COLLABORATION AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
COLLABORATION AGREEMENT
This
COLLABORATION AGREEMENT (“Agreement”), dated
June 17, 2009 by and between Elephant Talk Communications, Inc., a corporation
organized under the laws of the State of California (“Elephant Talk”), and
Validsoft Limited, an entity organized under the laws of the Republic of Ireland
(“Validsoft”).
RECITALS
WHEREAS,
Elephant Talk is the owner of mobile virtual network operator
products;
WHEREAS,
Validsoft is the owner of innovative real-time telecommunication products using
mutual authentication and transaction verification software which are focused on
identification verification, fraud prevention, false positive reduction and
business enablement;
WHEREAS,
the parties believe it is in their mutual best interest to collaborate to
develop and commercialize products using the above Elephant Talk and Validsoft
products pursuant to the terms and conditions hereof; and
WHEREAS,
the parties desire to establish the rights and obligations of Elephant Talk and
Validsoft with respect to the development, distribution, marketing and sale of
joint product(s) encompassing the foregoing Elephant Talk and Validsoft products
pursuant to the terms and conditions hereof.
NOW
THEREFORE, in consideration of the premises and mutual and dependent promises
set forth herein, the parties hereto agree as follows:
ARTICLE
I. DEFINITIONS
1.1 Certain
Definitions.
“Affiliate” shall mean
any Person which controls, is controlled by or is under common control with a
party to this Agreement. For the purpose of this Agreement “control”
shall mean the direct or indirect ownership and having the power to vote on the
affairs of the Person actually controlled by, controlling or under common
control with a party to this Agreement.
“Commissions” shall
have the meaning set forth in Section
4.2.
“Confidential
Information” shall have the meaning set forth in Section
5.1(a).
“Elephant Talk IP”
means all Intellectual Property owned by Elephant Talk relating to or arising
from any and all Elephant Talk Products.
“Elephant Talk
Products” shall mean a mobile virtual network operator product, which
include all standard fixed line services like originating and terminating
national and international voice and data calls (including toll free, shared
revenue and VOIP calls) and all services included in Elephant Talk’s mobile
virtual network enabling platform which is comprised of an in-house developed
integrated IN/CRM/Billing platform and network elements such as switches, HLR,
STP, USSD, SMS-C, MMS-C, WAP gateway, OTA, OTA handset and GGSN/SGSN,together in
each case, all improvements, enhancements and variations thereto including those
undertaken or effected pursuant to this Agreement.
CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
“Intellectual
Property” shall mean: (a) patents, patent applications of any kind,
patent rights, inventions, discoveries and invention disclosures (whether or not
patented); (b) rights in registered and unregistered trademarks,
service marks, trade names, trade dress, logos, packaging design, slogans and
Internet domain names, and registrations and applications for registration of
any of the foregoing; (c) copyrights in both published and unpublished works,
including without limitation all compilations, databases and computer programs,
manuals and other documentation and all copyright registrations and
applications, and all derivatives, translations, adaptations and combinations of
the above; (d) rights in know-how, trade secrets, confidential or proprietary
information, research in progress, algorithms, data, designs, processes,
formulae, drawings, schematics, blueprints, flow charts, models, strategies,
prototypes, techniques, Beta testing procedures and Beta testing results; (e)
any and all other intellectual property rights and/or proprietary rights
relating to any of the foregoing; and (f) goodwill, franchises, licenses,
permits, consents, approvals, and claims of infringement and misappropriation
against third parties, in each case which subsist or will subsist now or in the
future in any part of the world.
“Collaborative
Business” the business to be pursued by the parties pursuant to this
Agreement, for the parties to co-operate and act together for the marketing and
sale of their respective products, which are to be coupled for joint
benefit.
“Losses” shall have
the meaning set forth in Section
6.1(a).
