Document:

mPhase Technologies Inc.: Exhibit 10.19 - Prepared by TNT Filings Inc.

 

EXHIBIT 10.19

SOFTWARE LICENSE AGREEMENT 

This Software License Agreement ("Agreement") is made and entered into this
3rd day of November, 2004, (the "Effective Date") by and between Espial Group
Inc., a Canadian corporation with its principal place of business at 200 Elgin
Street, Suite 901, Ottawa, Ontario, Canada K2P 1L5, on behalf of itself, and its
subsidiaries (hereinafter individually and collectively referred to as
"Espial"), and mPhase, Inc. with its principal place of business at 587
Connecticut Avenue, Norwalk, CT 06854-1711("Licensee"). Espial and Licensee are
each a "Party", and together are "Parties", to this Agreement. 

WHEREAS, Licensee wishes to license certain software and obtain certain
services from Espial under the terms and conditions set forth below; and 

WHEREAS, Espial wishes to license software, the associated documentation and
provide certain services to Licensee under the terms and conditions set forth
below. 

NOW THEREFORE, the Parties mutually agree as follows: 

1.         DEFINITIONS 

"Confidential Information" shall mean the terms and conditions of this
Agreement and any and all information that is disclosed under this Agreement (i)
in oral, written, graphic, machine recognizable, and/or sample form, being
clearly designated, labeled or marked as confidential or its equivalent, or (ii)
obtained by examination, testing or analysis of any hardware, software or any
component part thereof provided by one Party ("Disclosing Party") to another
Party ("Receiving Party"). Confidential Information that is disclosed orally
shall be identified as confidential at the time of disclosure and confirmed by
the Disclosing Party by submitting a written document to the Receiving Party
within thirty (30) days after such disclosure. The written document shall
contain a summary of the Confidential Information and shall be labeled or marked
as confidential or its equivalent. "Confidential Information" includes the
Software, business plans, market projections, marketing plans, price data and
similar proprietary information of the parties, as well as the terms of this
Agreement. 

"Development Project" shall mean the software development project undertaken
by Licensee employing the Software Development Kit with the assistance of the
Professional Services, if any, to create a customized version of the Embedded
Software to support the Product. 

"Embedded Software" shall mean run-time versions of Espial's proprietary
software and Sublicensed Supplier Software (if any) more fully described in
Exhibit A, licensed to Licensee hereunder which may, pursuant to this Agreement,
be customized pursuant to the Development Project described herein and
distributed as an embedded program within Licensee's Products, and shall include
documentation and any future versions, improvements, updates, enhancements,
modifications or derivative works which may be supplied by Espial as part of
Espial's Support Services or Professional Services. 

"End User" means a third party licensed to use Licensee's Product. 

"End User Agreement" means a written agreement between the Licensee and an
End User governing the use of Licensee's Product containing the terms and
conditions set forth in Section 3.4 hereto. 

"Espial Mark(s)" shall mean the Espial trademark(s) as more fully described
in Exhibit C. 

Page 1 of 15 

"Intellectual Property Rights" shall mean all rights in any invention,
discovery, improvement, utility model, copyright, industrial design or mask work
right, and all rights of whatsoever nature in computer software and data,
Confidential Information, trade secrets or know-how, and all intangible rights
and privileges of a nature similar to the foregoing, in every case in any part
of the world and whether or not registered, and shall include all rights in any
applications and granted registrations for any of the foregoing. 

"Product(s)" shall mean any and all of Licensee's devices described in
Schedule A that operate on the unique combination of operating system ("OS"),
central processing unit ("CPU that are specified in Exhibit A and that following
modification pursuant to the Development Project, incorporates a customized
version of the Embedded Software. Any product or follow-on product with
different functionality or which utilizes a different CPU & OS, than those
specified in Exhibit A shall be deemed a new or different Product. 

"Professional Services" shall mean the technical design, programming and
development services provided to Licensee by Espial or its subcontractors in
accordance with the Statement of Work, if any, for the purpose of customizing
the Embedded Software to operate with the Product. 

"Software" shall mean the Software Development Kit and the Embedded Software.

"Software Development Kit" shall mean the Espial proprietary software and the
Sublicensed Supplier Software described in Exhibit A and includes any future
versions, improvements, Updates, enhancements, modifications or derivative works
which may be supplied by Espial in the course of providing Professional Services
and/or Support Services. 

"Statement of Work" shall mean the mutually agreed list of
services, if any, set forth in Exhibit B as may be amended by mutual agreement
from time to time, or as otherwise mutually agreed upon by the Parties, that are
to be performed by Espial to customize the Embedded Software to operate with the
Products. 

"Sublicensed Supplier Software" means Supplier Software licensed to Espial
under licenses that permit Espial to offer Company sublicenses in such Supplier
Software under the terms of this Agreement and the additional terms specified in
Exhibit D; 

"Supplier Software" means all or any part of the software: 

(i) for which all right, title and interest (including all intellectual
property rights) are owned by a third party ("Supplier"); and (ii) that in
modified or unmodified form is or may be incorporated into, or executed in
association with, Espial's proprietary software. 

"Support Services" shall mean routine telephonic and e-mail technical support
and copies of any Updates that may be released during the period of the Support
Services to be provided by Espial to Licensee pursuant to Section 4. 

"Updates" shall mean error corrections, bug fixes and such interim releases
of the Software as may be officially released by Espial to its customers
receiving support services similar to or identical to the Support Services. 

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2.         PROFESSIONAL SERVICES

2.1 In the event the parties agree to implement a Statement of Work, the
terms and conditions of this Section 2 shall apply to all Professional Services
provided hereunder. 

2.2. Espial will use commercially reasonable efforts to provide all
Professional Services according to the Statement of Work. 

2.3. Licensee will make available at its own expense computer systems and
appropriate personnel to the extent necessary for Espial to perform the
Professional Services. Licensee will ensure that any Licensee computer systems
will be fully functional, accompanied by complete and accurate user
documentation and that Licensee will make technical support available in a
timely manner as is reasonably required. The parties agree that any Statement of
Work delivery date or work requirement will be adjusted for any delay in
performance of the Professional Services that results from failure of Licensee
computer systems to perform, inadequate documentation, insufficient technical
support or failure to make timely payments under this Agreement and that any
costs and expenses incurred as a result of such delay shall be borne by
Licensee. 

2.4. Espial will invoice Licensee for Professional Services as specified in
the Statement of Work. 

2.5. Professional Services fees shall be payable by Licensee upon Licensee's
receipt of Espial's invoice. If Licensee's procedures require that an invoice be
submitted against a purchase order before payment can be made, Licensee will be
responsible for issuing such purchase order, but such procedure shall not affect
Licensee's obligation to pay an invoice in accordance with Section 5.5. Espial's
terms and conditions as provided herein shall apply at all times,
notwithstanding subsequent receipt on a purchase order of Licensee's terms and
conditions. 

2.6. Licensee will pay or reimburse Espial for all reasonable expenses
incurred to provide the Professional Services, including, without limitation,
expenses related to travel and the acquisition of any hardware or software
systems specific to the Development Project. 

2.7. All Professional Services shall be provided on a non-exclusive basis.

3.         GRANT OF LICENSE RIGHTS

3.1 Espial hereby grants to Licensee, subject to the terms and conditions
contained herein, including but not limited to the payment of all associated
fees and the terms and conditions specific to the Sublicensed Supplier Software
contained in Exhibit D hereto: (a) a non-exclusive, non-transferable, limited
license which may be subject to further limitations specified in Schedule A to
have employees use the Software Development Kit for the express purpose of
undertaking the Development Project; and (b) a non-exclusive, non-transferable,
royalty-bearing, worldwide, limited license to (i) to integrate the Embedded
Software into the Products; (ii) to reproduce the Embedded Software as
integrated into the Products, and (iii) to distribute the Embedded Software as
integrated into the Products solely to End Users who are subject to an End User
Agreement. 

