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October 8, 2009
 
Snap Telecommunications, Inc.
Aequus Technologies Corp.
1 Blue Hill Plaza, 14th Floor
PO Box 1626
Pearl River, New York 10965
Attention: Thomas Kielty, President and CEO
 
Dear Mr. Kielty:
 
The purpose of this letter (the “Letter”) is to set out certain agreements
between Snap Telecommunications, Inc., Aequus Technologies Corp. and their
respective direct and indirect subsidiaries (collectively, jointly and
severally, “Aequus”) and WorldGate Communications, Inc., OJO Service LLC and
their respective direct and indirect subsidiaries (collectively, jointly and
severally, “WGAT”, and together with Aequus, the “Parties”) to provide for a
cooperative business relationship on a going-forward basis.

WGAT and Aequus are interested in settling all obligations under the AEQ-WGAT
Agreements, terminating the AEQ-WGAT Agreements following such settlement and
entering into a new agreement regarding the resale of certain video phones.  For
purposes of this Letter, “AEQ-WGAT Agreements” means all current and prior
agreements, contracts, licenses, leases, commitments, arrangements or
understandings, written or oral, including, but not limited to, any sales orders
or purchase orders, between any of the Parties prior to the date of this Letter,
including, but not limited to, the agreements listed on Exhibit A of this
Letter.  Initial capitalized terms not defined in this Letter shall have the
definition attributed to such term in the AEQ-WGAT Agreements.

For good and valuable consideration, receipt of which is hereby acknowledged,
and intending to be legally bound, the Parties hereby agree as follows:

1.      Outstanding Amounts.  Each of the Parties acknowledges and agrees that
Aequus owes WGAT the following outstanding amounts under the AEQ-WGAT
Agreements:
 
(a)
$742,351.98 for products ordered by Aequus from WGAT pursuant to the Reseller
Agreement, dated as of March 22, 2006, as amended by the Revised and Restated
Amendment and Master Contract, dated as of March 31, 2008 (collectively, the
“Current Reseller Agreement”);

 
 
 

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October 8, 2009
Page 2
 
 
(b)
$6,070.00 for Tier 2 Support Services for the period February 1, 2009 through
May 30, 2009 pursuant to the License, Maintenance and Update Services Agreement,
dated as of March 31, 2008 (the “Current License Agreement”);

 
 
(c)
$27,335.49 for the Maintenance and Update Service Fee for the period April 1,
2009 through May 30, 2009 pursuant to the Current License Agreement;

 
 
(d)
$9,762.67 for the License Fee for the period April 1, 2009 through August 30,
2009 pursuant to the Current License Agreement; and

 
 
(e)
$5,625.00 for Aequus’s share of the fees related to the Arbitration Claim.

 
2.      Actions on the Signing of this Letter.
 
 
(a)
Aequus shall

 
(i)
on the date of this Letter, execute and deliver to WGAT the reseller agreement
attached as Exhibit B of this Letter (the “New Reseller Agreement”);

 
(ii)
on or before October 26, 2009, pay to WGAT fifty thousand forty dollars
($54,040.00), in cash by wire transfer of immediately available funds to the
account or accounts designated by WGAT, in payment for the purchase by Aequus of
one hundred sixty seven (167) additional video phones from WGAT pursuant to the
terms of the New Reseller Agreement, plus any additional amounts required for
such purchase pursuant to the New Reseller Agreement, including, but not limited
to, insurance, storage, shipping, taxes, duties and special packaging and/or
handling;

(iii)
on or before November 26, 2009, pay to WGAT fifty thousand forty dollars
($54,040.00), in cash by wire transfer of immediately available funds to the
account or accounts designated by WGAT, in payment for the purchase by Aequus of
one hundred sixty seven (167) additional video phones from WGAT pursuant to the
terms of the New Reseller Agreement, plus any additional amounts required for
such purchase pursuant to the New Reseller Agreement, including, but not limited
to, insurance, storage, shipping, taxes, duties and special packaging and/or
handling;

 

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October 8, 2009
Page 3
 
(iv)
on or before each of December 31, 2009, January 29, 2010, February 26, 2010,
March 31, 2010 and April 30, 2010, to the extent WGAT has available inventory of
video phones on any such date, pay to WGAT sixteen thousand two hundred twelve
dollars ($16,212.00), in cash by wire transfer of immediately available funds to
the account or accounts designated by WGAT, in payment for the purchase by
Aequus of fifty (50) additional video phones on each such date from WGAT
pursuant to the terms of the New Reseller Agreement, plus any additional amounts
required for such purchase pursuant to the New Reseller Agreement, including,
but not limited to, insurance, storage, shipping, taxes, duties and special
packaging and/or handling;

