretation or administration of any of the foregoing by any national, state or local government (or any association, organization (oF Institution of which any of the foregoing is a ‘member, or to whose jurisdiction any thereof is subject, or In whose activites any thereof is 2 participant), whether now or hereafter In effect. 1.8 “censor Content” means, collectively, ‘the Included Programs, Metadata, and all other material (including, without limitation, Promotional Material and Promotional Segments) delivered, or otherwise made available, by Licensor hereunder. 1.9. “brary Included Program” means an Included Program other than a New Release Included Program. 1.10 *Metadata” means the information set forth on the attached Schedule LA11 ‘New Release Included Program” means @ motion picture that has not been ‘exhibited in the United States by any means or media (other than by means of theatrical exhibition and/or Home Video exhibition) prior to the date that is 12 months prior to the first date of the License Period for such picture in the United States. A New Release Included Program shall become a Library Included Program on the 366” day following the first day ‘that such New Release Included Program was exhibited in the United States by means or ‘media other than by means of theatrical exhibition and/or Home Video exhibition. 1.12 "Panty’ or “Parties” means NTE and/or LUcensor, asthe context requires. 1.13 “Person” means any individual, corporation, general or limited partnership, limited ability company, joint venture, estate,trust, association, organization, governmental ‘agency or entity or any other entity of any kind cor nature, 1.14 “Promotional Materials” means the ‘Trallers, logos, publicity images, and any other advertising and promotional materials supplied by Ucensor to NTE or that Licensor otherwise authorizes NTE to utlize in connection with the promotion of the Included Programs. 1.15 “Service” means the premium 4X UHD digital delivery service, aka- UiraFlix™ that distributes audio-visual content to Customers fon a video-on-demand basis via NTE’s proprietary Streaming Player and via such other ‘consumer electronics devices on which the Service Is accessible at any time during the Term, 1.16 “Streaming Player” means the Nuvola NP-1 Set Top Box (together with any and all successor players thereto) 1.17 “Trailer” means 2 program containing excerpts from an Included Program. 1.18 “Transmit” means download, stream and/or otherwise transmit and distribute by ‘any means or methods (e.g, by wire ot wireless methods now known or hereafter devised), “Transmitted” and “Transmission” shall have correlative meanings. 1.19 “Viewing Period” means, with respect to each Customer Transaction for an Included Program on a VOD Distribution bass, the time period (a) commencing at the time a Customer downloads such Included Program for the fist time, and (t) ending on the earlier of) no less than twenty-four (24) and no more than seventy-two (72) hours (as determined by NTE) after such Customer has commenced the playback or viewing of such included Program forthe fist time and (i) thity (30) days after the date that 2 Customer downloads such Induded Program for the first time (uniess otherwise expressly approved in writing by licensor). 1.20. "VOD Distribution” means a Customer ‘Transaction whereby a Customer Is charged @ transactional fee for authorization to receive ‘Transmissions of an Included Program on an ‘on-demand basis for personal viewing at times chosen by the Customer in the Customer's sole discretion during the applicable Viewing Period. PRICES, FEES AND PAYMENT 2.1 Currency Conversion. All. amounts payable to Licensor hereunder shall be paid in US. dollars, converted from local currency, if applicable, atthe applicable closing rate in New York, New York set forth in the Wall Street Journal (U.S. edition) on the first business day Of the month in which the applicable payment is due. 2.2 anes. As between Licensor and NTE, INTE shall be responsible to collect, bear and pay any and all taxes levied or based upon the sale or resale of any products or provision of services by NTE, Including, all sales, use, value added, withholding or similar taxes. NTE Is not liable for any of the taxes of Licensor that Licensor is legally obligated to pay that are Incurred or arise In connection with or related to the sale or license of the Licensor Content under this Agreement, and all such taxes (including but not limited to net income or gross receipts taxes, franchise taxes, and/or Property taxes) shall be the financial responsibilty of Licensor, provided that NTE shall pay to Licensor any sales, use or value ‘added taxes that are owed by NTE solely as a result of entering into this Agreement and that are required to be collected from NTE by censor under applicable Law. NTE may provide to censor a valid exemption certificate in which case Ucensor shall not collect the taxes covered by such certificate. censor agrees to indemnify, defend and hold INTE harmless from any taxes (including sales or use taxes paid by NTE to Licensor) or claims, causes of action, costs (including, without limitation, reasonable attorneys’ fees) and any cother liabilities of any nature whatsoever related to such taxes. If taxes are required to be withheld on any amounts otherwise to be paid by NTE to Licensor, NTE shall deduct such taxes from the amount otherwise owed and ay them to the appropriate taxing authority NTE shall secure and deliver to Licensor an official receipt for any taxes withheld. DELIVERY MATERIALS; CONTENT PROTECTION 3.1 Ucensor shall be responsible forall costs ‘and expenses related to the creation anddelivery of all Licensor Content materials required to be delivered by Licensor hereunder. INTE shall have the right to inspect each delivery item delivered hereunder and shall have the right to relect delivery Items which do not pass NTE’s customary quality review. If NTE reasonably rejects any item pursuant to the above, Licensor shall promptly replace such rejected Item until such delivery item passes INTE's quality review. 3.2 NTE shall have the right to cut, edit, dub, substtie, alter and otherwise modify the Ucensor Content as may be necessary to comply with local or national broadcast standards or any other applicable Laws or standards (Including obscenity laws or standards) and to authorize any Person to do the foregoing. NTE shall have the right to cut, ‘edit, dub, sub-ttle, ater and otherwise modify the Ucensor Content to create Promotional Materials, provide that any such cuts, edits, etc. ‘must be approved by Licensor, which approval shall not be unreasonably withheld. 3.3. NTE will implement industry standard security and content protection technologies that are designed to protect the Included Programs from unauthorized accessor distribution. Without limiting the foregoing, the security and content production technologies and settings utilized in connection ‘with the distribution of the Inchided Programs will be no less protective than the most Protective technologies and settings employed by the Service to protect any other content distributed in the Authorized Resolution via the Service. Notwithstanding the foregoing, Licensor acknowledges that such measures and technologies may not be effective in all instances to protect the Included Programs from unauthorized access or use by end users ‘and under no cireumstances will NTE be lable to Licensor or any other person or entity in the ‘event of any failure or circumvention of such technologies and/or measures by end users. WITHDRAWAL 4.1 Ucensor shall have customary rights to withdraw a given Included Program for legal or liabilty reasons as reasonably determined by Licensor in good faith (applied in a non- discriminatory fashion and so as not to frustrate the intent of this Agreement). In the event that the withdrawal by Licensor of an Included Program is on account of the expiration of an underlying license from LUcensor’s content provider or for other legal or liability reasons, Licensor shall replace the Included Program with a comparable Included rogram for the duration of the License Period for the withdrawn Included Program. The withdrawal by Licensor of an included Program shall have no effect on the rights of any Customer who conducted a Customer Transaction for such Included Program via the Service on 2 VOD Distribution basis prior to ‘such withdrewal (or any of NTE'S rights in connection therewith), and the continued Fights of any such Customer (or any of NTE's rights In connection therewith) shall continue to be governed by the terms of this Agreement. NTE's removal of any Included Program pursuant to this Section 4.1 shall not in any way bbe deemed to be a walver of any rights of remedies NTE may have as a result of Lcensor’s breach of this Agreement or relieve Licensor of Its indemnification or other obligations hereunder with respect to such withdrawn Included Program. REPORTS AND AUDIT 5.1 Reports, NTE shall provide Ucensor ith a calendar monthly reports (delivery of such report via e-mail is acceptable) in ‘accordance with Licensor’s then-current business practices containing the following information for such reporting period: ()) the fname of each Included Program for which a Customer Transaction was concluded; (ll) the ‘number of Customer Transactions for each such Included Program; and (ii) the applicable License Fees payable to Licensor. In addition, the form of NTE’s monthly report shall contain at least the data described on Schedule 3 attached to the Main Agreement. Each monthly report shall be delivered to Ucensor, along with payment of any License Fees then due, no later than thirty (30) days after the last day of the applicable calendar month. Reports sent to censor shall be emailed to: and NTE ‘hall send to Ucensor any amounts due by wire to the bank account specified in Schedule 3 hereto, Notwithstanding the foregoing, (a) if no Ucense Fees are due to Licensor in a given ‘month, NTE shall not be obligated to deliver @‘monthly report to Licensor for such month, and (b) remittance to Licensor of License Fees may be withheld until the following month if the total amount of all License Fees payable to Licensor does not exceed Five Hundred Dollars ($500). 5.2 _ Audit. During the Term and for up to fone (1) year thereafter, Licensor may, at its ‘own expense but not more than once in any twelve (12) month period commencing on the Effective Date (or any anniversary thereof) and ‘only upon not less than thirty (30) days’ prior written notice, cause the audit of the books and records of account relating to the sale of Ineluded Programs hereunder ("Books") at INTE’s principal place of business soley in order to verify the amounts due from NTE to Licensor hereunder. Such audit may only be conducted by an independent certified public accountant approved by NTE (such approval not to be unreasonably withheld) (an “Accountant’), and shall be conducted only during NTE's regular business hours and in such a manner as not to interfere with the normal business activities of INTE and shall not continue for more than ten (10) business days, Licensor acknowledges that the Books constitute and contain confidential information, and the Accountant must sign and deliver to NTE a confidentiality agreement in a form acceptable to NTE prior to engaging in any ‘examination of the Books. The Accountant shall not be engaged on 2 contingency fee basis. Licensor may only make such an examination for a particular statement within one (1) year after the date when Ucensor receives such statement. If Licensor shall so cause the audit of the Books, then Lcensor shall, within three (3) months of the commencement of such examination, inform NTE In writing of any claim resulting therefrom (Including a true copy of the Accountant's report). Licensor shall be deemed to have consented to all accountings fendered by NTE hereunder, and said ‘accountings shal be binding upon Licensor and shall not be subject to any objection by Licensor for any reason unless specific ‘objections, in writing, stating the basis thereof, are glven to NTE within fifteen (15) months after the date rendered, and, after such written objection, unless sults instituted withia fifteen (15) months after the date rendered. censors right to examine is limited to the Included Programs and under no circumstances shall Ucensor oF the Accountant have the right to examine records relating to NTE's business ‘generally or with respect to any other content for purposes of comparison or otherwise, and LUcensor shall have no right, under common law ‘or otherwise, to examine or audit the Books ‘other than in accordance with the provisions set forthin this Section 5. 6. INSURANCE. With respect to each Included Program delivered to NTE hereunder, Licensor shall ‘maintain in full force and effect, at Licensor’s sole cost ‘and expense, a standard Multimedia Liability or Errors ‘and Omissions insurance policy (including intellectual ‘property coverage, issued by a nationally recognized insurance carrier having at least an A.M. Best rating of ‘AB, 2 Standard & Poor's rating of AA or a Moody's rating of a2, covering NTE's Transmission and exploitation of all Licensor Content in the minimum amount of Three Million Dollars ($3,000,000) per ‘occurrence and Five Million Dollars ($5,000,000) in the aggregate with a deductible no larger than Ten Thousand Dollars ($10,000). Such policy shall name as additional insureds NTE and its Affliates, assigns and licensees as now or hereafter may exist and the directors, officers, shareholders, attorneys, agents and employees of the same (and any additional Persons as INTE may designate to Licensor from time to time), and shall contain a statement that the insurance being provided therein is primary and that any errors and ‘omissions insurance carried by NTE or any of its Afilates is neither primary nor contributing. Licensor shall maintain each such policy In full force and effect and unmodified throughout the Term. Concurrently with delivery to NTE of each Included Program hereunder, Licensor shall deliver to NTE a valid Insurance certificate (In form and substance reasonably satisfactory to NTE) evidencing the Insurance coverage required hereby. 