3.2. Licensee agrees that it will conspicuously display the Espial Mark in
the form attached hereto as Exhibit C on each Product in one of the following
formats: (i) silk-screened or affixed as a sticker on the Product on the same
side of the Product as the Product's main screen display; or (ii) as a screen
shot displayed on the Product's screen display during boot. In either case, the
minimum dimensions of the Espial Mark as displayed in or on the Product will be
10.1mm wide x 4.2mm high. Licensee may display 

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the Espial Mark in red and black, white or black, as may be reasonably deemed
appropriate in light of the background colors. 

3.3. Espial hereby grants to Licensee a nonexclusive, nontransferable limited
license to use, reproduce and display the Espial Mark solely in accordance with
Section 3.1(b) and 3.2 above and in connection with the distribution,
advertising, marketing and promotion of Licensee's Products incorporating the
Embedded Software, provided that appropriate trademark notices are included and
the use conforms to Espial's guidelines regarding the use of trademarks, which
will be provided at Licensee's request. Licensee agrees that Espial is the sole
and exclusive owner of the Espial Mark and all goodwill associated therewith.
Except as expressly provided herein, Licensee is granted no right, title or
license to, or interest in, any Espial Marks. Licensee agrees not to: (i)
challenge Espial's ownership or use of the Espial Marks; (ii) attempt to
register any of the Espial Marks, or any mark or logo substantially similar
thereto; or (iii) incorporate any Espial Mark into Licensee's own trademarks,
product names, services marks, company names, or domain names. 

3.4. End User Agreements shall include the following terms and conditions:

  3.4.1 Prohibition against distribution and copying. 

  3.4.2 Prohibition against modifications or derivative works. 

  3.4.3 Prohibition against decompiling, reverse engineering, disassembling,
  or otherwise reducing the software to a human-perceivable form. 

  3.4.4 Provision indicating ownership of software by Licensee and its
  suppliers. 

  3.4.5 Disclaimer of all applicable statutory warranties, to the full extent
  allowed by law. 

  3.4.6 Limitation of liability not to exceed price of Licensee Product and
  provision that sole remedy shall be a right of return and refund, if any, from
  Licensee. 

  3.4.7 Disclaimer of indirect, special, incidental, punitive or
  consequential damages. 

4.        
SUPPORT SERVICES 

4.1. Support Services are for a one-year term and renew annually. The support
fee for each of the first two years of the Term is specified in Exhibit A.
Licensee may renew Support Services in subsequent years paying the then
applicable Support Fee. Espial shall not be obligated to renew Support Services
if Licensee has discontinued Support Services in any year. Annual Support shall
renew automatically at the then-current fees and policies unless Licensee
notifies Espial at least sixty (60) days prior to the expiration of an annual
support term of its desire to cancel Support Services for the following year.

4.2. Espial reserves the right to discontinue the Support Services should
Espial, in its sole discretion, determine that continued support for any
Software is no longer economically practicable and will give Customer at least
six (6) months prior written notice of any such discontinuance of Support
Services and will refund any unused Support Services fees Licensee may have
prepaid with respect to the affected Software. Espial reserves the right to
suspend performance of the Support Services if Customer fails to pay any amount
that is payable to Espial under the Agreement within thirty (30) days after such
amount becomes due. 

5.         LICENSE FEES AND PAYMENT
TERMS 

5.1. The fees and other charges applicable to the Software and/or any
services provided by Espial are set out in Exhibit A. 

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5.2. A per copy royalty is payable for each copy of Embedded Software that is
to be embedded in Product. The per copy royalty fee is to be purchased in the
block quantities specified in Schedule A prior to the Embedded Software being
embedded in Product. The block quantities shall be purchased quarterly based on
Licensee's projected requirements. In the event that additional requirements are
later identified, additional block quantities may be purchased during the
quarter. 

5.3. All prepaid royalty fees are non-recourse nonrefundable regardless of
whether or not the minimum number of copies to which such prepaid royalty fee
relates is actually distributed. Prepaid royalty fees are treated as a credit
against royalties otherwise payable and therefore upon committing to a specific
prepaid royalty, no royalties are payable until the credit of prepaid royalty
fees has been consumed. 

5.4. Licensee shall pay all shipping charges for materials shipped by Espial
under this Agreement, as well as any taxes, duties, licenses, fees or tariffs
imposed by any state or other governmental body or agency for storage,
licensing, sale, transportation, import, export or use of the Embedded Software
and/or Software Development Kit. Espial shall be responsible for all taxes based
upon its net income. If Licensee is required by law to withhold income taxes on
any payment owed to Espial, then Licensee may deduct such taxes from amounts
owed to Espial and shall pay them to the appropriate tax authority, provided
that Licensee shall deliver to Espial an official receipt for any taxes withheld
and any other documents necessary to enable Espial to claim tax credit. 

5.5. All payments under this Agreement shall be made in lawful United States
currency, unless otherwise agreed in writing by both parties, within thirty (30)
days of Licensee's receipt of Espial's invoice or as otherwise expressly
specified herein. All payments not paid when due shall incur interest at a rate
equal to a monthly charge of one and one-half percent (1.5%) per month or the
maximum allowed by law, whichever is less. 

6.         OWNERSHIP OF
INTELLECTUAL PROPERTY 

6.1. Licensee acknowledges and agrees: (i) that Espial owns or is the
rightful licensee of all 

Intellectual Property Rights in the Software and related documentation; and
(ii) any Intellectual Property Rights conceived, created or developed by Espial
(including its subsidiaries, affiliates and contractors) in the course of
performing Professional Services shall be owned by Espial and Licensee shall, at
Espial's expense, execute all documents and take all actions required of it by
Espial in order to perfect the vesting of same in Espial throughout the world.

6.2. All rights not expressly granted herein by Espial are reserved. Licensee
shall not attempt, or knowingly permit or encourage others to attempt, to
translate, decompile, decipher, disassemble, reverse engineer or otherwise
decrypt or discover the source code or otherwise replicate the functionality of
all or any portion of the Software or the Products except and only to the extent
permissible by applicable law despite such prohibition. 

7.         CONFIDENTIAL INFORMATION
/ NONSOLICITATION 

7.1. It may be necessary during the performance of this Agreement for the
parties to exchange Confidential Information. Each Party agrees to use the same
degree of care to protect the confidentiality of the Confidential Information
and to prevent its unauthorized use or dissemination as it uses to protect its
own confidential information of a similar nature, and in no event less than
reasonable care. Each Party 

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agrees to use the Confidential Information only for purposes
related to the performance of this 

Agreement. Both parties agree not to make any copy of any
document, drawing or diagram as provided as part of the Confidential Information
without the prior written consent of the Disclosing Party and to return promptly
to the Disclosing Party any such document, drawing or diagram when that
Confidential Information is no longer required or upon request, expiration or
termination of this Agreement in accordance with Section 9.3. All Confidential
Information remains the property of the Party disclosing the information and,
except for the licenses expressly granted under this Agreement pursuant to
Section 3, no license or other rights to Confidential Information is granted
hereby. 

7.2. Neither Party will be liable for disclosure of any
information received under this Agreement which (i) is or becomes generally
known or available by publication, commercial use or otherwise; (ii) was
lawfully known or received by the Receiving Party prior to disclosure, as
evidenced by its business records; (iii) is independently developed by the
Receiving Party without the use of Confidential Information, as evidenced by
their business records; (iv) is obtained from a third party, provided such third
party, or any other party from whom such third party receives such information,
is not in breach of any confidentiality obligation in respect of such
information; or (v) is disclosed when such disclosure is compelled pursuant to
legal, judicial, or administrative proceedings, or otherwise required by law,
subject to the Receiving Party providing prior notice to the Disclosing Party to
allow it to seek protective and other court orders. 

7.3. In consideration of the rights granted herein, Licensee
agrees that, during the Term as defined in Section 9.1 below and for a period of
one year thereafter, it shall not solicit any employee of Espial for employment
by Licensee or any affiliate. 

