LICENSE AGREEMENT
AMONG
ARRAY TELECOM CORPORATION,
ePHONE TELECOM, INC.
AND
COMDIAL CORPORATION
This License Agreement (this "Agreement") is made as of March 31, 2000,
by and among ARRAY TELECOM CORPORATION, a corporation incorporated under the
laws of the State of Delaware and having its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Array"), ePHONE TELECOM, INC., a corporation
incorporated under the laws of the State of Florida and having its principal
office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ("ePHONE"), and COMDIAL CORPORATION, a corporation incorporated under
the laws of the State of Delaware and having its principal office at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Comdial").
RECITALS
A. This Agreement is executed in conjunction with the Strategic Alliance
Agreement dated March 31, 2000, by and among Array, ePHONE, and Comdial (the
"Strategic Alliance Agreement"), pursuant to which, among other things, ePHONE
purchased certain of the assets of Array, excluding intellectual property
assets.
B. Array is willing to grant ePHONE a license to Array's Intellectual Property,
as hereinafter defined, on the terms and conditions set forth herein.
C. Array is a wholly owned subsidiary of Comdial. Comdial is willing to assist
ePHONE with marketing the Products and Services, as hereinafter defined, through
Comdial's existing distribution channels, which include over 2000 independent
telecommunications equipment dealers.
AGREEMENT
NOW, THEREFORE, in consideration of the covenants, agreements, and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement:
Section 1.1 "Copyrights" means any work containing copyrightable subject matter
that Array owns or has the right to license to others relating to Products and
Services, including without limitation works registered with the United States
Copyright Office or works for which an application to register the work with the
United States Copyright Office has been filed.
Section 1.2 "Intellectual Property" means the entire right, title, and interest
in and to all proprietary rights encompassed within the categories of
Copyrights, Know-How, and Patents, and the ▇▇▇▇.
Section 1.3 "Know-How" means unpatented technology, inventions, designs,
drawings, processes, recipes, formulae, data, technical information, and other
industrial, commercial property that: (i) are known to Array as of the Effective
Date; (ii) are secret, in the sense that they are not generally known or easily
accessible to others; and (iii) relate to the Products and Services. A list of
Know-How licensed hereunder is attached to this Agreement as Schedule 2 and
incorporated by reference herein.
Section 1.4 "▇▇▇▇" means the common law trademark and service ▇▇▇▇ "ARRAY".
Section 1.5 "Patents" means the United States patents and design patents that
had been issued as of the Effective Date as well as United States patent
applications filed as of the Effective Date. A list of Patents licensed
hereunder is attached to this Agreement as Schedule 1 and incorporated by
reference herein.
Section 1.6 "Products and Services" means: (i) VoipGate, Array Version 2, Array
Series 3000, and any products developed from the foregoing; and (ii)
international long distance telecommunications services that allow users to
perform phone-to-phone dialing via Voice Over Internet Protocol, and related
services.
Section 1.7 Any capitalized term contained in this Agreement that is not
expressly defined herein shall be deemed to have the meaning ascribed to it by
the Strategic Alliance Agreement.
2
ARTICLE 2
EFFECTIVE DATE AND TERM
Section 2.1 Effective Date. This Agreement shall be effective as of the date
first set forth above (the "Effective Date").
Section 2.2 Term. This Agreement and the licenses granted herein shall become
effective as of the Effective Date and shall remain in effect for an initial
term of five (5) years.
Section 2.3 ePHONE's Option to Renew the Agreement or to Purchase the
Intellectual Property. Upon the conclusion of the initial term of this
Agreement, ePHONE, in its sole discretion, may elect: (i) to allow the Agreement
to expire; (ii) to renew the Agreement under the identical terms and conditions
set forth hereunder for an additional term of five (5) years; or (iii) to
terminate the Agreement by purchasing the Intellectual Property.