“Net Revenue” shall
mean the amount of profits and revenues actually collected by or on behalf of
Elephant Talk or Validsoft, as the case may be, for sales of Products, less the
following deductions with respect to Products:
(i) value
added, excise, sales
and other consumption taxes and customs duties to the extent included in the
invoice price to customers or paid by Elephant Talk or Validsoft, as the case
may be (excluding taxes based on Elephant Talk’s and Validsoft’s
income);
(ii) all
reasonable freight, postage and shipping, insurance and other transportation
charges to the extent included in the invoice price to customers or paid by
Elephant Talk or Validsoft, as the case may be;
(iii) all
amounts repaid or credited by reason of recalls, rejections or return of
Products;
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CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
(iv) to
the extent agreed between the Parties or included in any agreed business plan,
direct and external accounting, legal, administrative and marketing costs and
expenses relating to the distribution, marketing and sale of Products reasonably
incurred by Elephant Talk or Validsoft, as the case may be;
(v) all
Commissions payable to Elephant Talk, Validsoft, mobile network operators and/or
any other reseller; and
(vi) any
direct third party costs paid or due to be paid to carriers which are necessary
for sales and paid by either party, and which shall be recognized in the actual
currency of billing with respect to such costs.
“Net Sales Price”
shall mean the sales price of each Product sold and collected by, or on behalf
of, Elephant Talk or Validsoft, as the case may be, less the following
deductions:
(i) value
added, excise, sales
and other consumption taxes and customs duties to the extent included in the
invoice price to customers or paid by Elephant Talk or Validsoft, as the case
may be (excluding taxes based on Elephant Talk’s and Validsoft’s
income);
(ii) all
reasonable freight, postage and shipping, insurance and other transportation
charges to the extent included in the invoice price to customers or paid by
Elephant Talk or Validsoft, as the case may be;
(iii) all
amounts repaid or credited by reason of recalls, rejections or return of
Products;
(iv) to
the extent agreed between the Parties or included in any agreed business plan,
direct and external accounting, legal, administrative and marketing costs and
expenses relating to the distribution, marketing and sale of Products reasonably
incurred by Elephant Talk or Validsoft, as the case may be; and
(v) any
direct third party costs paid or due to be paid to carriers which are necessary
for sales and paid by either party, and which shall be recognized in the actual
currency of billing with respect to such costs.
“Person” shall mean
any individual, corporation, limited liability company, limited liability
partnership, general partnership, limited partnership, company, joint venture,
voluntary association, unincorporated organization, trust, estate, other entity
or government (or any agency, instrumentality or political subdivision
thereof).
“Products” shall mean
products developed, distributed, marketed and sold by or on behalf of Elephant
Talk or Validsoft that encompasses or bundles together any Elephant Talk
Products and any Validsoft Products in the Collaborative
Business.
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CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
“Target Markets” shall
be the following:
|
(1)
|
Card
Present (CP) ATM and POS fraud and false positive detection,
identification and resolution;
|
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(2)
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Card
Not Present (CNP) transactions - detection, identification and
resolution;
|
|
(3)
|
telecommunications
based authentication and transaction
verification;
|
|
(4)
|
virtual
private network/extranet authentication and identity/credentials
verification;
|
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(5)
|
Microsoft
outlook web access (OWA), Citrix, Cisco, Juniper - authentication and
identity/credentials verification;
|
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(6)
|
fraud
detection/prevention based lookup and mobile location
solutions,
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to the
financial services industry, government, government agencies and semi-state
bodies.
“Validsoft IP” means
all Intellectual Property owned by Validsoft relating to or arising from any and
all Validsoft Products.
“Validsoft Products”
shall mean the following software products developed by ValidSoft:
VALid-POS™
- Card-Present, ATM and POS (point of sale) fraud prevention solution from
Validsoft that provides Real-Time fraud detection, false positive reduction and
utilizes the underlying VALid® functionality to also provide real-time
resolution. VALid-POS provides invisible transaction verification capability
that assists banks in determining whether the genuine customer is conducting the
card-based transaction.
VALid®
- Real-Time Interactive
Voice Response (IVR) Internet mutual authentication and transaction verification
solution that provides holistic multi-channel approach to fraud prevention.
VALid-IVR provides outbound and inbound telephony all with configurable
Transaction Verification. VALid-IVR integrates with Text-To-Speech (TTS), Speech
Recognition and Voice Biometrics functionality to provide the highest level of
secure authentication. VALid® provides the Real-Time Resolution capability for
VALid-POS™.
VALid-VPN
– Real-Time telecommunications based Virtual Private Network client that allows
users to gain secure remote access to an organization’s protected network.
Remote network access is becoming a greater issue for many organizations through
the growth of home working, remote workers, extended enterprises and disaster
recovery and business disruption planning. VALid-VPN supports major VPN servers
including Citrix (multiple) and Juniper.