7.4 Licensee acknowledges and agrees that in the event of its
breach of any of the terms of this Section, Espial will suffer irreparable
injury, such that no remedy at law will afford it adequate protection against
such injury. Accordingly, Licensee consents to an injunction or other equitable
relief if sought by Espial from a court of competent jurisdiction, without the
posting of a bond, against the breach of any of the terms of this Section, in
addition to any other legal or equitable remedies that may be available to
Espial. 

7.5. If either Party develops a product or a process not
contemplated within the context of this Agreement which, in the reasonable
opinion of the other Party, might have involved the use of any of the other
Party's Confidential Information, the Party which has made the development
shall, at the request of the other Party, supply to it any information
reasonably necessary to establish that the other Party's Confidential
Information has not been used in the development or exploitation of the said
product or process. 

8.         RECORDS &
REPORTING 

8.1. Quarterly Reports. Licensee agrees to provide Espial,
within fifteen (15) days after the end of each calendar quarter and within ten
(10) days after the expiration or termination of this Agreement, a report of the
total number of copies of the Embedded Software embedded by Licensee during the
prior quarter by country. Licensee shall commence providing Espial such reports
within fifteen (15) days following the end of the calendar quarter in which this
Agreement is signed. 

8.2. Auditable Records. Licensee shall keep true, accurate and
consistent records containing regular entries relating to the disposition of
each copy of Embedded Software distributed by Licensee. These records shall be
available for examination during normal business hours by accountants
representing Espial, who shall be entitled to perform an audit and to make
copies and extracts and to receive any 

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explanations that may reasonably be requested. Espial is
responsible for payment of the accountant's fee, except that Licensee shall be
responsible for such fees in the event an examination discloses a discrepancy in
Espial's favor of more than five (5) percent of the payment of total fees due
under this Agreement. 

9.         TERM AND TERMINATION 

9.1. Term. This Agreement shall commence on the Effective Date and terminate
three (3) years thereafter (the "Term") unless terminated earlier in accordance
with Section 9.2. 

9.2. Termination. In the event a Party breaches this Agreement (which shall
include, without limitation, any failure by Licensee to make timely payments
hereunder), the other Party may terminate this Agreement by giving thirty (30)
days advance notice to the Party in breach provided the breach has not been
cured within the thirty (30)-day period. The thirty (30) day period herein shall
not apply to any material breach by a Party of Sections 3, 6 or 7 (Grant of
License Rights, Ownership of Intellectual Property, Confidential Information),
and Espial may terminate this Agreement with immediate effect upon its discovery
of such a breach by Licensee. 

9.3. Return of Embedded Software and Confidential Information. In the event
of expiration or termination of this Agreement, Licensee shall return all full
or partial copies of Embedded Software and Confidential Information, and any
other materials furnished by Espial to Licensee within ten (10) days following
the termination or expiration date, including any in-house copies Licensee may
have produced. At the termination or expiration of this Agreement, Licensee will
be deemed to have conveyed back to Espial all rights granted to it pursuant to
this Agreement. Notwithstanding the foregoing, any licenses to the Products
properly granted to an End User under this Agreement shall remain in effect so
long as such licenses are used in accordance with the respective license grant
contained in the End User Agreement. 

9.4. Remedies. Licensee shall not have any right to reimbursement of prepaid
royalties in the event of termination. 

9.5. Survival. The provisions of Sections 5, 6, 7, 8, 9.3, 9.4, 9.5, 12 and
13 shall survive expiration or termination of this Agreement. 

10.        WARRANTIES 

10.1. Warranties. Espial represents and warrants, for the benefit of Licensee
only, that for a period beginning on the Effective Date and ending ninety (90)
days thereafter (the "Warranty Period") the Software will operate free from any
material nonconformity with the functional description of the operation of the
Software in the applicable documentation (an "Error"). For Software modules that
have been purchased by Licensee but have not been incorporated into the
Licensee's development cycle, Licensee will give Espial fifteen (15) days notice
that development has commenced, at which such time these Software modules will
be covered by Warranty Period. 

10.2. Remedy. As Licensee's exclusive remedy and Espial's sole obligation for
any Error, Espial shall use commercially reasonable efforts to provide a fix or
work-around, provided that Licensee (i) notifies Espial of the nonconformity
within the Warranty Period, (ii) has installed all Updates provided to Licensee
pursuant to Section 4 of this Agreement and (iii) has not made any unauthorized
changes or misused or damaged the Software. In the event Espial is not able to
repair or replace the nonconforming Software, Espial's sole liability and
Licensee's sole remedy shall be a refund the license fees pertaining to the
nonconforming Software. 

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10.3. Disclaimer. THE PRECEDING WARRANTIES ARE MADE IN LIEU OF ALL OTHER
WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY EXPRESS, IMPLIED OR STATUTORY
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NONINFRINGEMENT. ESPIAL AND ITS SUPPLIERS SHALL HAVE NO LIABILITY WITH RESPECT
TO CLAIMS RELATING TO OR ARISING FROM THE USE OF NON-ESPIAL PRODUCTS OR
SERVICES, EVEN IF ESPIAL RECOMMENDED, REFERRED OR INTRODUCED LICENSEE TO SUCH
PRODUCTS OR SERVICES. LICENSEE ACKNOLWEDGES THAT LICENSEE IS RESPONSIBLE FOR THE
CREATION AND MAINTENANCE OF ANY FILE THAT CONTAINS TRUSTED CERTIFICATES THAT
CONTAIN PUBLIC KEYS FROM CERTIFICATE AUTHORITIES THAT ARE USED AS A BASIS FOR
ALL SECURE SOCKETS LAYER AND TRANSPORT LAYER SECURITY. ANY SUCH FILE
(HEREINAFTER "ROOTCERT FILE") PROVIDED BY ESPIAL IS PROVIDED "AS IS" AND FOR
REFERENCE PURPOSES ONLY. NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS AGREEMENT
ESPIAL MAKES NO REPRESENTATIONS, DOES NOT WARRANT, AND SHALL HAVE NO LIABILITY
WHATSOEVER IN RESPECT OF ANY ROOTCERT FILE PROVIDED TO THE LICENSEE PURSUANT TO
THIS AGREEMENT. 

11.        INDEMNIFICATION 

11.1. Espial agrees to defend, indemnify and hold harmless Licensee from any
claim or action brought against Licensee alleging that Espial's proprietary
software infringe any third party's rights under U.S. or Canadian patent law,
copyright law or trade secret law, provided Licensee (i) provides Espial written
notice of any such claim within fifteen (15) days from when Licensee becomes
aware of the same, (ii) grants Espial sole control and authority over the
defense or settlement of such claim or action and (iii) provides Espial with
proper and full information and assistance in defending and/or settling such
claim or action. Espial may, at its sole option and expense, (i) procure for
Licensee the right to use the infringing material licensed hereunder, (ii)
replace the infringing material with noninfringing materials or (iii) accept
return of the same and refund the value of the same provided that in no event
will Espial be liable for more than the fees paid by Licensee. The foregoing
states the sole obligation and exclusive liability of Espial, and Licensee's
sole recourse and remedy, for any infringement or claim of infringement by the
Software. 

11.2. Espial shall have no liability for any claim of infringement based on (i)
use of other than the latest commercially available version of the Software
provided to Licensee, to the extent the infringement would have been avoided by
use of such version; (ii) modification of the Software by Licensee to the extent
the infringement would have been avoided without such modification; (iii)
compliance with Licensee's specifications or express requirements; or (iv) the
combination or use of the Software with materials not furnished by Espial to the
extent such infringement would have been avoided by use of the Software alone.

11.3. Licensee agrees to indemnify, defend and hold Espial harmless from and
against any costs, losses, liabilities, claims or expenses (including attorneys'
fees) arising out of: (i) any claim that any Product infringes on the
intellectual property or proprietary rights of any third party, except to the
extent such infringement is caused solely by the Software; or (ii) the
distribution of any Product by Licensee or any third party; or (iii) the use of
any Product by any third party. 