 
(v)
on or before each of May 31, 2010, June 30, 2010, July 30, 2010, August 31,
2010, September 30, 2010, October 29, 2010, November 30, 2010, December 31,
2010, January 31, 2011 and February 28, 2011, to the extent WGAT has available
inventory of video phones, pay to WGAT fifty five thousand three hundred fifteen
dollars and thirty-four cents ($55,315.34), in cash by wire transfer of
immediately available funds to the account or accounts designated by WGAT, in
payment for the purchase by Aequus of one hundred seventy (170) additional video
phones on each such date from WGAT pursuant to the terms of the New Reseller
Agreement, plus any additional amounts for such purchase required pursuant to
the New Reseller Agreement, including, but not limited to, insurance, storage,
shipping, taxes, duties and special packaging and/or handling; and

 
(vi)
use its best efforts to have all items held by Iron Mountain Intellectual
Property Management, Inc. or its assignee or successor, pursuant to the
Third-Party Escrow Service Agreement, dated March 31, 2008, immediately returned
to WGAT, but in no event more than three business days after the date of this
Letter, and to have such agreement terminated in its entirety; and

 
 
(b)
WGAT shall

 
 
(i)
on the date of this Letter, execute and deliver to Aequus the New Reseller
Agreement; and

 

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October 8, 2009
Page 4
 
(ii)
within three business days following the date of this Letter, place in the mail
to Aequus the original Promissory Note, dated March 31, 2008, in the amount of
$1,174,437.50.

 
3.      Termination of AEQ-WGAT Agreements.  Immediately following completion of
the actions contemplated by Section 2 of this Letter required to be performed on
the date of this Letter and except as provided in Section 4 of this Letter, (a)
each of the AEQ-WGAT Agreements shall be deemed terminated, void and of no
further force and effect, and none of the Parties shall have any further
liabilities or obligations under the AEQ-WGAT Agreements whatsoever, (b) WGAT
shall release Aequus from, and shall credit the account of Aequus with respect
to, all amounts provided in Section 1 of this Letter, (c) subject to Section 13
of this Letter, all video phones of WGAT (other than the License IP (defined
Section 13(a) of this Letter) located at the facilities or warehouses of Aequus
shall be deemed the sole property of Aequus free and clear of all ownership
rights or other liens of WGAT and (d) all video phones of WGAT located at the
facilities or warehouses of WGAT shall be deemed the sole property of WGAT free
and clear of all ownership rights or other liens of Aequus.
 
4.      Default.  Notwithstanding anything to the contrary in this Letter, upon
any default by Aequus under this Letter or the New Reseller Agreement, (a)
Sections 6, 10, 13, 14 and 15(a) of this Letter shall be deemed terminated, void
and of no further force and effect, and none of the Parties shall have any
further liabilities or obligations under such sections whatsoever and (b) Aequus
shall immediately pay to WGAT an amount equal to (i)  $791,145.14 less (ii) any
amounts paid by Aequus to WGAT under Section 2(a) of this Letter.  Any amounts
not paid by Aequus to WGAT as required by this Section 4 of this Letter within
two business days of WGAT’s request for such payment shall bear interest from
and including the date of such request by WGAT to and including the date of
payment in full at a rate per annum equal to the lesser of 1.5% of the unpaid
balance (annual rate of 18%) or the maximum late payment penalty charge
permitted by law.  Aequus shall reimburse WGAT for all costs and expenses
associated with WGAT’s attempts to collect amounts due under this Letter,
including, but not limited to, all costs and expenses associated with a
collection agency or legal action to collect amounts due.
 
5.      Representations and Warranties of the Parties.  Each Party hereby makes
the following representations and warranties to the other Party, each of which
shall survive the closing of the transactions contemplated by this Letter:
 
 
(a)
Status.  Such Party is an entity validly existing and in good standing under the
laws of the jurisdiction in which it was formed.

 
 
(b)
Authorization. Such Party has the requisite power and authority to execute and
deliver this Letter and the documents contemplated by Section 2 of this Letter
and to perform the transactions to be performed by it hereunder.  Such
execution, delivery and performance shall have been duly authorized by all
necessary action on the part of such Party.  This Letter constitutes the valid
and binding obligation of such Party, enforceable against such Party in
accordance with its terms.