4
CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
VALid-OWA
- Real-Time telecommunications based Outlook Web Access client that provides
secure access for Microsoft Exchange remote users. Currently many Exchange sites
disallow remote access through OWA due to security concerns. VALid-OWA solves
this problem and, through its zero client-footprint model, enables instant wide
scale distribution.
together
in each case, all improvements, enhancements and variations thereto including
those undertaken or effected pursuant to this Agreement.
ARTICLE
2. COLLABORATION
2.1 Management. The
annual budget of Elephant Talk and Validsoft devoted to the distribution,
marketing and sale of Products shall be determined and mutually agreed upon by
the parties. Each
party shall comply with all laws, rules and regulations applicable to it in the
development, distribution, marketing and sale of Products. Any
amendment to any business plan previously agreed upon by the parties shall
require consent of both parties.
2.2 Target
Markets. The parties shall concentrate the distribution,
marketing and sale of Products in the Target Markets.
2.3 Pricing. The
prices for Products shall be mutually agreed upon by the parties.
2.4 Elephant Talk
Obligations. Elephant Talk shall be responsible for the
following:
(a) dealings
with telecom elements and the recruitment of mobile network operators as
resellers;
(b) jointly
with Validsoft, software development (including where Validsoft agrees using
Elephant Talk’s China operations on an outsource basis, at a cost plus ***); and
(c) jointly
with Validsoft, the re-applying and relevant integration and joining of the
Elephant Talk Products and Validsoft Products to form the Products and to expand
the Products for the Target Market, at all times to mutual
advantage.
2.5 Validsoft
Obligations. Validsoft shall be responsible for the
following:
(a) jointly
with Elephant Talk, software development (including where Validsoft agrees using
Elephant Talk’s China operations on an outsource basis, at a cost plus 10%
price); and
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CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
(b) jointly with Elephant Talk, the
re-applying and relevant integration and joining of the Elephant Talk Products
and Validsoft Products to form the Products and to expand the Products for the
Target Market, at all times to mutual advantage.
2.6 License. Elephant
Talk hereby grants to Validsoft a non-exclusive, worldwide, fully paid-up,
royalty free license with respect to the Elephant Talk IP to the extent
necessary for the distribution, marketing and sale of
Products. Validsoft hereby grants to Elephant Talk a non-exclusive,
worldwide, fully paid-up, royalty free license with respect to the Validsoft IP
to the extent necessary for the distribution, marketing and sale of
Products.
2.7 Resellers and
Distributors. Upon mutual agreement by the parties, the
parties may appoint, on a non-exclusive basis, mobile network operators,
resellers and other distributors to market, distribute and sell
Products.
2.8 Non-Exclusivity. Nothing
in this Agreement shall be construed or deemed to restrict or prohibit Elephant
Talk from developing, marketing, distributing or selling any Elephant Talk
Products or any of its other products. Nothing in this Agreement
shall be construed or deemed to restrict or prohibit Validsoft from developing,
marketing, distributing or selling any Validsoft Products or any of its other
products.
2.9 Restricted Business.
In order to assure to the other the full benefit of this Agreement, each Party
undertakes on its own behalf, and undertakes to procure that each of its
Affiliates, shall not directly or indirectly (whether as principal, shareholder,
partner, employees, agents or otherwise), and whether on its own account or in
conjunction with or on behalf of any other Person, during the Restricted Period
carry on or be engaged, concerned or interested in a business which competes
with the sale of the Products, and further that it will not enter into any
agreement or arrangement with any third party which is engaged in business in
competition with the other party to this Agreement in relation to the Target
Market, the intent or effect of which is to be materially prejudicial to the
interests of the other party. For the purpose of this Section 2.9,
the Restricted Period shall be the term of this Agreement, and a period of 12
months thereafter.
2.10 Reasonable
Endeavors. Each party undertakes to the other to use all
reasonable endeavors to promote and extend sales of the Products, and to exploit
the rights arising in the Collaborative Business to the intent of maximization
of Net Revenues to the benefit of both of the parties.
ARTICLE
3. REPRESENTATIONS AND WARRANTIES
3.1 Representations and
Warranties of Elephant Talk. Elephant Talk represents to
Validsoft as follows:
(a) Organization
and Corporate Power. Elephant
Talk is a corporation duly organized, validly existing and in good standing
under the laws of the State of California.