(a) In order to exercise its option to purchase the Intellectual Property,
ePHONE must give Array and Comdial notice of its election to exercise
such option within six (6) months prior to the end of the initial term
of this Agreement. In the event ePHONE elects to exercise its option to
purchase the Intellectual Property, ePHONE shall be entitled to
purchase the Intellectual Property for the fair market value of the
Intellectual Property, determined at the time ePHONE exercises its
option to purchase the Intellectual Property. For this purpose, the
fair market value of the Intellectual Property shall be determined by
two investment bankers, one selected by Array or Comdial and the other
selected by ePHONE. If the two investment bankers are not able to agree
upon the fair market value of the Intellectual Property, the investment
bankers shall choose a third investment banker and the average of the
values asserted by the two investment bankers who assert the two
amounts closest in value shall be deemed the fair market value of the
Intellectual Property.
(b) In the event ePHONE exercises its option to purchase the Intellectual
Property, ePHONE agrees to grant Comdial and Array, and their
successors and affiliates, a nonexclusive, irrevocable, royalty free
license to the Intellectual Property.
ARTICLE 3
LICENSE TO INTELLECTUAL PROPERTY
Section 3.1 Grant of Patent License. Subject to the terms and conditions of this
Agreement, Array grants to ePHONE, and ePHONE accepts, an exclusive right and
license to the Patents to make, have made, use, and sell the Products and
Services, on a worldwide basis. ePHONE shall be entitled to sublicense, assign,
or transfer the rights granted herein without the prior written consent of
Array. The license granted herein shall terminate upon the expiration or
termination of this Agreement.
3
(a) Patent License Territory. ePHONE acknowledges that the Patents cover
only the United States; practicing the technology covered by the
Patents outside of the United States will be at ePHONE's sole risk and
discretion.
(b) Patent License Term. Notwithstanding anything to the contrary provided
herein, the license to the Patents granted herein shall terminate upon
the conclusion of the term of the relevant Patent, unless sooner
terminated pursuant to the terms of this Agreement.
(c) Notice. When utilizing the Patents, ePHONE agrees that where reasonable
and practical, any patented designs, devices, objects of manufacture,
or any other patented items shall bear the appropriate patent notice.
(d) Prosecution of Patent Applications. ePHONE shall make all reasonable
efforts to assist Array or Comdial with the prosecution of any patent
applications encompassed within the definition of the Patents licensed
hereunder, including executing any necessary documents and providing
such evidence and expert assistance as ePHONE may have within its
control.
Section 3.2 Grant of Know-How License. Subject to the terms and conditions of
this Agreement, Array grants to ePHONE, and ePHONE accepts, an exclusive right
and license to the Know-How to make, have made, use, and sell the Products and
Services, on a worldwide basis. ePHONE shall be entitled to sublicense, assign,
or transfer the rights granted herein without the prior written consent of
Array. The license granted herein shall terminate upon the expiration or
termination of this Agreement.
Section 3.3 Grant of Copyright License. Subject to the terms and conditions of
this Agreement, Array hereby grants ePHONE an exclusive right and license to the
Copyrights for use in connection with selling, manufacturing, marketing or
rendering of Products and Services, on a worldwide basis. ePHONE shall be
entitled to sublicense, assign or transfer the rights granted herein without the
prior written consent of Array. The license granted herein shall terminate upon
the expiration or termination of this Agreement.
(a) Notice. When using the Copyrights, ePHONE agrees that where reasonable
and practicable, use of the Copyrights shall be accompanied by the
symbol (C), the date of copyright, and the name of the copyright owner.
Section 3.4 Grant of ▇▇▇▇ License. Subject to the terms and conditions of this
Agreement, Array grants to ePHONE, and ePHONE accepts, an exclusive right and
license to the ▇▇▇▇ as necessary to produce, promote, and sell Products and
Services, on a worldwide basis. ePHONE acknowledges and agrees that its use of
the ▇▇▇▇ shall inure to Array's benefit. ePHONE shall be entitled to sublicense,
assign, or transfer the rights granted herein without the prior written consent
of Array. The license granted herein shall terminate upon the expiration or
termination of this Agreement.
