IOTEX COMMUNICATIONS v DEFREIS - Legal Case Documents

DELAWARE
PERSONAL JURISDICTION
IOTA PARTIES
IOWAVE
DEL
BEHBEHANI
COURT
DISMISS
MOTION
INCORPORATION
STOCK
SUPPORT
EXERCISE
PAPENDICK
CREATION
DEFENDANT
INSUFFICIENT SERVICE
SUPR
FACTS
IOTEX
PLAINTIFFS
CONTROL
LAW
EMPLOYEE
PURPOSES
SUBSIDIARIES
B-W
EXHIBITS
APP

              IN THE COURT OF CHANCERY OF THE STATE OF DIELAWARE
                            IN AND FOR NEW CASTLE COUNTY

IOTEX COMMUJNICA'TIONS, INC.,

                       Plaintiff,,

       v.                                                    Consolidated Civil
                                                             Action No., 15817
ANTHONY DEFRIES, et al.,                             .

                                                     ..
                       Defenda.nts

IOTA, INC., et al.,

                       Counterclaim Plaintiffs,

        v.

IOTEX COMMUNICATIONS, INC., et al.,

                       C'ounterclaim  Defendants.

                       RIEPLY  BRIEF XN SUPPORT OF DEFENDANT
                   TAHER BEHBEHANI'S  MOTION TO DISMISS FOR
                        LACK OF PERSONAL JURISDICTION AND
                           INSUFFICIENT SERVICE: OF PROCESS


 Of Counsel:                                       Allen M. Terrell, Jr.
 Blair G. Brown                                    Srinivas M. Raju
 Lynn 1:. Kaufmann                                 RICHARDS, LAYTON & FINGER, 1P.A.
 ZIJCKERMAN,  SPAESDER, GOLDSTEIN,                 One Rodne:y Square:
   TAYLOR & KOLKER, L.L.P.                         P.O. Box 551
 1201 Connecticut A.venue, N.W.                    Wilmington, DE 19899
 Washington,  D.C. 20036                           (302) 658-6541
 (202)  m-1800                                     Counsel for Defendant Tah.er Behbehani

.luly 2 1, 1999



                                                TABLE OF CONTENTS
                                                                    "-.

                                                                                                   

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . ii

IOTEX COMMUNICATIONS, INC., et al.,

RIEPLY BRIEF XN SUPPORT OF DEFENDANT

IOWAVE IS AN INSUFFICIENT CONTACT TO SUPPORT THE EXERCISE

OF PERSONAL JURISDICTION OVER HEM UNDER SECTION 3 104.

Ix,, Del.

Supr., 650 A.2d 1270.

Corporate & Commercial Practice in the Delaware Court of Chancerv

In his 0pe:ning Brief in support of his motion to dismiss all claims against him for lack

of personal jurisdiction and insufficient service of process,

Behbehani demonstrated that the Iota Parties' cannot obtain personal jurisdiction over him

controlled, or even owned shares in, ioWave at the time of its incorporation, or that Mr.

expansion of the law of personal jurisdiction, and distances the Iota Part& frotn plainly

BEHBEHANI'S ALLEGED PARTICIPATION IN THE CREATION OF IOWAVE IS AN INSUFFICIENT CONTACT TO

did not control ioWave, and did not participate in the incorporation of ioWave in Delaware.

the Iota Parties contend that the exhibits

Those facts are consistent with Mr. Behbehani's statement in his affidavit that he was not a

the Iota Parties assert that Mr. Behbehani held stock options upon his

Assuming, for purposes of this

20,000 out of 6.4 million shares in November 1996, (see Al3 App.

Behbehani, while an employee of IOTEX and then of ioWave, was very involved (and

Parties -principally base their argument on the progeny of Papendick v.