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CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
(b) Authority;
No Violation. Elephant
Talk has all requisite power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and
performance by Elephant Talk of this Agreement has been duly and validly
authorized and approved by all necessary actions of Elephant
Talk. Neither the execution, delivery or performance of this
Agreement by Elephant Talk, nor compliance by Elephant Talk with any of the
terms or provisions hereof, will violate, conflict with, or result in a breach
or default under any provision of the organizational documents of Elephant Talk
or violate any applicable law, rules or regulations.
(c) Ownership of Intellectual
Property. Elephant Talk (i) is the owner of the Elephant Talk
IP, and (ii) no Person has asserted any infringement or ownership claim, formal
or informal, with respect to the Elephant Talk IP and (iii) any Intellectual
Property rights or interests of any Persons in or to any part of the Elephant
Talk Product is and will remain properly and lawfully licensed for all purposes
contemplated by this Agreement.
3.2 Representations and
Warranties of Validsoft. Validsoft represents to Elephant Talk
as follows:
(a) Organization
and Corporate Power. Validsoft
is a corporation duly organized, validly existing and in good standing under the
laws of the Republic of Ireland.
(b) Authority;
No Violation. Validsoft
has all requisite power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance by
Validsoft of this Agreement has been duly and validly authorized and approved by
all necessary actions of Validsoft. Neither the execution, delivery
or performance of this Agreement by Validsoft, nor compliance by Validsoft with
any of the terms or provisions hereof, will violate, conflict with, or result in
a breach or default under any provision of the organizational documents of
Validsoft or violate any applicable law, rules or regulations.
(c) Ownership of Intellectual
Property. Validsoft (i) is the owner of the Validsoft IP, and
(ii) no Person has asserted any infringement or ownership claim, formal or
informal, with respect to the Validsoft IP (iii) any Intellectual Property
rights or interests of any Persons in or to any part of the ValidSoft Product is
and will remain properly and lawfully licensed for all purposes contemplated by
this Agreement.
ARTICLE
4. NET REVENUE AND COMMISSIONS
4.1 Net
Revenue. Elephant Talk and Validsoft shall *** share in the Net Revenue
generated from the sale of Products. Estimated Net Revenue payments
shall be made on a weekly basis (the “Estimated Weekly
Payments”). ***
4.2 Commissions. Elephant
Talk is entitled to commissions from the sale of Products equal to *** of the Net Sales Price of
each Product directly sold by Elephant Talk. Validsoft is entitled to
commissions from the sale of Products equal to *** of the Net Sales Price of
each Product directly sold by Validsoft. The commission payable under
this Section is hereinafter referred to as the “Commissions”. Commissions
shall be calculated by each party on a calendar quarterly basis and paid
pursuant to Section
4.1.
7
CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
4.3 Books and
Records. Each party shall maintain accurate books and accounts
of record in connection with the calculation of the Net Revenue (and items used
in the calculation of Net Revenue) and Commissions (and items used in the
calculation of Net Sales Price) in sufficient detail to permit accurate
determination of Net Revenue and Commissions. Elephant Talk and
Validsoft shall each have the right (but is not obligated) to inspect, review
and make copies of such books and accounts. Such books and accounts
shall be maintained for a period of five (5) years from the end of each year in
which sales of Products occurred. To ensure that the proper Net
Revenue and Commission payment is made, each party shall have the right to audit
the other party’s books and accounts. If any such audit reveals that
an underpayment in Net Revenue and/or Commissions has occurred, then the
auditing party shall provide notice to the other party of such
underpayment. In the event that the other party does not dispute the
audit results, such other party shall pay to the auditing party the amount of
such underpayment plus interest accrued thereon at the rate of 1.5% above ECB (REFI) during
the period from the date the Net Revenue and/or Commission payment was to be
paid and ending on the date that the underpayment and interest is paid by the
other party. In addition, if an audit reveals an underpayment of
greater than five percent (5%) of the aggregate Net Revenue and Commissions
amount that was paid for such calendar quarter then the other party shall
reimburse the auditing party for the reasonable fees and expenses incurred by
the auditing party in conducting the audit. Any such reimbursement shall be
without prejudice to any other right or remedy available to the auditing party
arising from such underpayment.
