AMENDED AND RESTATED LICENSE AGREEMENT
THIS AMENDED AND RESTATED LICENSE AGREEMENT (the "LICENSE AGREEMENT") is
entered into this 30th day of July, 1999 (the "EFFECTIVE DATE"), by and between
Softalk Inc., an Ontario corporation whose principal offices are located at 000
Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx ("SOFTALK"), and Wavetech
International, Inc., a Nevada corporation whose principal offices are located at
0000 X. Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxx 00000 ("WAVETECH").
WHEREAS, Softalk is the owner of certain unique intellectual property for
use in the transmission of voice, data and fax services using Voice over
Internet Protocol ("VOIP") and Voice over Frame ("VOF") technology; and
WHEREAS, Wavetech possesses the resources to sell, market and conduct
billing, collection and customer services with respect to Softalk's intellectual
property;
WHEREAS, on April 23, 1999, Softalk and Wavetech entered into an agreement
pursuant to which Softalk granted a license to Wavetech to market Softalk's
intellectual property and transfer to Wavetech certain customers then in
existence.
WHEREAS, the parties now desire to expand and clarify the terms of the
rights and obligations provided in the original license agreement.
NOW THEREFORE, in consideration of the covenants and agreements contained
in this License Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree to
amend and restate the License Agreement as follows:
1. LICENSE GRANTS.
1.1 Subject to the terms and conditions of this License Agreement, Softalk
hereby grants to Wavetech, for the term of this License Agreement, a
non-exclusive, non-transferable worldwide license, to the current and
future communications software developed by Softalk commonly referred
to as ICALL, IBILL, CCALL and IFAX (collectively referred to as the
"SOFTALK PRODUCTS") for use by Wavetech solely in connection with the
sale, marketing, and provision of customer support services of the
Softalk Products. For purposes of clarification, the Softalk Products
include the technology covered by Canadian Patent Application No.
2,198,024 and U.S. Patent Application No. 08/811,099 and the
trademarks, tradenames and service marks associated therewith which
are listed on Schedule A hereto, copyright in the Softalk Products,
ownership of proprietary Confidential Information (as hereinafter
defined) and ownership of certain trade-marks.
1.2 Wavetech does not have the right to sub-license this License
Agreement.
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2. TECHNOLOGY TRANSFER.
2.1 Technical Information. Within 6 months following execution of this
License Agreement, Softalk will make available to Wavetech all
necessary technical information relating to the Softalk Property then
in its possession.
2.2 Technical Assistance. Softalk shall render technical training on the
Softalk's Products, and assistance to Wavetech's engineers or
technical personnel, in connection with the initial installation and
for a period of 3 months thereafter. Any further technical assistance
will be rendered at a charge to be determined by Softalk at the time
of request.
3. FURTHER RESEARCH AND DEVELOPMENT.
3.1 Softalk shall, during the term of this License Agreement, devote
resources to continuing product development and to research and
development of improvements and modifications for the purpose of
augmenting exploitation by Wavetech in all markets for, and all uses
of, the Softalk Products (collectively, referred to as the
"IMPROVEMENTS").
3.2 Softalk shall, during the term of this License Agreement, as
appropriate, promptly communicate to Wavetech all Improvements that
relate in any manner to the Softalk Products.
4. TRANSFER OF CUSTOMERS. In addition to the license granted under this
License Agreement, Softalk shall transfer to Wavetech the customers listed
in Schedule B (the "SOFTALK ACCOUNTS"). Wavetech shall have the exclusive,
non-transferable right to conduct all billing, collection and customer
support activities related to the Softalk Accounts. If Softalk shall
determine in its reasonable discretion that Wavetech's billing activities
with respect to the Softalk Accounts would be more effectively facilitated
offshore, Softalk shall have the right to cause Wavetech to conduct such
activities through an offshore entity. For purposes of clarification, the
Softalk Accounts currently in existence are set forth on Schedule B
attached hereto. In addition, the customer support services to be provided
by Wavetech hereunder shall consist of those also described on Schedule B.
All customer support services provided by Wavetech with respect to the
Softalk Products shall be delivered in a manner reasonably consistent with
the methods and standards of quality as are delivered to Wavetech's
employees pursuant to Section 2.2 of this License Agreement.
