EXHIBIT 10.16
NET2PHONE - BUNDLING AGREEMENT
THIS NET2PHONE BUNDLING AGREEMENT ("Agreement") is made on this 23rd day of
April, 1998, by and between IDT Corporation ("IDT"), a Delaware corporation,
having its principal offices at 000 Xxxxx Xxxxxx, Xxxxxxxxxx, XX 00000 and E-Net
Incorporated, ("AGENT"), a Delaware corporation, having its principal offices at
00000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000.
WITNESSETH
WHEREAS, IDT desires to provide AGENT with a SOURCECODED version of Net2Phone
Software (hereinafter "SOFTWARE") which is owned by IDT for AGENT to bundle with
AGENT's product; and
WHEREAS, AGENT desires to bundle IDT's SOFTWARE with AGENT's product and boxed
product (hereinafter "BUNDLED PRODUCT") according to the terms set forth herein;
and
WHEREAS, the parties have agreed to cooperate with each other under the terms
and conditions contained herein for the parties' mutual benefit.
NOW, THEREFORE, in consideration of the mutual covenants and conditions herein
contained, the parties hereto do hereby agree as follows:
I. DEFINITIONS:
1. "SOFTWARE" shall mean IDT's Net2Phone (PC to telephone) Internet
Telephony Software.
2. "BUNDLED PRODUCT" shall mean the packaging together of the SOFTWARE and
AGENT's product.
3. "SOURCECODED" shall mean the embedded alphanumeric code contained in the
SOFTWARE as assigned by IDT in order to track usage. For the purposes of this
Agreement the source code shall be ENET.
II. IDT's OBLIGATIONS:
1. IDT will provide AGENT with a SOURCECODED version of the SOFTWARE from which
AGENT may duplicate onto CD ROM or floppy disk.
2. ALL SERVICES PROVIDED HEREUNDER BY IDT ARE PROVIDED "AS IS". IDT DISCLAIMS
ALL WARRANTIES EXPRESS OR IMPLIED OF WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
3. IDT agrees to provide users of the SOFTWARE contained within the BUNDLED
PRODUCT with any and all additional technical support which may be required for
the SOFTWARE.
4. IDT agrees to indemnify and hold AGENT harmless for any and all claims or
damages from end-users utilizing the SOFTWARE arising out of IDT's gross
negligence or willful misconduct.
III. AGENT'S OBLIGATIONS:
1. AGENT agrees to bundle the SOFTWARE with the BUNDLED PRODUCT and agrees to be
responsible for all associated packaging and/or placement costs.
2. AGENT agrees to use its best efforts to distribute and advertise the location
of the BUNDLED PRODUCT.
3. AGENT acknowledges that IDT is the sole owner of the SOFTWARE and that AGENT
acquires no interest in them except as provided herein. AGENT will not
disassemble, decompile, or reverse engineer the object code or any program in
the SOFTWARE or prepare any derivative work, or grant any interest in the
SOFTWARE.
4. AGENT agrees that it may not place the IDT or Net2Phone name in any format on
the face or wrapper of any packaging which contains the BUNDLED PRODUCT
(containing IDT's Net2Phone Software) which will be distributed in the United
States retail market as set forth in the AGREEMENT. Any failure to comply with
this provision shall constitute material breach of the AGREEMENT and AGENT shall
indemnify and hold IDT harmless for any and all damages and claims which may
occur due to AGENT's failure to comply with such requirement.
5. AGENT further agrees to submit to IDT for prior written approval all
packaging and/or artwork which shall be placed on the face or wrapper of the
BUNDLED PRODUCT.
6. AGENT acknowledges that all of IDT's trademarks and tradenames will remain
the exclusive property of IDT.
7. AGENT agrees not to misrepresent any of IDT's services in any way and AGENT
agrees to indemnify and hold IDT harmless for any of its fraudulent or negligent
acts regarding IDT's services.
8. AGENT agrees to submit to IDT for prior written approval of any and all
advertising materials or otherwise that AGENT wishes to disseminate using the
IDT or Net2Phone name or logos.
IV. PAYMENT AND COMMISSIONS:
1. IDT agrees to pay AGENT six and one half (6.5%) percent of all revenues
collected by IDT that is generated by users of the SOURCECODED version of the
SOFTWARE who receive the BUNDLED PRODUCT and utilize the SOFTWARE contained
within the BUNDLED
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PRODUCT. All monies paid to AGENT shall be based solely upon payments which IDT
collects from such end-users. AGENT shall be entitled to compensation upon IDT's
receipt of such payment.
2. All payments shall be made to AGENT on a monthly basis on or about the first
week of every month, based upon revenues generated on the previous calendar
month. IDT will, at AGENT's written request, provide auditing summaries
capturing the purchase history generated from each of AGENT's end-users
utilizing the SOURCECODED version of the SOFTWARE contained within the BUNDLED
PRODUCT.
V. INTELLECTUAL PROPERTY RIGHTS:
All right, title, and interest in the Software shall remain vested in IDT and
its licensors, as applicable. IDT grants to AGENT a worldwide, non exclusive,
royalty-free license under any intellectual property right, including any
patent, patent application, trademark, copyright, trade secret, or mask work
right, assertable by IDT or its licensors with respect to the SOFTWARE to
reproduce, use, distribute, and sub-license end-users to use copies of the
SOFTWARE under this Agreement.