ARTICLE
5. COVENANTS
5.1 Confidentiality.
(a) Each
of the parties acknowledges that it will be given access to confidential and
proprietary information regarding the other parties (the “Confidential
Information”). For the purposes of this Agreement,
Confidential Information includes, but is not limited to, patents, trademarks,
product development data, customer lists, marketing information, product
samples, prototypes, drawings, photographs, competitive strategies, trade
secrets, know how and other Intellectual Property. The receiving
party acknowledges that the Confidential Information remains the property of
disclosing party. The receiving party shall not, either during the
term of this Agreement or thereafter, disclose any Confidential Information to
any Person and will not use the Confidential Information for any purpose other
than in the performance of its obligations hereunder. The
confidentiality and non-use obligations of this Agreement shall not apply to (i)
information that, at the time of disclosure to the receiving party, is in the
public domain; (ii) information that, after disclosure to the receiving party,
becomes part of the public domain by publication or otherwise, except by breach
of this Agreement by the receiving party; (iii) information that the receiving
party can establish by written evidence was lawfully in the receiving party’s
possession at the time of disclosure to the receiving party by the disclosing
party without any obligation on the part of the receiving party to treat such
information as confidential; (iv) information disclosed to the receiving party
by a third party after the time of disclosure hereunder which the third party
has the right to disclose without restriction; (v) information that is
independently developed by the receiving party without use or reference to the
disclosing party’s Confidential Information; and (vi) information that the
receiving party is compelled to disclose pursuant to a subpoena or other legal
process, provided that the receiving party shall promptly notify the disclosing
party in writing of such compelled disclosure and will cooperate with the
disclosing party’s efforts to protect the confidentiality of such information,
at the disclosing party’s expense. The receiving party shall have the
burden of proving that any of the foregoing exceptions are
applicable. Upon termination of this Agreement, the receiving party
shall return to the disclosing party all tangible copies of Confidential
Information and destroy all notes, memoranda, workpapers, extracts and the like
containing Confidential Information.
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CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
(b) The
receiving party understands that the Confidential Information constitute unique
and valuable trade secrets of the disclosing party and acknowledges that the
breach of the provisions of Section 5.1(a) of
this Agreement may result in irreparable harm to disclosing party for which
monetary damages may be inadequate. Accordingly, the receiving party
agrees that in the event of any breach or threatened breach by the receiving
party or any of its employees or agents of Section 5.1(a), the
disclosing party may seek to obtain temporary or permanent injunctive relief or
other equitable relief from any court of competent jurisdiction, in addition to
any other remedies available to it, without the requirements of proving actual
damages or posting bond, and the receiving party will not claim as a defense to
such petition for injunctive relief that the disclosing party has an adequate
remedy at law.
5.2 Ownership of Intellectual
Property. The parties acknowledge and agree that
nothing in this Agreement shall be construed to grant a party any right, title,
interest or license to or in any Intellectual Property owned by the other
party. Neither party shall, during the term of this Agreement or at
any time thereafter:
(a) attack
or challenge the validity of, or the other party’s rights and title to, such
other party’s Intellectual Property;
(b) claim
any right, title, or interest in or to the other party’s Intellectual
Property;
(c) register,
or apply for registration, for Intellectual Property protection for the other
party’s Intellectual Property;
(d) adopt
any names or marks that incorporates the other party’s Intellectual Property
anywhere in the world;
(e) use
anywhere in the world any xxxx or design identical or likely to cause confusion
with the other party’s Intellectual Property; or
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CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
(f) independently
seek to claim or register any Intellectual Property arising in any Product of
the Collaborative Business that are not derived from, improvements on or
enhancements or variations to (in the case of Elephant Talk) the Elephant Talk
Products (or in the case of Validsoft) the Validsoft Products.
5.3 Database. Subject
to applicable law, any obligation of confidentiality and any other contractual
rights binding on the party owning such database or customer list, each party
shall have the right to access and use any databases or customer lists developed
by or on behalf of the other party with respect to the marketing, distribution
or sale of Products.
5.4 Each
party undertakes to procure that each of its Affiliates shall comply with the
provisions of this Section 5.
5.5 Each
party agrees that during the term of this Agreement and for a period of 1 year
following the termination of this Agreement, not to solicit or induce any
officer, employee, agent or contractor of the other party or any of its
Affiliates involved with the development or sale of (in the case of Elephant
Talk) the Elephant Talk Products or (in the case of Validsoft) the Validsoft
Product to terminate their employment or engagement with the other party or its
Affiliate (as appropriate); provided, however, that a party shall not be deemed
to be in violation of this Section 5.5 if a party directly or indirectly
participates in a general solicitation of employment to which employees of the
other party or its affiliates respond.