7. REPRESENTATIONS, WARRANTIES AND. COVENANTS. 7. Each Party represents, warrants and covenants that it is an entity duly formed and/or organized and validly subsisting pursuant to the laws of its jurisdiction of formation and/or organization; that this ‘Agreement has been executed by 2 duly authorized representative; and that it has the fight, power and authority to enter into this ‘Agreement and to fully perform its respective obligations hereunder.7.2 Licensor further represents, warrants and covenants to NTE as follows: 7.21 All Licensor Content shall have been produced in compliance with all applicable Laws, including, without limitation, the record keeping and other requirements of 18 U.S.C Section 2257 and all related statutory regulations and provislons, and any and all activities Ucensor undertakes in connection with this Agreement shall be performed in compliance with all applicable Laws. 7.2.2 Licensor owns or controls, and shall own and control at all times during the Term, the rights necessary to make the grants of rights, licenses and permissions hereunder and necessary for NTE to freely exploit the rights granted to it herein, without the need for any licenses, clearances, releases, consents, approvals not granted herein for the requirement to make any payments of any nature to any Person (excluding solely the obligation to pay the License Fees to Licensor in the manner described herein and any obligations specified in Section 7.2.8 hereof); 7.2.3 Licensor has recelved information regarding the Service and has viewed the Service, 7.2.4 Ucensor has not engaged in, and shall not engage in, any actions that conflict or interfere with any of its commitments or obligations under this ‘Agreement and no agreements entered into by Licensor, or that shall be entered into by Licensor, shall confict or interfere with Licensor’s performance of its obligations under this Agreement. 7.2.5 The Uicensor Content and any and all other materials provided by LUcensor pursuant to this Agreement, and the use thereof by NTE in accordance with this Agreement, does rot and shall not infringe or violate any ‘common law or other right (Including, without limitation, contractual proprietary or intellectual property rights) of any other Person, including, without limitation, copyrights, trademark rights and rights of publicity ‘and privacy, droit moral or any simi rights, or violate any law. 7.2.6 Except for those music performance rights fees and royalties set forth in Section 7.2.8 below, Licensor, shall pay any and all royalties, fees, residuals, contingent compensation and ‘other amounts to performers, directors, writers, producers, songwriters, music publishers, owners of rights in sound recordings, unions, guilds, applicable rating agencies and all other third parties in connection with the storage, hosting, sale, ‘Transmission, reproduction, advertising and other permitted exploitation by NTE of censor Content hereunder, including, without limitation, all synchronization royalties, mechanical royalties, master use royalties, and other amounts payable to owners of rights in musical compositions and sound recordings. 7.2.7 There are not, and shall not be, any pending or threatened claims, lens, charges, restrictions or encumbrances (on any Licensor Content licensed to NTE hereunder that could materially imerfere with the rights of NTE under this Agreement. 7.2.8 To the extent any such rights may be implicated, if at all, NTE shall be responsible for clearing (by way of obtaining a valid license) and making payment of any royalties payable to collecting societies in respect of the communication to the public or performing rights (as. applicable depending on the country of exploitation) — of any musical ‘compositions and lyrics in the Licensor Content, only where such clearances ‘and payments arise from NTE’s use of censor Content, but shall not be responsible for any payments set out in Section 7.2.6. 7.2.9 Each Included Program that Is licensed for distribution In the U.S. and Is delvered to Licensee without true andcorrect closed captions in the format ‘and manner required under the CVAA, is not required to contain closed- captioning under the CVAR because it has not aired on television in the US. with closed captioning prior to the commencement of the Term. INDEMNITY 8.1 A Party (the “Indemnifying Party’) shall at its expense and the request of the other Party, defend and indemnify the other Party and its Affliates, licensees and independent contractors and the directors, officers, agents ‘and employees of the same each, an “indemnified Party"), from and against any claims, actions, causes of action, demands, costs, liabilities, expenses (including reasonable outside attorneys’ fees) and damages Claims") to the extent arising out of or in ‘connection with or resulting from or based upon a third party claim of breach or alleged breach of a warranty, representation, covenant ‘or obligation of the Indemnifying Party set forth in this Agreement. In addition to the foregoing, Licensor shall at its expense and the request of NTE, defend and indemnify NTE and Its Affliates, licensees and independent contractors and the directors, officers, agents and employees of the same, from and against any third party claims, actions, causes of zction, demands, costs, liabilities, expenses (including reasonable attorneys’ fees) and damages to the extent arising out of or in connection with or resulting from or based upon NTE’s use of the sor Content a5 permitted hereunder. If NTE receives any Claim that is subject to this Section 8, NTE may notify Ucensor of the details thereof in writing. Thereafter, until such Claim has been finally adjudicated or settled, INTE may, in its sole discretion and in addition to and without prejudice to any other right or remedy NTE may have in Law or in equity or under this Agreement, withhold from monies becoming due or payable to Licensor pursuant to this Agreement, an amount reasonably related to the amount of such Claim. Upon the final adjudication, settlement or other final disposition of such Claim, NTE shall disburse all such withheld funds to Licensor or to any other party entitled thereto, in accordance with the terms of any such adjudication, settlement or other final disposition, 8.2 Mf any action is brought against an Indemnited Party with respect to any allegation for which indemnity may be sought from the Indemnifying Party, the Indemnified Party shall promptly notify Indemnifying Party In writing, The Indemnified Party shall cooperate with the Indemnifying Party, at the Indemnifying Party's expense and in all reasonable respects, in connection with the defense of any such action, The Indemnifying Party shall, upon written notice from the Indemnified Party, undertake to conduct all proceedings or negotiations in connection therewith, assume the defense thereof, and all ‘other required steps or proceedings to settle or defend any such action, including the employment of counsel that shall_be reasonably satisfactory to the Indemnified Party, and payment of all expenses. The Indemnified Party shall have the right to employ separate counsel and participate in the defense at the Indemnified Party's sole expense. Neither the Indemnifying Party nor any Indemnified Party shall settle or compromise any claim or action on the other's behalf without first obtaining the others written permission, which permission shall not be unreasonably withheld or delayed. DEFAULTS; TERMINATION 9.1 Event of Default. Each of the following ‘events shall constitute an event of default hereunder (an “Event of Default”) 9.1.1. The commission by a Party of a material breach of any material provision of this Agreement, unless such breach is cured within thirty (30) days following receipt of notice of such breach, or if not able to be so cured, then resolved to the other Partys reasonable satisfaction within such period; or 9.1.2 The suspension by a Party of payment to its creditors or the general inability of such Party to pay its debts as, ‘and when they fall due or the suffering cof such Party of the making of an administration order or the appointment of a receiver (including an administrative receiver) or manager of the whole or any part ofits assets or the making of any order or passing of @10. resolution for its winding up (except for the purpose of amalgamation or reconstruction) Upon the occurrence of an Event of Default and at any time thereafter, the non-breaching Party shall be entitled to terminate this Agreement upon written notice to the other Party. Notwithstanding the foregoing, in the event of ‘a breach by NTE ofits obligations under Section 5 of the Main Agreement and/or Section 5 of these Standard Terms and Conditions, Licensor's sole remedy shall be an action at aw for any direct damages, and Licensor acknowledges that such direct damages are fully adequate to compensate Licensor In the case of any such breach by NTE hereunder, and Licensor shall have no right to terminate this Agreement or seek or be entitled to rescission, injunctive or other equitable relief. Upon the expiration or earlier termination of this ‘Agreement, NTE shall promptly cease selling and promoting the distribution of Included Programs on the Service in the Territory. The emiration or earlier termination of this Agreement shall have no effect on the rights of any Customers who conducted Customer ‘Transactions for Included Programs prior to such expiration or earlier termination (or any of INTE’s rights in connection therewith}, 9.2 Survival. Sections 3, 5 and 7 of the Main Agreement and Sections 1,2, 5, 6, 7, 8, 9.2 and 10 of these Standard Terms and Conditions shall survive any expiration or earlier termination of this Agreement. MISCELLANEOUS PROVISIONS 10.1 Notices. Any notice, approval, consent oF other communication required or permitted to any Party or assignee under this Agreement shall be in writing to the addresses set forth in Exhibit 8 or such other addresses as the Parties shall inform each other of, in writing, and shalt bbe deemed to have been duly given or made (I) if delivered to a Party personally or by courier, then as of the date delivered of, If delivery is refused, then as of the date presented; (i) if sent or mailed by FedEx or other nationally recognized overnight delivery service, then as of the next business day; (ll) if sent via the United States mail to a party postage prepaid and return receipt requested, then as of the date that is five (5) days after such mailing; and 10 (Ws) elven via facsimile machine then as of the date receipt thereof is electronically acknowledged. Except for notices for breach, termination or contractual termination, the Parties may also send notices via e-mail provided that the other Party replies via e-mail that ithas received such notice. 10.2 Assignment. Neither party may, directly, indirectly, by operation of Law or otherwise, assign, transfer or otherwise delegate, any of its rights and/or obligations hereunder to any Person; provided that either party may assign its rights and/or obligations hereunder to any Affliate or an Person acquiring all of the assets or equity of the assigning party. Any purported assignment, transfer or delegation in violation of the foregoing shall be null, vold and not ‘enforceable. 10.3 UMITATION OF LIABILITY. WITHOUT UMITING OR RESTRICTING THE PARTIES! INDEMNIFICATION OBLIGATIONS UNDER SECTION 8 HEREOF AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT UMITATION, ANY LOST PROFITS, LOST GOODWILL OR LOSS OF BUSINESS, WHETHER FORESEEABLE OR NOT], OCCASIONED BY ANY BREACH UNDER THIS AGREEMENT OR ANY OTHER CAUSE OR CLAIM WHATSOEVER RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, WHETHER BASED ON NEGLIGENCE OR OTHERWISE, 10.4 Confidentiality, Each of Licensor and INTE hereby covenant and agree that, except as may be required by apalicable Law or pursuant ‘to subpoena or order of any judicial, legislative, executive, regulatory or administrative body, or as part of Its normal reporting or review procedure to Its partners, its current and prospective shareholders, Its divisions, Affiliates and its financial advisors, participants, Licensor’s, auditors and attomeys, or as necessitated by the collective bargaining process or as required by the terms of any applicable collective bargaining agreement (provided that any and all such parties shallagree to be bound by the provisions of this, Section 10.4), neither it nor any of Is officers, directors, employees, or agents shall, directly or indirectly, disclose to any third party any of the terms of this Agreement including, but not limited to, the License Fees and all .other financial terms, and all other terms and ‘conditions ofthis Agreement. Each of NTE and Licensor (each a “Disclosing Party’) agrees that It shall, and It shall Instruct in vatiting its respective attorneys, accountants ‘and other financial advisors to hold in confidence and not communicate, transmit, publish, disseminate or otherwise disclose any information regarding the other Party's business learned in the course of dealing or performance hereunder (collectively, “Confidential information"); except as may be required by applicable Law or pursuant to subpoena or order of any judicial, legislative, ‘executive, regulatory or administrative body, oF a8 part of its normal reporting or review procedure to its partners, Its current and prospective shareholders, its divisions, its Affiiates and its financial advisors, partielpants, Lcensor’s, auditors and attorneys, or as necessitated by the collective bargaining process or as required by the terms of any applicable collective bargaining agreement (provided that any and all such parties shail ‘agree to be bound by the provisions of this Section 10.4) Notwithstanding anything to the contrary herein, Confidential Information shall not include information which () ator prior to the time of disclosure by the Disclesing Party was knowa to or independently developed by the party receiving such Information (a “Receiving Party’, except to the extent unlawfully appropriated by the Receiving Party; (il) at or after the time of disclosure by the Disclosing Party becomes generaly avallable tothe pubic through no. wrongful or negligent act or comission on the Receiving Party's part oF (i) the Recelving Party receives from a thir party free to make such disclosure without breach of any legal obigation. 