 

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October 8, 2009
Page 5
 
 
(c)
Consents and Approvals.  Neither the execution and delivery by such Party of
this Letter, nor the performance of the transactions performed hereunder by such
Party, will require any filing, consent, renegotiation or approval, or conflict
with, result in any breach of or constitute a default under (i) any provision of
any law, statute, rule or regulation, or any ruling, writ, injunction, order,
judgment or decree of any court order or other governmental authority to which
such Party is subject, (ii) the constituent documents of such Party, or (iii)
any contract, governmental permit or other document to which such Party is
subject.

 
6.      Non-disparagement.  Subject to Section 4 of this Letter, each Party
agrees that it will not say or do anything that portrays the other Party or its
parent, subsidiaries or affiliated entities, or its and their officers,
directors, members, shareholders, employees or agents in a negative light or
portrays such Party’s products or services in a negative light.  Subject to
Section 4 of this Letter, without limiting the foregoing, no Party shall make
any disparaging or defamatory remark or comment about any other Party or its
parent, subsidiaries or affiliated entities, or its and their officers,
directors, members, shareholders, employees or agents or its products or
services.
 
7.      [intentionally omitted].
 
8.      Certification of Review.  Each Party certifies that it has read the
terms of this Letter, that it understands the terms of this Letter, and that it
is entering into this Letter of its own volition.  Each Party warrants and
represents that it has received independent legal advice from its attorney
regarding its decision with respect to the advisability of making and entering
into this Letter.
 
9.      Certification of Drafting.  Each Party and its counsel has reviewed this
Letter and has participated in its drafting and, accordingly, no Party shall
attempt to invoke the normal rule of construction to the effect that ambiguities
are to be resolved against the drafting Party in any interpretation of this
Letter.
 
10.   Expenses.  Subject to Section 4 of this Letter, except as otherwise
explicitly provided in this Letter, each of the Parties shall bear all of their
own expenses in connection with the negotiation and closing of this Letter and
the transactions contemplated hereby.
 
11.   Cooperation.  Each Party agrees to execute any and all documents
reasonably requested by any other Party in order to give effect to or
acknowledge the agreements concluded or contained in this Letter.
 

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October 8, 2009
Page 6
 
12.   Non-Disclosure, Confidentiality and Other Provisions.  The Parties agree
that the provisions attached to this Letter as Exhibit C are hereby incorporated
by reference and made a part of this Letter.
 
13.   License to Aequus.  Subject to Section 4 of this Letter, WGAT hereby
grants to Aequus a non-exclusive, non-transferable, non-sublicensable perpetual
license to use the Licensed IP solely to support and operate Video Relay
Services and Video Remote Interpreting services in the Territory (as defined in
the New Reseller Agreement) solely with respect to video phones sold by WGAT to
Aequus and paid for in full by Aequus to WGAT and solely for Customers (as
defined in the New Reseller Agreement) that purchased a video phone sold by WGAT
to Aequus and paid for in full by Aequus to WGAT.  The license provided in the
previous sentence shall terminate if Aequus (i) does not continually and
on-going basis support and operate Video Relay Services and Video Remote
Interpreting services in such Territory for such Customers, (ii) makes an
assignment for the benefit of creditors, or (iii) files or has filed against it,
petition for relief under federal or state bankruptcy laws.  WGAT disclaims all
warranties, either express or implied, including, but not limited to, implied
warranties of merchantability, fitness for a particular purpose or otherwise
with respect to the Licensed IP.  The Licensed IP is provided “as is” subject to
the terms of this Section 13 of this Letter.  For purposes of this Letter,
 
 
(a)
“Licensed IP” means all intellectual property owned or held under license (to
the extent it is able to be sub-licensed) by WGAT as of the date of this Letter
which is required for the use and operation of video phones sold by WGAT to
Aequus.

 
 
(b)
“Intellectual Property” means all of the following in any jurisdiction
throughout the world: (i) all inventions (whether patentable or unpatentable and
whether or not reduced to practice), all improvements thereto, and all patents,
patent applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof, (ii) all trademarks, service marks, together with all applications,
registrations, and renewals in connection therewith, (iii) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (iv) all computer software (including source code,
executable code, data, databases, and related documentation), and (v) all other
proprietary rights.