RB came into the State of Delaware to create, u&r the Delaware: Corporation Law, a subsidiary

We conclude that RB's ownership of RBNA stock was the result of RB's purposeful activity in

parents that have come into Delaware to fiJrm wholly owned subsidiaries as an essential

2 . ANSWER OF DEFENDANT IOWAVE TO AMENDED COMPLAINT

PARAGRAPH
DENIES
ALLEGATIONS
ADMIT
IOTEX
BASIS DENIES
IOWAVE LACKS
SUFFICIENT KNOWLEDGE
DENY
BEHBEHANI
RESPONSE
EXECUTIVE OFFICER
FRIEDLI
INCORPORATES
CHIEF EXECUTIVE OFFICER
PLAINTIFF
REFERENCE
COMMUNICATIONS
PRECEDING PARAGRAPHS
DEFENDANT IOWAVE
AMENDED COMPLAINT
LICENSE AGREEMENT
COURT
NAM
VICE PRESIDENT
WRONGFUL
PLAINTIFFS CLAIMS
RELIEF
SOLE

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR NEW CASTLE COUNTY

IOTEX COMMUNICATIONS, INC., ....
Plaintiff, ....
V. .. Consolidated Civil
.. Action No. 15817
Anthony Defries and ..
Iota, Inc., :..
Defendants ......
Iota, Inc. and NeoSoft, A.G., ....
Counterclaim-Plaintiffs, ....
V. ....
IOTEX COMMUNICATIONS, INC., ..
ioWave, Inc., Peter Friedli, and ..
Taher Behbehani, :..
Counterclaim-Defendants. :...
_--------------_____---~~~---

ANSWER OF DEFENDANT IOWAVE, INC.
TO AMENDED COMPLAINT BY DIEGO FOUNDATION, individually,
and derivatively on behalf of IOTEX COMMUNICATIONS, INC.

Defendant ioWave, Inc. ("ioWave"), by and through its undersigned attorneys, for its answer

to the Amended Complaint by Diego Foundation, individually, and derivatively on behalf of IOTEX

COMMUNICATIONS, INC., states, as follows:

1. ioWave lacks sufficient knowledge to admit or deny the allegations of Paragraph 1

and on that basis denies them.

RLFl-2018391-1

2. ioWave admits that Peter Friedli is currently the sole director of IOTEX

COMMUNICATIONS, INC. ("IOTEX") and that Taher Behbehani ("Behbehani") is the former

Chief Executive Officer of IOTEX. ioWave admits that Peter Friedli and Behbehani are directors

of ioWave and that Behbehani is an officer of ioWave. ioWave denies that Peter Friedli is an officer

of ioWave. ioWave denies that Friedli and Behbehani caused the destruction of IOTEX. The

and derivatively on behalf of IOTEX COMMUNICATIONS,

Defendant ioWave, Inc., by and through its undersigned attorneys, for its answer

to the Amended Complaint by Diego Foundation, individually, and derivatively on behalf of

and on that basis denies them.

INC. and that Taher Behbehani is the former

Chief Executive Officer of IOTEX.

ioWave admits that Peter Friedli and Behbehani are directors

remaining allegations of Paragraph 2 contain legal conclusions to which no response is

to the extent that an answer may be called for, ioWave denies the allegations.

Paragraph 4 sets forth the relief requested by Plaintiff, to which no response is

ioWave lacks sufficient knowledge

to admit or deny the remaining allegations of Paragraph 7 and on that basis denies them.

ioWave lacks sufficient knowledge to admit or deny the allegations of Paragraph 9

and that Peter Friedli was initially the sole director of IOTEX.

ioWave avers that the License Agreement and the Project Management Agreement

Young Nam is the former Vice President of IOTEX, that Behbehani is the current Chief

iowave's response in each of the preceding Paragraphs is incorporated herein by

reference.

ioWave denies that Behbehani has engaged in wrongful conduct.

The Complaint fails to state a claim upon which relief can be granted.

Plaintiffs claims are barred by the doctrines of laches,

Plaintiff has failed to demonstrate injury to himself or to any other shareholder of IOTEX.

under its Counterclaim in this consolidated action, which ioWave incorporates by reference

3 . ANSWER OF COUNTERCLAIM DEFENDANT IOWAVE TO AMENDED COUNTERCLAIM BY IOTA AND NEOSOFT

PARAGRAPH
ALLEGATIONS
IOWAVE DENIES
RESPONSE
IOTEX
COUNTERCLAIM
ADMIT
IOTA
AGREEMENT SPEAKS
LACKS SUFFICIENT KNOWLEDGE
DENY
BASIS DENIES
BEHBEHANI
IOWAVE AVERS
PETER FRIEDLI
LICENSE AGREEMENT
AMENDED COUNTERCLAIM
COMMUNICATIONS
COUNTERCLAIM DEFENDANT IOWAVE
PROJECT MANAGEMENT AGREEMENT
SEPARATION AGREEMENT SPEAKS
INCORPORATES
REFERENCE
PRECEDING PARAGRAPHS
CHANCERY
DELAWARE
TAHER BEHBEHANI
ATTORNEYS
COUNTERCLAIM PLAINTIFFS