5. COMMISSIONS. Wavetech shall pay to Softalk an amount equal to (1) 100% of
Softalk's actual direct expenses incurred in connection with the sale,
license and delivery of Softalk Products plus (ii) five percent (5%) markup
of the total traffic on the wholesale long distance per minute line costs
on a monthly basis.
6. LICENSE FEE. In consideration of the license granted in Section 1 hereof,
Wavetech shall pay to Softalk, the amount of Two Hundred Thousand Dollars
(US$200,000). This fee shall be payable in cash upon execution of this
License Agreement (the "LICENSE FEE").
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7. STANDARDS, QUALITY CONTROL, PROMOTION.
7.1 Softalk must approve all promotional, advertising and product literature
prepared by Wavetech in connection with the actions to be taken by Wavetech
pursuant to this License Agreement. Neither Softalk nor Wavetech shall take
any action or make any omission that would tend to impair or damage the
goodwill associated with the Softalk Products. Wavetech shall maintain high
standards of quality and service with respect to all Softalk Products made
and/or sold hereunder, and all related advertising and promotional material
including, without limitation, the quality of physical material utilized.
All Softalk Products will be sold, and distributed in accordance with all
applicable federal, state, local and foreign laws and regulations. None of
the content of the Softalk Products; packaging, advertising, and
promotional material related thereto; the exploitation of the Softalk
Products; or the manner in which any or all rights granted to Wavetech
hereunder are exercised or exploited, shall violate or infringe any right
of privacy or publicity, copyright, or trademark or constitute defamatory,
obscene, or unlawful matter. Softalk is familiar with the standards and
practices of Wavetech, and acknowledges that Wavetech presently maintains
high standards of quality, style, and appearance with respect to its
products and services.
7.2 If Softalk reasonably determines that Wavetech has failed to maintain such
quality of service described in Section 7.1 above as to the Softalk
Products, Softalk shall promptly notify Wavetech in writing and shall
specify with reasonable detail the nature of the alleged deficiency.
Wavetech will have sixty (60) days from the date of the notice in which to
remedy the failure to Softalk's satisfaction.
7.3 Patent Infringement
In the event Wavetech becomes aware of any information indicating that a
third party may be infringing (or may have infringed) any of the Softalk
Products, Wavetech shall give notice of such alleged infringement,
identifying the country or countries in which the alleged infringing
product or service is sold and describing the alleged infringing product or
service in sufficient detail to enable Softalk to determine whether such
product or service infringes any of the Softalk Products. To the extent
possible, Softalk shall assert the Softalk Products against the infringer
within three (3) months of such notice, unless (a) Wavetech and Softalk
determine not to assert such claim, or (b) Softalk has received an opinion
from patent counsel acceptable to Wavetech that the allegedly infringing
product does not infringe the Softalk Products.
All reasonable litigation expenses and costs, including reasonable
attorneys' fees, incurred by Wavetech in the course of any litigation
pursuant to the immediately preceding paragraph shall be promptly
reimbursed by Softalk. In such event, all recoveries including, but not
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limited to, awards of damages, statutory damages, and awards of attorneys'
fees, expenses and/or costs, obtained by Wavetech in the course of any
litigation arising out of any notification of Softalk by Wavetech pursuant
to this Section shall be paid to Softalk, provided, however, that Wavetech
shall be entitled to offset such payments by amounts previously incurred by
Wavetech in connection with the defense of the Softalk Products pursuant to
this section and not previously reimbursed by Softalk.