 
14.    Mandated SOW.  Subject to Section 4 of this Letter, from time to time
during the term of the New Reseller Agreement, WGAT will provide to Aequus such
services as are set forth in mutually agreed written statements of work as a
result of any requirement adopted or published by the United States Federal
Communications Commission or the equivalent regulatory authority of any other
jurisdiction in the Territory (as defined in the New Reseller Agreement)
(“Mandated Changes”), which shall be negotiated and agreed upon by the Parties
in accordance with the following:
 

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October 8, 2009
Page 7
 
 
(a)
Aequus shall notify WGAT in writing of any Mandated Change.  Within thirty (30)
days after receiving such notice, WGAT shall provide Aequus with a proposed
statement of work setting forth in reasonable detail the work required to be
done to implement the Mandated Change, a timetable for performing such work, the
deliverables to result from such work and the costs related thereto (a “Mandated
SOW Proposal”).  Upon delivery to Aequus of a Mandated SOW Proposal, the Parties
shall promptly commence diligent and good faith negotiations to agree on the
terms and conditions of the Mandated SOW Proposal, including, but not limited
to, the costs of engaging a third party subcontractor by WGAT to perform
services in connection with such Mandated SOW Proposal (if necessary).  If the
Parties cannot agree on the terms and conditions of the Mandated SOW Proposal
within seven (7) days following delivery of WGAT’s initial written proposal,
then the Parties shall, upon demand by either Party, submit the Mandated SOW
Proposal for determination by an arbitrator in accordance with the following:

 
 
(i)
Each Party shall submit its most recent proposal (in a form suitable for
execution as a statement of work) and any other materials deemed relevant by
such Party, to the American Arbitration Association or such other independent
expert or organization with expertise in the design and development of systems
for delivery of video phone services as the Parties may agree, such agreement
not to be unreasonably withheld, conditioned or delayed.  If such expert
determines that WGAT’s financial terms are commercially reasonable, then Aequus
shall be obligated to accept the financial terms of the last proposal made by
WGAT.  If such expert determines that WGAT’s terms are not commercially
reasonable, and that Aequus’s terms are commercially reasonable, then WGAT shall
be obligated to accept the financial terms of the last proposal made by
Aequus.  If such expert determines that WGAT’s and Aequus’s terms are not
commercially reasonable, then such expert shall determine commercially
reasonable terms that are between the terms proposed by Aequus and the terms
proposed by WGAT.  The decision of the expert shall be final and binding on the
Parties, and the proposal determined to be commercially reasonable shall be
immediately executed and delivered by the Parties and each Party shall become
bound thereby.

 
 
 

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October 8, 2009
Page 8
 
15.    Releases.
 
 
(a)
WGAT Release.  Subject to Section 4 of this Letter, the WGAT Parties, hereby
forever fully, irrevocably and unconditionally releases and discharges the
Aequus Parties from any and all Claims which the WGAT Parties can, shall or may
have against the Aequus Parties (collectively, the “WGAT Released Claims”),
except that the WGAT Released Claims shall not include the obligations of Aequus
under this Letter or the New Reseller Agreement.  The WGAT Parties hereby
irrevocably agree to refrain from directly or indirectly asserting any claim or
demand or commencing (or causing to be commenced) any suit, action, or
proceeding of any kind, in any court or before any tribunal, against any Aequus
Party based upon any WGAT Released Claim.  It is understood and agreed by all
Parties that the release in this Section 15(a) of this Letter is a general
release of the Aequus Parties, and it is to be construed in the broadest
possible manner consistent with applicable law.

 
 
(b)
Aequus Release.  The Aequus Parties hereby forever fully, irrevocably and
unconditionally releases and discharges the WGAT Parties from any and all Claims
which the Aequus Parties can, shall or may have against the WGAT Parties
(collectively, the “Aequus Released Claims”), except that the Aequus Released
Claims shall not include the obligations of WGAT under this Letter or the New
Reseller Agreement. The Aequus Parties hereby irrevocably agree to refrain from
directly or indirectly asserting any claim or demand or commencing (or causing
to be commenced) any suit, action, or proceeding of any kind, in any court or
before any tribunal, against any WGAT Party based upon any Aequus Released
Claim.  It is understood and agreed by all Parties that the release in this
Section 15(b) of this Letter is a general release of the WGAT Parties, and it is
to be construed in the broadest possible manner consistent with applicable law.