                                                                              ORIGINAL

               IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                               IN AND FOR NEW CASTLE COUNTY


IOTEX COMMUNICATIONS, INC.,                             ....
                          Plaintiff,                    ....
         V.                                             .*      Consolidated Civil
                                                        :       Action No. 15817
Anthony Defries and                                     ..
Iota, Inc.,                                             ....
                          Defendants                    ..
                                                        :

Iota, Inc. and NeoSoft, A.G.,

                          Counterclaim-Plaintiffs,

         V.

IOTEX COMMUNICATIONS, INC.,
ioWave, Inc., Peter Friedli, and
Taher Behbehani,

                          Counterclaim-Defendants. :..

                  ANSWER OF COUNTERCLAIM DEFENDANT IOWAVE, INC.
          TO AMENDED COUNTERCLAIM BY IOTA, INC. AND NEOSOFT, A.G.

         Counterclaim defendant ioWave, Inc. (`YoWave"),  by and through its undersigned

attorneys, for its answer to the Amended Counterclaim by Iota, Inc. ("Iota") and Neosoft, A.G.

("Neosoft"), states as follows:
                                        I,.
         1.        Paragraph 1 asserts*legal  con&ions  to &jch no response is required, but to the
                              L4. F WM .?$ -t"- Ah
extent that an answer may be called for, idWave-denies the allegations  of Paragraph  1.



RLFl-2018381-I



         2.       Paragraph 2 asserts legal conclusions to which no response is required, but to the

ANSWER OF COUNTERCLAIM DEFENDANT IOWAVE,

TO AMENDED COUNTERCLAIM BY IOTA,

attorneys, for its answer to the Amended Counterclaim by Iota, Inc. and Neosoft, A.G.

extent that an answer may be called for, idWave-denies the allegations of Paragraph 1.

Paragraph 2 asserts legal conclusions to which no response is required,

extent that an answer may be called for, ioWave denies the allegations of Paragraph 2.

ioWave lacks sufficient knowledge to admit or deny the allegations of Paragraph

and on that basis denies them.

IOTEX and that Peter Friedli was initially the sole director of IOTEX.

ioWave avers that the License Agreement and the Project Management

License Agreement and the Project Management Agreement speak for themselves.

ioWave avers that the License Agreement speaks for itself.

ioWave avers that the Separation Agreement speaks for itself.

ioWave admits that Taher Behbehani was IOTEX's Chief

ioWave's response in each of the preceding Paragraphs is incorporated herein by

reference.

Counterclaim plaintiffs' claims are barred by the doctrine of unclean hands.

incorporates by reference pursuant to Court of Chancery Rule 10and adopts as its own.

4 . ANSWER OF DEFENDANT IOWAVE TO AMENDED COMPLAINT BY NEOSOF AND IOTA

PARAGRAPH
ALLEGATIONS
IOWAVE DENIES
RESPONSE
IOTEX
ADMIT
IOTA
AGREEMENT SPEAKS
LACKS SUFFICIENT KNOWLEDGE
DENY
BASIS DENIES
NEOSOFT
IOWAVE AVERS
PETER FRIEDLI
LICENSE AGREEMENT
AMENDED COMPLAINT
DEFENDANT IOWAVE
PROJECT MANAGEMENT AGREEMENT
COUNTERCLAIM-PLAINTIFFS
COMMUNICATIONS
BEHBEHANI
SEPARATION AGREEMENT SPEAKS
INCORPORATES
REFERENCE
PRECEDING PARAGRAPHS
CHANCERY
DELAWARE
UNDERSIGNED ATTORNEYS
PLAINTIFFS

                                                                                    ORIGINAL

               IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                             IN AND FOR NEW CASTLE COUNTY


IOTEX COMMUNICATIONS, INC.,                            ..
                                                       :
                         Plaintiff,                    ....
        V.                                             ..       Consolidated Civil
                                                       ..       Action No. 15817
Anthony Defries and                                    :
Iota, Inc.,                                            ....
                         Defendants                     ....
Iota, Inc. and NeoSoft, A.G.,

                         Counterclaim-Plaintiffs,

        V.