4
(a) Quality Control. ePHONE agrees that all Products to which the ▇▇▇▇ is
affixed shall be formulated, manufactured, promoted, and sold or
provided in a first rate manner and all Services with which the ▇▇▇▇ is
associated shall be rendered in a first rate manner. ePHONE understands
and agrees that Array has the right to and will monitor the quality of
Products and Services provided under the ▇▇▇▇. Upon written request
from Array or Comdial, ePHONE shall provide to Array and Comdial
either: (i) a reasonable number of samples of the Products to which the
▇▇▇▇ is affixed, or (ii) a reasonable written description of the
Services that ePHONE provides under the ▇▇▇▇ and the manner in which
the ▇▇▇▇ is used in connection with such Services, so that Array and
Comdial may monitor the quality of such Products or Services and
otherwise protect and maintain Array's rights in the ▇▇▇▇. Upon written
notice to ePHONE, representatives of Array or Comdial may visit and
inspect ePHONE's facilities in order to monitor the quality of the
Products and Services.
In the event Array or Comdial reasonably determines that
the Products sold or Services provided by ePHONE under the ▇▇▇▇ are not
of a sufficiently high quality, Array or Comdial shall so notify ePHONE
in writing and ePHONE shall have thirty (30) days in which to (i)
reassure Array and Comdial that the quality of the Products or Services
is in fact commensurate with the specified standard or (ii) take steps
to improve the quality of the Products or Services to meet such
standard. If, at the end of such thirty (30) day period, Array or
Comdial is not reasonably satisfied that the quality of the Products
sold or Services provided by ePHONE under the ▇▇▇▇ meets the specified
standard, Array or Comdial may terminate this Agreement upon thirty
(30) days' written notice to ePHONE.
(b) Trademark and Service ▇▇▇▇ Notices. When affixing the ▇▇▇▇ to Products,
ePHONE agrees that where reasonable and practicable, the ▇▇▇▇ shall be
accompanied by the symbol (TM) on labels, packaging, and advertising
and promotional materials. When using the ▇▇▇▇ in connection with
Services, ePHONE agrees that where reasonable and practicable, the ▇▇▇▇
shall be accompanied by the symbol (sm) on advertising and promotional
materials.
Section 3.5 Retention of Ownership Rights and Right to License or Assign.
Nothing in this Agreement or in ePHONE's use of the Intellectual Property shall
grant ePHONE any rights in or to the Intellectual Property other than the rights
expressly licensed hereunder. The licenses granted herein are exclusive as
between Array and unrelated third parties. Nonetheless, Array shall retain all
rights in and to the Intellectual Property, including the right to license or
assign the Intellectual Property, in whole or in part, to Comdial, to any
majority owned subsidiary of Comdial, or to any successor to Comdial's business,
provided that such license or assignment shall have no detrimental effect on
ePHONE's rights and obligations hereunder. Notwithstanding the foregoing or
anything to the contrary contained herein, neither Array nor Comdial, nor any
successor or affiliate thereof, shall be entitled to use the ▇▇▇▇ in connection
with products or services that are marketed in direct competition with the
Products and Services.
5
ARTICLE 4
ROYALTIES
Section 4.1 Royalty Payments. In partial consideration for the licenses to
Intellectual Property granted herein and for the transactions contemplated under
the Strategic Alliance Agreement, ePHONE shall pay Array, or such other entity
as Array may designate, a royalty equal to two percent (2%) (the "Royalty Rate")
of ePHONE's Consolidated Gross Sales, as hereinafter defined.
(a) The royalty amounts set forth herein shall accrue upon the recognition
by ePHONE of revenues for transactions that would be included in
Consolidated Gross Sales and shall be paid by ePHONE on a calendar
quarterly basis. For each of the first three (3) quarters of each
calendar year, such quarterly royalty amount shall be calculated at the
Royalty Rate applied to Consolidated Gross Sales during such quarter,
and shall be paid not later than forty-five (45) days after the end of
such quarter. For the fourth quarter of each calendar year, such
quarterly royalty amount shall be an amount equal to the Royalty Rate
applied to Consolidated Gross Sales for the calendar year, less the
quarterly royalty payment amounts made for the prior three (3) quarters
of that year, and shall be paid not later than ninety (90) days after
the end of such calendar year.