10.5 Publicity. Each of Licensor and NTE covenant and agree that neither it nor any of Its officers, directors, employees or agents shall u make any public statement, press release or announcement with respect to (a) the existence of this Agreement and/or (b the terms of this Agreement including, but not limited to, the License Fees and all other financial terms, and all other terms and ‘conditions of this Agreement, unless (i) the substance and form of the statement, release for announcement are agreeable to Licensor ‘and NTE and (i) the Parties agree that such statement, release or announcement shall be made. 10.6 Walver. No course of dealing between Licensor and NTE shall operate as a waiver of any of Ucensor’s or NTE’s rights under this ‘Agreement. No delay or omission on the part of Licensor or NTE in enforcing or requiring the performance of an obligation or covenant or other undertaking of the other Party under this ‘Agreement shall operate as a walver of such right or any other right hereunder. The breach ‘of any provision of this Agreement shall not be walved or deemed waived by the non- breaching Party unless such waiver isin waiting and signed by such non-breaching Party. The waiver by the non-breaching Party of any one breach shall not be and shall not be deemed to be a waiver by the non-breaching Party of any other breach of the same or any other provision 6f this Agreement. 10.7 Force Majeure. Neither Party shall be responsible for, or be in breach of this ‘Agreement, to the extent that its performance is delayed or prevented as a result of any act of God, war, terrorism, flood, fire, earthquake, sickness, accident, labor dlspute, strikes lock- outs, civil commotion, act of government or any other cause whally beyond Its control, and not due to its own negligence or that of its contractors. or representatives, and which cannot be overcome by the exercise of due dligence; provided that NTE shall have the Fight, by delivering written notice thereof to the other, to terminate this Agreement upon the occurrence of any of the foregoing events that affects the operation of the Service and that continues for thirty (30) or more ‘consecutive days. 10.8 No Third Party Beneficiaries. This ‘Agreement is entered into for the express benefit of the Parties hereto, thelr successorsand permitted assigns and is not intended, and shall not be deemed, to create in any other Person, any rights or interest’ whatsoever, including, without limitation, any right to enforce the terms hereof. The relationship between Licensor and NTE hereunder is only that of Licensor and NTE, respectively, and this ‘Agreement shall not, and shall not be deemed ‘to, create or be construed to create a joint venture or partnership between the Parties hereto. 10.9 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and wholly performed therein without regard to principles of conflicts of law. 10.10 Consent to Jurisdiction. Licensor (i) ‘agrees that any litigation, action or proceeding arising out of or relating to this Agreement may be instituted by NTE in any state or federal court in the State of California; (i) waives any objection which it might have now or hereafter to the venue of any such litigation, action or proceeding; (li) irrevocably submits to the jurisdiction of any such court in any such litigation, action or proceeding; (iv) waives any claim or defense of inconvenient forum; and (v) agrees that any litigation, action or proceeding arising out of or relating to this Agreement shall be instituted by Licensor exclusively in state or federal court located in the city of Los ‘Angeles and State of California. Licensor consents to service of process by registered airmail, return receipt requested, at the address set forth in Exhibit_8 and expressly waives the benefit of any contrary provision of foreign law. Nothing in this Section 10.20 shall affect NTE's right to serve process in any other ‘matter permitted by Law or to commence legal proceedings or otherwise proceed against LUcensor in any other court in which Licensor is subject to suit. 10.11 Headings. The headings contained in this Agreement are for convenience and reference only, do not form a substantive part of this Agreement, and in no way modify, interpret or construe the intentions of the Parties. No provision of this Agreement shall be interpreted for or against any Party because 2 that Party or its legal representative drafted such provision, 10.12 Entre Agreement. This Agreement (including all exhibits attached hereto, which are Incorporated herein by reference) constitutes the entire agreement between the Parties and all prior understandings are merged herein, 10.13 Amendments. This Agreement may not be changed, modified, amended or supplemented, except in writing signed by both Parties. 10.14 Severability. if any term or provision of this Agreement is found to be void or contrary ‘to Law, such term or provision shall, but only to the extent necessary to bring this Agreement within the requirements of applicable Law, be deemed to be severable from the other terms ‘and provisions of this Agreement, and the remainder of this Agreement shall be given effect as if the Parties had not included the severed term herein 10.15 Signatures. This Agreement may be signed in counterparts. Facsimile signatures and/or electronic scans shall have the same binding effect as originals 10.16 Not Effective Until Execution. This ‘Agreement shall have no force or effect, and nothing in thls Agreement shall be binding upon Licensor or NTE, unless and until such time, if any, as this Agreement has been ‘executed by an authorized signatory of Licensor and NTE, respectively, and has been delivered to each Party.EXHIBIT B NOTICES Notices shall be given pursuant to the terms of the Agreement and shall be delivered to each Party as follows: TONTE: ‘TOLICENSOR: ‘NanoTech Entertainment, Inc, 2450 Kruse Drive San Jose, CA 95131 Ann: Tal Fax: E-mail aron@ntek com aw Marte Keesser Fax: E-mail: mark @ KG we nicabiens CO 13SCHEDULE 1 INCLUDED PROGRAMS © The VOD Deemed Price shall be as follows: For New Release Included Programs, $9.99 For Library Included Programs, $7.99 PoimstewaveTabt the Joscomenary | horhAneres [Eatin ares 739 ia Beconeney | aca | era Ter 73 Resear at ake Secanenay | ton ea | tra Ter 735 Fite Pat Opened |oscomeniny | hartamarea | mah Ter 7 ea psaenan |Terms | es pes | Navcore tomwan —Oonrnonay | ver Amaria | Ein Tem 7 fea Secomean | teria] aah ae 735 a Sacarenty | “Renae | trae aa 7 a a a ae 7 aac Fresno learner | narvamanes | — ear Te 7H pane Jcarensy | tarararea | ran Tyr 738 estat adrerre sare | “Norvarers| tah Tew 738 [asa Sprtaf he wia —Jaoamenay | Wonbanea | tain ar 7 [agers Rak Te [Bourvamay | “enhanera | trator ae 7 scans ote faa ecameniny | Ranvier | enor ad 738 14SCHEDULE 2 DELIVERY MATERIALS Licensor shall deliver the following materials, a its sole cost, to NTE no later than ninety (90) days prior to ‘the start of the applicable License Period for each Included Program: 1) With respect to each Included Program, and Promotional Segment and Trailer for such Included Program: MEZZANINE FILE SPEC ProRes HQ native 4K mezzanine level master file (or) 4K DPX (or) 4K CINEON 2) With respect to each Included Program, official artwork for such Included Program, in one ofthe below formats in order of preference: ‘A)Layered PSD of art including title treatment, RGB B)Layered Al or INDD, RGB CO)TIFF, PDF, EPS, JPG of art, RGB 3) Closed captions in the format required by the CVAA. 4) Licensor, at its sole cost and expense, shall provide any and all available press and marketing materials, including, but not limited to, press kits, EPKS, still images, key art and poster art, and video promos. 5) In addition, Licensor, at its sole cost and expense, shall provide the following materials: 8) Seripts/Transeripts- thd b) Synopsis. A brief synopsis ofthe Included Program (30 words) and a regular synopsis of the Included Program. ©) Musle Cue Sheets - thd 4) Contact Information ~ A document containing the following Information; ‘+ Licensor’s Designated Primary Contact Information forthe Included Program: Public Relations and Marketing Related Matters for the Included Program (if same as General Inquires state "Same"): Same + Technical Matters = 15- Metadata should be sent electronically as an Excel, Word or PDF file. Title of Included Program Included Program Synopsis Credit List (including final cast and crow fst) names as well as oles (Actor/Actress, Dittttor, Producer etc) (Chapter timecodes Genre Year of Production/Release Premiere Date Rating(s)~all ratings information issued by an administrative, regulatory or other body in each county ofthe Teritory andor that are otherwise required tobe displayed in connection with the distribution of the Included Programs via the Service, Runtime/Block Time Poster Image(s) (“Teumbnail”) ~ a promotional image for TV (800x800 JPG) show, hi-res movie poster (800x584 JPG) - not DVD box shot for movies Key Awards/Festvals Country of Origin Language Company/Distributor Copyright Aspect Ratio 16a VIDEO-ON-DEMAND LICENSE AGREEMENT This Video-on-Demand License Agreement (together with each of the exhibits and schedules hereto, this “Agreement”) is made as of August 20°, 2014 (the “Effective Date”), by and between ‘NanoTech Entertainment, Inc. (“NTE”) and K2 Communications, Inc. (“Licensor”). 1. DEFINITIONS. Capitalized terms not otherwise defined in the Main Agreement have the meaning ascribed to them in Exhibit A attached hereto. 4.1. “4K UHD” means a video transmission with up to: (a) 2160 lines of vertical resolution; and (b) 4096 lines of horizontal resolution; provided that a stream of an Included Program licensed in 4K UHD may fall below 2160 lines of vertical resolution or 4096 lines of horizontal resolution, from time to time due to network congestion, consumer broadband speed and other technical issues. 1.2. “Authorized Language” means, with respect to each Included Program, all languages unless limited to the language(s) indicated beside such Included: Program in the “Authorized Language” column of Schedule 1 hereto. 4.3. “Authorized Resolution” means 4K UHD. 1.4 “License Fees” means VOD License Fees. 1.5 “Licensed Business Model” means Monthly Minimum Guarantee, 1.6 “Promotional Segment” means, with respect to each Included Program, an audio-visual excerpt of such Included Program designated by Licensor in writing to NTE. 1.7 “Territory” means, with respect to each Included Program, worldwide unless limited to the country (jes) indicated beside such Included Program in the “Territory” column of Schedule 1 hereto. 2. TERM. The “Term” of this Agreement shall commence on the first day that NTE is permitted to launch one or more Included Program, currently anticipated to be during the month of November, 2014 (the Launch Date”) and continue through and including the lat day of the twenty-fourth full month after the month during which the Launch Date falls. 3. _ LICENSE. Licensor hereby grants NTE a limited, non-exclusive right and license under copyright for otherwise, in the Territory, during the Term, to Transmit copies of each Included Program, in the ‘Authorized Language, and in the Authorized Resolution, during such Included Program's applicable License Period, via the Licensed Business Model, for viewing by Customers of the Service. In furtherance ‘of such grant, Licensor hereby grants to NTE with respect to each Included Program, the rights and licenses to: 3.1 advertise, publicize, market, test and promote (collectively, “Promote”) the Licensor Content and its Transmission and exploitation via the Service, commencing ninety (90) days prior to and continuing through the respective License Period of each applicable Included Program, including, without limitation, the right to use and license others to use Licensor’s name, the title of, Trailers created for and excerpts from such Included Program (including without limitation audio and video portions either together or separately) and the name, voice and likeness of and ‘any biographical material concerning all persons appearing in or connected with such Licensor Content, trademarks and other identifiers of Licensor and any third party licensed to Licensor in connection with Licensor Content, and any other Promotional Materials provided by Licensor for the purpose of Promoting such Included Program; EXHIBIT3.2 utilize and embed Metadata in connection with the exploitation of all Licensor Content, Licensor shall promptly provide to NTE updates of, and corrections to, Metadata as they become available to Licensor. Without limiting the foregoing, NTE shall have the right to edit or modify Metadata in order to correct errors and supplement incomplete information, and to add additional categories of information to such Metadata, such as genres, biographical information and product reviews; 3.3. encodehranscode tapes or files of Licensor Content delivered hereunder into the various consumer specification formats, bitrates and resolutions utilized by the Service, in accordance with NTE’s specifications and store such tapes, files or encoded/transcoded tapes or files during the Term and 3.4 permit end users of the Service to receive Transmissions to the Streaming Player of the Promotional Segment of each Included Program, during the applicable License Period of the related Included Program, at no charge to each such end user (such rights, the “Promotional ‘Transmission Rights"). All right, title and interest in, to and with respect to the Included Programs, and the elements and parts thereof, and means of exhibition and distribution not specifically granted herein to NTE shall be and are specifically and entirely reserved to Licensor. 