IOTEX COMMUNICATIONS, INC.,
ioWave, Inc., Peter Friedli, and
Taher Behbehani,                                         ..
                         Counterclaim-Defendants. :..
_______------------------- - -


                           ANSWER OF DEFENDANT IOWAVE, INC.
               TO AMENDED COMPLAINT BY NEOSOFT, A.G. AND IOTA, INC.

         Defendant ioWave, Inc. ("ioWave"), by and through its undersigned attorneys, for its

answer to the Amended Complaint by Neosoft, A.G. and Iota, Inc., states as follows:

         1.       Paragraph 1 asserts legal conclusions to which no response is required, but to the

extent that an answer may be called for, ioWave denies the allegations of Paragraph 1.





RLFl-2018394-1



         2.        Paragraph 2 asserts legal conclusions to which no response is required, but to

_______------------------- - -ANSWER OF DEFENDANT IOWAVE,

Counterclaim-Plaintiffs,

TO AMENDED COMPLAINT BY NEOSOFT, A.G. AND IOTA, INC.

Defendant ioWave, Inc., by and through its undersigned attorneys, for its

Paragraph 1 asserts legal conclusions to which no response is required,

extent that an answer may be called for, ioWave denies the allegations of Paragraph 1.

ioWave lacks sufficient knowledge to admit or deny the allegations of Paragraph

and on that basis denies them.

ioWave admits that IOTEL COMMUNICATIONS,

IOTEX and that Peter Friedli was initially the sole director of IOTEX.

ioWave avers that the License Agreement and the Project Management

License Agreement and the Project Management Agreement speak for themselves.

ioWave avers that the License Agreement speaks for itself.

ioWave avers that the Separation Agreement speaks for itself.

ioWave admits that Taher Behbehani was IOTEX's Chief

ioWave's response in each of the preceding Paragraphs is incorporated herein by

reference.

Plaintiffs' claims are barred by the doctrines of laches,

under its Counterclaim in this action, which ioWave incorporates by reference pursuant to

5 . BRIEF IN SUPPORT OF P. FRIEDLIS MOTION TO DISMISS

JURISDICTION
AMENDED PLEADINGS
DELAWARE
COURT
IOTA
NEOSOFT
MOTION
DISMISS
BAYENDOR
COUNTERCLAIM
FRIEDLI
DEFENDANT
DEL
IOTEX COMMUNICATIONS
DEFRIES
INSUFFICIENT SERVICE
ALLEGATIONS
AMENDED COMPLAINT
ASSERTION
FORMATION
DELAWARE CORPORATION
CONSPIRACY
PLAINTIFF
AMENDED PLEADINGS PERTINENT
CONNECTION
PAPENDICK
ANTHONY DEFRIES
AUTHORITIES
FACTS

           IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                             IN AND FOR NEW CASTLE COUNTY

IOTEX COMMUNICATIONS, INC.,

           Plaintiff,
                                              . Consolidated
                                              .
    V.                                              Civil Action No. 15817

ANTHONY DEFRIES, et ano.,

           Defendants,


IOTA, INC., et ano.,

           Counterclaim Plaintiffs,           ..
    V.                                        .
IOTEX COMMUNICATIONS, INC.,
et al.,                                       ..
           Counterclaim Defendants.

                   OPENING BRIEF IN SUPPORT OF PETER FRIEDLI'S
                         MOTION TO DISMISS FOR LACK OF PERSONAL
              JURISDICTION AND INSUFFICIENT SERVICE OF PROCESS

                                       MORRIS, JAMES, HITCHENS & WILLIAMS
                                       Michael J. Maimone
                                       Joseph C. Schoell
                                       222 Delaware Avenue
                                       P.O. Box 2306
                                       Wilmington, Delaware 19801
                                       (302) 888-6800
                                       Attorneys for IOTEX COMMUNICATIONS,
                                       INC., and Peter Friedli

May 7, 1999



                                    TABLE OF CONTENTS

                                                                                             PAGE

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

NATURE AND STAGE OF THE PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . 1

MOTION TO DISMISS FOR LACK OF PERSONAL

OF FACTS

Allegations Of The Amended Pleadings Pertinent

To Iota's And NeoSoft's Assertion Of Jurisdiction

The Bayendor Motion to Dismiss.

Iota And NeoSoft Have Waived The Opportunity

Law To Confer Personal Jurisdiction On Friedli

Inc., Del.

INC. v. Defries, Del.