8. CONFIDENTIALITY.
8.1 Wavetech acknowledges that Softalk's Confidential Information is unique and
valuable and was developed or otherwise acquired by Softalk at great
expense, and that any unauthorized disclosure or use of Softalk's
Confidential Information may cause Softalk irreparable injury or loss for
which damages would be an inadequate remedy. Wavetech agrees to hold such
Confidential Information in strictest confidence, to use all efforts
reasonable under the circumstances to maintain the secrecy thereof, and not
to make use thereof other than in accordance with this License Agreement,
and not to release or disclose Confidential Information to any third party
without Softalk's prior written consent. Softalk hereby acknowledges and
consents to the disclosure of Softalk's Confidential Information to those
employees of Wavetech and any permitted sub-licensees, that must have
access to such Confidential Information in order to perform services for
Wavetech pursuant to this License Agreement, but only after each employee
of Wavetech and its sub-licensees agrees to maintain Softalk's Confidential
Information in strictest confidence, to use all efforts reasonable under
the circumstances to maintain the secrecy thereof, not to make use thereof
other than in accordance with this License Agreement, and not to release or
disclose Confidential Information to any third party without Softalk's
prior written consent.
8.2 Softalk acknowledges that various information regarding the business plans
and product concepts of Wavetech may comprise Confidential Information.
Softalk agrees to hold Wavetech's Confidential Information in strictest
confidence, not to make use thereof other than in accordance with this
License Agreement, to use all efforts reasonable under the circumstances to
maintain the secrecy thereof, and not to release or disclose Confidential
Information to any third party without Wavetech's prior written consent.
Wavetech hereby acknowledges and consents to Softalk's disclosure of
Wavetech's Confidential Information to Softalk employees and agents, but
only after such employees and agents having access to Wavetech Confidential
Information agree, in writing, to maintain Wavetech's Confidential
Information in strictest confidence, to use all efforts reasonable under
the circumstances to maintain the secrecy thereof, not to make use thereof
other than in accordance with this License Agreement, and not to release or
disclose Confidential Information to any third party without Wavetech's
prior written consent.
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8.3 The parties acknowledge that any violation of this Section 8 shall
constitute a material breach of this License Agreement resulting in
irreparable injury to the non-breaching party and agree that, in addition
to any and all other rights available to the non-breaching party by law or
by this License Agreement, the non-breaching party shall have the night to
have an injunction entered against the breaching party to enjoin any
further violations of this License Agreement.
8.4 For purposes of this Section 8, "Confidential Information" shall mean any
and all technology, information and/or data which is not readily
ascertainable by proper means and which derives economic value, actual or
potential, from not being generally known, and which has been the subject
of efforts that are reasonable under the circumstances to maintain its
secrecy. All know-how and technical information and/or information relating
to the products or operations of Wavetech or Softalk, as the case may be
(in either case the "DISCLOSING PARTY"), which is provided to the other
party (the "RECEIVING PARTY"), or to which the Receiving Party otherwise
obtains access, pursuant to, or as a result of, this License Agreement
shall be considered Confidential Information; except such information which
the Receiving Party can clearly show: (a) as of the Effective Date of this
License Agreement is publicly and openly known; (b) after the Effective
Date of this License Agreement becomes publicly and openly known through no
fault of the Receiving Party; (c) comes into the Receiving Party's
possession and lawfully obtained by the Receiving Party from a source other
than from the Disclosing Party or a source deriving from the Disclosing
Party, and not subject to any obligation of confidentiality or restrictions
on use; or (d) is approved for release by written authorization of the
Disclosing Party.
8.5 Any press release or other public statement by either Softalk or Wavetech
that relates to the other party, this License Agreement or the transactions
contemplated hereby shall be approved by both parties prior to its release.
9. WARRANTIES.
9.1 Softalk makes no representation, promise or warranty whatsoever that
the Softalk Products will ultimately be protected by issued patents or
that the Softalk Products and their use do not or will not infringe
the intellectual property rights of others.
9.2 Softalk has the full right, power and authority to grant the licenses
contemplated by this License Agreement.
9.3 Softalk hereby represents and warrants that the Softalk Products shall
perform in the manner intended without interruption. Notwithstanding
the prior sentence, Wavetech acknowledges and agrees that its sole
indemnification rights with respect to hardware purchased by Softalk
directly from third parties will be limited to warranties provided by
such third parties if any.
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10. INDEMNITIES.
10.1 The parties shall each indemnify and hold the other harmless from and
against any and all claims, liabilities, loss, expense (including
reasonable attorneys' fees) or damages arising out of any breach of
this License Agreement, provided that the indemnified party shall,
with reasonable promptness, notify the indemnifying party of any such
claim, demand, or suit and shall fully cooperate in the defense
thereof. The indemnifying party shall have the right to designate
counsel to defend against such claims and suits; however, at the
indemnified party's option, the indemnified party shall have the right
to participate in the defense with its own counsel at its own expense.