4. INCLUDED PROGRAMS 4.1 Generally. “Included Programs” shall mean those programs included on Schedule 1, as the same may be supplemented by mutual agreement of the Parties in writing from time to time. NTE shall have the right, exerciseble in its sole discretion, to determine which Included Program(s) (if any) it shall make available via the Service at any time during the applicable License Period in the Territory and to remove one or more Included Programs from availability via the Setvice in the Territory at any time during the applicable License Period. 4.2. License Period. The period in the Territory during which Licensor permits NTE to offer each Included Program on the Service (“License Period”) for the Licensed Business Model shall be set forth on Schedule 1, as indicated beside such Included Program in the “License Period” column of Schedule 1 hereto, subject to Licensor's withdrawal rights as set forth in Exhibit A attached hereto, 4.3 Delivery. With respect to each Included Program (including each Promotional Segment thereof), Licensor shall deliver the materials listed in Schedule 2 to NTE or NTE’s designee in accordance with the specifications set forth therein. FEES AND PAYMENT; MINIMUM GUARANTEE, 5.1 Monthly Minimum Guarantee. NTE shall pay Licensor a monthly minimum guarantee (the “MG”) in the amount of $2500.00 per month per Included Program for the Term. The MG shall be paid with 50% cash and 50% Company stock (OTC: NTEK ) with the stock value price locked in at the signing of this Agreement, (i) NTE shall make each “MG” payment by the last day of the month that each Included Program is made available on NTE Service, ake- UltraFlix. Nothwithstanding the foregoing, the first MG payment shall be made within 30 days of the Effective Date.6. RESERVED 7, MISCELLANEOUS 7.4 In the event of any conflict between the foregoing (the “Main Agreement”) and any ‘exhibits or schedules attached hereto, the terms of the Main Agreement shall take precedence end shall govern. The attached Exhibit A, Exhibit B, Schedule 1, Schedule 2, Schedule 3, and any other exhibits and schedules attached to this Agreement, are hereby incorporated by reference. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. NANOTECH ENTERTAINMENT, K2 COMMUNICATIJONS, INC. INC. By; EMU (ecoce seem age Nam Yur Kresser wy A Te, “Pre Silent ‘Name: Aaron Taylor Tite: EVPLcensor and NTE, 1 EXHIBIT A STANDARD TERMS AND CONDITIONS Following are the Standard Terms and Conditions of this Agreement (“Standard Terms and Conditions”) between DEFINITIONS. Capitalized terms not otherwise defined in the Main Agreement have the meaning ascribed to them as follows: 1.1 “Actual Retail Price” means, with respect to an Included Program, the non- returnable monies actually received by NTE from a Customer Transaction on a VOD Distribution basis, of such Included Program, net of any applicable taxes and levies and payment processing fees (collectively, “Taxes") For the avoidance of doubt, the retail price on the Service of any included Program shall be established by NTE init sole discretion. 1.2. “Affilate” means, with respect to any Person, any other Person that controls, is controlled by (directly or indirectly), or is under common control with, such Person. 1.3. “Customer Transaction” means each transaction whereby NTE recelves the applicable Actual Retall Price from a Customer ‘and, in exchange therefor, such Customer actually recelves a Transmission of an Included Program on a VOD Distribution basis from the Service. For clarity, Transmissions of Promotional Segments shall not constitute Customer Transactions hereunder. 1.4 “Customer” means a user of the Service. 1.5 “CVAR” means the 21st Century Communication and Video Accessibility Act as promulgated by the requirements, rules and regulations of the Federal Communications Commission (and corresponding interpretations of the Federal Communications Commission), as may be amended, modified or supplemented 1.6 “Home Video” means OVO, Bluray or any other form of home video media now known or hereafter devised (Including, without limitation, via electronic or digital sell-through or rental). 1.7 "Laws" means any statute, law, regulation, ordinance, rule, Judgment, order, In the event of any conflict between the Standard Terms and Conditions and the Main ‘Agreement, the provisions ofthe Main Agreement shall control decree, permit, concession, grant, franchise, license, agreement, directive, guideline, policy ‘oF rule of common law, or any governmental requirement or other governmental restriction ‘or similar form of decision or determination, or any interpretation or administration of any of the foregoing by any national, state or local government (or any association, organization ‘oF institution of which any of the foregoing is 9 ‘member, oF to whose jurisdiction any thereof is. subject, or in whose activities any thereof is a participant), whether now or hereafter In effect. 1.8 “Ucensor Content” means, collectively, the Included Programs, Metadata, and all other material (Including, without limitation, Prometional Material and Promotional Segments) delivered, or otherwise made available, by Licensor hereunder. 1.9 “Ubrary Included Program” means an Included Program other than a New Release Included Program. 1.10 “Metadata” means the information set forth on the attached Schedule 2 1.11 "New Release Included Program” means a motion picture that has not been ‘exhibited in the United States by any means or ‘media {other than by means of theatrical ‘exhibition and/or Home Video exhibition) prior to the date that is 12 months prior to the first date of the License Period for such picture in the United States. A New Release Included Program shall become a Library Included Program on the 366" day following the first day that such New Release Included Program was exhibited in the United States by means or media other than by means of theatrical exhibition and/or Home Video exhibition, 1.12 "Party’ or “Parties” means NTE and/or Licensor, as the context requites, 1.13 “Person” means any _ individual, corporation, general or limited partnership, limited liability company, joint venture, estate,trust, association, organization, agency or entity or any ether entity of any kind or nature. 1.14 “Promotional Materials” means the ‘Teailers, logos, publicity images, and any other advertising and promotional materials supplied by Licensor to NTE or that Licensor otherwise authorizes NTE to utilize in connection with the promotion of the included Programs. 1.15 “Service” means the premium 4K UHD digital delivery service, aka- UltraFlix™ that distributes audio-visual content to Customers fon 2 video-on-demand basis via NTE's proprietary Streaming Player and via such other consumer electronics devices on which the Service is accessible at any time during the Term. 1.16 “Streaming Player” means the Nuvola INP-1 Set Top Box (together with any and all suocessor players thereto}. 1.17. "Trailer’ means a program containing ‘excerpts from an Included Program. 1.418. “Transmit” means download, stream ‘and/or otherwise transmit and distribute by any means or methods (e.., by wire or wireless methods now known or hereafter devised). “Transmitted” and “Transmission” shall have correlative meanings. 1.19 “Viewing Period” means, with respect to each Customer Transaction for an Included Program on a VOD Distribution basi, the time period {a] commencing at the time a Customer downloads such included Program for the first time, and (b) ending on the earlier of (i) no less than twenty-four (24) and no more than seventy-two (72) hours (as determined by NTE) after such Customer has commenced the playback or viewing of such Included Program for the first time and (i) thirty (30) days after the date that a Customer downloads such Included Program for the first time (unless otherwise expressly approved in writing by censor) 1.20 “VOD Distribution” means a Customer ‘Transaction whereby a Customer is charged a transactional fee for authorization to receive Transmissions of an Included Program on an on-demand basis for personal viewing at times chosen by the Customer in the Customer's sole discretion during the applicable Viewing Period, PRICES, FEES AND PAYMENT 2.1 Currency Conversion. All amounts ‘payable to Licensor hereunder shall be paid in US. dollars, converted from local currency, if applicable, at the applicable closing rate in New York, New York set forth in the Wall Street Journal (US. edition) on the first business day cof the month in which the applicable payment Is due, 2.2 Tanes. As between Ucensor and NTE, NTE shall be responsible to colect, bear and pay any and all taxes levied or based upon the sale or resale of any products or provision of services by NTE, Including, all als, use, value added, withholding or similar taxes. NTE i not lable for any of the taxes of Licensor that LUcensor is legally obligated to pay that are incurred or arise in connection with or related to the sale or license of the Licensor Content under this Agreement, and all such taxes (including but not limited to net income or ‘ross receipts taxes, franchise taxes, and/or Property taxes) shall be the financial responsibilty of Licensor, provided that NTE shall pay to Licensor any sales, use or value added taxes that are owed by NTE solely as a result of entering into this Agreement and that are required to be collected from NTE by licensor under applicable Law. NTE may provide to Licensor a valid exemption certificate in which case Licensor shall not collect the taxes covered by such certificate. Licensor agrees to indemnity, defend and hold INTE harmless from any taxes (including sales or use taxes paid by NTE to Licensor) or claims, causes of action, costs (including, without limitation, reasonable attorneys’ fees) and any other abilities of any nature whatsoever related to such taxes. If taxes are required to be withheld on any amounts otherwise to be pald by NTE to Licensor, NTE shall deduct such taxes from the amount otherwise owed and pay them to the appropriate taxing authority ANTE shall secure and deliver to Licensor an oficial receipt for any taxes withheld. DELIVERY MATERIALS; CONTENT PROTECTION 3.1 Licensor shall be responsible for all costs and expenses related to the creation anddelivery of all censor Content materials required to be delivered by Licensor hereunder. INTE shall have the right to inspect each delivery item delivered hereunder and shall hhave the right to reject delivery items which do not pass NTE's customary quality review. if NTE reasonably rejects any item pursuant to the above, Licensor shall promptly replace such rejected item until such delivery item passes INTE’s quality review. 3.2. NTE shall have the right to cut, edit, dub, sub-ttle, ater and otherwise modify the LUcensor Content as may be necessary to comply with local or national broadcast standards or any other applicable Laws or standards (including obscenity laws or standards)and to authorize any Person to do the foregoing. NTE shall have the right to cut, cet, dub, sub-ttl, alter and otherwise modify the Licensor Content to create Promotional Materials, provide that any such cuts, edits, etc ‘must be approved by Licensor, which approval shall not be unreasonably withheld. 