12.        LIMITATION OF LIABILITY 

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WITH THE EXCEPTION OF CLAIMS BY ESPIAL RELATED TO BREACHES OF SECTIONS 3 AND
7, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY LOST REVENUES OR PROFITS OR
OTHER SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING
OUT OF THIS AGREEMENT, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES, WHETHER ARISING IN CONTRACT, TORT (INCLUDING NEGLILGENCE AND
STRICT LIABLITY) OR OTHERWISE. IN NO EVENT SHALL ESPIAL BE LIABLE FOR ANY
DAMAGES WHATSOEVER ARISING OUT OF LICENSEE'S MODIFICATION OF THE SOFTWARE,
INCLUDING BUT NOT LIMITED TO THE MODIFICATION OR REPLACEMENT OF ANY RANDOM
NUMBER GENERATOR THAT MAY BE SUPPLIED WITH ESPIAL'S SOFTWARE. IN NO EVENT SHALL
THE LIABILITY OF 

EITHER PARTY (OTHER THAN FOR CLAIMS BY ESPIAL RELATING TO BREACHES OF
SECTIONS 3 AND 7) EXCEED THE ACTUAL AMOUNTS PAID BY LICENSEE TO ESPIAL UNDER
THIS AGREEMENT, EXCEPT THAT LICENSEE MAY BE LIABLE TO PAY AMOUNTS OWED BUT NOT
PAID. IN NO EVENT SHALL ESPIAL'S SUPPLIERS BEAR ANY LIABLITY TO LICENSEE UNDER
THIS AGREEMENT (WHETHER DIRECT, INDIRECT, SPEACIAL, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES [SUCH AS LOST PROFITS]. 

13.        MISCELLANEOUS 

13.1. Force Majeure. A Party is not liable under this Agreement for
nonperformance (except for nonpayment), to the extent that the nonperformance is
caused by events or conditions beyond that Party's reasonable control, and the
Party gives prompt notice to the other Party and makes all reasonable efforts to
perform. 

13.2. Severability. In the event that any part of this Agreement is found to
be unenforceable, the remainder will continue in effect, to the extent
consistent with the intent of the parties as of the Effective Date. 

13.3. Relationship of the Parties. No employees, consultants, contractors or
agents of one Party are agents, employees, franchisees or joint ventures of the
other Party, nor do they have any authority to bind the other Party by contract
or otherwise to any obligation. They will not represent to the contrary, either
expressly, implicitly or otherwise. 

13.4. Choice of Law; Jurisdiction and Venue. This Agreement is made under and
will be governed by and construed in accordance with the laws of the Province of
Ontario, Canada (except that body of law controlling conflict of laws). The
parties agree that the United Nations Convention on Contracts for the
International Sale of Goods will not be applicable to this Agreement. The
parties hereby exclusively submit to the personal jurisdiction of the courts
located in Ottawa, Ontario. 

13.5. Export Laws. The Embedded Software may be subject to
U.S. and/or Canadian export control laws and may be subject to export or import
regulation in other countries. The parties agree to comply strictly with all
such regulations. 

13.6. Assignment. Licensee may not assign this Agreement to a third party
without Espial's prior written approval. 

13.7. Notices. All notices required hereunder must be in
writing and delivered either in person or by a means evidenced by a delivery
receipt, at the address first specified aboveto the attention of the CEO or as
otherwise notified in writing. Such notice will be effective upon receipt. 

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13.8. No Waiver. Failure by either Party to enforce any provision of this
Agreement will not be deemed a waiver of future enforcement of that or any other
provision. 

13.9. No Rights in Third Parties. This Agreement is made for the benefit of
the parties and not for the benefit of any third parties unless otherwise agreed
to by the parties. 

13.10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which will
constitute but one and the same instrument. 

13.11. Headings. The headings and captions used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement. 

13.12. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes and
replaces all prior or contemporaneous understandings or agreements, written or
oral, regarding such subject matter. Unless otherwise provided herein, this
Agreement may not be modified, amended, rescinded or waived, in whole or in
part, except by a written instrument signed by the duly authorized
representatives of both parties. 

13.13. Marketing. Espial may draft and issue a press release announcing the
signing of this Agreement after the Effective Date and may reference Licensee as
a customer in their marketing collateral. Following the Effective Date, Espial
may also refer to Licensee as Espial's customer in Espial's sales and marketing
materials and presentations. Prior to Licensee's deployment of Products,
Licensee agrees to provide Espial with ten (10) Products at no cost for Espial's
use in marketing Espial's software solutions. 

IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by
its duly authorized representative. 

	 	 	 
	LICENSEE	 	ESPIAL GROUP INC.
	 	 	 
	 	 	 
	
     /s/ Martin Smiley	 	 
	
    Signature	 	
    Signature
	 	 	 
	 	 	 
	
    Printed Name	 	
    Printed Name
	 	 	 
	
    EVP, CFO & General Counsel	 	 
	
    Title	 	
    Title
	 	 	 
	
    11/3/2004	 	 
	
    Date	 	
    Date

	 
	Attachments:
	Exhibit A - License Fees &/or
    Charges
	Exhibit B - Statement of Work
	Exhibit C - Espial Mark
	Exhibit D - Sublicensed
    Supplier Software, Additional Terms.

Page 10 of 15 

 

 

Page 11 of 15 

EXHIBIT A - LICENSE FEES &/OR CHARGES Term Sheet 

 

  
** Portions of Exhibit A of this Software License Agreement has been ommitted pursuant to rule 406 of the
Securities Act of 1933, as amended, as part of a confidential treatment request
by the Company to the Securities and Exchange Commission under 17 CFR
§§ 200.80(b)(4) and 200.83.

1.        
Licensee Product

**

2.        
Software Development Kit

**

3.        
Cumulative volume price schedule:

**

4.        
Support Services

For one (1) year as described in Terms and
Conditions described in section 4.1

	 
    Support Level	 
    Price
	
      Level 1 support which includes:	
      **
	
      Bug fixes	 
	
      Telephone support	 
	
      E-mail support
	 

Page 12 of 15 

5.         Professional Services &
Fees: 

In addition to the paid support described in Exhibit A ("Support Services")
Espial will provided to mPhase one (1) days equivalent of reasonable and
customary technical assistance free of charge (except for any travel and other
reasonable out of pocket expenses) as part of the sales agreement, to brief
mPhase or mPhase delegated representatives on the Amino and Kasenna development
environment. If mPhase chooses to require additional Professional Services from
Espial, Professional Services and Fees will be invoiced to mPhase under Espial's
then current time and materials rates as a separate charge billable under the
same terms as described in Section 5.5 of Agreement. 

 

Page 13 of 15 

EXHIBIT B - STATEMENT OF WORK 

If applicable, describe Professional Services to be performed including
timetable and technical specifications. 

	 
    Statement of Work Reference # or Title	 
    Price
	
      **	
      **
	 	 

** Portions of Exhibit B of this Software License Agreement has been ommitted pursuant to rule 406 of the
Securities Act of 1933, as amended, as part of a confidential treatment request
by the Company to the Securities and Exchange Commission under 17 CFR
§§ 200.80(b)(4) and 200.83.

 

 

Page 14 of 15 

EXHIBIT C - ESPIAL MARK 

The following are examples of acceptable Espial Marks. Electronic copies of
the Espial Marks will be provided with the shipment of the Embedded Software
from Espial. 

Page 15 of 15mPhase Technologies, Inc. - Exhibit 10.20 - Prepared By TNT Filings Inc.

 

EXHIBIT 10.20

SOFTWARE DEVELOPMENT AGREEMENT 

This Development Agreement ("Agreement") is made and entered
into by the undersigned parties: mPhase Technologies Inc., 150 Clove Road, a New
Jersey corporation (hereinafter "COMPANY"), and Magpie Telecom Insiders, Inc,
12050 N. Pecos, Suite 210, Denver, Colorado, 80234, a Colorado corporation,
(hereinafter "Contractor"). 