Papendick v. Robert Bosch GmbH,

Statutes and Other Authorities

Action"), by plaintiff IOTEX COMMUNICATIONS, INC., on July 18,

breaches of various duties and fraud committed by defendants Anthony Defries

generally Amended Complaint, D.I. 28.

Answer and Counterclaim in the IOTEX Action in October 1997,

In November and December of 1997, NeoSoft A.G.

`As explained in greater detail below, IOTEX's Complaint and Amended Complaint also named

Friedli was neither named as a party nor served in connection with either

motion to amend their pleadings that it is Friedli's alleged involvement in the formation

is a Delaware corporation.

Complaint alleges a conspiracy involving, among others, Bayendor, and an essential

6 . ANSWER AND COUNTERCLAIM

AMENDED COMPLAINT
PARAGRAPH
ALLEGATIONS
IOTEX
IOTA
PROJECT MANAGEMENT AGREEMENT
ADMIT
NEOSOFT
DEFRIES
LICENSE AGREEMENT
DEFENDANTS STATE
RESPONSIVE PLEADING
COUNTERCLAIM
PETER FRIEDLI
TECHNOLOGY
DELAWARE CORPORATION
IOTEX COMMUNICATIONS
PLAINTIFFS
LACK SUFFICIENT INFORMATION
DEFENDANTS LACK SUFFICIENT
ATTORNEYS
CONNECTION
INCORPORATE
DEFENDANTS REPEAT
FULLY SET
IOTA IMPROPERLY PAID
OBLIGATIONS
SWISS CORPORATION
UNDERSIGNED ATTORNEYS

              IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                              IN AND FOR NEW CASTLE COUNTY

IOTEX COMMUNICATIONS, INC.,                   :
a Delaware corporation,                       ..
          Plaintiff and                       ..
          Counterclaim Defendant,             ..: Consolidated
    V.                                         : Civil Action No. 15817

ANTHONY DEFRIES and IOTA, INC., :
a Delaware Corporation,

          Defendants,


                                              .
IOTA, INC.,  a Delaware corporation,          :
and NEOSOFT, A.G., a  Swiss  corporation,:

          Counterclaim-Plaintiffs,            ..                                        ,
                                              .
   V.                                         ..

IOTEX COMMUNICATIONS, INC.,                   :
a Delaware corporation, IOWAVE, INC., :
a Delaware corporation, PETER FRIEDLI, :
and TAHER BEHBEHANI,                          ....
          Counterclaim-Defendants.            ..

                           ANSWER OF IOTEX COMMUNICATIONS, INC.
                  AND PETER FRIEDLI TO NEOSOFT A.G. AND IOTA, INC.`S
                           AMENDED COMPLAINT AND COUNTERCLAIM
                              OF IOTEX COMMUNICATIONS. INC.

          IOTEX COMMUNICATIONS, INC. ("IOTEX"), and Peter Friedli ("Friedli")

(collectively, "Defendants") by and through their undersigned attorneys,  for their answer to

plaintiffs amended Gomplaint (the "Amended Complaint"), dated March  26, 1999, the following

admissions, denials and allegations:



        1.     Defendants state that the allegations in paragraph 1 of the Amended Complaint

constitute an introductory statement to which no responsive pleading is required. To the extent

ANTHONY DEFRIES and IOTA, INC.,: a Delaware Corporation,

and NEOSOFT, A.G., a Swiss corporation,:

ANSWER OF IOTEX COMMUNICATIONS, INC.

AND PETER FRIEDLI TO NEOSOFT A.G. AND IOTA,

AMENDED COMPLAINT AND COUNTERCLAIM

IOTEX COMMUNICATIONS, INC., and Peter Friedli

by and through their undersigned attorneys,

Defendants state that the allegations in paragraph 1 of the Amended Complaint

constitute an introductory statement to which no responsive pleading is required.

except admit that IOTEX entered into a License Agreement with NeoSofl.

and a Project Management Agreement with Iota, and that a Separation Agreement was entered

Defendants deny the allegations in Paragraph 4 of the Amended Complaint except

Defendants lack sufficient information and knowledge to admit or deny the

in 1991, at the direction of Defries, and that Iota was and is controlled by Defries.

Friedli to invest approximately $5,400,000 in connection with the development of the

NeoSofi giving IOTEX rights to certain applications of the Technology for use in North America

Defendants repeat and incorporate their answers to Paragraphs 1 through 5 1 of the

the Amended Complaint as if fully set forth herein.