(b) For purposes of determining the royalty to be paid by ePHONE, the term
"Consolidated Gross Sales" shall mean all sales resulting from ePHONE's
business activities, as reflected in ePHONE's Business Plan.
(c) Each royalty payment hereunder shall be accompanied by a written report
describing the calculation of such payment. Furthermore, ePHONE agrees
to maintain complete and accurate records sufficient to substantiate
the calculation of payments made hereunder. Array or its designee may,
from time to time, inspect such records to verify the accuracy of
payments made hereunder; provided, however, that ePHONE shall receive
at least thirty (30) days written notice of such inspections and such
inspections shall take place at ePHONE's offices during ePHONE's
regular business hours. Array or its designee shall bear all costs of
such inspections, unless an inspection reveals a discrepancy of more
than three percent (3%) in ePHONE's favor between the royalty actually
paid and the royalty that should have been paid, based on ePHONE's
Consolidated Gross Sales, in which case ePHONE shall bear all costs of
the inspection that revealed the discrepancy.
(d) Notwithstanding the foregoing, ePHONE shall pay to Array or its
designee the following minimum royalty amounts:
(i) During the first year of the term of this Agreement, ePHONE
shall pay a minimum annual royalty amount of $180,000 (the
"First Year Minimum Royalty"). In the event Consolidated Gross
Sales for the first year are less than $9,000,000, ePHONE
shall pay such additional royalty amounts as shall be
necessary to cause the total royalty amount paid for such year
to be at least equal to the First Year Minimum Royalty. Such
amounts shall be paid not later than the due date for the
first quarterly royalty payment due after the close of the
first year.
6
(ii) For each calendar quarter after the first year of the term of
this Agreement, ePHONE shall pay a minimum quarterly royalty
amount of $125,000 (the "Quarterly Minimum Royalty"). In the
event Consolidated Gross Sales during any quarter are less
than $6,250,000, ePHONE shall pay such additional royalty
amounts as shall be necessary to cause the total royalty
amount paid for such quarter to be at least equal to the
Quarterly Minimum Royalty. In the event any calendar quarter
shall be less than three (3) months, the Quarterly Minimum
Royalty for such quarter shall be prorated on a daily or other
appropriate basis.
Section 4.2 Non-Payment of Royalty Amounts. In the event ePHONE is unable, after
exhausting all of its consolidated cash and cash equivalent assets, to pay Array
or its designee the full amount of any royalty payment at the time the payment
is due, the following provisions shall be applicable.
(a) ePHONE shall give Array or its designee notice of ePHONE's inability to
pay any portion of any royalty payment, which notice shall be
accompanied by a written statement by ePHONE's principal lenders and
credit facilities confirming ePHONE's inability to make such payment
and the fact that ePHONE has exhausted all of its consolidated cash and
cash equivalent assets.
(b) The total unpaid amount of any royalty payment (the "Delinquent
Payment") shall accrue interest at the annual rate of ten percent (10%)
during the first year after the Delinquent Payment was due. For each
three (3) month period thereafter, for so long as any portion of the
Delinquent Payment remains unpaid, the interest rate applicable to the
Delinquent Payment will increase by one (1) percentage point for each
such three (3) month period.
(c) In its sole discretion, Array or its designee may elect to accept
ePHONE stock in lieu of the Delinquent Payment and accrued interest
thereon. If Array or its designee exercises this option, Array or its
designee shall be entitled to receive an amount of ePHONE stock
equivalent in value to the Delinquent Payment, calculated at a twenty
percent (20%) discount from the average of the closing prices of such
stock on the five (5) trading days prior to the date on which Array or
its designee elects to exercise this option. The equivalent value so
determined may be paid to Array or its designee either in ePHONE common
stock or in warrants for the purchase of ePHONE common stock, the terms
of which are reasonably satisfactory to Array or its designee, and
which provide for an exercise price of not more than one cent ($0.01)
per share. ePHONE agrees to provide Array or its designee demand and
piggy back registration rights for registration on an established stock
exchange or on the Nasdaq national market for its shares, or for the
warrants and the warrant shares to be issued upon exercise of the
warrants, and to assist in the registration process. Array shall have
at least two (2) demand registration rights for each year so long as
any of such shares, or such warrants or warrant shares, remain
unregistered. Within sixty (60) days after the Closing Date, as defined
in the Strategic Alliance Agreement, the parties agree to negotiate in
good faith to execute a registration rights agreement with terms and
conditions that are consistent with the terms of this Agreement and
that are customary and usual with respect to such agreements.