WHEREAS, COMPANY is engaged in the business of designing,
manufacturing and marketing products for the telecommunications industry and
desires to retain the Development services of Contractor; 

WHEREAS, Contractor possesses unique skills, knowledge, and
expertise, which would assist COMPANY in meeting, a unique, temporary business
need and Contractor desires to provide development services that meet COMPANY's
need to develop software that will be integrated into COMPANY's product or
service. 

NOW THEREFORE, in consideration for the promises, rights and obligations set
forth below, the parties hereby agree as follows: 

	Term of Development Agreement. The term of this Agreement shall
  begin on TODAY, and continue for a period of three (3) years, unless
  terminated earlier as set forth in this agreement. 

 
	Designation of Qualified Staff, Representations and Warranties.
  

  
    a. Contractor represents that it engages individuals
    (hereinafter referred to as "workers"), who possess the qualifications,
    knowledge, skill and expertise necessary to develop the product that COMPANY
    is seeking by this Agreement. By assigning a worker to COMPANY under this
    Agreement, Contractor warrants that it has verified the worker's credentials
    and in good faith believes the worker is suited to the development project.
    Contractor further warrants that it has the unrestricted legal right to
    render the services contemplated by this Agreement to COMPANY without
    violating any other contracts, service agreements, confidentiality
    provisions, or other restrictions by which Contractor is or may be bound.
    

    b. By this Agreement, Contractor affirms that it has the
    sole discretion to hire and assign qualified workers to complete the product
    development contemplated by this Agreement. Any employment activities
    related to the hiring, disciplining, appraising, compensating or otherwise
    retaining such workers shall be under Contractor's exclusive control and
    conducted at Contractor's sole expense. Contractor is not authorized to
    perform any employment activities on COMPANY property except as may be
    necessary from time to time for Contractor to evaluate or manage
    Contractor's workers. 

  

	
  COMPANY's Agreement to Pay Contractor. COMPANY
  agrees to pay Contractor in accordance with the compensation method identified
  on the Work Order (Exhibit A) which is part of this Agreement. Contractor
  shall submit invoices for deliverables completed on a timely basis which
  COMPANY agrees to pay within a reasonable period of time. For example,
  invoices payable within 30 days of receipt are acceptable to COMPANY. 

 

	
  Contractor's Responsibility for Expenses. All travel
  and incidental expenses incurred by any worker in the performance of services
  under this Agreement are the sole responsibility of Contractor, unless COMPANY
  expressly approves and agrees in writing to a different arrangement regarding
  payment of expenses. 

 

	Contractor's Responsibility to its Workers. Contractor's
  workers are not COMPANY employees. Contractor is solely responsible
  for compensating its workers and complying with 

1 

  applicable state and federal laws including but not limited
  to: administering payroll; maintaining workers compensation insurance as may
  be required by statute; and providing such other benefits as Contractor may be
  required by law to provide to its workers. Contractor acknowledges that the
  workers assigned to COMPANY under this Agreement are not COMPANY employees and
  are not eligible to participate in any COMPANY benefit plans, including
  welfare or pension benefits, retirement plans, global employee stock purchase
  plans, incentive plans or any other COMPANY benefit available to COMPANY
  employees. 

	
  Contractor's Obligation to Obtain Insurance for the
  Benefit of COMPANY and Waiver of Subrogation. Contractor agrees to
  maintain insurance coverage as specifically identified on Exhibit C.
  Contractor shall provide evidence of such insurance by giving COMPANY a copy
  of Contractor's Certificates of Insurance which shall name COMPANY as an
  Additional Insured and/or Loss Payee and which shall give COMPANY the right to
  receive written notice from the insurance carrier of any change in policy
  coverage, endorsements or limits at least thirty (30) days before such change
  takes effect. By this Agreement, Contractor waives any right of subrogation in favor of Contractor against COMPANY. If the insurance coverage referenced in
  this paragraph is subject to renewal during the term of this Agreement,
  Contractor's obligation to continue the coverage referenced herein continues,
  and copies of the renewal certificates shall be provided to COMPANY. 

 

	Contractor's Obligations Concerning COMPANY Confidential Information.
  

  a. "COMPANY Confidential Information" shall mean all
  information disclosed by COMPANY to Contractor, or individuals performing
  services on behalf of contractor, (whether orally, in writing, or in other
  tangible form) which relates to the manufacture, use, sale or marketing of
  COMPANY's products or components of such products, including, but not limited
  to: information relating to matters which are the subject of this Agreement;
  any analyses, compilations, studies, summaries, extracts, 3rd party
  documentation or information received under NDA by Company to perform
  assignment and shared with Contractor or other documentation developed by
  Contractor as a result of work in connection with this Agreement; and all
  other information regarding COMPANY products, processes, equipment, machinery,
  apparatus, business operations, technical information, drawings,
  specifications, material, all information or data used by or stored on
  COMPANY's computer system and the like; except that "Confidential Information"
  shall not include information which: 

  
    (1) is at the time of disclosure, or thereafter becomes,
    a part of the public domain through no act or omission of Contractor, or
    individual(s) performing services on behalf of Contractor, recognizing that
    the act of copyrighting in itself does not cause the copyrighted material to
    be in the public domain; 

    (2) is lawfully in Contractor's possession prior to disclosure by COMPANY
    as shown by written records; or 

    (3) is lawfully disclosed to Contractor by a third party, which did not
    acquire the same under an obligation of confidentiality from or through
    COMPANY. 

  

  Before relying on any of the foregoing exceptions and
  disclosing or using information disclosed under this Agreement on the basis of
  such exceptions, Contractor shall notify COMPANY in writing of Contractor's
  intent to do so, provide a written basis for the reliance on the exception to
  COMPANY and give COMPANY a period of 30 days to object or take other action to
  protect its rights in the information. 

  b. Contractor and the individual(s) performing services on
  behalf of Contractor, shall hold all COMPANY Confidential Information in
  confidence and shall not disclose the same, without the written consent of
  COMPANY, to anyone for any reason at any time other than to Contractor's
  employees or subcontractors as required for performance of their duties in
  connection with Contractor's performance for COMPANY. Contractor agrees to
  maintain adequate procedures to prevent loss or unauthorized disclosure of any
  Confidential 

2 

  Information and, in the event of any such loss or unauthorized disclosure
  of any Confidential Information, shall notify COMPANY immediately. 

  c. Contractor shall not use any COMPANY Confidential Information for any
  purpose except that requested by COMPANY, without written consent of COMPANY.
  

  d. Contractor acknowledges that COMPANY Confidential
  Information includes valuable trade secret information, and that breach by
  Contractor of the terms hereof would result in substantial harm and
  irreparable injury to COMPANY. Therefore, Contractor hereby consents to the
  entry of an injunction against Contractor in the event of Contractor's actual
  or threatened breach of obligations hereunder, and acknowledges that such
  relief shall be additional to such other and further relief as may be
  available to COMPANY at law or in equity. 

  e. Contractor agrees not to disclose to COMPANY any
  information which Contractor desires to maintain in confidence. COMPANY will
  not have any obligation of confidentiality with respect to any information
  disclosed by Contractor. 

	Contractor's Obligations Concerning COMPANY Property. 

  a. "COMPANY Property" shall be understood to mean all
  tangible property provided to Contractor by COMPANY or developed by Contractor
  in connection with this Agreement, including, but not limited to: 

  
    (1) all samples; 

    (2) all COMPANY Confidential Information; 

    (3) all records relating to COMPANY products, operations and business;
    

    (4) all reports, Intellectual Property as defined in this Agreement,
    correspondence and other communications developed by Contractor; and 

    (5) all copies of the foregoing, regardless of copying medium. 

    (6) all COMPANY Source Code. 