Defendants state that Iota improperly paid numerous costs and expenses

The plaintiffs' claims are barred by the doctrine of unclean hands.

Notwithstanding its obligations under section 3.2, Iota did not comply with the

7 . REPLY TO COUNTERCLAIM

AMENDED COUNTERCLAIM
PARAGRAPH
ALLEGATIONS
DEFENDANTS DENY
IOTA
IOTEX
COUNTERCLAIM DEFENDANTS STATE
AMENDED COUNTERCLAIM SET
RESPONSIVE PLEADING
LICENSE AGREEMENT
ADMIT
NEOSOFT
PETER FRIEDLI
REFER
DEFRIES
LACK SUFFICIENT INFORMATION
COUNTERCLAIM DEFENDANTS LACK
DEFENDANTS LACK SUFFICIENT
DELAWARE CORPORATION
PROJECT MANAGEMENT AGREEMENT
TECHNOLOGY
IOTEX COMMUNICATIONS
INCORPORATE
COUNTERCLAIM DEFENDANTS REPEAT
SEPARATION AGREEMENT
SWISS CORPORATION
UNDERSIGNED ATTORNEYS
IOTEX RIGHTS
PAID NUMEROUS COSTS

         IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                          IN AND FOR NEW CASTLE COUNTY

IOTEX COMMUNICATIONS, INC.,                :
a Delaware corporation,                    ..
         Plaintiff and                     ..
         Counterclaim Defendant,           .: Consolidated
   V.                                      : Civil Action No. 15817
                                           .
ANTHONY DEFRIES and IOTA, INC., :
a Delaware Corporation,                    ..

         Defendants,

                                            ..
IOTA, INC., a Delaware corporation,         :
and NEOSOFT, A.G., a Swiss corporation,:

         Counterclaim-Plaintiffs,

                                            .
   V.                                       .
                                            .
IOTEX COMMUNICATIONS, INC.,                      :
a Delaware corporation, IOWAVE, INC., :
a Delaware corporation, PETER FRIEDLI, :
and TAHER BEHBEHANI,                             ..

         Counterclaim-Defendants.

                           IOTEX COMMUNICATIONS, INC. ' S
                           AND PETER FRIEDLI'S REPLY TO
               COUNTERCLAIM OF IOTA. INC. AND NEOSOFT. A.G.


         IOTEX COMMUNICATIONS, INC. ("IOTEX"), and Peter Friedli ("Friedli")

(collectively, "Counterclaim Defendants") by and through their undersigned attorneys,



hereby responds to the amended counterclaim (the "Amended Counterclaim") filed by

defendants/counterclaimants  Iota, Inc. ("Iota") and NeoSoft, A.G.  ("NeoSoft"),  dated

March 26, 1999, and make the following admissions, denials and allegations:

        1.     Counterclaim Defendants state that the allegations in Paragraph 1 of the

ANTHONY DEFRIES and IOTA, INC.,:

and NEOSOFT, A.G., a Swiss corporation,:

a Delaware corporation, PETER FRIEDLI,:

IOTEX COMMUNICATIONS, INC. ' S

COUNTERCLAIM OF IOTA.

IOTEX COMMUNICATIONS, INC., and Peter Friedli

by and through their undersigned attorneys,

hereby responds to the amended counterclaim filed by

March 26, 1999, and make the following admissions, denials and allegations:

Counterclaim Defendants state that the allegations in Paragraph 1 of the

Amended Counterclaim set forth legal conclusions to which no responsive pleading is

To the extent that a responsive pleading is required,

Defendants deny the allegations of Paragraph 1 of the Amended Counterclaim,

that a Separation Agreement was entered into between Iota and Andrew

Amended Counterclaim except admit that this action is a companion action to two other

Counterclaim Defendants lack sufficient information and knowledge to

approximately $5,400,000 in connection with the development of the Technology.