In no event shall any such claims or suits affecting the rights of a
party be settled without the prior written consent of that party.
10.2 Wavetech agrees that any liability on the part of Softalk hereunder
for breach of warranties contained herein or any other breach giving
rise to liability, including a breach of a condition or fundamental
term or fundamental breach or breaches or in any other way arising out
of or related to this License Agreement for any cause of action
whatsoever and regardless of the form of action (including breach of
contract, strict liability, tort including negligence or any other
legal or equitable theory) shall be limited to Wavetech's actual,
direct, provable damages in an amount not to exceed the License Fee
payable hereunder.
10.3 Wavetech agrees that in no event will Softalk be liable for damages in
respect of incidental, ordinary, punitive, exemplary, indirect,
special or consequential damages even if Softalk has been advised of
the possibility of such damages including, but not limited to, lost
business revenue, lost profits, failure to realize expected savings,
loss of data, loss of business opportunity or any claim against
Wavetech by any other party.
11. TERM. This License Agreement shall commence on the Effective Date and shall
continue for 7 years with automatic renewals, unless sooner terminated
pursuant to Section 12 hereof.
12. DEFAULT AND TERMINATION.
12.1 Either party shall have the right to terminate this License Agreement
upon thirty (30) days written notice to the other party, if such other
party falls to comply in any material respect with any term or
condition of this License Agreement and such failure to comply is not
corrected within the foregoing thirty (30) day notice period.
12.2 Either party shall have the right to terminate this License Agreement
in the event the other party becomes bankrupt or insolvent, suffers a
receiver to be appointed, or makes an assignment for the benefit of
its creditors.
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12.3 Softalk shall have the right to terminate this License Agreement upon
sixty (60) days written notice following a change of control of
Wavetech. For purposes of this Section 11.3, a "change of control"
shall be deemed to have occurred:
(a) When, after the date of this License Agreement, any person (as
such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"))
is or becomes the beneficial owner (as defined in Rule l3d-3 of
the Exchange Act), directly or indirectly, of securities of
Wavetech representing fifty-one percent (51%) or more of the
combined voting power of Wavetech's then outstanding securities,
other than (i) an employee benefit plan established or maintained
by Wavetech or a subsidiary of Wavetech, or (ii) any person who
presently owns such quantity of securities as of the date hereof,
or
(b) Upon the approval by Wavetech's stockholders of (1) a merger or
consolidation of Wavetech with or into another corporation (other
than a merger or consolidation the definitive agreement for which
provides that at least a majority of the directors of the
surviving or resulting corporation immediately after the
transaction are Continuing Directors (as hereinafter defined),
(ii) a sale or disposition of all or substantially all of
Wavetech's assets, or (iii) a plan of liquidation or dissolution
of Wavetech.
(c) Individuals who, as of the date hereof, constitute the Board of
Directors of Wavetech (the "INCUMBENT BOARD") cease for any
reason to constitute at least 80% of the Board; provided,
however, that any person becoming a member of the Board
subsequent to the date hereof whose election, or nomination for
election by Wavetech's stockholders, was approved by a vote of at
least 80% of the members then comprising the Incumbent Board
(other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or
threatened election contest relating to the election of directors
of Wavetech, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act or any successor provision
thereto) shall be, for purposes of this License Agreement,
considered as though such person were a member of the Incumbent
Board.
12.4 Sections 10, 12, 14 and 15 hereof shall survive termination (for any
reason) of this License Agreement.
12.5 Upon the termination of this License Agreement for any reason
whatsoever, Wavetech shall be permitted to continue using the Softalk
intellectual property in providing services to all its existing (at
the point of termination) clients.
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13. ASSIGNMENT. Neither party may assign or otherwise transfer this License
Agreement, or any rights under it, without the prior written consent of the
other party, which consent shall not be unreasonably withheld. Any
attempted assignment in violation of this Section 12 shall be null and
void.