  

  b. Contractor agrees to return or surrender any COMPANY
  Property, except samples destroyed by testing, at any time upon request by
  COMPANY and upon termination or expiration of this Agreement, unless otherwise
  agreed to in writing by COMPANY. Contractor may also retain a sample of
  product(s) developed for COMPANY hereunder, and copies of correspondence and
  other communications between Contractor and COMPANY in connection with this
  Agreement, for purposes of Contractor's own confidential records, but may not
  disclose such sample without prior written authorization by COMPANY. 

  c. Contractor agrees to abide by all COMPANY rules and regulations while
  visiting COMPANY premises and agree to respect and keep in good condition all
  COMPANY Property to which Contractor has access. In the event an COMPANY name
  badge is issued to Contractor or the individual(s) performing services on
  behalf of Contractor, such badge shall be used solely for the intended
  purpose, shall not be used to allow unauthorized personnel onto COMPANY's
  premises, and any loss or theft of such badge shall be immediately reported by
  Contractor to COMPANY. Contractor shall return all such badges upon request of
  COMPANY, at the termination or expiration of this Agreement, or at the
  expiration of each work order. 

3 

	Contractor's Obligation Concerning COMPANY Source Code
  

  a. Contractor acknowledges and agrees that the COMPANY Source Code
  represents valuable trade secret(s) to and is the proprietary information of
  COMPANY. Contractor covenants and agrees not to encumber the COMPANY Source
  Code in any manner, nor market, sell, assign, lease, transfer, license, or
  sub-license the COMPANY Source Code, or any part or parts thereof including
  any compiled object code. 

  b. Contractor shall protect the confidentiality of the COMPANY Source Code,
  all associated documentation, and all trade secrets and proprietary or other
  confidential information contained therein to at least the same degree
  Contractor protects Contractor's own proprietary and confidential materials.
  Notwithstanding the preceding sentence, the protection required by Contractor
  under this paragraph shall not be less than commercially reasonable standards
  of protection for proprietary source code that is entrusted to third-parties
  for limited times and purposes. Contractor shall not allow or facilitate any
  attempt to recreate, or generate any portion of the COMPANY Source Code by any
  person, nor shall Contractor aid or permit others to do so. 

  c. Contractor acknowledges and agrees that any disclosure of the COMPANY
  Source Code or other propriety and confidential information of COMPANY, or use
  of the COMPANY Source Code in any manner that breaches the terms and
  conditions of this Agreement is likely to cause COMPANY harm for which
  monetary damages may not be an adequate remedy, and that COMPANY shall,
  therefore, be entitled to equitable relief to restrain such breach, without
  prejudice to any other right or remedy. 

  d. Contractor agrees to indemnify and hold COMPANY harmless from and
  against any and all costs and reasonable attorneys' fees (including those fees
  and expenses associated with COMPANY's In-House Counsel) incurred by COMPANY
  in connection with any action or proceeding brought by COMPANY or any other
  party as a direct or indirect result of any such unauthorized disclosure,
  regardless of whether such unauthorized disclosure was willful or negligent.
  

  THE COMPANY SOURCE CODE AND ASSOCIATED DOCUMENTATION ARE PROVIDED AS IS,
  WITHOUT ANY WARRANTY, EITHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
  WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. COMPANY SHALL
  NOT BE LIABLE TO CONTRACTOR FOR ANY PROPERTY DAMAGE, PERSONAL INJURY, LOSS OF
  USE, INTERRUPTION OF BUSINESS, LOSS OF PROFITS, OR OTHER SPECIAL, INCIDENTAL
  OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED, WHETHER FOR BREACH OF WARRANTY,
  CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE. 

	Contractor's Obligations Concerning Intellectual Property.
  

  a. Contractor agrees that services performed hereunder
  constitute work for hire and that work developed, including any invention,
  improvement or discovery conceived or made by Contractor, either alone or in
  cooperation with others, during the term of this Agreement and which relates
  in any way to the services provided by Contractor, is hereby owned by and
  shall be the exclusive property of COMPANY. Contractor shall fully disclose to
  COMPANY all such inventions, improvements, or discoveries, whether or not
  subject to patent, copyright, or other protection. If requested by COMPANY,
  Contractor will, at the expense of COMPANY, sign all papers (including
  documents confirming the assignment herein) and do all other acts necessary to
  assist COMPANY to obtain patents, copyrights or other property rights in such
  inventions in any and all countries and to assign such patents, copyrights or
  other property rights to COMPANY. 

  b. Contractor agrees not to provide COMPANY with any designs, plans,
  models, samples, software, integrated circuits, reports, or other writing or
  product which Contractor either 

4 

  knows or has reason to believe are covered by the valid patent, copyright,
  or other form of intellectual property right of a third party without the
  written agreement of COMPANY. 

  c. COMPANY agrees that low level, generic programming or
  subroutines that are not unique to the work performed as a result of this
  agreement, and which have general and nonproprietary applicability, may be
  reused by Contractor without restriction or limitation. Such items shall be
  mutually agreed in writing. 

	
  lndemnity. Company and Contractor agree to
  indemnify, defend and hold harmless each other, their affiliates, customers,
  employees, successors and assigns from and against any losses, damages,
  claims, fines, penalties and expenses (including reasonable attorney's fees)
  that arise out of or result from: (1) injuries or death to persons or damage
  to property, including theft, in any way arising out of or caused or alleged
  to have been caused by the work or services performed by, or Material provided
  by the other or persons furnished by the other, except if such injuries or
  death to persons, or damage to property, is caused solely by the other's
  negligence or willful misconduct; (2) assertions under Workers' Compensation
  or similar acts made by persons furnished by the other; or (3) any grossly
  negligent or willful failure of the other to perform its obligations under
  this Agreement. 

 

	
  Infringement. Contractor shall indemnify and save
  harmless Company, its affiliates and their customers, officers, directors, and
  employees (all referred to in this clause as "Company") from and against any
  losses, damages, liabilities, fines, penalties, and expenses (including
  reasonable attorneys' fees) that arise out of or result from any and all third
  party claims (1) of infringement of any patent, copyright, trademark or trade
  secret right, or other intellectual property right, private right, or any
  other proprietary or personal interest, and (2) related by circumstances to
  the existence of this Agreement or performance under or in contemplation of it
  (an Infringement Claim). If the Infringement Claim arises solely from
  Contractor's adherence to Company's written instructions regarding services or
  tangible or intangible goods provided by Contractor (Items) and if the Items
  are not (1) commercial items available on the open market or the same as such
  items, or (2) items of Contractor's designated origin, design or selection,
  Company shall indemnify Contractor. Company or Contractor (at Company's
  request, if no Company intellectual property is involved in the infringement,
  Contractor may manage the claim,) shall defend or settle, at its own expense
  any demand, action or suit on any Infringement Claim for which it is
  indemnitor under the preceding provisions and each shall timely notify the
  other of any assertion against it of any Infringement Claim and shall
  cooperate in good faith with the other to facilitate the defense of any such
  Claim. 

  Contractor shall not indemnify Company hereunder for any infringement
  arising from the use or sale of Software Material furnished by Contractor
  hereunder if the infringement results solely from Company's modification of
  the Software Material or use of the Software Material in combination with
  material not furnished by Contractor unless the modification or combination is
  the normal use of the Material or is done at the direction or authorization of
  Contractor. If the Software Material gives rise to a claim that it infringes
  an intellectual property right of a third party, or if Contractor has
  reasonable grounds to believe that the Software Material may give rise to a
  claim that it infringes an intellectual property right of a third party, then,
  Contractor may by license or other release from claim of infringement procure
  for Company's and it's customer's benefit the right to use the Software
  Material. If company or its customer is enjoined from using the Software
  Material and if a license cannot be obtained to permit use of the Software
  Material substantially as described, then, 

  a) Contractor shall, with the consent of Company, which consent shall be
  based upon Contractor's proposal and shall not be unreasonable withheld, in a
  manner that will minimize disruption to company and its customers, 

  
    (1) replace the Software Material with equally suitable software free of
    infringement, or 

    (2) modify the Software Material so it will be free of infringement and
    no less capable than the 

  

5 

  
    Software Material originally furnished, or, 

  

  b) If Contractor is unable to accomplish the foregoing,
  Company may 

  
    (1) terminate this Agreement and Contractor shall return
    any monies paid by Company less a reasonable amount for the benefit realized
    by Company and its customers from use of the Software Material and restore
    the premises and associated equipment as nearly to their original condition
    as is reasonably possible, or 

    (2) continue its or its customer's use of the Software
    Material without the enjoined or unlicensed material and Contractor shall
    return any monies paid by Company less a reasonable amount for the benefit
    realized by Company and its customers from use of the Software Material
    

  

THE FOREGOING STATES THE ENTIRE LIABILITY AND OBLIGATION OF
CONTRACTOR WITH RESPECT TO INFRINGEMENT OR CLAIMS OF INFRINGEMENT BY THE
CONTRACTOR'S PRODUCTS, OF ANY PATENT, COPYRIGHT, TRADE SECRET OR OTHER
INTELLECTUAL PROPERTY RIGHT 

	Non Competition.
  