 
 
(c)
Definitions.  For purposes of this Letter,

 
 
(i)
“Aequus Parties” means, collectively, jointly and severally, Aequus and/or each
of its predecessors, successors, affiliates, successors-in-interest, executors,
heirs, administrators, receivers, trustees, assigns, assignees and its and their
insurers, officers, directors, members (direct and indirect), partners (direct
and indirect), owners, past and present shareholders, past and present
stockholders, direct or indirect subsidiaries, employees, agents, attorneys,
lenders (and agents related thereto) and/or representatives.

 

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October 8, 2009
Page 9
 
(ii)
“Claims” means actions, suits, claims, demands, debts, dues, complaints, sums of
money, accounts, reckonings, bonds, bills, specialities, covenants, contracts
(whether oral or written, express or implied from any source), agreements,
warranties, controversies, promises, judgments, extents, executions, variances,
trespasses, liabilities or obligations of any kind whatsoever, in law or equity,
and causes of action of every kind and nature, or otherwise (including, but not
limited to, claims for damages, costs, expenses, and attorneys’, brokers’,
accountants’ and other professionals’ and consultants’ fees and expenses)
arising out of or related, directly or indirectly, to events, facts, conditions
or circumstances existing or arising from the beginning of the world, through
and until the day of date of this Letter, whether arising in law, admiralty, or
equity or by statute, by regulation, or otherwise, whether known or unknown,
suspected or unsuspected, unanticipated as well as anticipated and that now
exist or may hereafter accrue based on matters now unknown as well as known,
including, but not limited to, any and all claims and demands under, related to,
arising from, or in any way connected with the AEQ-WGAT Agreements or the
ownership of any video phones or other products located at the facilities or
warehouses of the other Party.

 
(iii)
“WGAT Parties” means, collectively, jointly and severally, WGAT and/or each of
its predecessors, successors, affiliates, successors-in-interest, executors,
heirs, administrators, receivers, trustees, assigns, assignees and its and their
insurers, officers, directors, members (direct and indirect), partners (direct
and indirect), owners, past and present shareholders, past and present
stockholders, direct or indirect subsidiaries, employees, agents, attorneys,
lenders (and agents related thereto) and/or representatives.

 
 
(d)
WGAT Warranty to Aequus Regarding the Settlement of All Claims.  WGAT represents
and warrants that it is the exclusive owner of the Aequus Released Claims and
that, as of the date of their execution of this Letter, they have not assigned,
sold, transferred or otherwise conveyed those claims to any other persons or
entities.  WGAT represents and warrants that, as of the date of their execution
of this Letter, they have not filed with any court, tribunal or alternative
dispute resolution organization any claim, demand, action, joinder or cause of
action against Aequus.  If this warranty and representation should later be
found to be untrue, then, in addition to any other relief or damages to which
Aequus may be entitled, WGAT shall, at no cost or expense to Aequus, immediately
file all documents and take all action necessary to have the claim, action or
cause of action dismissed or discontinued with prejudice.

 

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October 8, 2009
Page 10
 
 
(e)
Aequus Warranty to WGAT Regarding the Settlement of All Claims.  Aequus
represents and warrants that it is the exclusive owner of the WGAT Released
Claims and that, as of the date of full execution of this Letter, they have not
assigned, sold, transferred or otherwise conveyed those claims to any other
persons or entities.  Aequus represents and warrants that, as of the date of
their execution of this Letter, they have not filed with any court, tribunal or
alternative dispute resolution organization any claim, demand, action, joinder
or cause of action against WGAT.  If this warranty and representation should
later be found to be untrue, then, in addition to any other relief or damages to
which WGAT may be entitled, Aequus shall, at no cost or expense to WGAT,
immediately file all documents and take all action necessary to have the claim,
action or cause of action dismissed or discontinued with prejudice.

 
[Signature Page Follows]
 
 
 

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Please indicate your agreement to the terms of this Letter by executing the
enclosed copy of this Letter.  This Letter will be null and void if it has not
been executed by Aequus and returned to WGAT before 5:00 p.m., New York time, on
October 8, 2009.
 
WorldGate Communications, Inc.
   
By:
/s/ George Daddis
 
Name: George Daddis
 
Title: CEO and President

 
OJO Service LLC
   
By:
WorldGate Communications, Inc., its sole member
     
By:
/s/ George Daddis
 
Name: George Daddis
 
Title: CEO and President

 
Acknowledged and agreed to as of
this 8th day of October, 2009:
 
Snap Telecommunications, Inc.

By:
/s/ Thomas W. Kielty
 
Name: Thomas W. Kielty
 
Title: CEO and President
   
Aequus Technologies Corp.
   