7
(d) Notwithstanding any of the provisions of this Agreement, in the event
any royalty payment or portion thereof remains unpaid for one (1) year,
or Array or its designee accept warrants for such payment and the
warrants are not registered within such year, then ePHONE's license to
the Intellectual Property shall no longer be exclusive and Array shall
be entitled to license the Intellectual Property to third parties other
than ePHONE.
ARTICLE 5
OWNERSHIP AND PROTECTION OF INTELLECTUAL PROPERTY
Section 5.1 Ownership. Nothing in this Agreement or in ePHONE's use of the
Intellectual Property shall grant ePHONE any rights in or to the Intellectual
Property other than the rights expressly licensed hereunder. ePHONE acknowledges
Array's rights in the Intellectual Property. ePHONE shall not commit, or cause
any third party to commit, any act challenging, contesting, or in any way
impairing or attempting to impair Array's rights in and to the Intellectual
Property.
Section 5.2 Infringement by Third Parties. If ePHONE learns of any activity by a
third party that might constitute infringement of Array's rights in any of the
Intellectual Property, or if any third party asserts that ePHONE's use of the
Intellectual Property constitutes unauthorized use or infringement, ePHONE shall
so notify Array. Any action or litigation resulting from any claim of
infringement arising hereunder shall be handled by Array or Comdial. ePHONE
shall make all reasonable efforts to assist Array or Comdial with any such
action or litigation, including providing such evidence and expert assistance as
ePHONE may have within its control.
Section 5.3 Rights in Improvements, Developments, Enhancements, Modifications,
and Inventions.
(a) CTVoice Release 2A. Within thirty (30) days following the Effective
Date, ePHONE shall deliver to Array the source code for the product
CTVoice Release 2A, which product shall have the same functionality and
all of the capabilities of the product Array Series 3000. Array, or
such other entity as Array may designate, shall own all rights in such
source code, including without limitation all intellectual property
rights. The source code shall be included within the definition of
Intellectual Property for purposes of this Agreement, and it shall be
licensed to ePHONE pursuant to the terms and conditions hereunder.
8
(i) Until the first anniversary of the Effective Date, ePHONE
shall provide to Array or its designee any improvements,
developments, enhancements, modifications, or inventions that
resolve any functional problems or other technological
difficulties with the CTVoice Release 2A product ("Bug
Fixes"). ePHONE shall own all rights in the Bug Fixes,
including without limitation all intellectual property rights.
Nonetheless, by providing Array or its designee with the Bug
Fixes, ePHONE shall be deemed to have granted Array or its
designee, and such parties' successors and affiliates, a
nonexclusive, irrevocable, royalty free license to the Bug
Fixes.
(ii) After the first anniversary of the Effective Date, ePHONE and
Array or its designee agree to negotiate in good faith
regarding the terms and conditions under which any Bug Fixes
developed, invented, or created by employees or agents of
ePHONE after the first anniversary of the Effective Date may
be licensed to Array or its designee. ePHONE shall charge
Array or its designee rates at least as low as the lowest
rates charged to third parties not affiliated with ePHONE for
such licenses.
(b) Improvements, Developments, Enhancements, Modifications, and Inventions
other than CTVoice Release 2A.
(i) If any of the employees or agents of ePHONE improves,
develops, enhances, modifies, or invents technology, works, or
other intangible property, related to or arising from the
Intellectual Property licensed hereunder, ePHONE shall own all
rights in such technology, works, or other intangible
property, including without limitation all intellectual
property rights.