  Contractor agrees that, during the Term of this Agreement
  and for a period of three (3) years after its expiration or Termination,
  Contractor shall be prohibited from using any confidential or proprietary
  processes, information, data, or trade secrets obtained from COMPANY for
  purposes of developing or improving new or existing technologies, inventions,
  research, or processes, which directly compete with any of COMPANY's products
  or services. 

	
  Termination of this Agreement.
  COMPANY may terminate this Agreement for any reason by giving Contractor 30
  days written notice. If COMPANY notifies Contractor that this Agreement is
  being terminated, Contractor shall immediately cease performing any
  development activities under this Agreement and shall not bill further time
  unless such additional activities and/or billings are pre-approved by COMPANY
  in writing. Upon termination Contractor shall deliver all work in process to
  COMPANY. COMPANY may terminate this Agreement immediately upon the filing by
  Contractor of a petition for relief under the Bankruptcy Code. Contractor may
  terminate this Agreement for any reason upon 30 days written notice. The
  parties may terminate this Agreement at any time by written mutual consent.
  

 

	Obligations Surviving
  Termination of this Agreement. All obligations to preserve COMPANY's
  

  Confidential Information, COMPANY Property,
  Intellectual Property, Infringement, Source Code, Non Competition, and other
  warranties and representations set forth herein shall survive the termination
  of the Agreement. 

	
  Governing Law and Principles of
  Construction. This Agreement shall be governed and construed in accordance
  with Colorado law and any actions brought in the Colorado Court in which
  COMPANY corporate headquarters is located. If any provision in this Agreement
  is declared illegal or unenforceable by a court of competent jurisdiction and
  cannot be modified to be enforceable, the provision will become void, leaving
  the remainder of this Agreement in full force and effect. This Agreement may
  be signed in one or more counterparts; each counterpart shall be deemed an
  original and all counterparts together shall constitute one and the same
  instrument. 

 

	Entire Agreement. This Agreement represents the
  entire Agreement between the parties and the provisions of this Agreement
  shall supersede all prior oral and written commitments, contracts 

6 

  and understandings with respect to the subject matter of this Agreement.
  This Agreement may be amended only by mutual written agreement of the parties.
  

	
  Assignment. This Agreement shall inure to the
  benefit of and shall be binding upon each party's successors and assigns.
  Neither party shall assign any right or obligation hereunder in whole or in
  part, without the prior written consent of the other party, except that
  COMPANY may assign this Agreement as part of an internal reorganization. 

  IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
  executed by their duly authorized representatives, effective as of the day and
  year first above written. 

	mPhase Technologies Inc.	Magpie Telecom Insiders, Inc.
	 	 
	 	 
	 	 
	By:	By:
	Name:	Name:
	Title:	Title:
	Dated:	Dated:

7 

                      WORK ORDER 

                    
                  
                
              
            
          
        
      
    
  

This Work Order dated TODAY, is an integral part of the Development Agreement
between Contractor and COMPANY dated TODAY. 

Contractor is hereby authorized to perform work as set forth below in
accordance with this Work Order and the Development Agreement. 

	Description of software to be developed by Contractor: See Exhibit
  B 

 
	Description of where services will be provided: Services will
  primarily be provided at Contractor facility in Denver, Colorado and on-site
  at COMPANY's facility in New Jersey and Lucent Technologies site in New
  Jersey. 

 
	Dates Service will be provided: Services will be provided from
  TODAY to LAST DAY. These dates may change due to COMPANY's requirements. 

 
	Rate of compensation and/or charges for service: 

  $AMOUNT. 

  Any significant changes in features or functionality outlined in Exhibit B of
  this document may affect the quoted price and delivery time. Once a contract
  is in place, any changes to the requirements/deliverables will require a
  signed deviation order and may require additional price negotiation. 

 
	Payment Schedule: 

  Forty percent (40%) of the charge for service is due and
  payable upon acceptance of the proposal and signature of this Work Order. Upon
  delivery of each MILESTIONE xx percent (xx%) is due. The remaining twenty
  percent (20%) will be due when the software has passed the acceptance test by
  COMPANY. If CONTRACTOR terminates this agreement prior to the Acceptance Test
  milestone of delivering software to COMPANY for Acceptance Testing, then the
  forty percent (40%) service charge will be fully refunded to COMPANY within 30
  days of termination of this agreement. 

	Late Payments: 

  Accounts which are past due (days) will be subject to a monthly charge of
  one and one-half percent (1.5%) per month or the maximum rate permitted by the
  law, whichever is less.. 

	Delivery and Acceptance: 

  One set of custom executable software will be delivered for
  acceptance testing. This set of custom software will be installed on one
  system that COMPANY will specify for use during acceptance testing and final
  acceptance, which shall be held in accordance with the Acceptance Test Plan
  ("ATP"). The ATP will be delivered along with the software. The Custom
  Development software shall be deemed "Accepted" according to the following
  criteria, which ever occurs first; a) COMPANY furnishes a formally signed
  statement of acceptance of the finished product, or b) COMPANY deploys the
  product in a customer environment for 30 days or more, or c) 30 days have
  passed after the delivery of the final product to COMPANY, during which no
  problems of severity level one (1), severity level two (2) and severity level
  three (3) errors were reported in the delivered custom software. The start
  date for criteria (c) will not begin until software has been successfully
  installed and configured on COMPANY'S test system in New Jersey. Thirty days
  (30) prior to the ATP phase of this agreement, COMPANY will provide to
  CONTRACTOR technical engineering documentation that clearly defines severity
  level conditions 1 through 3 for COMPANY acceptance. 

EXHIBIT A 

  Upon Acceptance, one copy of the final custom software source code will be
  shipped to COMPANY. 

	Warranty: 

  For a period of ninety (90) days from delivery to COMPANY
  for acceptance, Contractor warrants that the software will perform
  substantially in accordance with its applicable documentation under normal
  usage. 

	Termination of Order: 

  In the event COMPANY decides to terminate the contract with
  Contractor prior to completion of the project, COMPANY will pay Contractor for
  any work performed and expenses incurred prior to the date of termination. 

	COMPANY Project Manager/Point of Contact: 

  Name: Phil Thompson

  Phone Number: 973-638-2452

  Email: pthompson@mphasetech.com

  Name: Steve Simon

  Phone Number: 973-638-2451

  Email: ssimon@mphasetech.com

11. Contractor Point of Contact: 

  Name:

  Phone Number: (303) 255-6079 

IN NO EVENT SHALL THE PAYMENT FOR SERVICES AND EXPENSES UNDER THIS WORK ORDER
EXCEED $AMOUNT WITHOUT THE ADVANCE WRITTEN APPROVAL OF COMPANY. 

	mPhase Technologies, Inc.	Magpie Telecom Insiders, Inc.
	 	 
	 	 
	 	 
	By: /s/ Martin Smiley	By:
	Name: 	Name:
	Title: EVP, CFO & General Counsel	Title:
	Dated: 9/2/2004	Dated:

EXHIBIT A 

DESCRIPTION OF SERVICES TO BE PROVIDED BY CONTRACTOR 

The Contractor will develop the following: 

	Features: 

 
	Other development information: 

 
	Description of where services will be provided: Services will be
  provided at Contractor's facility in Westminster, Colorado. Contractor to
  provide on-site personnel for a minimum of PERIOD at the start of the contract
  to facilitate knowledge transfer and to finalize the design for the software
  to be developed. Additional on site time will be provided by Contractor as
  required to complete the knowledge transfer and design. COMPANY is responsible
  for integration and system test that will be done at COMPANY's ADDRESS
  facility. 