ARTICLE
6. INDEMNIFICATION
6.1 Indemnification.
(a) Elephant
Talk shall indemnify, defend and hold Validsoft and its directors, officers,
employees and agents, harmless from and against any and all claims, demands,
actions, causes of action, judgments, losses, liabilities, costs and expenses of
any kind, nature and description, including but not limited to reasonable
attorneys’ fees and other litigation expenses (collectively, “Losses”), arising
from or related to Elephant Talk’s breach of any of its warranties, covenants or
representations contained herein.
(b) Validsoft
shall indemnify, defend and hold Elephant Talk and its directors, officers,
employees and agents, harmless from and against any and all Losses arising from
or related to Validsoft’s breach of any of its warranties, covenants or
representations contained herein.
(c) In
the event that the indemnified party to seek indemnification under this
Section 6.1, it
shall promptly, after receiving notice of the indemnifiable claim,
inform the indemnifying party of such claim and shall simultaneously
furnish to the indemnifying party a written description of such claim and a copy
of any legal papers served upon the indemnified party which relate to such
claim. The indemnifying party, at its sole expense, shall assume the
defense of any claim for which the indemnified party is entitled to
indemnification under this Section 6.1 through
counsel of the indemnifying party’s choice. The indemnified party may
elect to have its own counsel participate in such matter at the indemnified
party’s cost. However, if the indemnifying party assumes the defense
of the claim on behalf of the indemnified party and the indemnified party
reasonably believes that counsel representing the indemnifying party has a
conflict of interest that would preclude the it from adequately representing the
indemnified party, then the indemnified party may appoint its own counsel
acceptable to the indemnifying party at the indemnifying party’s
expense. If the indemnifying party requests, the indemnified party
shall provide reasonable assistance to the indemnifying party, at the
indemnifying party’s expense, in connection with the defense of any such
claim. Neither party may consent to any judgment against or agree to
any settlement affecting the other party without the prior written approval of
such other party, which approval shall not be unreasonably
withheld.
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CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
6.2 Limitation of liability
Parties
will see to it that they make no representations or warranties concerning
products and services of the other Party, other than those which are consistent
with that Party’s own representations and warranties, as set forth in this
Agreement. Parties will not accept any liability for damages, suffered by the
purchasers, related to the other Parties’ (non) performances under the
Agreement. Parties fully indemnify each other against any and all of such
claims, including but not limited to all costs directly or indirectly arising
out of such claim, such as reasonable costs for legal assistance.
A Party
can only be held liable for direct damages resulting from an attributable
failure of its obligations under the Agreement. Direct damages in this respect
exclusively mean:
(a)
|
all
reasonable costs incurred by the other Party in order to have the liable
Party’s performances meet its obligations under the
Agreement.
|
(b)
|
all
reasonable costs incurred by the other Party in order to prevent or limit
any direct damages as meant in this
article.
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(c)
|
all
reasonable costs incurred by the other Party in order to establish the
nature and scope of the direct damages as meant in this
article.
|
The
direct damages as meant in this article will be limited to a maximum amount of
20.000,- euro for all events (connected or not) in any period of 12 calendar
months. In the event of death, physical injury or damage to things, Party’s
liability will be limited to an amount of 50.000,- euro.
Any and
all liability for indirect damages, including but not limited to consequential
damages, loss of profit, loss of turnover and damage of reputation, is
excluded.
ARTICLE
7. TERM AND TERMINATION
7.1 Term. The
term of this Agreement shall commence on the date hereof and shall continue and
remain in full force and effect until ten (10) years from the date of this
Agreement unless earlier terminated pursuant to Section
7.3. Unless earlier terminated pursuant to Section 7.3 or if a
party provides notice to the other party of its intent not to renew this
Agreement three (3) years prior to the expiration of the initial term or any
renewal term, this Agreement shall automatically renew after the initial term,
or any renewal term, for an additional term of five (5) years without any
further action by any of the parties.
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CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
7.2 Amendment
Six
months after the date of this Agreement, parties will review the content of this
Agreement and will replace this Agreement by a revised version before 1 June
2010. Parties will take the basics of this Agreement as starting
point.