3.3. NTE will implement Industry standard security and content protection technologies that are designed to protect the Included Programs from unauthorized accessor distribution. Without limiting the foregoing, the security and content production technologies and settings utilized in connection With the distribution of the Included Programs will be no less protective than the most protective technologies and settings employed by the Service to protect any other content distributed in the Authorized Resolution via the Service. Notwithstanding the foregoing, Licensor acknowledges that such measures and technologies may not be effective in all Instances to protect the included Programs from unauthorized access or use by end users and under no circumstances will NTE be lable to Licensor or any other person or entity in the ‘event of any failure or circumvention of such technologies and/or measures by end users. WITHDRAWAL 4.1 Licensor shall have customary rights to withdraw a given Included Program for egal or liability reasons as reasonably determined by Licensor in good faith (applied in a non- discriminatory fashion and so as not to frustrate the intent of this Agreement). In the ‘event that the withdrawal by Licensor of an Included Program Is on account of the ‘expiration of an underlying license from censors content provider or for other legal or Mabiity reasons, Licensor shall replace the Included Program with a comparable included Program for the duration of the License Period for the withdrawn Included Program. The withdrawal by Licensor of an Included Program shall have no effect on the rights of any Customer who conducted a Customer Transaction for such Included Program via the Service on @ VOD Distribution basis prior to such withdrawal (or any of NTE’s rights in connection therewith), and the continued ights of any such Customer (or any of NTE's ights in connection therewith) shall continue ‘tobe governed by the terms ofthis Agreement. NTE’s removal of any Included Program pursuant to this Section 4.1 shall notin any way be deemed to be a waiver of any rights or remedies NTE may have as a result of Licensor's breach of this Agreement or relieve Licensor of Its indemnification or other obligations hereunder with respect to such withdrawn Included Program. REPORTS AND AUDIT 5.1 Reports. NTE shall provide Licensor with a calendar monthly reports (delivery of such report via e-mall Is acceptable) in accordance with Licensor’s then-current business. practices containing the following information for such reporting period: (i) the name of each Included Program for which a Customer Transaction was concluded; (i) the ‘number of Customer Transactions for each such Ineluded Program; and (i) the applicable License Fees payable to Licensor. In addition, the form of NTE’s monthly report shall contain at least the data described on Schedule 3 attached to the Main Agreement. Each monthly report shall be delivered to Licensor, along with payment of any License Fees then due, no later than thirty (30) days after the last day of the applicable calendar month. Reports sent to censor shall be e-mailed to and NTE ‘shall send to Licensor any amounts due by wire to the bank account specified in Schedule 3 hereto. Notwithstanding the foregoing, (a) ifn0 Ucense Fees are due to Licensor in a given month, NTE shall not be obligated to deliver a‘monthiy report to Licensor for such month, and (b) remittance to Licensor of License Fees may be withheld unti! the following month if the total amount of all License Fees payable to Licensor does not exceed Five Hundred Dollars ($500), 5.2 Audit. During the Term and for up to fone (1) year thereafter, Licensor may, at its ‘own expense but not more than once in any twelve (12) month period commencing on the Effective Date (or any anniversary thereof) and only upon not less than thirty (30) days’ prior written notice, cause the audit of the books and records of account relating to the sale of Included Programs hereunder ("Books") at NNTE’s principal place of business solely in order to verify the amounts due from NTE to Licensor hereunder. Such audit may only be conducted by an independent certified public accountant approved by NTE (such approval not to be ‘unreasonably withheld) (an “Accountant”), and shall be conducted only during NTE's regular business hours and in such a manner as not to Interfere with the normal business activities of INTE and shall net continue for more than ten {20) business days. Lleensor acknowledges that the Books constitute and contain confidential information, and the Accountant must sign and deliver to NTE a confidentiality agreement in a form acceptable to NTE prior to engaging in any ‘examination of the Books. The Accountant shall not be engaged on a contingency fee basi. Licensor may only make such an examination for 2 particular statement within one (1) year after the date when Licensor receives such statement. If Licensor shal so cause the audit of the Books, then Licensor shall, within three (3) months of the commencement of such ‘examination, inform NTE in writing of any claim resulting therefrom (including a true copy of the Accountant's report). Licensor shall be deemed to have consented to all accountings rendered by NTE hereunder, and said accountings shall be binding upon Licensor and shall not be subject to any objection by Licensor for any reason unless. specific objections, in writing, stating the basis thereof, are given to NTE within fifteen (15) months after the date rendered, and, after such written objection, unless suit is instituted within fifteen (25) months after the date rendered. Licensor’s right to examine is limited to the Included Programs and under no circumstances shall Licensor or the Accountant have the right to examine records relating to NTE’s business generally or with respect to any other content for purposes of comparison or otherwise, and Licensor shall have no right, under common law for otherwise, to examine or audit the Books ‘ther than in accordance with the provisions set forthin this Section 5. 6. INSURANCE. With respect to each Included Program delivered to NTE hereunder, Licensor shall maintain in full force and effect, at Licensor's sole cost and expense, a standard Multimedia Liability or Errors ‘and Omissions insurance policy (including intellectual property coverage), issued by 2 nationally recognized Insurance carrier having at least an A.M. Best rating of AB, a Standard & Poor's rating of AA or a Moody’s rating of a2, covering NTE’s Transmission and exploitation of all Licensor Content in the minimum amount of Three Million Collars ($3,000,000) per ‘occurrence and Five Milion Dollars ($5,000,000) in the ageregate with 2 deductible no larger than Ten ‘Thousand Dollars ($10,000). Such policy shall name as additional insureds NTE and its Affiliates, assigns and licensees as now or hereafter may exist and the directors, officers, shareholders, attorneys, agents and ‘employees of the same (and any additional Persons as. INTE may designate to Licensor from time to time), and shall contain a statement that the Insurance being provided therein Is primary and that any errors and ‘omissions insurance carried by NTE or any of its Affliates Is neither primary nor contributing. Licensor ‘shall maintain each such policy in full force and effect ‘and unmodified throughout the Term. Concurrently with delivery to NTE of each Included Program hereunder, Licensor shall deliver to NTE a valid Insurance certificate (in form and substance reasonably satisfactory to NTE) evidencing the insurance coverage required hereby. 7. REPRESENTATIONS, WARRANTIES AND. COVENANTS. 7A Each Party represents, warrants and covenants that it Is an entity duly formed and/or organized and validly subsisting pursuant to the laws of its jurisdiction of formation and/or organization; that this ‘Agreement has been executed by a duly authorized representative; and that it has the right, power and authority to enter into this ‘Agreement and to fully perform its respective obligations hereunder.7.2 Licensor further represents, warrants ‘and covenants to NTE as follows: 7.2.4 All Licensor Content ‘shall have been produced in compliance with all applicable Laws, including, without limitation, the record keeping and other requirements of 18 US.C. Section 2257 and all related statutory regulations and provisions, and any and. all activities LUcensor undertakes in connection with this Agreement shall be performed in compliance with all applicable Laws. 7.2.2 Licensor owns or controls, and shall own and control at all times during the Term, the rights necessary to make the grants of rights, licenses and permissions hereunder and necessary for NTE to freely exploit the rights granted to it herein, without the need for any licenses, clearances, releases, consents, approvals not granted herein or the requirement to make any payments of any nature to any Person (excluding solely the obligation to pay the: License Fees to Ucensor in the manner described herein and any obligations specified in Section 7.2.8 hereof); 7.2.3 Licensor as-received Information regarding the Service and has viewed the Service. 7.2.4 licensor has not engaged in, and shall not engage in, any actions that conf’ or interfere with any of its commitments or obligations under this Agreement and no agreements entered Into by Licensor, or that shall be entered into by Licensor, shall conflict or interfere with Licensor’s performance of its obligations under this Agreement, 7.2.5 The Licensor Content and any and all other materials provided by censor pursuant to this Agreement, and the use thereof by NTE in accordance with this Agreement, does not and shall not infringe or violate any ‘common law or other right (including, without limitation, contractual proprietary or intellectual property rights) of any other Person, including, without imitation, copyrights, trademark rights and rights of publicity and privacy, drolt moral or any similar rights, or violate any law. 1.2.6 Except for those — music performance rights fees and royalties set forth in Section 7.2.8 below, Licensor shall pay any and all royalties, fees, residuals, contingent compensation and ‘other amounts to performers, directors, writers, producers, songwriters, music publishers, owners of rights in sound recordings, unions, guilds, applicable rating agencies and all other third parties in connection with the storage, hosting, sale,-——Transmission, reproduction, advertising and other permitted exploitation by NTE of Ucensor Content hereunder, Including, without limitation, all synchronization royalties, mechanical royalties, master use royalties, and other amounts payable to owners of rights in musical compositions and sound recordings. 7.2.7 There are not, and shall not be, any pending or threatened claims, liens, charges, restrictions. or encumbrances ‘on any Licensor Content licensed to NTE hereunder that could materially interfere with the rights of NTE under this Agreement. 7.2.8 To the extent any such rights ‘may be Implleated, fat all, NTE shal be responsible for clearing (by way of obtaining a valid license) and making payment of any royalties payable to collecting societies in respect of the communication to the public or performing rights (as applicable depending on the country of, exploitation) of | any musical compositions and lyrics in the Licensor Content, only where such clearances and payments arise from NTE's use of censor Content, but shall not be responsible for any payments set out in. Section 7. 71.2.9 Each Included Prog licensed for di is delivered to Licensee without true andcorrect closed captions in the format land manner required under the CVAA, Is not required to contain closed- captioning under the CVAA because it has not aired on television in the US, with closed captioning prior to the ‘commencement of the Term. INDEMNITY 8.1 A Party (the “Indemnifying Party") shall at its expense and the request of the other Party, defend and indemnify the other Party and its Affiliates, licensees and independent contractors and the directors, officers, agents and employees of the same (each, an “Indernnified Party’), from and against any Claims, actions, causes of action, demands, costs, liabilities, expenses {including reasonable outside attorneys’ fees) and damages ("Claims") to the extent arising out of or in connection with or resulting from or based upon a third party claim of breach or alleged breach of a warranty, representation, covenant Cr obligation of the Indemnifying Party set forth in this Agreement. in addition to the foregoing, Licensor shall at its expense and the request of NTE, defend and indemnify NTE and its Affiliates, licensees and independent contractors and the directors, officers, agents ‘and employees of the same, from and against any third party clalms, actions, causes of action, demands, costs, liabilities, expenses (including reasonable attorneys’ fees) and damages to the extent arising out of or in connection with or resulting from or based upon NTE's use of the censor Content as permitted hereunder. If INTE receives any Claim that is subject to this Section 8, NTE may notify Ucensor of the details thereof in writing. Thereafter, until such Claim has been finally adjudicated or settled, NTE may, in its sole discretion and in addition to and without prejudice to any other right or remedy NTE may have in Law of in equity ot under this Agreement, withhold from monies becoming due or payable to Licensor pursuant to this Agreement, an amount reasonably related to the amount of such Claim. Upon the final adjudication, settlement or other final disposition of such Claim, NTE shall disburse all such withheld funds to Licensor or to any other party entitled thereto, in accordance with the terms of any such adjudication, settlement or ‘other final disposition. 9. 