By:
 /s/ Thomas W. Kielty
 
Name: Thomas W. Kielty
 
Title: CEO and President

 
 
 

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EXHIBIT A OF LETTER
 
 
1.
Revised and Restated Amendment and Master Contract, dated as of March 31, 2008

 
 
2.
Third-Party Escrow Service Agreement, dated March 31, 2008

 
 
3.
Escrow Agreement, dated as of March 31, 2008

 
 
4.
License, Maintenance and Update Services Agreement, dated as of March 31, 2008

 
 
5.
Master Agreement, dated as of March 31, 2008

 
 
6.
Rental Agreement, dated as of March 31, 2008

 
 
7.
Promissory Note, dated March 31, 2008, in the amount of $1,174,437.50

 
 
8.
Mutual Confidentiality Agreement, dated as of March 31, 2008

 
 
9.
Transition Services Agreement, dated as of March 31, 2008

 
10.
Reseller Agreement, dated as of March 22, 2006

 
11.
Professional Services Agreement, dated as of August 14, 2006

 
12.
Video Service Provider Agreement, dated as of May 16, 2006

 
13.
Agreement, dated April 18, 2008, between Aequus, WGAT and Mototech, Inc.

 
14.
Settlement Agreement and Mutual Release, dated as of January 27, 2009

 
15.
Mutual Release, dated as of March 31, 2008

 
 
 

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EXHIBIT B OF LETTER
 
[FORM OF RESELLER AGREEMENT]
 
 
 

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EXHIBIT C OF LETTER
 
1.             Definitions.  The following terms are defined as follows:

(a)           “Confidential Information” means (i) any and all information
concerning either Party or its affiliates which has been or is, in the future,
furnished by such Party (the “Provider”) or any of its Representatives (as
defined below) to the other Party (the “Recipient”) or any of its
Representatives, orally or in writing (whatever the form or storage medium),
including, but not limited to, information concerning its subsidiaries,
affiliates, businesses, operations, markets, products, product specifications,
designs, documentation, technical data, trade secrets, processes, computer
programs (in object or source code form), know-how, research and development,
financial condition, results of operations, projections, strategies, marketing
information, contracts, customers, employees and prospects, and (ii) any and all
notes, analyses, compilations, studies or other documents prepared by the
Recipient or any of its Representatives containing or reflecting any
Confidential Information described in clause (i). The term “Confidential
Information” does not include information which the Recipient demonstrates: (A)
was or becomes generally available to or known by the public (other than as a
result of a disclosure directly or indirectly by the Recipient or any of its
Representatives who received such information pursuant hereto); or (B) was or
becomes available to the Recipient or any of its Representatives on a
non-confidential basis, prior to its disclosure to the Recipient by the Provider
or its Representatives; provided that, the source of such information is not
otherwise known by the Recipient after reasonable investigation to be bound by a
confidentiality agreement with the Provider or any of its Representatives, or to
be under a contractual, legal, fiduciary or other obligation to the Provider or
any of its Representatives not to transmit the information to the Recipient.

 (b)           The term “Representative” means, with respect to either Party,
such Party’s affiliates and its and their officers, directors, stockholders,
members, partners, employees, financial and other advisors, attorneys,
accountants, consultants and agents.

2.             Use of Confidential Information.

(a)           Any Confidential Information provided to the Recipient hereunder
will be used by such Party and its Representatives solely for the purpose of
performing their responsibilities under this Letter and the New Reseller
Agreement and shall not be used by such Party for any other purpose, including,
but not limited to, use in any way detrimental to the other Party. The Recipient
shall maintain the strict confidentiality of any Confidential Information
provided to it or any of its Representatives by the other Party or any of its
Representatives and shall not disclose any part of it to any other person;
provided that, (i) it may disclose any such Confidential Information or portions
thereof to its Representatives subject at all times to Section 3 of this Exhibit
C, and (ii) it may disclose any such Confidential Information in accordance with
Section 4 of this Exhibit C.  The Recipient shall treat the Confidential
Information with the same degree of care as it would its own, but in no event
with less than reasonable care.

 
 

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(b)           The Provider shall retain the entire right, interest and title to
its Confidential Information.  No license under any patent, copyright,
trademark, other intellectual property right or any application therefor, is
hereby granted or implied by the provision of Confidential Information to the
Recipient.  The Recipient shall not alter or obliterate any trademark or any
other proprietary mark or notice thereof of the Provider on any copy of the
Confidential Information, and shall reproduce any such mark or notice on all
copies of the Confidential Information.  In the event product samples are
furnished hereunder, such samples shall only be use as reasonably required in
accordance with this Letter, and the Recipient shall not de-compile, disassemble
or otherwise attempt to reverse engineer the samples.