(ii) If any of the employees or agents of Array or Comdial
improves, develops, enhances, modifies, or invents technology,
works, or other intangible property, related to or arising
from the Intellectual Property licensed hereunder, Array or
Comdial, as appropriate, shall own all rights in such
technology, works, or other intangible property, including
without limitation all intellectual property rights.
(iii) The parties agree to negotiate in good faith regarding the
terms and conditions under which any improvements,
developments, enhancements, modifications, or inventions
encompassed by this Section 5.3(b) may be licensed to the
other parties. The parties shall charge rates at least as low
as the lowest rates charged by the parties to unaffiliated
third parties for such licenses.
9
ARTICLE 6
WARRANTIES, DISCLAIMERS, INDEMNIFICATION,
AND LIMITATION OF LIABILITY
Section 6.1 Warranties. ePHONE represents and warrants that it shall use the
Intellectual Property only in accordance with the terms and conditions of this
Agreement.
Section 6.2 Representations and Disclaimers.
(a) Array and Comdial each represent and warrant that the Patents set forth
on Schedule 1 and the Know-How set forth on Schedule 2 accurately list
all of the Intellectual Property owned by Array that has been duly
registered with, filed in, or issued by, as the case may be, the United
States Patent and Trademark Office. Array owns the entire right, title,
and interest in and to the Patents and the Know-How, including without
limitation the exclusive right to use and license the same. To the
knowledge of Array, no Person, as defined in the Strategic Alliance
Agreement, is infringing upon any of the Patents or the Know-How.
(b) The Intellectual Property constitutes all of the intellectual property
necessary to conduct the business and operations of Array as conducted
as of the Effective Date. To the knowledge of Array, there is no basis
for any claim of infringement by any Person, as defined in the
Strategic Alliance Agreement, with regard to any of the Intellectual
Property.
(c) Notwithstanding the foregoing, neither Array nor Comdial represents or
warrants that: (i) the Intellectual Property is suitable for use in
connection with Products or Services; (ii) use of the Intellectual
Property will enable ePHONE to obtain specific results; (iii) the
Intellectual Property does not infringe the rights of third parties; or
(iv) use of the Intellectual Property will not cause any loss, damage,
or injury. ePHONE will use the Intellectual Property at its own risk
and neither Array nor Comdial shall be responsible for any Products or
Services provided through the use of the Intellectual Property or for
any other exploitation of the Intellectual Property.
Section 6.3 Indemnification.
(a) ePHONE agrees to be solely responsible for, and to defend, indemnify,
and hold Array and Comdial, and any of their successors or affiliates,
harmless against any and all claims, actions, suits, liabilities,
demands, expenses (including reasonable attorneys' fees and
disbursements), losses, costs, or damages asserted against or incurred
by Array, Comdial, or any of their successors or affiliates, arising
out of or in connection with (i) Products produced or Services rendered
by ePHONE, (ii) the use of the Intellectual Property by ePHONE, or
(iii) any breach of ePHONE's obligations hereunder.
10
(b) Array and Comdial, jointly and severally, agree to be solely
responsible for, and to defend, indemnify, and hold ePHONE, and any of
its successors or affiliates, harmless against any and all claims,
actions, suits, liabilities, demands, expenses (including reasonable
attorneys' fees and disbursements), losses, costs, or damages asserted
against or incurred by ePHONE, or any of its successors or affiliates,
arising out of or in connection with (i) any failure of the
representations and warranties set forth in Section 6.2 of this
Agreement to be true and correct or (ii) any breach of Array's or
Comdial's obligations hereunder.
Section 6.4 Limitation of Liability. No party to this Agreement shall under any
circumstances be liable for any special, incidental, consequential, indirect, or
punitive damages arising from breach of warranty, breach of contract,
negligence, or any other legal theory arising from or related to this Agreement,
even if such party or its agents or employees have been advised of the
possibility of such damages.