2 if any action is brought against an Indemnified Party with respect to any allegation for which indemnity may be sought from the Indemnifying Party, the Indemnified Party shall promptly notify Indemnifying Party in writing, ‘The Indemnified Party shall ‘cooperate with the Indemnifying Party, at the Indemnifying Party's expense and in all reasonable respects, in connection with the defense of any such action. The Indemnifying Party shall, upon written notice from the Indemnified Party, undertake to conduct all proceedings or negotiations in connection ‘therewith, assume the defense thereof, and all other required steps or proceedings to settle or defend any such action, Including the employment of counsel that shall be reasonably satisfactory to the Indemnified Party, and payment of all expenses. The Indemnified Party shall have the right to employ separate counsel and participate in the defense at the Indemnified Party's sole expense. Neither the Indemnifying Party nor any Indemnified Party shall settle or ‘compromise any claim or action on the other's behalf without first obtaining the other's written permission, which permission shall not bbe unreasonably withheld or delayed. DEFAULTS; TERMINATION 9.1 Event of Default. Each of the following events shall constitute an event of default hereunder (an “Event of Default’): 9.1.1 The commission by a Party of a material breach of any material Provision of this Agreement, unless such breach is cured within thirty (30) days following recelpt of notice of such breach, or If not able to be so cured, then resolved to the other Party's reasonable satisfaction within such period; or 9.1.2 The suspension by a Party of payment to its creditors or the general inability of such Party to pay its debts as and when they fall due or the suffering of such Party of the making of an administration order or the appolntment of a receiver (including an administrative receiver) or manager of the whale or any part of its assets or the making of any order or passing of a10. resolution for its winding up (except for the purpose of amalgamation or reconstruction) Upon the occurrence of an Event of Defauit and at any time thereafter, the non-breaching Party shall be entitled to terminate this Agreement ‘upon written notice to the other Party. ‘Notwithstanding the foregoing, in the event of 1 breach by NTE ofits obligations under Section 5 of the Main Agreement and/or Section 5 of these Standard Terms and Conditions, Licensors sole remedy shall be an action at law for ary direct damages, and Licensor ‘acknowledges that such direct damages are fully adequate to compensate Licensor in the ‘case of any such breach by NTE hereunder, and LUcensor shall have no right to terminate this ‘Agreement or seek or be entitled to rescission, injunctive or other equitable relief. Upon the expiration or earlier termination of this Agreement, NTE shall promptly cease selling ‘and promoting the distribution of included. Programs on the Service in the Territory. The expiration or earller termination of this ‘Agreement shall have no effect on the rights of any Customers who conducted Customer Transactions for Included Programs prior to such expiration or earlier termination (or any of INTE's rights in connection therewith). 9.2 Survival. Sections 1, § and 7 of the Main ‘Agreement and Sections 1, 2, 5, 6,7, 8,9.2 and 10 of these Standard Terms and Conditions shall survive any expiration or earlier termination of this Agreement. MISCELLANEOUS PROVISIONS 10.1. Notices. Any notice, approval, consent or other communication required or permitted to any Party or assignee under this Agreement shall be in writing to the addresses set forth in Exhibit or such other addresses as the Parties shall inform each other of, in writing, and shall be deemed to have been duly given or made (i) if delivered to a Party personally or by courier, then as of the date delivered of, if livery is refused, then as of the date presented; (i) if sent or malled by Fedtx or other nationally recognized overnight delivery service, then 2s of the next business day; il) if sent via the United States mal to a party postage prepaid and return receipt requested, then as of the date that i ive (5) days after such malig; and 10 “iv) If glven via facsimile machine then as of the date recelpt thereof is electronically acknowledged. Except for notices for breach, termination or contractual termination, the Parties may also send notices via e-mait provided that the other Party replies via e-mail thatithas received such notice. 10.2 Assignment. Neither party may, directly, indrecty, by operation of Law or otherwise, assign, transfer or otherwise delegate, any ofits rights and/or obligations hereunder to any Person; provided that ether party may assign its rights and/or obligations hereunder to any Affliate or an Person ‘acquiring all of the assets or equity of the assigning party. Any purported assignment, transfer or delegation in violation of the foregoing shall be null, void and not enforceable. 10.3 IMITATION OF LIABILITY. WITHOUT UMITING OR RESTRICTING THE PARTIES’ INDEMNIFICATION OBLIGATIONS UNDER SECTION 8 HEREOF AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND OR. NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, LOST GOODWILL OR LOSS OF BUSINESS, WHETHER FORESEEABLE OR NOT], OCCASIONED BY ANY BREACH UNDER THIS AGREEMENT OR ANY OTHER CAUSE OR CLAIM WHATSOEVER RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE — TRANSACTIONS CONTEMPLATED HEREBY, WHETHER BASED ON NEGLIGENCE OR OTHERWISE, 10.4 Confidentiality. Each of Licensor and INTE hereby covenant and agree that, except as ‘may be required by applicable Law or pursuant to subpoena or order of any judicial, legislative, executive, regulatory or administrative body, or as part of its normal reporting or review procedure to its partners, its current and Prospective shareholders, its divisions, its Affliates and its financial advisors, participants, Ucensor’s, auditors and attorneys, or as necessitated by the collective bargaining process or as required by the terms of any applicable collective bargaining agreement (provided that any and all such parties shall‘agree to be bound by the provisions of this Section 10.4), neither it nor any of its officers, directors, employees, or agents shall, directly or indirectly, disclose to any third party any of the ters of this Agreement including, but not limited to, the License Fees and all other financial terms, and all other terms and conditions ofthis Agreement. Each of NTE and Licensor (each a “Disclosing Party?) agrees that it shall, and it shall instruct in waiting its respective attorneys, accountants and other financial advisors to hold in confidence and not communicate, transmit, publish, cisseminate or otherwise disclose any information regarding the other Party's business leamed in the course of dealing or performance hereunder —_(eolectively, *confidential Information”); except a5 may be required by applicable Law or pursuant to subpoena or order of any Judicial legislative, ‘executive, regulatory ot administrative body, or 25 part of its normal reporting or review procedure to its partners, its current and prospective shareholders, Its divisions, its Affliates and ts financial advisors, parlelpants, Ueensor’s, auditors and attorneys, or 3s necessitated by the collective bargaining process or as required by the terms of any applicable collective bargaining agreement (provided that any and all such parties shall agree to be bound by the provisions of this Section 10.) Notwithstanding anything to the contrary herein, Confidential Information shall not Include information which () ator prior to the time of disclosure by the Disclosing Party was known to or independently developed by the party receiving such information (a "Receiving. Party’), except to the extent unlawfully appropriated by the Receiving Party; (i) at or after the time of disclosure by the Disclosing Party becomes generally avaliable to the public through no wrongful or negligent act or ‘omission on the Recelving Party's part; of (i) the Recelving Party recelves from a third party free to make such disclosure without breach of any legal obligation 10.5 Publicity. Each of Licensor and NTE covenant and agree that nelther it nor any of Its officers, directors, employees or agents shall u make any public statement, press release or announcement with respect to (a) the existence of this Agreement and/or (b) the terms of this Agreement including, but not limited to, the License Fees and all other financial terms, and all other terms and ‘conditions of this Agreement, unless (j) the substance and form of the statement, release ‘or announcement are agreeable to Licensor and NTE and (i) the Parties agree that such statement, release or announcement shall be made. 10.6 Walver. No course of dealing between Lcensor and NTE shall operate as a waiver of ‘any of Licensor's or NTE's rights under this ‘Agreement. No delay or omission on the part of Licensor or NTE in enforcing or requiring the performance of an obligation or covenant or ‘other undertaking of the other Party under this ‘Agreement shall operate as a waiver of such right or any other right hereunder. The breach of any provision of this Agreement shall not be waived or deemed waived by the non- breaching Party unless such waiver isin writing ‘and signed by such non-breaching Party. The waiver by the non-breaching Party of any one breach shall not be and shall not be deemed to bbe a waiver by the non-breaching Party of any ‘other breach of the same or any other provision ofthis Agreement. 10.7 Force Majeure. Neither Party shall be responsible for, or be in breach of this ‘Agreement, to the extent that its performance Is delayed or prevented as a result of any act of God, war, terrorism, flood, fire, earthquake, sickness, accident, labor dispute, strikes lock- outs, civil commotion, act of government or any other cause wholly beyond Its control, and not due to its own negligence or that of its Contractors or representatives, and which cannot be overcome by the exercise of due diligence; provided that NTE shall have the right, by delivering written notice thereof to the other, to terminate this Agreement upon the occurrence of any of the foregoing events that affects the operation of the Service and that continues for thirty (30) or more consecutive days. 10.8 No Third Party Boneficiaries. This ‘Agreement is entered into for the express benefit of the Parties hereto, their successorsand permitted assigns and is not intended, and shall not be deemed, to create in any other Person, any rights or interest whatsoever, including, without limitation, any right to enforce the terms hereof. The relationship between Licensor and NTE hereunder is only that of Licensor and NTE, respectively, and this, ‘Agreement shall not, and shall not be deemed to, create or be construed to create a joint venture or partnership between the Parties hereto. 10.9 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Callfonia applicable to contracts made and wholly performed therein without regard to principles of conflicts of law, 10.10 Consent to Jurisdiction. Licensor (i) agrees that any litigation, action or proceeding atising out of or relating to this Agreement may be instituted by NTE In any state or federal court in the State of California; (i) waives any ‘objection which it might have now or hereafter to the venue of any such litigation, action oF proceeding; i) irrevocably submits to the Jurisdiction’ of any such court in any such litigation, action or proc (iv) waives any claim or defense of inconvenient forum; and (v) agrees that any litigation, action or proceeding arising out of oF relating to this Agreement shall be instituted by Licensor exclusively In state or federal court located inthe city of Los Angeles and State of California. Licensor consents to service of process by registered airmail, return receipt requested, at the address set forth in Exhibit 8 and expressly waives the benefit of any contrary provision of forelgn law. Nothing in this Section 10.10 shall affect NTE's right to serve process in any other ‘matter permitted by Law of to commence legal proceedings or otherwise proceed against censor in any other court in which Licensor is subject to suit. 10.11 Headings. The headings contained In this Agreement are for convenience and reference only, do not form a substantive part of this Agreement, and in no way modify, interpret or construe the intentions of the Parties. No provision of this Agreement shall bbe interpreted for or against any Party because 12 that Party or its legal representative drafted such provision 10.12 Entire Agreement. This Agreement (including all exhibits attached hereto, which ‘are incorporated herein by reference) constitutes the entire agreement between the Parties and all prior understandings are merged herein, 10.13 Amendments. This Agreement may not be changed, modified, amended or supplemented, except in writing signed by both Parties. 10.14 Severability. If any term or provision of this Agreement is found to be void or contrary ‘to Law, such term or provision shal, but only to the extent necessary to bring this Agreement within the requirements of applicable Law, be deemed to be severable from the other terms ‘and provisions of this Agreement, and the remainder of this Agreement shall be given effect as If the Parties had not Included the severed term herein. 