License Agreement between HomeAccess MicroWeb, Inc. and HA Technology, Inc. for Internet Access System Intellectual Property

 THIS LICENSE AGREEMENT (this "Agreement") is made and entered into as of October 19, 2000, by and between HomeAccess MicroWeb. Inc., ("HOMEACCESS"), a California corporation having a place of business at 905 Toledo Way, Irvine, California 92618, and HA Technology, Inc., a Delaware corporation having a place of business at 905 Toledo Way, Irvine, California 92618 ("HA"). WHEREAS, HOMEACCESS has developed a system that allows the user to access the Internet using a screen phone, and has developed unique proprietary technology and know-how, including software, which is incorporated into the design, manufacturing, marketing, operation and support of such technology, and has developed methods and procedures and know-how for the operation of such technology and owns certain trademarks, service marks and domain names relating to the system; and WHEREAS, HA desires to acquire a license for such intellectual property including such technology, know-how, software, trademarks, service marks, methods and procedures relating to such system. NOW, THEREFORE, HOMEACCESS and HA have reached certain agreements with respect to the licensing of such intellectual property of HOMEACCESS upon the terms and conditions more particularly described herein; and, inasmuch as the parties desire to set forth their agreements and understandings in writing, in consideration of the promises, covenants and matters hereinafter set forth, intending to be legally bound hereby, the parties mutually covenant, contract and agree, each with the other, as follows: ARTICLE 1. DEFINITIONS As used in this Agreement, the following terms shall have the meanings set forth below: 1.01 "Effective Date" means that day and year first above written. 1.02 "HOMEACCESS Intellectual Property" means the (a) Technical Information, (b) Improvements, (c) trademarks and service marks, trademark or service mark applications and registrations and goodwill related thereto, listed on Schedule 1 attached hereto (collectively "the Marks"), and (d) copyrights, mask works, software and documentation (in object code form), designs, specifications. or other proprietary rights of HOMEACCESS relating to the Products. 1.03 "Improvement" means any and all improvements, upgrades, updates, enhancements, additions, successor versions, maintenance releases, bug fixes, corrections, developments, variations, derivative works and innovations (whether or not patented or patentable) relating to the HOMEACCESS Intellectual Property. 1.04 "Licensed Product" shall mean a Product which incorporates substantial HOMEACCESS Intellectual Property and/or a Product that would violate HOMEACCESS's rights in the HOMEACCESS Intellectual Property if made, used, sold, offered for sale or imported by an unlicensed third party. -1-  1.05 "Product" means the technology and business model, including without limitation software, relating to a system for accessing the Internet using a screen phone, and telephone and wireless communication services enabling access to commercial services including financial and banking services, purchasing of various goods and services, bill presentation and payment, electronic mail, paging, health care, commercial advertisements, and community-based public service notices. 1.06 "Technical Information" means information which: (a) is in the possession of HOMEACCESS as of the Effective Date of this Agreement; (b) is freely licensable by HOMEACCESS and may be freely disclosed to HA by HOMEACCESS without any obligation to another party; and (c) is reasonably useful and necessary in the commercial, use, maintenance, sale, and production of Products, including the following information, as applicable: know-how; show-how; design drawings; assembly drawings; bills of material; product specifications; application, maintenance and operation information; quality control specifications; electrical diagrams; plot plan; equipment specifications; instrument specifications; general specifications; description of laboratory equipment and procedures; test data; and preliminary operating manuals. 1.07 "Territory" means the world, except for the states of Washington, Nevada, Oregon and Pennsylvania in the United States of America, and such other territories as the parties may agree to in writing. ARTICLE 2. LICENSE 2.01 License to HOMEACCESS Intellectual Property. HOMEACCESS hereby grants to HA an exclusive, non-transferable, non-assignable and fully paid license to make, use, sell and offer for sale the HOMEACCESS Intellectual Property in the Territory during the Term (the "License"). The License shall also include an exclusive, non-transferable, non-assignable and fully paid right to sublicense the HOMEACCESS Intellectual Property in the Territory during the Term; provided that during the first eighteen (18) months of the Term, such sublicense right shall be limited to those circumstances in which, in the absence of such sublicense, a third-party purchaser of the Licensed Product could not use the Licensed Product for its intended use without violating the proprietary rights of HOMEACCESS with respect to the HOMEACCESS Intellectual Property (unless the consent to a broader sublicense