ARTICLE 7
DEFAULT AND TERMINATION
Section 7.1 Events of Default. Any one of the following shall constitute an
Event of Default by ePHONE:
(a) ePHONE defaulting in the performance of any covenant, agreement, term,
or provision under this Agreement, and such default continuing for a
period of thirty (30) days after written notice thereof by Array or
Comdial to ePHONE;
(b) ePHONE filing a voluntary petition for bankruptcy, reorganization, or
an arrangement under any bankruptcy or insolvency law, or an
involuntary petition under any such law being filed against ePHONE and
not dismissed within ninety (90) days; or
(c) ePHONE making an assignment for the benefit of its creditors.
Section 7.2 Remedies. Without limiting other remedies available to Array or
Comdial at law or equity, upon the occurrence of an Event of Default by ePHONE,
either Array or Comdial may, at their option, terminate this Agreement by giving
written notice to ePHONE.
Section 7.3 Discontinuation of Use. Following the expiration or termination of
this Agreement, for any reason other than ePHONE's election of its option to
purchase the Intellectual Property pursuant to Section 2.3, ePHONE shall
immediately cease use of the Intellectual Property licensed under this
Agreement.
11
ARTICLE 8
CONFIDENTIALITY
Section 8.1 ePHONE's Confidentiality Obligations. The parties acknowledge that,
during the ordinary course of business, ePHONE will be required to disclose
confidential and proprietary information to its customers and other parties.
During the term of this Agreement and thereafter, ePHONE agrees that it will
enter into confidentiality agreements or nondisclosure agreements with usual and
customary terms and conditions prior to disclosing the Know-How and all other
technology, inventions, software, hardware, designs, drawings, processes,
recipes, formulae, data, technical information and the like, which are disclosed
by Array or Comdial to ePHONE or received by ePHONE's personnel under this
Agreement.
Section 8.2 Array's and Comdial's Confidentiality Obligations. The parties
acknowledge that, during the ordinary course of business, Array and Comdial will
be required to disclose confidential and proprietary information to its
customers and other parties. During the term of this Agreement and thereafter,
Array and Comdial agree that they, jointly or individually, will enter into
confidentiality agreements or nondisclosure agreements with usual and customary
terms and conditions prior to disclosing all technology, inventions, software,
hardware, designs, drawings, processes, recipes, formulae, data, technical
information and the like, which are disclosed by ePHONE to Array or Comdial or
received by Array or Comdial's personnel under this Agreement.
Section 8.3 Exceptions to Confidentiality Obligations. The confidentiality
obligations set forth in this Article 8 shall not apply to any information that:
(i) is or becomes generally available to the public other than as a result of
disclosure by one of the parties or the parties' agents, employees,
representatives, or advisors; (ii) is rightfully disclosed to either of the
parties by a third party without any breach of the confidentiality obligations
hereunder. Any of the parties may disclose the other parties' confidential
information to its personnel and independent contractors, including, without
limitation, lawyers, accountants, and consultants, when the course of their
employment necessitates such disclosure; provided, however, that the disclosing
party shall take appropriate measures to maintain the confidentiality of all
confidential information disclosed to or obtained by such party's personnel or
independent contractors.
Section 8.4 Return of Confidential Information. Upon the expiration or
termination of this Agreement, for any reason other than ePHONE's election of
its option to purchase the Intellectual Property pursuant to Section 2.3, each
party hereto shall return to the other parties, as applicable, all materials or
items that contain, embody, or relate to any confidential information belonging
to the other parties, including, without limitation, documents, drawings,
software, hardware, databases, electronic information, storage media, samples,
and models. Each party shall return all such materials to the other parties
within fifteen (15) days of the date of expiration or termination.
12
ARTICLE 9
TECHNICAL ASSISTANCE
Section 9.1 Technical Assistance Services. ePHONE shall use commercially
reasonable efforts to make its employees and agents available to Array and
Comdial to provide technical assistance with the Intellectual Property, any
improvements, developments, enhancements, modifications, or inventions related
thereto, or any other technical matters related to ePHONE's business. ePHONE
shall charge Array and Comdial rates at least as low as the lowest rates charged
to third parties not affiliated with ePHONE for such technical assistance
services.
ARTICLE 10
GENERAL PROVISIONS
Section 10.1 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person or entity other than the parties and their
respective successors and permitted assigns.