EXHIBIT B 

	Schedule of deliverables: 

	
        Deliverable	
        Date
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

  

Any significant changes in features or functionality outlined
in Section 1 of this document may affect the quoted price and/or delivery time.
Once a contract is in place, any changes to the requirements/deliverables will
require a signed deviation order and may require additional price negotiation.

EXHIBIT B 

CHECKLIST FOR INSURANCE REQUIREMENTS 

EXHIBIT C 

	
    Type of Insurance	
    Development House	 
	
    COMMERCIAL GENERAL	 	
    If Required
	
    LIABILITY	 	 
	 	
    COMPANY named as "Additional Insured" on House's	 
	 	
    Certificate of Insurance and insurance policy.	 
	 	 	 
	 	
    Minimum Limits:	 
	 	
    $1,000,000 Per Occurrence	 
	 	
    $2,000,000 Annual Aggregate	 
	 	 	 
	
    ERRORS &	 	
    If Required
	
    OMISSIONS	 	 
	 	
    Minimum Limits:	 
	 	
    $1,000,000 Per Claim or Per Wrongful Act	 
	 	
    $2,000,000 Aggregate	 
	 	 	 
	
    WORKERS'	
    Statutory Obligations	
    If Required
	
    COMPENSATION	 	 
	 	 	 
	
    EMPLOYERS	 	 
	
    LIABILITY	 	 
	 	 	
    If Required
	 	
    Injury by Accident: $1,000,000	 
	 	
    Disease - Policy Limit: $1,000,000	 
	 	
    Disease - Each Employee: $1,000,000	 
	 	 	 
	
    AUTOMOBILE	
    If relevant to development services:	
    If Required
	 	 	 
	 	
    Covered Autos: Hired/Non-Owned: Minimum Limit:	 
	 	
    $1,000,000 Per Accident	 

Evidence of Insurance. Evidence of the insurance coverage
required to be maintained by the Consultant, represented by Certificates of
Insurance issued by the insurance carrier or its legal agent, must be furnished
to COMPANY within a reasonable time after this agreement has been signed not to
exceed ten (10) days. New certificates of Insurance shall be provided to COMPANY
prior to the current certificate(s) coverage termination date if prior to
completion of the work. Failure of COMPANY to demand such evidence of full
compliance with these insurance requirements or failure of COMPANY to identify a
deficiency from evidence provided will not be construed as a waiver of the
Consultant's obligation to maintain such insurance. The Evidence of Insurance
must state that COMPANY will be notified in writing sixty (60) days prior to the
cancellation of or reduction in coverage or intent not to renew coverage, and
Certificate of Insurance shall specify elimination of "endeavor to" and "but
failure to mail such notice shall impose no obligation or liability of any kind
upon the company, its agents or representatives" for the cancellation provision.

EXHIBIT C 

EXHIBIT 10.20

WORK ORDER 

This Work Order dated January 3, 2005, is an integral part of
the Development Agreement between Contractor and COMPANY dated September 1,
2004. The Start Date is the date that the payment is received by Contractor for
Proposal Acceptance in the amount specified in the Schedule of Deliverables in
Exhibit B. 

Contractor is hereby authorized to perform work as set forth below in
accordance with this Work Order and the Development Agreement. 

	Description of software to be developed by Contractor: See Exhibit
  B 

 
	Description of where services will be provided: Services will
  primarily be provided at Contractor facility in Denver, Colorado and on-site
  at COMPANY's facility in New Jersey and Lucent Technologies site in New
  Jersey. 

 
	Dates Service will be provided: Services will be provided from the
  Start Date as stated above for a period of six (6) months. These dates may
  change due to COMPANY's requirements. 

 
	Rate of compensation and/or charges for service: 
  *

 
	Payment Schedule: *

 
	Late Payments: Accounts which are past due (days) will be subject
  to a monthly charge of one and one-half percent (1.5%) per month or the
  maximum rate permitted by the law, whichever is less.. 

 
	Delivery and Acceptance: One set of custom executable software will
  be delivered for acceptance testing. This set of custom software will be
  installed on one system that COMPANY will specify for use during acceptance
  testing and final acceptance, which shall be held in accordance with the
  Acceptance Test Plan ("ATP"). The ATP will be delivered along with the
  software. The Custom Development software shall be deemed "Accepted" according
  to the following criteria, which ever occurs first; 

  
    a) COMPANY furnishes a formally signed statement of acceptance of the
    finished product, or 

    b) COMPANY deploys the product in a customer environment for 30 days or
    more, or 

    c) 30 days have passed after the delivery of the final product to
    COMPANY, during which no problems of severity level one (1), severity level
    two (2) and severity level three (3) errors were reported in the delivered
    custom software. The start date for criteria (c) will not begin until
    software has been successfully installed and configured on COMPANY'S test
    system in New Jersey. Thirty days (30) prior to the ATP phase of this
    agreement, COMPANY will provide to CONTRACTOR technical engineering
    documentation that clearly defines severity level conditions 1 through 3 for
    COMPANY acceptance. 

  

EXHIBIT A 

 
Upon Acceptance, one copy of the final custom software source code will be
shipped to COMPANY. 

	Warranty: 

  For a period of ninety (90) days from delivery to COMPANY for acceptance,
  Contractor warrants that the software will perform substantially in accordance
  with its applicable documentation under normal usage. 

	Termination of Order: 

  In the event COMPANY decides to terminate the contract with
  Contractor prior to completion of the project, COMPANY will pay Contractor for
  any work performed and expenses incurred prior to the date of termination. 

	COMPANY Project Manager/Point of Contact: 

  Name: Phil Thompson

  Phone Number: 973-638-2452

  Email: pthompson@mphasetech.com

  Name: Steve Simon

  Phone Number: 973-638-2451

  Email: ssimon@mphasetech.com

	Contractor Point of Contact: 

  Name: Bryan Richardson

  Phone Number: (303) 255-6079 

  Email: Bryan@magpieti.com 

IN NO EVENT SHALL THE PAYMENT FOR SERVICES AND EXPENSES UNDER THIS WORK ORDER
EXCEED $312,000 WITHOUT THE ADVANCE WRITTEN APPROVAL OF COMPANY. 

	mPhase Technologies, Inc.	Magpie Telecom Insiders, Inc.
	 	 
	 	 
	 	 
	By:	By:
	Name:	Name:
	Title:	Title:
	Dated:	Dated:

EXHIBIT A 

DESCRIPTION OF SERVICES TO BE PROVIDED BY CONTRACTOR 

Exhibit B 

The Contractor will develop the following: 

	Features: Exhibit A PART ONE (UI-Only) features. 

 
	Other development information: The list of features is in Exhibit A.
  

 
	Description of where services will be provided: Services will be
  provided at Contractor's facility in Westminster, Colorado. Contractor to
  provide on-site personnel for a minimum of PERIOD at the start of the contract
  to facilitate knowledge transfer and to finalize the design for the software
  to be developed. Additional on site time will be provided by Contractor as
  required to complete the knowledge transfer and design. COMPANY is responsible
  for integration and system test that will be done at COMPANY's New Jersey
  facility. 

EXHIBIT A 

	 Schedule of deliverables: 

*

Any significant changes in features or functionality outlined in Section 1 of
this document may affect the quoted price and/or delivery time. Once a contract
is in place, any changes to the requirements/deliverables will require a signed
deviation order and may require additional price negotiation. 

EXHIBIT A 

* 
Portions of this exhibit have been ommitted pursuant to rule 406 of the
Securities Act of 1933, as amended, as part of a confidential treatment request
by the Company to the Securities and Exchange Commission under 17 CFR
§§ 200.80(b)(4) and 200.83.

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