is obtained from HOMEACCESS which consent shall not be reasonably withheld. Such consent shall not be deemed to be unreasonably withheld, if HOMEACCESS reasonably believes such sublicense would adversely affect the value of HA as a result of such sublicense). HOMEACCESS reserves the right to make, use, sell, offer for sale, and sublicense the HOMEACCESS Intellectual Property outside of the Territory. Prior to executing any sublicense agreement with a third party, HA shall forward to HOMEACCESS the following information: (i) the name and address of the prospective sublicensee; (ii) the name, address and telephone number of a contact person or authorized representative of the prospective sublicensee; (iii) the HOMEACCESS Intellectual Property to be licensed; (iv) the number of licensed users; and (v) the location and manner in which the HOMEACCESS Intellectual Property will be used. If a HOMEACCESS Bankruptcy Event (as hereinafter defined) occurs, the Territory shall be automatically redefined as the entire world and, in such event, the parties agree to execute any and all documents necessary or appropriate to evidence such expansion. "HOMEACCESS Bankruptcy Event" means (i) a receiver is appointed for HOMEACCESS or its property and HOMEACCESS is liquidated or dissolved, (ii) HOMEACCESS makes an assignment for the benefit of its creditors, or (iii) any proceeding is commenced by, for or against HOMEACCESS under any bankruptcy, insolvency or debtor's relief law for the purpose of seeking a reorganization of HOMEACCESS' debts, and such proceeding is not dismissed within ninety (90) calendar days of its commencement. -2-  2.02 Consideration. In consideration for the License of the HOMEACCESS Intellectual Property, HA shall pay HOMEACCESS the sum of two hundred fifty thousand dollars ($250,000) in readily available funds upon the execution of this Agreement. 2.03 Ownership. HA understands and acknowledges that the HOMEACCESS Intellectual Property is licensed and not sold and that HOMEACCESS shall retain all right, title and interest (including all copyrights, patents, service marks, trademarks, trade secret rights, domain names and any other intellectual property rights, including the goodwill associated with such rights) in the HOMEACCESS Intellectual Property. Nothing contained in this Agreement, except the License, shall be deemed to convey to HA any right or interest in the HOMEACCESS Intellectual Property. ARTICLE 3. QUALITY CONTROL OF MARKS 3.01 Proper Use. HA agrees that all use of the Marks shall only occur in connection with the Licensed Products and shall be in strict compliance with the terms of this Agreement. HA may use the Marks only in connection with the promotion of the Licensed Products. HA undertakes and agrees not to use the Marks in any manner whatsoever which, directly or indirectly, would derogate or detract from the Licensed Products repute and to use the Marks in conformance with HOMEACCESS' trademark guidelines ("Trademark Guidelines"), which Trademark Guidelines will be provided by and may be revised by HOMEACCESS from time to time. HA agrees not to use any other trademark or service mark in combination with the Marks. HA has no right to sublicense, transfer or assign the use of the Marks or use the marks for any other purposes other than the purpose described herein. HA may not use the Mark in connection with, or for the benefit of, any third party's products or services. HA will not remove, alter or destroy any Mark, copyright markings or notices placed upon or contained within the HOMEACCESS Intellectual Property. 3.02 Quality Standards. HA agrees to maintain a level of quality of the Licensed Products and services related thereto and in connection with the Marks wherein such level of quality shall be to the satisfaction of HOMEACCESS. HA further agrees to maintain a level of quality in connection with its use of the Marks. 3.03 Monitoring By Licensor. HA acknowledges that HOMEACCESS does have the right to periodically monitor HA's use of the Marks in conjunction with the Licensed Products. Upon request by HOMEACCESS, HA shall provide HOMEACCESS with representative samples of each such use prior to the time the Marks are published on the Internet or in press materials or marketing or advertising materials. If HOMEACCESS determines that HA is using the Marks improperly, and/or in connection with the Licensed Products which do not meet the standards set forth in Sections 3.01 and 3.02, HOMEACCESS shall notify HA, and HA shall remedy the improper use within two (2) business days following receipt of such notice from HOMEACCESS. Use of the Marks on goods or services other than the Licensed Products in a manner inconsistent with the Trademark Guidelines, or in connection with an infringement of HOMEACCESS' or a third party's rights, including but not limited to rights under trademark, patent, trade secret or copyright laws constitute a material breach of this Agreement. If such material breach has not been cured within two (2) business days following receipt of notice from HOMEACCESS, this Agreement shall be terminated. 