Document:

mPhase 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 

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  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. 

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	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 

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  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 

  

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    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 CmPhase Technologies, Inc. - Exhibit 10.20 - Prepared By TNT Filings Inc.

 

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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