7.3 Termination. Either
party may terminate this Agreement, as follows:
(a) upon
written notice, if the other party breaches any material term of this Agreement
and fails to cure the breach (if such breach may be reasonably cured) within
thirty (30) days after it receives written notice from the other party;
or
(b) with
or without notice, if the other party has a receiver appointed for its assets,
files a petition for relief from its creditors under applicable bankruptcy laws
or becomes subject to an involuntary petition under applicable bankruptcy laws
which is not discharged or stayed within thirty (30) days after
commencement.
(c) without
prejudice to the generality of sub Section 7.3 (a) above, if the other party
challenges or disputes the validity or ownership of any of the terminating
party's Intellectual Property or the other party is in breach of its
confidentiality obligations under Section 5 or if the other party undergoes any
change in legal or beneficial ownership or control, except to the parties, or to
any Persons collectively controlling either party at the date of this
Agreement.
(d) upon
written notice in the event that a third party acquires a majority interest in
the voting rights or the share capital of the other Party.
7.4 Effect of
Termination. In the event of termination of this Agreement
pursuant to Section
7.3, this Agreement will no longer have any effect except that (a) this
Section 7.4 and
Sections 4.1,
4.2, 4.3, 5.1, 5.3, 5.4, 5.5, 6.1 and 8.1 hereof will
survive any termination of this Agreement, and (b) Elephant Talk or Validsoft,
as the case may be, shall continue to be responsible for the maintenance and
support for Elephant Talk Products or Validsoft Products, as the case may be,
underlying any Product pursuant to any agreement, warranty or reseller agreement
which is in force at the date of termination.
7.4 Notwithstanding
Section 7.4, following termination of this Agreement, one party's right of
access to and use of the other party's database pursuant to Section 5.3 above
shall cease on such termination, save in respect of that database arising (to
either or both of the parties) during the term of this Agreement and in respect
of the Collaborative Business and the Products, which database shall continue to
be shared pursuant to Section 7.4.
12
CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
ARTICLE
8. MISCELLANEOUS
8.1 Miscellaneous.
(a) This
Agreement constitutes the entire agreement and understanding between the parties
with respect to the subject matter hereof and supersedes all previous
undertakings, agreements and representations between the parties, written or
oral, with respect to the subject matter hereof. No modification or
amendment of any provisions of this Agreement shall be binding upon either party
hereto unless the same shall be in writing and duly executed by a duly
authorized representative of both parties hereto. No waiver by either
party of any of its rights hereunder shall be effective unless in writing and
signed by the party to be charged therewith. Any waiver of breach pursuant to this
Agreement shall not be a waiver of any other subsequent
breach.
(b) In
the event any provision of this Agreement is determined by a court of competent
jurisdiction to be unenforceable, the remaining provisions of this Agreement
shall remain in full force and effect, and such unenforceable provision shall be
replaced with a provision which accomplishes, to the extent possible, the
original business purpose of the invalid or unenforceable part or provision in a
valid and enforceable manner.
(c) All notices, requests or communications required or permitted to be given
hereunder shall be addressed to the party’s address set forth herein below in writing and shall be deemed to have
been received: (i) when received if hand delivered, or (ii) the next business day after being
sent by an national recognized overnight courier, in each case addressed to the
party at its address given above, or to another address which may subsequently
be specified in writing to a party pursuant to this Section.
If to Elephant Talk: | If to Validsoft: | |||
Elephant
Talk Communications, Inc. Schipol
Xxxxxxxxx 000
0000
XX
Xxxxxxxxxx
Xxxxxxx
Xxxxxxxxxxx
Attn:
|
Validsoft
Limited
Victoria
House
00
Xxxx Xxxxxx
Xxxxxx
XX0X
Xxxxxx
Xxxxxxx
Attn:
|
|||
With a copy to: | With a copy to: | |||
Ellenoff
Xxxxxxxx & Schole LLP
000
Xxxx 00xx
Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
XXX
Attn: Xxxxx
X. Xxxxxxxx, Esq.
|
Wollastons
LLP
Xxxxxxx
Place
New
Xxxxxx Xxxx
Xxxxxxxxxx
Xxxxx
XX0 XXX
Xxxxxx
Xxxxxxx
Attn:
Xxxxxxxx Xxxxxxx Esq.
|
13
CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
(d) This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, and together shall constitute one and the same
document. Delivery by such counterparts by electronic transmission
shall not impair the validity thereof.
(e) All
section headings in this Agreement have been included herein for reference
purposes only and are not to be used in the interpretation of this
Agreement.