3.             Representatives. Each Party may disclose Confidential Information
to those of its Representatives who have a reasonable need to know such
information in order to assist the Recipient in performing their
responsibilities under this Letter; provided that, prior to any such disclosure,
(a) the Recipient informs any such Representative of the terms of this Letter
and (b) such Representative agrees to preserve the confidentiality of the
Confidential Information.  Each Party shall take all such actions as will ensure
that its Representatives comply with the terms of this Letter. Each Party will
be responsible for any breach of this Letter by any of its Representatives.

4.             Subpoenas, etc.  If the Recipient or any of its Representatives
becomes required by law or applicable legal process to disclose any Confidential
Information furnished by the Provider, the Recipient shall provide the Provider
with prompt prior written notice of such requirement and the terms of and
circumstances surrounding such requirement so that such Provider may seek an
appropriate protective order or other remedy, or waive compliance with the terms
of this Letter, and the Recipient shall provide such cooperation with respect to
obtaining a protective order or other remedy as the Provider shall reasonably
request.  If, in the absence of protective order or other remedy or the receipt
of a waiver by the Provider, the Recipient or any of its Representatives are
nonetheless, in the written opinion of its counsel, reasonably acceptable to the
Provider, legally compelled to disclose Confidential Information to any tribunal
or else stand liable for contempt or suffer other censure or penalty, the
Recipient or its Representatives may, without liability hereunder, disclose to
such tribunal only that portion of the Confidential Information which such
counsel advises the Recipient is legally required to be disclosed; provided
that, the Recipient exercises its best efforts to obtain an appropriate
protective order or other reasonable assurance that confidential treatment will
be accorded such Confidential Information by such tribunal.
 
 
 

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5.             Effect of Termination on Confidential Information.  In the event
of a termination of this Letter or the Reseller Agreement or at the request of
either Party, the Recipient shall immediately (a) cease using the Confidential
Information, (b) return to the Provider any Confidential Information furnished
by the Provider or any of its Representatives and (c) destroy any and all copies
of such Confidential Information and any and all notes, analyses, compilations,
studies or other documents prepared by the Recipient or any of its
Representatives containing or reflecting any Confidential Information.  Any
destruction required pursuant to this Section 5 of this Exhibit C shall, upon
request of the Provider, be certified in writing to the Provider by an
authorized officer supervising such destruction.  Notwithstanding the return or
destruction of the Confidential Information, each Party and its Representatives
will continue to be bound by its obligations of confidentiality and other
obligations hereunder.

6.             Non-Disclosure.  Without the prior written consent of the other
Party, each Party will not, and will cause its Representatives not to, disclose
to any person (including, but not limited to, by press release or other public
statement) (a) that any Party has requested or received Confidential Information
from the other Party or (b) the terms, conditions or other facts concerning this
Letter or the rights and obligations of the Parties under this Letter,
including, but not limited to, the status or existence thereof; provided that,
either Party may make such disclosure if required by law or the rules of any
securities exchange or market. The term “person” as used in this Letter shall be
broadly interpreted to include, without limitation, the media and any
corporation, partnership, group, individual or other entity.  Aequus
acknowledges and agrees that WGAT will publicly disclose this Letter in filings
with the U.S. Securities and Exchange Commission

7.             Accuracy of Materials. Neither Party makes any representation or
warranty, express or implied, as to the accuracy or completeness of the
Confidential Information provided or to be provided by it or any of its
Representatives.  No Party nor any of its Representatives will have any
liability to the other Party or any other person resulting from any action taken
or any inaction occurring in reliance on any Confidential Information provided
by the other Party or any of its Representatives or the contents thereof.

8.             Remedies. Each Party agrees to indemnify and hold the other Party
and its stockholders harmless from any damages, loss, liabilities, diminution in
value of property, costs and expenses (including, but not limited to, attorney
fees and expenses) arising out of any breach of this Letter by such Party or its
Representatives.   Each Party acknowledges and agrees that money damages are an
inadequate remedy for breach of the confidentiality and nonsolicitation
provisions of this Letter because of the difficulty of ascertaining the amount
of damage that will be suffered in the event that this Letter is
breached.  Therefore, each Party shall be entitled to equitable relief,
including, but not limited to, an injunction and specific performance, in the
event of any breach of the confidentiality and nonsolicitation provisions of
this Letter by the other Party or any of its Representatives, in addition to all
other remedies available to such Party at law or in equity.