3.04 Legend and Disclaimer. HA shall include with any online publication or publication in print of the Marks a legend indicating that the Marks are those of HOMEACCESS, used under license, and a disclaimer that HA and not HOMEACCESS has produced the Licensed Products related thereto and is responsible for the content thereof. -3-  ARTICLE 4. IMPROVEMENTS 4.01 Improvements. HOMEACCESS shall own all Improvements to the HOMEACCESS Intellectual Property whether developed or created by HOMEACCESS, HA or jointly by the parties. HOMEACCESS may at its expense file patent applications or copyright applications anywhere in the world on any such Improvements, and title to any such patent application and copyright application shall be and remain exclusively in HOMEACCESS. HA shall cooperate fully with HOMEACCESS, but at HOMEACCESS's expense, in the preparation and prosecution of any such patent application and copyright application and in the maintenance and enforcement of any patent or copyright registration that may issue therefrom. Each party shall disclose promptly to the other party any of its Improvements to the HOMEACCESS Intellectual Property, and such Improvements shall automatically be included within the definition of HOMEACCESS Intellectual Property. 4.02 Infringement. HA shall give prompt notice to HOMEACCESS of any infringement or suspected infringement or misappropriation of HOMEACCESS Intellectual Property. HOMEACCESS shall be obligated to take appropriate legal action, in accordance with good commercial judgement, to cease such infringement or suspected infringement or misappropriation of HOMEACCESS Intellectual Property, and HA shall at its expense render reasonable assistance to HOMEACCESS in connection therewith. HOMEACCESS shall bear all other expenses and shall be entitled to all recoveries and/or settlements resulting from any such action. ARTICLE 5. DISCLAIMER OF WARRANTIES AND INDEMNIFICATION 5.01 Limited HOMEACCESS Intellectual Property Warranty. EXCEPT AS OTHERWISE PROVIDED HEREIN, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, HOMEACCESS AND ITS SUPPLIERS DISCLAIM ALL WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTIBILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE HOMEACCESS INTELLECTUAL PROPERTY OR THE LICENSED PRODUCT. 5.02 HOMEACCESS's Indemnification. (a) HOMEACCESS shall indemnify and hold HA harmless from and against any and all liabilities, obligations, damages, losses, claims, encumbrances, costs and expenses, including attorney's fees and costs (collectively "Losses") to which HA may become subject as a result of any (i) claim, demand, action or proceeding by any third party to the extent such Losses arise directly or indirectly out of the breach of this Agreement by HOMEACCESS or (ii) claim, action, suit or proceeding claiming infringement of any patents, copyrights, trademarks or trade secret rights involved in the Licensed Product, provided such claim, action, suit or proceeding is not the result of any modification or addition by HA to the HOMEACCESS Intellectual Property. (b) If there is an adjudication that the use by HA of the HOMEACCESS Intellectual Property is an infringement or misappropriation, or if the use of such HOMEACCESS Intellectual Property is enjoined, in addition to its indemnification obligation, HOMEACCESS shall, at its expense, use commercially reasonable efforts to either: (i) procure for HA the past and future rights granted to HA hereunder with respect to the allegedly infringing portion of the HOMEACCESS Intellectual Property; or (ii) replace or modify the allegedly infringing portion to make such portion non-infringing, provided that the replacement or modified portion provides substantially the same functionality as the replaced or original portion; and upon failure to complete (i) or (ii), HOMEACCESS shall, at its expense, reimburse -4-  HA for the total amount of its license fee paid hereunder, after giving effect to the length of time that HA has had use of the HOMEACCESS Intellectual Property. (c) THIS SECTION 5.02 STATES HOMEACCESS'S ENTIRE OBLIGATION AND LIABILITY TO HA WITH RESPECT TO ANY CLAIM REGARDING ALLEGED INFRINGEMENT OR MISAPPROPRIATION OF THE INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY. Section 5.03 HA's Indemnity. (a) HA shall defend HOMEACCESS against any Losses to which HOMEACCESS may become subject as a result of any claim, demand, action or proceeding by any third party to the extent such Losses arise directly or indirectly out of (i) the breach of this Agreement by HA or (ii) that any modification or addition to the HOMEACCESS Intellectual Property made by or for HA infringes a published intellectual property right of a third party. (b) THIS SECTION 5.03 STATES HA'S ENTIRE OBLIGATION AND LIABILITY TO HOMEACCESS WITH RESPECT TO ANY CLAIM REGARDING ALLEGED INFRINGEMENT OR MISAPPROPRIATION OF THE INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY. 5.04 Limitation on Liability. IN NO EVENT SHALL EITHER PARTY OR THEIR RESPECTIVE DIRECTORS, OFFICERS, PARENT COMPANY, AND AFFILIATES, LICENSORS, AND SUPPLIERS, BE LIABLE FOR ANY LOST DATA OR CONTENT, LOST PROFITS, BUSINESS INTERRUPTION OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE HOMEACCESS INTELLECTUAL PROPERTY, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING ANY ASSERTED FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. ARTICLE 6. TERM AND TERMINATION 6.01 Term. Unless terminated in accordance with this Article 6, the term of this Agreement shall be for perpetuity from the Effective Date hereof. 