10.15 Signatures. This Agreement may be signed in counterparts. Facsimile signatures and/or electronic scans shall have the same binding effect as originals, 10.16 Not Effective Until Execution. This ‘Agreement shall have no force or effect, and ‘nothing in this Agreement shall be binding ‘upon Licensor or NTE, unless and until such time, if any, as this Agreement has been ‘executed by an authorized signatory of Licensor and NTE, respectively, and has been delivered to each Party.EXHIBIT B NOTICES Notices shall be given pursuant fo the terms of the Agreement and shall be delivered to each Party as follows: TONTE: NanoTech Entertainment, Inc. 2450 Kruse Drive San Jose, CA 95131 ‘Attn: Aaron Talor___ Fax: = E-mail saron@ntek com, ‘TO LICENSOR: 3SCHEDULE 1 INCLUDED PROGRAMS * The VOD Deemed Price shall be as follows: For New Release Included Programs, $9.99 For Library Included Programs, $7.99 [Uemate Wave Tans, The [Documentary Werls engish| Dear 799 escoe Documentary War ra Dyas 1 [legends of Fhe Docanereary Wor Trash tae 1 ger Pot: Operating Red [Dosimentary Wea trash ea 7 Fo ear Documentary werd alah Tee 735 [rev eaar Docanentay | Wore exckaie oF | nals Teas 7 Franee, Gemany andthe Bencior Terstoes probe Bocanentry ‘Wirle ain Tee 7a [eeceTone Bocamenery Wore Trae yes 755 Iorsnae Serer ofthe [Documentary War Teale Ter 7 nara [the ast Rea? Decameron Was rok Tee 759 Bans Documenta Wor Engh Tee 7 [art et Adventure [Basursenary Wor oy Tee 7 [ase Spar The wid [Documenta Wars Tn Te 7 [arena Ros The [Documentary War trai ea 1H Icence of Rs fanarcics Docurentary Wort eraiah Ter 7 14SCHEDULE 2 DELIVERY MATERIALS Licensor shall deliver the following materials, at its sole cost, to NTE no later than ninety (90) days prior to the start of the applicable License Period for each Included Program: 1) With respect to each Included Program, and Promotional Segment and Trailer for such Included Program: MEZZANINE FILE SPEC ProRes HQ native 4K mezzanine level master file (or) 4K DPX (ot) 4K CINEON 2) With respect to each Included Program, official atwork for such Included Program, in one ofthe below formats in order of preference: ‘A)Layered PSD of art including ttle weatment, RGB B)Layered Al or INDD, RGB OJTIFF, PDF, EPS, JPG of art, RGB 3) Closed captions inthe format required by the CVAA. 4) Licensor, at its sole cost and expense, shall provide any and all available press and marketing materials, including, but not limited to, press kits, EPKs, still images, key art and poster art, and video promos, ‘5) In addition, Licensor, at its sole cost and expense, shall provide the following materials: a). Seripts/Transcripts- thd b) Synopsis. A brief synopsis ofthe Included Program (30 words) and a regular synopsis ofthe Included Program. ©) Muste Cue Sheets - thd 4) Contact Information ~ A document containing the following Information: ‘+ Licensot’s Designated Primary Contact Information forthe Included Program: . ‘Public Relations and Marketing Related Matters for the Included Program (if same as General Inquiries state “Same"): Same + Technical Matters 15©) Metadata - Metadata should be sent electronically as an Excel, Word or PDF file Title of included Program Included Program Synopsis Final Credit List (including final cast nd crew list - names as wel as roles (Actor/Actress, Diectoe, Producer ete) Chapter timecodes Genre ‘Year of Production/Releaso Promiere Dato ating(s) ~ all ratings information issued by an administrative, regulatory or other body in each county ofthe Teritory and/or that are otherwise required tobe displayed in connection with the distibution of the Included Programs via the Service. Runtime/Block Time Poster Image(s) (“Thumbnait”)~ a promotional image for TV (800x800 JPG) show, hi-res movie poster (800x584 JPG) - not DVD box shot for movies Key Awards/Festivals Country of Origin Language Company/Distributor Copyright Aspect Ratio 16SCHEDULE 3 INCLUDED PROGRAMS + The VOD Deemed Price shall be as follows: () For New Release Included Programs, $9.99 i) For Library Included Programs, $7.99 farica: The Serengeti Documentary English yeas 83046 798 [Anaanglounes Deanery we raise ee ‘e300 738 lana Deeamenany co raion Tea eat 7 Drcsaars iver Docanentary Te Traian Te aoe 75 [Bnomare Gans of Decameray we eraiah Ter cory 1 Patagonia Mage iourneyt Aa | Goameniny me Tagish rer per 7H aes ofthe Great Lakes | Documentary 7 Tatar es wane = [rie asin Deemer Wa tae Tye aot 1 [ratowone Docomenian oy Engle Teas ror 735 fon Ganon: Testor athe | Documentary we rae Ter aoe 7 lcoss eimarjaro:To te Root ot | Bocumentany cy ea Teas sao = laces fourmax Decuria ry Trash Teas Ts 7 [Aas and GeyondTime | Documentary Wa Tra yea Tosa 75 [Feta Demarany we raise ad waste 78 nda ngdom ore Teer | Documentary We train Fe Tso 7 fewer Deeametany We eran eae som 7a [raricine on ne waves | Decumentary cy trae Tea Tom 735 [Magieat iene Decameron We Traiah Fe Tio 758 Iatieastone mare TMAR | Cacmentary ry Taio Tene To 735 i 10 7Addendum — 8.20.14 1, Licensors shall be granted the right to substitute the Titles identified the above, Schedule 3 “Included Programs” for other comparable iMAX- format titles. NTE has the right to decide to either accept or reject such substitutions. In the event that NTE rejects a substitution, NTE shall not be obligated to pay for said title per this Agreement. 2. In the event that Licensor does not physically deliver the Included Programs, Titles HDD Delivery to NTE Deadline in Schedule 3 above, and in consideration of Addendum #1 2014, NTE shall not be obligated to pay for said Title or substitution titles. 3. ‘NTE shall have the option to replace the Initial Payment of each title in the amount of $2,500 (cash and stock) in exchange of delivering a Final 4K Digital Master File, with complete Post Processing and Encoding ‘with the same format that NTE shall adhere to in preparation for Final Upload and Delivery on the UltraFlix Service. Each Title Final Post Processing and Encoding will consist of a ProRes Master File and Several HEVC Files at various bit-rates. 18ED 2000 zaK2 Communications, Inc. 880 Apollo Street, Suite 239 El Segundo, CA 90245 95-4561561 Bill To: NanoTech Entertainment, Inc. 2450 Kruse Drive San Jose, CA 95131 Invoice # 00004701 Date: 1/28/15 Ship Via: Page: 1 Ship To: NanoTech Entertainment, Inc. 2450 Kruse Drive San Jose, CA 95131 Description Amount Tx License Fees: Adrenaline Rush $1,250.00 Alaska $1,250.00 Amazing Journeys $1,250.00 Animalopolis $1,250.00 Arabia $1,250.00 Bears $1,250.00 Fighter Pilot $1,250.00 Last Reef $1,250.00 Legends of Flight $1,250.00, Magic Journey to Africa $1,250.00 Mummies $1,250.00 ‘Mysteries of the Great Lakes $1,250.00 Rescue $1,250.00 Space Junk $1,250.00 Ultimate Wave Tahiti $1,250.00 ‘Van Gogh $1,250.00 Wild Ocean $1,250.00 Yellowstone $1,250.00 do . Freight $0.00 Sales Tax: $0.00 [ Total Amount: $22,500.00 peo. Amount $0.00 E 1/30/15 Balance Due: $22,500.00K2 Communications, Inc. 880 Apollo Street, Suite 239 El Segundo, CA 90245 95-4561561 Bill To: NanoTech Entertainment, Inc. Invoice #: 00004716 Date: 2/25/15 Ship Via: Page: 1 Ship To: a 2450 Kruse Drive NanoTech Entertainment, Inc. San Jose, CA 95131 2450 Kruse Drive San Jose, CA 95131 Description Amount Tx License Fees: Adrenaline Rush: The Science of Risk $1,250.00 Africa: The Serengeti $1250.00 Alaska: Spirit of the Wild $1,250.00 Amazing Journeys $1,250.00 Animalopolis $1,250.00 Antarctica $1,250.00 Arabia $1,250.00 Bears $1,250.00 Coral Reef Adventure $1,250.00 Dinosaurs Alive $1,250.00 Dolphins 1,250.00 Fighter Pilot: Operation Red Flag ' 1,250.00 The Last Reef $1,250.00 Legends of Flight $1,250.00 Magic Journey to Africa $1,250.00 ‘Mummies: Secrets of the Pharaohs $1,250.00 ‘Mysteries of the Great Lakes $1,250.00 Rescue $1,250.00 Space Junk $1,250.00 The Ultimate Wave Tahiti ‘$1,250.00 ‘Van Gogh $1,250.00 Wild Ocean $1,250.00 1 Yellowstone $1,250.00 -| The Living Sea $1,250.00 | Wonders-of the Arctic $1250.00 ' Freight: $0.00 t Sales Tax: $0.00 ‘Total Amount: $31,250.00 Your Order #: oe tan “Tue Date:_ 2/28/15 Balance Due: $31,250.00 ¥NanoTech Entertainrhent, Inc. (NTEK) # wateniat 0.0077 -0.0002(-2.53%) orc maress- so 3:34pm EST + Inver + Compson 1s 8 im am Gm ID yy Hy toy tae BY et Uw D [Goresmea [> Poet o=es a T ——— em i 1 Tk Pt eh Fanti w EXHIBIT : D uaHome Ma” Seen News Spans Fnanoe_— Weer Games Anenere—Sorsin—Fickr @ulanch nce on Freon = Search Finance Semapite> ta France Hone My Poel My Qua New Mana D0a Yabo Orde Buona France Perl Farce CNEC Cantus Sra ow cies moey eset TRADE NTEK ass Fidelity (40 ManoTech Entertainment, Inc. (NTEK) - Otter OTC watnsot te 0.01 0.00(6.33%) s«rwesr Historical Prices cainenca restr [0] estate . ern som, vovmven ees Suey Oot om em apn von te" cue vote Ce Fe Proves] hata Aoonmond to sprnsineat curacy USO. eu [Ad Topica Tet might ntreat You 1. Beet ETFs to lnest in 5. Top 10 cro Car ers 2. Gow inverting 6. Top Panny Stocks 3. ao5sUv Paces 7. Best Retrement vestments “Easy Auto surance {8 Rtinance Mortgage Rates ny heath - ABC News Netw rows sok NYS. SES yet emg Moa poe mtr apt eaetere ‘etn saesrg sn ano sm ys tesa eo else naomi aEXTRADE FINANCIAL NANOTECH ENTMT IN COM NTEK: OTC Pink - Current information| Year Car Lower Indicators Votane by Pre ‘lasso coe one sez re rovers in wo TAS SBS Scape ean eed TRICE ene Membr EE ‘rn mona nds acne yin ity torn i wl oom petomanc Repeat capi | eg ePeion | Canon Asean (Bama | Basan Pa |bs be rs) Q 1H BLACKSTONE LAW GROUP, INC. 580 Apolo t, ute 35 | Los angels, CA 9024 |: (310) 867-6300 | F330) 495-4620, Sent Via Federal Express, Facsit August 20, 2015 NanoTech Entertainment, Inc. 2450 Kruse Drive San Jose, CA 95131 Attn: Aaron Taylor RE: Breach of Contract/Fraud Dear Mr. Taylor, My firm represents K2 Communications (“K2”). This letter serves to notify NanoTech Entertainment, Inc. (“NTE”) that itis in breach of the Video-On-Demand License Agreement with K2 dated August 20, 2014 (the “Contract”), Thave reviewed the Contract, correspondence between K2 and NTE related to the Contract, and various press releases issued by NTE. NTE has made it clear that NTE does not have the ability or desire to pay its past or future contractual obligations. Further, itis clear that at the time NTE, entered into the Contract that management did not have the ability to meet its contractual obligations and management did not have the intent to pay K2 pursuant to the Contract. Such conduct is the very definition of fraud. In addition, itis offensive that NTE’s.management is announcing multiple deals at a time when it is unable to meet its basic obligations to K2. NTE is hereby advised to immediately come current with all payment obligations due and owing to K2. Failure to do so will result in immediate litigation, which may include personal claims against management for fraud. Alternatively, NTE and K2 can mutually agree to terminate the contract, NTE can pay past obligations in full in a lump sum payment, and K2 will waive any damages for future payments that will not be made under the contract. In addition, all shares in NTE that were to be issued to K2 should be issued and delivered. We require a response by noon on 8/25/15. This letter does not state all of K2’s claims against NTE and does not waive any of K2’s rights or remedies, all of which are specifically reserved. Regards, MUN oh Feline Mark A. Pittman, Esq. EXHIBIT EMark Kresser Karen Davis (kdavis@nanotechent.com) Al Stone (astone@nanotechent.com) Peter Riordan (priordan@nanotechent.com) Jeff Foley (jfoley@nanotechent.com)e @ cust “Charles MGoate, Esq” (SBN {4B1039° Hheresa E° fornson, Esq. (254123) roncounr teeny SNSCOnEL ag A 12400 Wilshire Blvd, Ste. D Los Angeles, CA 90625, Superior cl ‘TeuePnowe no. (310) 576-6161 saxno: (310) 576-6160 mM Oo Califomnia _ATTORNEY FOR (sma ge Co eed ions, Inc. oe W of 9s Angeles [SUPERIOR COURT OF CALIFORNIA, county oF Los Angeles Secon HT Noh Hl St. NOV 12 2015 [MAILING ADORESS: ‘orth Hill St. ‘Sheri R. Ci: in crvmozecooe Los Angeles, CA 90012 pies ns Ocenia somennane. Stanley Mosk Courthouse ——_ CASE NAME: K2 Communications, Inc. v. Nanotech Entertainment, Inc., Aaron Taylor CIVIL CASE COVER SHEET Complex Case Designation — |""BQ 09 g TT Unimited — _) Limited —_ oe counter soinser | demandes Gemandedis | Filed wth frst appearance by defendant exceeds $25,000) $25,000 orless)| (Cal. Rules of Cour ula 3.402) | oser tems 1-6 below must be completed (see instructions on page 2) [I- Check one box below for the case type that best describes tis case Auto Tor ‘Contract Provisionally Complex Civil Ligation ‘to (22) (EF resen ot cortracaranty (06) (Cal Rus of Cour, rules 2400-3403) ‘Uninsured motoist (48) (J Rute 3.740 cottectons (09) AntirustTrade regulation (03) ‘Other PUPDMWD (Personal injury/Property L_] Other collections (09) J construction defect (10) ‘Damage/Wrongful Death) Tort [1 insurance coverage (18) 5 amass tort (40) ‘Asbestos (04) Other contract (37) 2) securities itigation (28) Product iatity (24) Real Property (1 EmvronmentavToxic tr (30) Meal mapractoe (48) TT eminent domaintmerse () nsurance coverage cans arsing rom the ‘oar HPDIND (2) tendernaton (1) shove isted provaonaly compe case, Nox PIPOD (Otay Tor 1 rng evn (2) soma Business totlunair business practice (07) L_] Other real property (26) Enforcement of Judgment Giul ghts (08) Unlawful Detainer (1 Enforcement of judgment (20) Defamation (13) (I commercial (34) Miscellaneous Civil Complaint Fraud (16) CE) Residontiat (32) DG acon Intellectual property (19) Tongs 28) 1 otner compsin not spectieg above) (42) Profesional neghgence 25) iia Revi acelaneous Civil Petition Omer non-PUPONND tot (35) Bi Asset foreture (05) Partnership and corporate governance (21) Employment Petition: arivation award (14) se paisa ot seme star FEF irons eminaon (9) watrotmandate (02 | aren ped aor [1 omer ensloymant 15) [Fore js review (99) 2 Triscase [Tis Ly Tisnot complex under rule 3.400 ofthe Callforia Rules of Court. the case Is Complex, mark the factors requiing exceptional judicial management: 2.) Large number of separately represented parties. (_] Large number of witnesses. .] Extensive motion practice raising dificult or novel e. (_] Coordination with related actions pending in one or more courts issues that willbe time-consuming to resolve in other counties, states, or counties, or in a federal court ¢. (71 Substantial amount of documentary evidence +. [) substantia postjudgment judicial supervision 3. Remedies sought (check all that apy): a7] monetary b. CZ] nonmonetary; deciaratory or injunctive rele 4. Number of causes of action (specify): 1. Breach of Written Contract; 2. Accounting; 3. Fraud 5. Thiscase [_Jis isnot @ class action suit Bs there are any known related cases, fie and serve a notice of elated case, Pypu may use form CM.045) date: November (2.2015 > Gfivies Mt Coate » ‘ r TEST BTORE CY RT ORT TOE lin NOTICE % Praintit must fle this cover sheet withthe fist paper fed inthe acon o proceeding (except small clams cases or cases fled 9 under the Probate Code, Family Code, or Wellare and insttuions Code). (Cal Rules of Cour, rule 3200) Fate to fe may result insanctons, ‘+ Fle tis cover sheet inaction to any cover sheet required by local court ue hs case's complex under rule 3 400 et seq ofthe Calforia Rules of Cour. you must seve a copy ofthis cover sheet on all *? other partes tothe acton or procaecing [2 Unless isi a caetons ase under ule 2.740 or a cole ca, ths cove het wb used or satsteal pu poses ony. | areata CIVIL CASE COVER SHEET Sean aoa aes = ORaINALyt INSTRUCTIONS ON HOW TO COMPLETE THE COVER SHEET To Plaintifis and Others Filing First Papers. If you are fiing a first paper (for example, a complaint) in a civil case, you must complete and file, along with