14. CHOICE OF LAW, ARBITRATION. This License Agreement is made under, and shall
be governed by and construed in accordance with the internal laws of
Ontario, Canada, without reference to principles of conflicts of law. Any
disputes arising under this License Agreement shall be settled by binding
arbitration conducted in Toronto in accordance with the Rules of Procedure
for the Conduct of Arbitration and Mediation Antitrust of Ontario Inc.
15. GENERAL.
15.1 This License Agreement, including all Schedules, constitutes the
entire agreement between the parties and supersedes all prior
proposals, representation, negotiations and communications, oral or
written, between the parties with respect to its subject matter. No
variation from these provisions shall be binding unless in writing and
signed by both parties.
15.2 Each party shall be responsible for, and shall pay, all sales, value
added and similar taxes, if any, which may be imposed on any sales of
the Softalk Products hereunder by such party, as well as any other tax
based upon such party's use, sale, or possession of the Softalk
Products.
15.3 All rights and remedies conferred under this License Agreement or by
any other instrument or law shall be cumulative, and may be exercised
singularly or concurrently. Either party's failure or forbearance to
enforce any right or claim against the other arising under this
License Agreement shall not be deemed a waiver of future enforcement
of that or any other provision. In the event that any portion of this
License Agreement shall be held to be unenforceable by a court of
competent jurisdiction, the remaining portions of this License
Agreement shall remain in full force and effect.
15.4 In the event any provision of this License Agreement or the
application of any provision shall be held by a tribunal of competent
jurisdiction to be contrary to law, then the remaining provisions of
this License Agreement shall be unimpaired, and the illegal, invalid
or unenforceable provision shall be replaced by a provision, which,
being legal, valid and enforceable, comes closest to the intent of the
parties underlying the illegal, invalid or unenforceable provision.
15.5 If a party commences any action at law or in equity, or for
declaratory relief, or in appellate proceedings, to secure or protect
any rights under, or to enforce any provision of, this License
Agreement, then, in addition to any judgment, order, or other relief
obtained in such proceedings, the prevailing party shall be entitled
to recover from the losing party all reasonable costs, expenses, and
attorneys' fees incurred by the party in connection with such
proceedings, including, attorneys' fees incurred for consultation and
other legal services performed prior to the filing of such proceeding.
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15.6 All terms and conditions of this License Agreement shall be binding
upon and shall inure to the benefit of the parties to this License
Agreement and their respective permitted successors, permitted
assigns, and legal representatives.
15.7 All notices required or permitted under this License Agreement shall
be in writing and shall be deemed to have been given upon personal
delivery or upon deposit in the U.S. mail, first-class, postage
prepaid. The addresses of the parties (until written notice of change
shall have been given) shall be as follows:
SOFTALK: Softalk Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attn: Xxxxx Xxxx
Facsimile: 000-000-0000
WITH A COPY TO: Gowling, Strathy & Xxxxxxxxx
Suite 4900 Commerce CT W
Toronto, Ontario M5L IJ3
Attn: Xxxxx Xxxxx and Xxxxx Xxxxxxx
Facsimile: 416-862-7661
WAVETECH: Wavetech International, Inc.
0000 X. Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
ATTN: Squire, Xxxxxxx & Xxxxxxx L.L.P.
Two Renaissance Square
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
15.8 Nothing in this License Agreement shall constitute, or be deemed to
constitute, either party as an employee, agent, partner or joint
venture of the other.
15.9 Further Assurances. The parties shall from time to time execute and
deliver all such further documents and do all acts and things as the
other party may reasonably require to effectively carry out or better
evidence or perfect the fall intent and meaning of this License
Agreement.
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IN WITNESS WHEREOF, the parties have caused this License Agreement to be
executed by their duly authorized representatives.
SOFTALK, INC. WAVETECH INTERNATIONAL, INC.
BY: /s/ A. Xxxxx Xxxx BY: /s/ Xxxxxx X. Xxxxx
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NAME: A. Xxxxx Xxxx NAME: Xxxxxx X. Xxxxx
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TITLE: President TITLE: President & CEO
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DATE: 10/25/99 DATE: 10/25/99
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Schedules have been intentionally omitted.