6.02 Termination. (a) HOMEACCESS may terminate this Agreement immediately (i) in accordance with Section 3.03, (ii) if HA breaches a material term of this Agreement and fails to cure such breach within thirty (30) days after receiving written notice of such breach (unless such breach can not reasonably be cured in such thirty (30) day period, in which event such cure period shall be extended so long as HA is using commercially reasonable efforts to cure such default, but in no event greater than ninety (90) days), and (iii) if HA fails to pay any amount due hereunder and such non-payment remains uncured for five (5) business days following written notice to HA of non-payment; and (b) either party may terminate this Agreement immediately in the event (i) a receiver is appointed for the other party or its property or such other party is liquidated or dissolved, (ii) the other party makes an assignment for the benefit of its creditors or (iii) any proceeding is commenced by, for or against the other party under any bankruptcy, insolvency or debtor's relief law for the -5-  purpose of seeking a reorganization of such party's debts, and such proceeding is not dismissed within ninety (90) calendar days of its commencement. 6.03 Effect of Termination. Upon the termination of this Agreement for any reason: (a) each party shall retain its rights against the other party in respect of any past breach, in addition to any other rights, powers or remedies provided at law or in equity, (b) the License shall terminate and no longer be of any force or effect, and (c) within (30) days after the date of termination, HA shall immediately cease the use, sale, offer for sale and manufacture of the Licensed Products and shall destroy all HOMEACCESS Intellectual Property. 6.04 Bankruptcy. In the event that HOMEACCESS as a debtor in possession, or a trustee in bankruptcy under the U.S. Bankruptcy Code, rejects this Agreement or HA's right to continue the License under this Agreement, HA may elect to retain its license rights under this Agreement by paying all applicable fees, and otherwise acting in accordance with Section 365(n) of the U.S. Bankruptcy Code. Thereafter, neither HOMEACCESS as debtor in possession, nor a trustee in bankruptcy, shall interfere with the rights of HA to use the HOMEACCESS Intellectual Property in accordance with the terms of this Agreement. 6.05 Survival. The following provisions shall survive the termination of this Agreement for any reason: Sections 2.03, 4.01, 4.02, 8.06 and Articles 5 and 7. ARTICLE 7. PROTECTION OF TECHNICAL INFORMATION 7.01 Confidential Information. "Confidential Information" means any and all technical and nontechnical information, including but not limited to patent, copyright, trade secret, and proprietary information, techniques, and software programs related to the current, future and proposed products and services of a party, as well as any trade information, process, technique, algorithm, computer program (source and object codes), design, drawing formula, test data, financial data and budgetary information, income or sales data or projections, purchasing, customer lists, business development plans and forecasts, sales and merchandising, marketing plans, concepts, records and files, and information that a party discloses or that is otherwise made available to the other party, in writing or electronic form, pursuant to this Agreement. 7.02 Protection of Confidential Information. Each party retains sole and exclusive ownership to its own Confidential Information. Neither party will disclose, publish, communicate or divulge any of the other party's Confidential Information to any third party or use such Confidential Information for any purpose except to accomplish the intent of this Agreement, except either as allowed in this Agreement or with the other party's prior written consent. Each party receiving Confidential Information under this Agreement will protect such Confidential Information with the same degree of care it uses to protect its own Confidential Information of a similar nature, but never less than a reasonable degree of care. Each party agrees that the other party's Confidential Information will be disclosed or made available only to those of its employees who need to know such information and are aware of the confidentiality obligations hereunder or to independent contractors who are obliged to treat the Confidential Information in a manner consistent with all the obligations under this Agreement or as otherwise necessary to exercise the rights set forth in this Agreement. 