your frst paper, the Civ Case Cover Sheet contained on page 1. This information will be used to comple Slatisics about the types and numbers of cases fied. You must complete items 1 through 6 on the sheet. In tem 1, you must check fone box forthe case type that best describes the case. Ifthe case fits both a general and a more specific type of case listed in item 1, check the more specific one. If the case has multiple causes of action, check the box that best indicates the primary cause of action To assist you in completing the sheet, examples of the cases that belong under each case type in item 1 are provided below. A cover sheet must be filed only with your intial paper. Failure to fle a cover sheet withthe fist paper fled in a civil case may subject a party, its counsel, o both to sanctions under rules 2.30 and 3,220 ofthe California Rules of Court To Parties in Rule 3.740 Collections Cases. A “collections case" under rule 3.740 is defined as an action for recovery of money ‘owed in a sum stated to be certain that is not more than $25,000, exclusive of interest and attorney's fees, arising from a transaction in which property, services, or money was acquired on credit. A collections case does not include an action seeking the following: (1) tort damages, (2) punitive damages, (3) recovery of real propery, (4) recovery of personal property, of (6) a prejudgment wit of attachment. The identfication of a case as a rule 3.740 collections case on this form means that it will be exempt from the general time-for-service requirements and case management rules, uniess a defendant fles a responsive pleading. A rule 3740 collections. case will be subject tothe requirements for service and obtaining a judgment in rule 3.740. To Parties in Complex Cases. In complex cases only, parties must also use the Civil Case Cover Sheet to designate whether the case is complex. Ifa plaintif believes the case is complex under rule 3.400 of the California Rules of Cour, this must be indicated by ‘completing the appropriate boxes in tems 1 and 2. Ifa piaintif designates a case as complex, the cover sheet must be served with the ‘complaint on ail parties to the action. A defendant may fle and serve no later than the time of its frst appearance a joinder in the: Dlaintiffs designation, a counter-designation thatthe case is not complex, or, ifthe plaintif has made no designation, a designation that cmo10 the case is complex. Auto Tor “ae (2)-PrsonlunyPropery ‘amagevongl Cea unesured Matra) the ate motes sn nite ‘tor ln sabe tration ches tm taeda) Cina upon (Personal ry Property Damage/engtl bash) Tort Asbestos 09 ftbestos Propery Oamoge ‘bests Peter nay ‘trong Bean Prout aby rae or ‘onvenrmertay 9 Medien spac (9) Medea apace Phys Surgeons (ober Ptessua!Nenth Care iispctce Cote PUPBI 3) remes Laity 9, stp ma meron! oat ny POM te, san ana) veto neon of rotor ess Negigent lnficton of Emotional Oars ‘other PUPDIND Non-PUPDIWO (Other) Tort Business Torvuntar Business Practice (07) Civ Rights (eg. ciscrminaton, false ares) not cui harassment (08) Defamation (9. slander, ibe) (3). ps Fraud (6) Inflecival Property (19) Professional Negigence (25) Legal Malpractice Other Professional Malpractice ' (not meical or lga), 8) omer Non PUPDIND Tort (25) Employment iron Termination (36) 4.) Other Employment (15) ; ) Car an ‘CASE TYPES AND EXAMPLES Contract Breach of Conracharanty (06) ‘Breach of RentalLease ‘Contact (ot unlawtu detainer ‘or wrongtl eviction) CConractiarrany Breach Soler Plait ot raud or negligence) Negigent Breach of Convacl ‘Warranty ‘other Breach of ContracuWarranty Colecons (eg, maney owed, open ‘book accounts) (09) Golecton Case-Seter Paint (Other Promissory NoterCollections ‘Case Insurance Coverage (nt provisionally complex) (18) ‘Auto Subrogation Other Coverage Other Conract (97) ‘Contractual Fraus ‘Gtner Contac Dispute Real Property Eminent Domaivioverse Condemnation (14) Wrongful Eviction (33) Other Real Property (@.9. quit te) (2) \Whit of Possession of Real Property Mongage Forecosure Quel Te Other Real Property (not eminent domain, landordtenant, or foreclosure) Unlawul Detainer ‘Commerla (31) Resisetial (2) ‘Drugs (38) (the case involves ego! rugs, check this em: othenage, ‘report as Commercial or Resident Judicial Reviow ‘Asset Foroture (06) Petition Fe: Arsitraton Award (11) Wi of andate (02) Wirteaminstrotive Mandamus \Wt-Mandamus 09 Linted Court Case Mater \Wnt-Oiher Limited Cour Case Review ‘Other Juss! Review (30) ‘Raview of Heath Otioer Orcer Notice of Appeal-Labor ‘Commissioner Appeals CIVIL CASE COVER SHEET Provisionally Complex Civil Litigation (Cal Rulos of Court Rules 3.400-3.400) “Antivust Trade Regulation (03) Construction Deter (10) Clasrs rvolving Mas Tor (40) Secures Litgaton (28) Envronmenta/Toxt Tort (20) Insurance Coverage Ciaims {arising rem provisional complex ‘ase type let above) (41) Enforcement of Judgment, Enforcement of tucgment (20) ‘Abstract of Judgment (Out of ‘Gounty) Confession of Judgment (nan domestic relations) Sister State Judgment ‘Administrative Agency Award (not unpaid taxes) Pelitor/Cenicaton of Enty of judgment on Unpaid Taxes Cte, Enforcement af Judgment ‘Miscollanoous Civil Complaint RICO (27), (ther Complaint (ne specified ‘above) (42) Declaratory Rett Only Iunetve Relief Only (non- harassment) Mechanic Lien Other Commercial Complaint ‘Case (nonortnon-complex) ‘Other Cat Compiaint (ronrthon-comlex) Miscollanoous Civil Petition Partnership and Corporate Governance (21) ‘Omer Pesan (not speciieg ‘above (3), Gut Harassment Workplace Violence ElserDependent Ault “Abuse Election Contest Pettion for Name Change Ptiign fr Reet From cate ‘Ci Otner Ct Petition Tagef. ~ e @ SEE Communications. nev. Nanotech Enertainment, ne, erat. [== BCG 00877 CIVIL CASE COVER SHEET ADDENDUM AND STATEMENT OF LOCATION (CERTIFICATE OF GROUNDS FOR ASSIGNMENT TO COURTHOUSE LOCATION) ‘This form is required pursuant to Local Rule 2.3 in all new civil case the Los Angeles Superior Court. Item. Check the types of hearing and fil inthe estimated length of hearing expected for this case JURVTRIAL?YES CLASSACTION? YES LIMITEDCASE? YES TIME ESTIMATEDFOR TRL, HoURSIvDAYS Item Il, Indicate the correct district and courthouse location (4 steps — If you checked "Limited Case", skip to Item Ill, Pg. 4) ‘Step 1: After frst completing the Civil Case Cover Sheet form, find the main Civil Case Cover Sheet heading for your case in the left margin below, and, to the right in Column A, the Civil Case Cover Sheet case type you selected. Step heck ane Superior Court type of action in Column B below which best describes the nature of this case. ‘Step 3: In Column C, circle the reason for the court location choice that applies to the type of action you have checked, For any exception to the court location, see Local Rule 2.3, Applicable Reasons for Choosing Courthouse Location (see Column C below) 4 Gass actene munine Baan e Saniy Mo Couthouse conga § Locaon of propery a genmapatsaage vehicle 5 Uotetsn where ezuse of acon are," 200 Miubropery demags & [8eten therein detersanvrespordent unctins wholy 4 Losaton wnere boaly uy, death oF damage occurred, § Lecaton ere one or more o he pares rose 8 Lecaton where performance required or defendant resis, 40, Leeaton of Labor Commssioner Oto 1, Mandatory Filing Location (Hub Case) Step 4: Fill in the information requested on page 4 in Item Ill; complete Item IV. Sign the dectaration. A B C Applicable ce ee oe ferns face no Ces age ince aa nae eee $3 22 gpoceccrececica | Ya eeeact ey eae eee TT ‘Asbestos (04) ohh) i $s ei ‘Product Liability (24) _A7260 Product Liability (not asbestos or toxic/environmental) W284 si eles asaras eae a ES Ys scrnancen es Fy 5 eee io gs i Te |e Mt Pantene Te BB] om i ses eas areca Sorenretores ae | | eee ean ue ‘58 Death (23), 1D. A7270 Intentional inticion of Emotional Distress a Q 1D_A7220 Other Personal njryProperty Damagenrongtu Death a CACIN 109 (Rev 3/15) CIVIL CASE COVER SHEET ADDENDUM Local Rule 2.3 VASE Approved 03-04 AND STATEMENT OF LOCATION" Page 1 of 4 ORIGINALK2 Communications, Inc. v. Nanotech Entertainment, Inc., etal A B C Applicable con cas Coe Stat pet Aton aoe Se ep ere eens tien Zrnestor07 [0 Atte Ove conmenaiBunesTon atantoeaavonvaay [a 5 | canpueo |e saws cumpucemnan vas f £4 [commer [2 se ovina 12a 2S Fraud (18) 1D ABO13 Fraud (no contract) 12a as 2 ( A6017 Legal Malpractice 123. : EB | recession nepigence 25) nan Hf 1 tb Ofer Petessal apace et meal rep) tas one) | M005 Overton Ponca Popen Dore 2a 4g [peter temraten a [EAT Weng Tompson Ta i = (D A6024 Other Employment Complaint Case ea a Other Employment (15) pov : i 1 6100 Lar Commons Ape ° © HOO Basha Renaene Govan Gointlcearerorworwl |g Ea oesratceea nara | sean comacMarany Bein Seeaintrotasneigney [28 (not insurance) D_ A8019 Negligent Breach of ContractWarranty (no fraud) a (0 6028 Other Breach of ContractWarranty (not fraud or negligence) 2.8 z 1D 6002 Cotectons Case-Seler Plait 2.8.61 I comter 0 z 1. N12 Cher Pmt Hota Case paw bal (Q A6034 Collections Case-Purchased Debt (Charged Off Consumer Debt 5.611 Seine Ss asa Ss Tare Cowrap 8) | AEOT hanes Cogent conn) aes @ntt00 Cowecal Fa Laas onecoweeran | Astor Tonos muons tas © secar Oe Cenc Dopurttecnnsuancetaudiegigenee) [1.2.3.8 Crane Donaiirvese T7200 EmeniDomainCondennaten —_ Nunber of pare 2 VrgtEvctor Ga) | ABt23 Wwerta Eten Ce ze © Nove Mongge Face cnerneapopery@s) | atot2 auetTie i O A6060 Other Real Property (not eminent domain, landlordl:enant, foreclosure) \ p RRDRER SESS aa tae toetomomataamanngueam | i [neva Seaper Rese! pom20 unentOetaner Rete gor wong evan 2.8 ve) "| tieeionres [a aecr unnwlowanerPon Foesne ae en ee 2 ‘TRcw 109 Reva) ‘Das Approved 03-06 CIVIL CASE COVER SHEET ADDENDUM AND STATEMENT OF LOCATION Local Rule 23 Page 20f 4"2 Communications, Inc. v. Nanotech Entertainment, Inc., eta a B pppicabie Cia Case Cover Shost ‘Type of Acton Reasons Soe Step 3 Category No (heck ony one) ‘above ‘ssetForteture (05) | A6I08 Asset Foote Case 2.6. z_ | Pettonre arbitration (11) [6115 Petition to CompelConfem/Vacate Abitaton 2.5 i (0 ABIS1 Wht- Administrative Mandamus 2.8. g Wit of Mandate (02) | 0 A61S2 Wht- Mandamus on Limited Cour Case Matter 2 3 {6153 Wit Ober Lined Cout Case Review 2 (Other Juice Review (29) | 0 AS1SD Other Wt Jusiial Review 2.8 q_ | Anttrsirade Regulation (03) [C A8003.Anttnarede Reguton 1.2.8 | constnctiondetect(10) | 48007 Constrtion Detect 1.2.8 5 | Clamsimewyea mass Tor |r agc05 cians invcling Mass Tor 1.2.8 & | secmetiatonany [a neres seis gatoncare nae = = Tous Tot 5 nie 5g) | A806. Toxe TavEnvronmentl 12.308 & | insurance Coverage Claims 14 Insurance Coverage/Subrogaton (complex case 0 & | “trom CompexCase 11) | A801 Insurance CoveragesSubrogaton complexcase ory) 1258 ATT Sister State Judgment 2.9. a (2 AB160_ Abstract of Judgment 2.6. 35 Bz Enforcement 10. 8107 Confession of Judgment (nondomestc relations) 2.8 ge ‘of Judgment (20) 6140 Administrative Agency Award (not unpaid taxes) 2,8, as 1 A61t4 Petiton/Cerificate for Eniry of Judgment on Unpaid Tax 2.8. A112 Other Enforcement Judgment Case 2.8.8 RICO@7) TD A6099 Racketeemng (RICO) Care 1.2.8 18030 Declaratory Reket Only 1.2.8, Comer complaints | 0 A6OAD Inuncive Rett Onl (net domestharassment) 2.8 (Not Speciied Above) (42) | Ago11 Other Commercial Complaint Cas (nontoninon complex) 1.2.8 {28000 Other Civil Complain’ non-orinan-compyex) 1.208 Parpereip Comparten Ta Ast13 Partnership and Corporate Goverance Case 2.8 © A8121 Git Harassment 2.3.8 zg 138123 Workplace Harassment 2.3.9. 3 ter Potions | A824 EldeiDependent Adu Ate Case 2.3.8 S| spectedAvove) (43) | S180 Election Contest 2. é A110 Petiionor Change of Name 22. ho 1D ABITO Petition for Reet rom Late Claim Law 2.3.4.8 © A6100 Other Ci Paton 2.8 be 2 eACIV 108 (Rev 718) CIVIL CASE COVER SHEET ADDENDUM Local Rule 23 LASC Approved 2-04 AND STATEMENT OF LOCATION Page 30f4ft k2 Communications, Inc. v. Nanotech Entertainment, Inc. et al. Item Ill. Statement of Location: Enter the address of the accident, party's residence or place of business, performance, or other circumstance indicated in Item Il, Step 3 on Page 1, as the proper reason for filing in the court location you selected. REASON: Check the appropriate boxes for the numbors shown | 117 North Hi St. under Column C forthe type of action that you have selected for | (ox Angles, CA $0012 this case, p1.@2.03.04.95.06.07.0898c10.01 Los Angeles ca 0012 Wem IV. Declaration of Assignment: | declare under penalty of perury under the laws ofthe State of Califomia thatthe foregoing is true ‘and correct and that the above-entitled matter is properly filed for assignment to the Stanley Mosk ‘courthouse in the Central Distict of the Superior Court of California, County of Los Angeles (Code Civ. Proc. § 392 et seq, and Local Rule 23, subd (a). ous NovenbaZ2018 LAL (SIGNATURE OF ATTORNEWFIUNGPART) PLEASE HAVE THE FOLLOWING ITEMS COMPLETED AND READY TO BE FILED IN ORDER TO PROPERLY ‘COMMENCE YOUR NEW COURT CASE: 1. Original Complaint or Petition. 2. If filing a Complaint, a completed Summons form for issuance by the Clerk. 3. Civil Case Cover Sheet, Judicial Council form CM-010, 4 Civil Case Cover Sheet Addendum and Statement of Location form, LACIV 108, LASC Approved 03-04 (Rev. 03/15). Payment in full ofthe fing fee, unless fees have been waived. ‘Assigned order appointing the Guardian ad Litem, Judicial Council form C1V-010, ifthe plaintiff or pettioneris a ‘minor under 18 years of age will be required by Court in order to issue a summons. 7. Additional copies of documents to be conformed by the Clerk. Copies of the cover sheet and this addendum ‘must be served along with the summons and complaint, or other initiating pleading in the case. EARN 109 (Rev 718) CIVIL CASE COVER SHEET ADDENDUM Local Rule 23 [ASC Approved 03.08 AND STATEMENT OF LOCATION Page 4 of 4