Microsoft Corp. Licenses Burst.com Patents & Settles Suit

$60 Million Non-Exclusive License Sets Stage for Aggressive Patent Enforcement

Burst.com, Inc. and Microsoft Corporation today announced that Microsoft has taken a non-exclusive license to Burst's international patent portfolio, for a one-time license fee of $60 million dollars. The license is for use only by Microsoft in its own product and does not include sub-licensing rights. The patent license also settles the outstanding litigation between both companies.

Burst stated that while the patent license resolves the litigation with Microsoft, it also validates the Burst patents as pioneering intellectual property in the field of media delivery.

Richard Lang, Burst CEO, said that Burst intends to use the net proceeds from the license to Microsoft, after attorneys fees, in primarily 3 areas:

1.   To payoff, or reserve for, its current and long-term liabilities
(approximately $2.8 million), which includes promissory notes (secured and
unsecured), outstanding payables, debts to former employees of the company
and all accrued salaries and bonuses.

2.   To Reserve a sufficient amount of operating capital to launch a
vigorous ongoing enforcement of its patent rights against all infringing
parties, as well as pursuing software licensing and other avenues available
to the Company to maximize the return to Burst shareholders.

3.   Distribute a substantial portion of its funds through a cash dividend
to its shareholders of record. The dividend per share and date of record
will be announced at a subsequent date.

Burst said that when it is available, it will publish the settlement agreement and Microsoft patent license on its website, www.burst.com, except for any confidentiality provisions which may exist.

"We spent over a decade developing and patenting burst technology in anticipation of the markets that are now emerging. With this action behind us, the company will now focus on its other important opportunities. We would like to thank the many supporters and contributors who helped us make it to this exciting juncture," said Lang.

This Press Release contains forward-looking statements similar to those covered by the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. We believe that the expectations expressed herein, regarding the basis and effect of the new license of our technology with Microsoft, our use of the funds from this non-exclusive license, our intent to further enforce our patents against other companies and our intent to develop and sustain new operations are based on reasonable assumptions. However, these forward-looking statements are subject to numerous uncertainties and risks and actual results and developments could differ materially from these expectations. Factors which could affect our operations and prospects include the costs and uncertainties of pursuing complicated litigation, the effect our license with Microsoft will have on other companies utilizing our technology and in our market and our ability to pursue new or additional operating strategies. We are not responsible for updating any such forward-looking statements.

About Burst

Founded in 1988, burst.com has pioneered the development of Faster-Than-Real-Time(TM) video and audio delivery. burst.com has built an international patent portfolio covering bursting, video delivery scheduling and rapid casting.

Microsoft is a registered trademark of Microsoft Corp. in the United States and/or other countries. Burst.com is a registered trademark of Burst.com, Inc. in the United States and/or other countries.

The names of actual companies, products and technologies mentioned herein may be the trademarks of their respective owners.

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