License Agreement with NeoSoft giving IOTEX rights to

Management Agreement (the "Project Management Agreement") with Iota where Iota

Amended Counterclaim and refer to the License Agreement for a full and complete

Counterclaim Defendants repeat and incorporate their answers to

Iota improperly paid numerous costs and expenses not set forth in the budget with

8 . ANSWER TO DIEGO FOUNDATIONS AMENDED COMPLAINT

COMPLAINT
PARAGRAPH
ALLEGATIONS
DEFENDANTS DENY
IOTEX
ADMIT
RESPONSIVE PLEADING
COMPLAINT SET
DEFENDANTS STATE
FRIEDLI
IOWAVE
INCORPORATE
AGREEMENT
DELAWARE CORPORATION
IOTA
BEHBEHANI
CHIEF EXECUTIVE OFFICER
EXECUTIVE OFFICER
PLAINTIFF
IOTEX COMMUNICATIONS
NEOSOFT
PETER
DEFENDANTS LACK
LACK SUFFICIENT INFORMATION
DEFENDANTS REPEAT
FULLY SET
LICENSE
PROJECT MANAGEMENT
REFER

            IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                              IN AND FOR NEW CASTLE COUNTY

IOTEX COMMUNICATIONS, INC.,
a Delaware corporation,

               Plaintiff and
               Counterclaim Defendant,
                                                  : Consolidated
   V.                                             : Civil Action No. 15817

ANTHONY DEFRIES and IOTA, INC.,
a Delaware Corporation,

               Defendants,


IOTA, INC., a Delaware corporation,
and NEOSOFT, A.G., a Swiss corporation,

               Counterclaim-Plaintiffs,

   V.

IOTEX COMMUNICATIONS, INC.,
a Delaware corporation, IOWAVE, INC.,
a Delaware corporation, PETER FRIEDLI,
and TAHER BEHBEHANI,

               Counterclaim-Defendants.

              IOTEX COMMUNICATIONS, INC. `S AND PETER FRIEDLI'S
          ANSWER TO THE DIEGO FOUNDATION'S AMENDED COMPLAINT

               Defendants Peter Friedli ("Friedli") and IOTEX COMMUNICATIONS, INC.

("IOTEX") (collectively, "Defendants"), by their attorneys, for their answer to plaintiff's

amended complaint (the "Amended Complaint"), dated March 26, 1999, make the following

admissions, denials and allegations:



                  1.     Defendants lack sufficient information and knowledge to admit or deny

the allegations of paragraph 1 of the Amended Complaint, except admit that plaintiff is a

ANTHONY DEFRIES and IOTA, INC., a Delaware Corporation,

INC. `S AND PETER FRIEDLI'S ANSWER TO THE DIEGO FOUNDATION'S AMENDED COMPLAINT

Defendants Peter Friedli and IOTEX COMMUNICATIONS,

admissions, denials and allegations:

Defendants lack sufficient information and knowledge to admit or deny

the allegations of paragraph 1 of the Amended Complaint, except admit that plaintiff is a

Defendants state that the allegations in paragraph 2 of the Amended

Complaint set forth legal conclusions to which no responsive pleading is required.

Taher Behbehani is the former Chief Executive Officer of IOTEX.

Defendants deny the allegations of paragraph 3 of the Amended

technology that IOTEX had licensed from NeoSoft, A.G.,

Complaint, except admit that ioWave, Inc. is a Delaware corporation and was

NeoSoft and Iota entered into a project management agreement (the "Project Management

Agreement") and that IOTEX and NeoSoft entered into a license agreement (the "License

Defendants refer to the Project Management Agreement and the License

Defendants repeat and incorporate their answers to paragraphs 1 through

of the Amended Complaint as if fully set forth herein.

9 . MOTION FOR LEAVE TO AMEND PLEADINGS

IOTA
IOTEX
DIEGO
MAAG
PLAINTIFF
PLEADINGS
PARTIES
DEFENDANTS
CHANCERY RULE
COUNTERCLAIM
AMEND
NEOSOFT
MOTION
IOWAVE
PURSUANT
DELAWARE CORPORATION
SUBSTITUTION
COMMUNICATIONS
BEHBEHANI
AMENDMENTS
PERMITTING
PREJUDICE
AMENDED PLEADINGS
LITIGATION
INTERVENE
TRANSACTIONS
THIRD-PARTY PLAINTIFF
LAWSUITS
DISCOVERY

                 IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                                   IN AND FOR NEW CASTLE COUNTY

   IOTEX COMMUNICATIONS, INC.,
   a Delaware corporation,

                             Plaintiff and
                             Counterclaim Defendant,
                                                                  Consolidated Civil
           V.                                                     Action No. 15 8 17

   ANTHONY DEFRIES and
   DAVID BAYENDOR,

                             Defendants,

                             and

   IOTA, INC.,
   a Delaware corporation,

                             Defendant and
                             Counterclaim and
                             Third-Party Plaintiff,

                             V.

   ioWave, Inc.,

                             Third-Party Defendant.