7.03 Exceptions. A party has no obligation to maintain the confidentiality of, or refrain from using, Confidential Information of the other party that (a) the receiving party knew prior to receiving from the disclosing party as evidenced by written records maintained in the ordinary course of business; (b) the receiving party independently develops or has developed by individuals who do not have access to the other party's Confidential Information; (c) has become publicly available other than as a result of any default or wrongful or negligent act or omission by the receiving party; (d) the receiving party has rightfully received -6-  from a third party under no obligation of confidentiality prohibiting such disclosure; or (e) the disclosing party has approved for release by written authorization. In the event that a party is required to disclose Confidential Information pursuant to applicable law or judicial or administrative government proceedings, then, prior to the required disclosure, the receiving party shall give notice to the disclosing party so that the disclosing party may take reasonable steps to oppose or limit the required disclosure and that the receiving party does not disclose any more information than necessary to comport with the law or order. 7.04 Injunctive Relief. Each party acknowledges and agrees that (a) the restrictions and obligations contained in this Article 7 are reasonable and necessary to protect the other party's legitimate interests; (b) in the event of a violation of these restrictions or a breach of these obligations, remedies at law shall be inadequate and such violation or breach may cause irreparable damages to the other party within a short period of time; and (c) the non-disclosing party shall be entitled to injunctive relief, without posting bond or other security, against each and every such violation or breach, provided the party charged is given lawful notice of the proceeding and an opportunity to appear therein. ARTICLE 8. GENERAL 8.01 Independent Contractor. The relationship created by this Agreement is one of independent contractors, and not partners, franchisees or joint venturers. No employees, consultants, contractors or agents of one party are employees, consultants, contractors or agents of the other party, nor do they have any authority to bind the other party by contract or otherwise to any obligation, except as expressly set forth herein. Neither party will represent to the contrary, either expressly, implicitly or otherwise. 8.02 Miscellaneous. This Agreement and the Schedules attached hereto and made a part hereof, constitute the complete and exclusive agreement between HOMEACCESS and HA and supersede all prior oral or written understandings or agreements not specifically incorporated herein. This Agreement may not be modified except in a writing duly signed by an authorized officer of HOMEACCESS and HA. If any provision of this Agreement is held to be unenforceable for any reason, such provision shall be reformed only to the extent necessary to make it enforceable, and such decision shall not affect the enforceability of such provision under other circumstances, or of the remaining provisions hereof under all circumstances. Headings shall not be considered in interpreting this Agreement. 8.03 Binding Effect. All covenants, representations, warranties and other stipulations in this Agreement, given by or on behalf of any of the parties hereto, shall bind and inure to the benefit of the respective successors and assigns of the parties hereto. Notwithstanding Section 2.01 hereof, the license rights set forth in Section 2.01 shall be assignable commencing after the first eighteen (18) months of the Term. 8.04 Cumulative Powers. No remedy herein conferred upon a party to this Agreement is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and in addition to every other remedy given hereunder or now or hereafter existing at law, or in equity or by statute or otherwise. 8.05 Notices. Any notice, request, instruction, or other document to be given must be in writing and delivered personally or sent by certified mail or by United States Express Mail, postage or fees prepaid, or by FedEx to any such party at its address set forth on the first page of this Agreement. Notice so given shall be deemed given and received (i) if by registered mail on the third (3rd) day after mailing; (ii) by personal delivery on the date of personal delivery; and (iii) if by overnight courier, on the next business day following the day such notice is delivered to the courier service. -7-  8.06 Waiver. Failure or delay on the part of either party to exercise any right, remedy, power, privilege or option hereunder which is not subject to an express time limitation with respect to exercise shall not operate or be construed to operate as a waiver thereof. A waiver, to be effective, must be in writing and be signed by the party making the waiver. No written waiver of any term or condition of this Agreement shall operate or be construed to operate as a waiver of any other term or condition, nor shall any written waiver of any breach or default operate or be construed to operate as a waiver of any other breach or default or of the same type of breach or default on a subsequent occasion or operate or be construed to operate as a continuing waiver. 8.07 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and which together shall constitute but one and the same instrument. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the day and year first above written. HOMEACCESS By: /s/ Mark DiCamillo --------------------------- Name: Mark DiCamillo Title: Vice President HA By: /s/ Jerry Conrad --------------------------- Name: Jerry Conrad Title: President -8-  SCHEDULE 1 HOMEACCESS MARKS ---------------- Mark Serial No. Registration Number - ---- ---------- ------------------- Home Access 75-019,859 2,074,636