Section 10.2 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Any of the parties hereto shall be permitted to assign this
Agreement and its rights and obligations hereunder to a successor in interest of
all or substantially all of its assets, or to an affiliated entity.
Section 10.3 Amendments. No amendment of any provision of this Agreement shall
be valid unless the amendment shall be in writing and signed by all parties
hereto.
Section 10.4 Waivers. No waiver by any party of any default, misrepresentation,
or breach of warranty or covenant hereunder, regardless of whether intentional,
shall be deemed to extend to any prior or subsequent default, misrepresentation,
or breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
Section 10.5 Severability. Any term or condition of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
Section 10.6 Construction. The parties have participated mutually in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted mutually by the parties and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
of the provisions of this Agreement.
13
Section 10.7 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (i) upon
confirmation of receipt of facsimile or electronic mail; (ii) one (1) business
day following the date sent when sent by overnight delivery; or (iii) five (5)
business days following the date mailed when mailed by registered or certified
mail return receipt requested and postage prepaid to the following address:
If to Array or Comdial:
Comdial Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Copy to:
McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
If to ePHONE:
ePHONE Telecom, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
14
Copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇_▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Section 10.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 10.9 Headings. The Article and Section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 10.10 Entire Agreement. The Strategic Alliance Agreement, this
Agreement, and the other Agreements referred to and incorporated by reference in
the Strategic Alliance Agreement shall constitute the entire agreement between
the parties and supersede any prior understandings, agreements, covenants,
warranties, or representations by or between the parties, written or oral.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURES ARE ON THE NEXT PAGE]
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
ARRAY TELECOM CORPORATION
By:_______________________
Name:_____________________
Title:____________________
ePHONE TELECOM, INC.
By:_______________________
Name:_____________________
Title:____________________
COMDIAL CORPORATION
By:_______________________
Name:_____________________
Title:____________________
16
SCHEDULE 1
LIST OF PATENTS
--------------------------------------------------------------------------------------------------------------------
Title Serial Number Filing Date
--------------------------------------------------------------------------------------------------------------------
System, Method, and Computer Program Product for Managing a 09/393,288 09/10/1999
Carrier Exchange Network
--------------------------------------------------------------------------------------------------------------------
System, Method and Computer Program Product for Point-to-Point 09/430,297 10/29/1999
Band-width Conversation in an IP Network
--------------------------------------------------------------------------------------------------------------------
Method, System and Computer Program Product Providing Voice Over 09/393,658 09/10/1999
the Internet Communication
--------------------------------------------------------------------------------------------------------------------
Method, System and Computer Program Product for Managing 09/527,915 03/17/2000
Database Servers and Services
--------------------------------------------------------------------------------------------------------------------
System, Method and Computer Program Product Managing Routing 60/173,750 12/30/1999
Servers and Services
--------------------------------------------------------------------------------------------------------------------
System, Method and Computer Program Product Managing Routing PCT/US00/00009 01/10/2000
Servers and Services
--------------------------------------------------------------------------------------------------------------------
System, Method and Computer Program Product Managing Routing 09/527,920 03/17/2000
Servers and Services
--------------------------------------------------------------------------------------------------------------------
Method, System and Computer Program Product for Managing Jitter 09/429,652 10/29/1999
--------------------------------------------------------------------------------------------------------------------
Method, System and Computer Program Product for Managing Jitter PCT/US00/02330 02/01/2000
--------------------------------------------------------------------------------------------------------------------
17
SCHEDULE 2
LIST OF KNOW-HOW
Method, System and Computer Program Product for Route Quality Management
(According to Sterne, Kessler, ▇▇▇▇▇▇▇▇▇ & ▇▇▇, P.L.L.C., the
patent application for this invention is in the process of being
prepared.)
Any other unpatented technology, inventions, designs, drawings, processes,
recipes, formulae, data, technical information, and other industrial, commercial
property that: (i) are known to Array as of the Effective Date; (ii) are secret,
in the sense that they are not generally known or easily accessible to others;
and (iii) relate to the Products and Services.
18