[Registrant has removed proprietary and confidential information, indicated by an asterisk "*", pursuant to a
request for confidential treatment. Registrant has filed the confidential portion separately with the SEC.]
July 19, 1999
Memorandum of Understanding
Both Parties Agree that:
1. TEK and ePhone become "Strategic Partners" and work together on a continuing basis to the benefit of both
2. As part of the partnership TEK commits to support the development and delivery of TEKI agates as a first
priority. The TEKI iGate will enable ePhone to offer an IP telephony based fax and voice service. The specific
product specifications are to be mutually agreed defined between ePhone and TEK. TEK agrees that the iGates
to be delivered to ePhone will be branded as ePhone iGates.
3. In addition to product specifications, TEK agrees to support ePhone with specific commitments of technical
support and assignment of personnel. These commitments will be agreed between TEK and ePhone by July 16
and incorporated into an implementation plan which will form an addendum to this agreement (Addendum A).
Addendum A will cover:
-- product development and delivery milestones
-- actions and deliverables by specified personnel within TEK specific commitments in terms of time by specified
individuals within TEK to ePhone's program
-- technical support for ePhone in the field
-- specific schedule of TEK iGate deliveries to ePhone
4. ePhone has the right to name a replacement director for Robert Clarke if he resigns from the board of TEK. It
is Clarke's intention to resign from the board in the near future.
5. ePhone will be granted the same provisions for escrow and access to the source code as Franklin Telecom
and will also have the right to manufacture the TEK iGate in case TEK is unable to manufacture the product for
6. Joint Press Releases will de disseminated as agreed between the two companies.
7. ePhone will continue to assist TEK in its efforts to raise additional capital.