(f) This
Agreement constitutes the joint product of the parties hereto. Each
provision has been subject to the mutual consultation and agreement of the
parties and shall not be construed for or against either of them by reason of
authorship.
(g) This
Agreement shall be governed by and construed in accordance with the laws of the
Netherlands. The parties agree that any action, suit or proceeding
arising out of or relating to this Agreement shall be brought exclusively in the
Netherlands. The parties further agree that service of process shall
be proper if served pursuant to the notice methods set forth in Section
8.1(c).
(h) Subject
to Article 6,
each of the parties will bear its respective own expenses in connection with the
negotiation, execution, delivery and performance of this Agreement.
(i) This
Agreement may not be assigned by a party without the prior written consent of
the other parties. This Agreement shall be binding upon and
enforceable by, and shall inure to the benefit of, the parties hereto and their
respective successors and permitted assigns.
(j) Nothing
in this Agreement, and no action taken by the parties pursuant to this Agreement
shall constitute, or be deemed to constitute, a partnership between the parties
or shall constitute either party as the agent, employee or representative of the
other.
(k) The
invalidity of unenforceability of any term or of any right arising under this
Agreement shall not adversely affect the validity or enforceability of the
remaining terms and rights. In the event the invalid or unenforceable
provision is material in the context of this Agreement, the parties shall in
good faith agree to a mutually satisfactory replacement which accomplishes to
the extent possible, the original business purpose and intent of the invalid or
unenforceable provision in a valid manner.
14
CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
(l) All
transactions entered into between either party (or any of its Affiliates) and
the other or any third party pursuant to this Agreement shall be conducted in
good faith and on the basis set out or referred to in this Agreement or, if not
provided for in this Agreement, as may be agreed by the parties and, in the
absence of such agreement, on an arms length basis. Each party shall
at all times act in good faith towards the other and shall use all reasonable
endeavours to ensure that this Agreement is observed on a good faith
basis. Each Party shall do all things necessary and desirable to give
effect to the spirit and intention of this Agreement.
(m) Notwithstanding
Section 8.1(g) above jurisdiction and proceedings all notices, claims, disputes
and all other matters in or relating to this Agreement and dealings between the
parties shall be conducted in the English language. If this Agreement
is translated into any language other than English, the English language text
shall prevail.
(n) In
the event of a dispute arising from this Agreement, such dispute will first be
submitted to the chief executive officer of each party for resolution. The
chief executive officer of each party shall negotiate in good faith to resolve
such dispute for a period not to exceed thirty (30) days. In the event
that the chief executive officers of both parties have been unable to reach
accord using the procedures set forth in the foregoing sentence in such thirty
day time period, and only if such is the case, either party may seek final
resolution of the matter through binding arbitration. Any such arbitration
will be held in the Netherlands in accordance with the then existing arbitration
rules of the Netherlands and judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof. The decision of
the arbitrator shall be final and binding on the parties and shall be
accompanied by a written opinion of the arbitrator explaining the arbitrator’s
rationale for the decision. The party losing the arbitration shall pay all
fees and costs of the arbitrator. The intent of the Parties is that
except for the entering of an arbitration order in a court of competent
jurisdiction, disputes will be resolved finally in arbitration as provided
above, without appeal, and without recourse to litigation in the
courts. From and after the commencement of a dispute with respect to
this Agreement and continuing through the date upon which such dispute is
resolved by the parties, payments related solely to the issue in dispute shall
cease for the term in which such dispute is unresolved and any payments
unrelated to the issue in dispute shall continue to be
made.
[SIGNATURES
TO FOLLOW]
15
CONFIDENTIAL TREATMENT
REQUESTED
WITH RESPECT TO CERTAIN
PORTIONS HEREOF
DENOTED
WITH “***”
June 17, 2009
IN
WITNESS WHEREOF, the parties hereto have caused this Collaboration Agreement to
be executed by their duly authorized respective representatives as of the day
and year written above.
ELEPHANT
TALK COMMUNICATIONS, INC.
|
|||
By:
|
/s/ Xxxxxx van der
Velden
|
||
Name: Xxxxxx
van der Velden
|
|||
Title:
CEO
|
VALIDSOFT
LIMTED
|
|||
By:
|
Xxxxxxx X.
Xxxxxxx
|
||
Name: Xxxxxxx
X. Xxxxxxx
|
|||
Title:
CEO
|