VI. CONFIDENTIALITY:
During the term of this Agreement and at all times thereafter, each party will
hold strictly confidential within such party's organization, and shall only
disclose to those employees or agents of such party as have a need to know in
connection with the implementation of this agreement and who are subject to
appropriate confidentiality obligations, (i) all confidential documents and
information concerning the business, goods, or services of the other party
furnished to such party in connection with this memorandum of understanding and
the negotiation of the transactions contemplated hereby, and (ii) the terms of
this memorandum of understanding; provided that the foregoing confidentiality
obligation shall not apply to the extent that (i) the information being
disclosed is publicly known at the time of proposed disclosure by such party or
subsequently becomes publicly known through no act or omission of such party,
(ii) the information otherwise is or becomes legally known to such party other
than through disclosure by the other party or in relation with this agreement,
or (iii) disclosure is required by law or legal process.
VII. TERM AND TERMINATION:
1. Either party may terminate this agreement upon thirty (30) days prior written
notice to the other party in the event that the other party neglects or fails to
perform and observe any of the material covenants, conditions or agreements
contained in this Agreement and such default is not cured within such thirty
(30) day period. However, the obligation to pay the Commissions, as set forth in
section IV herein, shall only continue, for six (6) months after the termination
of this Agreement, if the termination was not due to breach of this Agreement on
the part of AGENT.
2. This Agreement may also be terminated by either party upon providing written
proof to the other party hereto of a determination by any governmental entity
having jurisdiction over the services provided hereunder that the relationship
of the parties or the services provided
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hereunder are contrary to then existing laws or the other party becomes or is
declared insolvent or bankrupt.
3. This Agreement shall commence at the effective date set forth above and
continue for one (1) year. Thereafter, this Agreement shall continue on a year
to year basis unless terminated by either party upon thirty (30) days written
notice prior to the expiration of any term.
VIII. ASSIGNMENT:
This Agreement may not be assigned or transferred by either party without the
prior written consent by the other party hereto, which will not be unreasonably
withheld, except that either party may assign this Agreement without consent to
any affiliate or wholly owned subsidiary.
IX. FORCE XXXXXX:
Neither Party shall be liable under this Agreement for delays, failures to
perform, damages, losses or destruction, or malfunction of any equipment, or any
consequence thereof, caused or occasioned by, or due to fire, earthquake, flood,
water, the elements, labor disputes or shortages, utility curtailments, power
failures, explosions, civil disturbances, governmental actions, shortages of
equipment or supplies, unavailability of transportation, acts or omissions of
third parties, or any other cause beyond its reasonable control. Such affected
Party shall use its best efforts to resume performance in a timely manner, as
soon as may be practicable.
X. NOTICE:
All notices shall be deemed effective upon receipt when properly addressed as
follows:
IDT CORPORATION E-NET INCORORATED
000 Xxxxx Xxxxxx ___________________________
Xxxxxxxxxx, XX 00000 ___________________________
Attn: Xxxx Xxxxxxx
with copy to:
IDT Legal Department
All notices may be sent by registered or certified mail, by overnight courier
service, facsimile transfer with confirmation or by other means agreed upon by
both parties.
XI. SEVERABILITY:
Any article or any other provision of this Agreement which is, or becomes,
illegal, invalid or unenforceable shall be severed herefrom and shall be
ineffective to the extent of such illegality, invalidity or unenforceability and
shall not affect or impair the remaining provisions hereto, which provisions
shall be severed from any illegal, invalid, or unenforceable Articles or any
other provision of this Agreement and otherwise remain in full force and effect.
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XII. NO WAIVER:
No waiver by either party to any provisions of this Agreement shall be binding
unless made expressly and confirmed in writing. Any such waiver shall relate
only to such matter, non-compliance or breach as it relates to and shall not
apply to any subsequent or other matter, non-compliance or breach.
XIII. HEADINGS:
All headings hereunder are for convenience only and shall not be construed as
part of the agreement.
XIV. NO AGENCY:
The relationship between and among the parties hereto shall not be that of
partners. Nothing herein contained shall be deemed to constitute a partnership
between and amongst them, merge their assets, or their fiscal or other
liabilities or undertakings. The common enterprise between and among the parties
shall be limited to the express provisions of this Agreement. Nothing herein
contained shall allow a party to act as a mandatory or agent of any other party
or all of them, except to the extent expressly permitted hereunder.
XV. AUTHORITY:
This Agreement, and the purchase or provision of Service by either party
hereunder, is expressly contingent upon the obtaining and maintenance of each
party hereto of such approvals, consents, governmental and regulatory
authorizations, licenses and permits as may be required or deemed necessary by
the Parties, who Shall endeavor to obtain and continue same.
XVI. CHOICE OF LAW:
This agreement shall be construed under the laws of the State of New Jersey.
Both parties consent that venue and jurisdiction are proper in the State of New
Jersey, County of Bergen.
IN WITNESS THEREOF, the undersigned parties have executed this Agreement on the
date set forth above and both parties agree that they have appropriate authority
to execute this Agreement.
IDT CORP. E-NET INCORPORATED
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Signature Signature
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Name Name
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Title Title
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Date Date
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