 
 

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9.             Nonsolicitation. In consideration of Confidential Information
being furnished to Aequus by WGAT, Aequus hereby agrees that, from the date of
the Letter until two years after the date of termination of the New Reseller
Agreement, without obtaining the prior written consent of WGAT, Aequus will not,
nor will any of its affiliates or Representatives, employ or solicit for
employment any employee of WGAT, or induce any employee of WGAT to terminate
such employee’s employment with WGAT; provided that, advertisements by way of
newspapers, magazines, trade publications, internet or general media or
non-directed executive search shall not constitute a violation of this
provision.

11.           Compliance with Law.  Recipient agrees that it will not indirectly
(a) export any technical Confidential Information acquired under this Letter or
any commodities using such Confidential Information to any country to which the
United States government forbids export or, at the time of export, requires an
export license or approval, without first obtaining such license or approval, or
(b) use any such Confidential Information to engage in or facilitate the trading
of any securities, in either case, in violation of any prevailing laws and
regulations in any applicable jurisdiction.  Each Party acknowledges and agrees
that it is aware that applicable securities laws prohibit any person who has
material, non-public information concerning Aequus, WGAT or their affiliates
from purchasing or selling any securities of Aequus, WGAT or their affiliates,
or from communicating such information to any other person or entity under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.

12.           Notices.  Notices given hereunder shall be in writing and shall be
deemed to have been duly given on the date established by the sender as having
been delivered personally, upon confirmation of receipt if sent by facsimile, on
the date delivered by a private courier as established by the sender by evidence
obtained from the courier, on the third day after the date mailed, if mailed by
certified or registered mail, return receipt requested, postage prepaid, to the
Party being notified at its address or facsimile number set forth below or such
other address as the addressee may subsequently notify the other Party of in
writing:

If to Aequus:

1 Blue Hill Plaza, 14th Floor
PO Box 1626
Pearl River, New York 10965
Attention:  Chief Executive Officer
Facsimile: 845-652-7109

If to WGAT:

3190 Tremont Avenue
Trevose, Pennsylvania 19053
Attn: General Counsel
Facsimile: 215-354-1049
 

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13.           Miscellaneous.

(a)           No failure or delay by any Party in exercising any right, power or
privilege hereunder will operate as a waiver thereof, nor will any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.

(b)           This Letter, including the Exhibits to the Letter, embodies the
entire agreement and understanding of the Parties with respect to the subject
matter hereof and supersedes all prior discussions, negotiations, agreements and
understandings among the Parties with respect to the subject matter hereof.

(c)           This Letter shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania, without giving effect to any
choice of law or conflicts of laws provisions or rule of any jurisdiction that
would cause the substantive laws of any other jurisdiction to apply. Aequus
hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of either the Court of Common Pleas of Bucks County,
Pennsylvania and of the United States of America located in the Eastern District
of Pennsylvania for any actions, suits or proceedings arising out of or relating
to this Letter. Aequus hereby irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Letter, in the courts of either the Court of Common Pleas of Bucks
County, Pennsylvania and of the United States of America located in the Eastern
District of Pennsylvania and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum.

(d)           This Letter may be amended, and any provisions hereof may be
waived, only by a writing signed by all Parties.  The Parties have negotiated
this Letter and the language of this Letter shall not be construed for or
against either Party.

(e)           Neither Party may assign this Letter or any of its rights
hereunder without the written consent of the other Party, except that WGAT may
assign this Letter to an affiliate of WGAT without Aequus’s consent.  This
Letter shall be binding upon and inure to the benefit of the Parties and their
respective successors and assigns.

(f)           If any portion or provision of this Letter shall to any extent be
declared illegal or unenforceable by a court of competent jurisdiction, then the
remainder of this Letter, or the application of such portion or provision in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision of
this Letter shall be valid and enforceable to the fullest extent permitted by
applicable law.

 
 

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(g)           This Letter may be executed in multiple counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.  This Letter, any and all agreements and instruments
executed and delivered in accordance herewith, along with any amendments hereto
or thereto, to the extent signed and delivered by means of E-mail, a facsimile
machine or other means of electronic transmission, shall be treated in all
manner and respects and for all purposes as an original signature, agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person.

[End of Exhibit C]

 
 

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