                      MOTION FOR LEAVE TO AMEND PLEADINGS
                          AND TO JOIN AND SUBSTITUTE PARTIES

                    Pursuant to Court of Chancery Rules 13, 15(a), 20(a), 23.1, 24, and 4 1 Iota,

   Inc. ("Iota"),  NeoSoft, A.G. ("NeoSoft"),  Urs Maag ("Maag"), and the Diego Foundation

   ("Diego") hereby move this Honorable Court for an Order permitting them to amend the

   various pleadings filed on their behalf in the three lawsuits that comprise this consolidated

   civil action, to join additional parties in the three lawsuits, and to allow a substitution of




   WP3: M:\DOCS3\PUBL2\089\MOTION\209878-1                                              55263.1001

MOTION FOR LEAVE TO AMEND PLEADINGS

Counterclaim Defendant,

IOTA, INC.,

Third-Party Plaintiff,

AND TO JOIN AND SUBSTITUTE PARTIES

various pleadings filed on their behalf in the three lawsuits that comprise this consolidated

parties in one of the 1awsuits.l In particular, Iota, NeoSofi, Maag, and Diego seek leave to

Behbehani as additional counterclaim-defendants.

Behbehani as additional defendants.

For the Court's convenience, and in accordance with Court of Chancery Rule 15, copies of the

In addition, copies of unreported opinions cited in this Motion are contained in a Compendium

Counsel for IOTEX and Mr. Friedli have communicated to the undersigned counsel that IOTEX and

substitution are set out below.

Amendments to Pleadines

amendment "turns on questions of prejudice to the various parties");

are `to be liberal in permitting amendments to pleadings at all stages of the proceedings

The proposed amendments are not calculated to expand the scope of discovery

in preparing for discovery and trying the litigation.

Indeed, in order to avoid any argument that lathes has attached during the period in which

anyone shall be permitted to intervene in an action.

severally, and in the alternative -- in respect of or arising out of the same transactions,

Pursuant to Court of Chancery Rules 20 and/or 24,

10 . MEMORANDUM OPINION

IOTA
DEFENDANT
MAAG
DELAWARE
BAYENDOR
COURT
PLAINTIFF
COUNTERCLAIM
NEOSOFT
PROJECT MANAGEMENT AGREEMENT
DEFRIES
ACTS
FRAUD
ESQUIRE
CIVIL CONSPIRACY
ALLEGATIONS
DAVID BAYENDOR
IOTEX COMMUNICATIONS
JURISDICTION
TECHNOLOGY
FIDUCIARY DUTY
RICO
THIRD-PARTY PLAINTIFF
MEMORANDUM OPINION
AMENDED COMPLAINT
NEGOTIATION
CRIMINAL ACTIVITY
PREDICATE ACTS
FRAUDULENT

     IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                   IN AND FOR NEW CASTLE COUNTY
                                     ,
IOTEX COMMUNICATIONS,  ,INC.,
a Delaware corporation,        /

                   Plaintiff and
                   Counterclaim Defendant,

                   V.                                  Consolidated Civil
                                                       Action No. 15817
ANTHONY DEFRTES and                              i
DAVID BAYENDOR,

                   Defendants,

                    and

IOTA, INC.,
a Delaware corporation,

                    Defendant and
                    Counterclaim and
                    Third-Party Plaintiff,

                    V.

ioWAVE, INC.,

                    Third-Party Defendant.

                             MEMORANDUM OPINION

                          Date Submitted: November 10, 1998
                           Date Decided: December 2 1, 1998

Grover C. Brown, Esquire, Michael J. Maimone, Esquire and Joseph C. Schoell,
Esquire, of MORRIS, JAMES, HITCHENS  & WILLIAMS, Wilmington,
Delaware, Attorneys for Plaintiff and Counterclaim Defendant Iotex
Communications, Inc.



Iota, Inc., Defendant and Counterclaim and Third-Party Plaintiff (C.A. No.
158 17); Anthony Defiies and David Bayendor, Defendants (C.A. No. 1.58 17); Urs
Maag, Plaintiff and Coynterclaim Defendant (C.A. No. 16082); Neosoft, A.G.,
Plaintiff (C.A. 16036).